Transfer of employment to related company doesn't reduce service

Employee worked in the same position for companies owned by members of same family before being dismissed
By Rich Appiah
|Canadian Employment Law Today|Last Updated: 11/25/2015

Family businesses can be particularly susceptible to challenging economic times and, as a result, they frequently search for ways to organize themselves corporately in a manner that limits their liability to creditors and employees alike. Having said that, as the Maccarone family discovered in the case of Dear v. Glamour Designs Ltd., courts will be hesitant to allow the transfer of an employee from one corporation to a related one to reduce the length of her continuous service.

Keith Dear commenced employment with Special Occasion Sales (SOS) as a sales representative on March 1, 2005. In August 2013, Vince Maccarone, the president of International Fashion Group (IFGL) and husband of SOS’s owner, Kathy, advised all sales associates working for SOS that they would be compensated for their work by a separate corporate entity known as Glamour Designs Ltd. (GDL). Dear’s employment continued with GDL thereafter. His job title, pay, and responsibilities remained unchanged.