Modern organizations and corporate structures are often complex, with different legal entities set up across jurisdictions, often for tax and compliance reasons. When terminated employees who work for global organizations wish to proceed with legal claims, this often raises questions about the country where claims can be filed, and which entities can be sued.

In a recent Canadian decision, the Court held that there is no requirement to have a physical presence in Canada in order to sue a former employer, and co-employment may be found based on the specific facts of each case. The decision in Mian v Expro Canada Inc., 2024 NSSC 218 involved a motion challenging jurisdiction over claims against a UK-entity which had no physical presence in Canada.

The decision of the Nova Scotia Supreme Court ruled that it had jurisdiction in Adam Mian’s  wrongful dismissal claims against both Expro Group Canada Inc., and the UK entity, Expro North Sea Ltd. The ruling is also noteworthy because the Court found that Expro North was a common employer alongside Expro Canada.

Expro North and Expro Canada are both subsidiaries of the same parent company. In 2019, Mian was offered employment by Expro North. However, due to delays with Mian’s UK visa application, the parent company decided that Mian should be offered employment with Expro Canada until the work visa issues were resolved.

The Expro Canada employment contract specified that Mian would be allowed to work from home in Nova Scotia, Canada, but would report to a Vice President of Expro North based in the UK. The result was a de facto arrangement where Mian worked for and took direction from both companies, but was formally employed by Expro Canada.

The questions relating to jurisdiction and the entities which he could sue arose after Mian’s employment was terminated without cause in 2022. In particular, Expro North said that it was not Mian’s employer, and thus challenged his right to initiate a claim against it.

Common employers

The basis for the Court’s finding that it has jurisdiction over Expro North as well as his legal employer Expro Canada was the determination that Expro North and Expro Canada were a common employer in relation to Mian. The Court emphasized that the common employer doctrine is a part of the common law in Canada and is enshrined in Nova Scotia employment statutes. And the intertwining of the two entities and management this case supported a finding of common employment.

The Court’s reasoning followed the earlier approach of the Ontario Superior Court in Davis v Amazon Canada Fulfillment Services ULC, 2023 ONSC 3665. In that case, the Ontario Court explained that multiple entities may constitute a common employer for Canadian employment law purposes where the evidence shows that there was an intention to create an employer/employee contractual relationship between the employee and more than one entity. The intention behind a contract does not have to be put into writing, and courts can infer the intention to essentially work for more than one entity based on the facts.

Was There Jurisdiction?

With the common employer relationship established, the Court in Mian noted that it was possible for there not to be jurisdiction even if there was a common employer. This could arise if, for example, because one of the employers may have opposed the actions of the other employer that established the jurisdiction of the Court. In other words, the relationship and interactions between the entities must be review.

The Court proceeded to apply the Court Jurisdiction and Proceedings Transfer Act and the decision in Club Resorts Ltd v Van Breda, 2012 SCC 17, to find that it had presumptive jurisdiction. The Court refused to find that Nova Scotia was a forum non conveniens because the two Expro companies had not met their burden of showing that there was another jurisdiction that was clearly superior to Nova Scotia to oversee the case.

Takeaways for Businesses

The decision in Mian v Expro Canada is an important reminder that the separate legal personality of a corporation may not on its own be sufficient to protect it from liability against claims by employees and former employees. In the case of global organizations, there may well be co-employment which straddles across international borders. This may be the case even when there is no physical presence in a particular jurisdiction. As a result, the interactions between corporate entities, as well as the dealings with employees, need to be carefully reviewed and managed.