Context: Employment in the Building Services Sector
In Ontario, it is common for property managers to outsource building management services. While the provider may change, employees often remain through the transition. The Employment Standards Act 2000 (“ESA”) addresses this by deeming the new provider the employer responsible for statutory termination and severance pay if former employees are not retained. But the question of liability for common law reasonable notice had remained unsettled until now.
The Kondaj Case: A Legal First
In Kondaj v. Crossbridge Condominium Services Ltd., 2025 ONSC 3905, the court examined whether the new building services provider assumes responsibility for common law termination entitlements of employees not kept on. The applicant, Gazmend Kondaj, worked as a Licensed Condominium Manager for nearly three and a half years before the new provider, Duka Property Management Inc., refused to employ him offering only statutory minimum notice pay.
Finding the New Provider Liable at Common Law
The court relied on the ESA’s legislative intent to protect employee stability and encourage retention and referenced the Ontario Court of Appeal’s precedent in Elsegood v. Cambridge Spring Service (2001) Ltd., 2011 ONCA 831. The ruling confirmed that where the ESA requires termination or severance pay that obligation extends to common law reasonable notice pay. As a result, Duka was held liable for Kondaj’s common law termination damages not just statutory entitlements.
Assessing Reasonable Notice: Economic Realities Matter
Applying customary factors such as age, length of service, and position the court weighed Kondaj’s mitigation efforts heavily. His extensive job search took 11 months amid a depressed condominium market in Toronto described as an economic “lockdown.” Taking these circumstances into account the court awarded a ten-month notice period recognizing the adverse market conditions as relevant to his mitigation.
Practical Lessons for Building Services Providers and Employees
This decision clarifies liability extends beyond statutory minimums for termination in service provider transitions when employees are not retained. It reinforces the importance of considering economic context when calculating damages and confirms that courts will view ability to mitigate through a holistic lens especially in difficult markets.
Flaherty McCarthy LLP continues to monitor developments in employment law closely ensuring clients receive up-to-date advice and practical guidance on managing transitions and terminations in Ontario’s unique labour market.
