Who Pays When No One Stays? Incoming Building Services Providers Could Be on the Hook for Common Law Notice

A recent Ontario court decision marks an important development for employers who provide building services: when a new provider takes over a contract and chooses not to retain existing staff, common law notice obligations may still apply.

Background

In Kondaj v. Crossbridge Condominium Services Ltd., 2025 ONSC 3905, the Plaintiff, a property manager, was employed by an outgoing property management company. When a new company assumed the service contract and opted not to retain the manager, he received statutory termination pay—but no common law notice—from either company. The lawsuit focused on which company was responsible for common law notice.

The Decision

The Court held that the incoming management company was liable to pay common law notice to the terminated employee.

The Court found that the Ontario Employment Standards Act (ESA) imposes liability for common law notice on the new service provider. This interpretation aligned with the legislative intent to stabilize employment in the building services sector, the scheme of the ESA, and the statutory language. The Court rejected the argument that the ESA limits the new provider's obligations to statutory termination and severance pay, finding that where the ESA “…imposes an obligation to provide termination or severance pay, that obligation includes common law notice.”

In addition, though the Plaintiff had only been employed for 3 years and 5 months, he was awarded 10 months’ pay in lieu of notice and 10% for lost benefits. The 10-month notice period reflected the Plaintiff’s role, age, years of service, economic conditions, and a strong job search effort.

Key Takeaway

A building services provider as defined under section 1(1) of the ESA and Regulation 287/01 (cleaning, security, property management, food services, etc.) who is taking over a services contract could be liable for common law notice for unretained staff, even if the former contractor provided termination notice or pay under the ESA.  Overlooking this risk can lead to significant and unexpected liability on incoming building services contractors.