Labor effects of corporate groups in Canada
| Autor | Eric Tucker - Abdalla Barqawi |
| Cargo | Professor Osgoode Hall Law School, York University, Distinguished Scholar in Residence, Cleveland-Marshall College of Law, Cleveland - Third-Year Student, Osgoode Hall Law School, York University |
| Páginas | 111-120 |
IUSLabor 3/2017
111
LABOR EFFECTS OF CORPORATE GROUPS IN CANADA
Eric Tucker,
Professor Osgoode Hall Law School, York University,
Distinguished Scholar in Residence, Cleveland-Marshall College of Law, Cleveland
State University
Abdalla Barqawi
Third-Year Student, Osgoode Hall Law School, York University
Introduction
In Canada, the norms of capitalist legality are deeply entrenched. As a result, businesses
are generally free to structure their affairs in any way that serves their interests. One of
the most foundational norms is that each corporation has a distinct legal personality.
Not only does this protect shareholders and directors from personal responsibility for
the corporation’s liabilities, but it also means that one corporation is not normally liable
for the obligations of another corporation even though both corporations are owned and
controlled by the same individuals.
Based on this legal framework, a common legal mechanism that businesses resort to is
the creation of multiple related entities that have separate legal personalities, but serve a
common business purpose or enterprise145. However, the norms of capitalist legality are
not absolute and will be compromised in some situations in order to protect other social
interests, including those of employees. So, while businesses can resort to this legal
mechanism to avoid some forms of liability, Canadian law has responded to the
deliberate fracturing of business enterprises by enabling employees, in certain
circumstances, to bring claims for their entitlements against inter-related business
entities.
Four preliminary notes are warranted before proceeding to the analysis of the specific
questions at hand. First, Canadian law does not use the term “corporate group” and does
not differentiate between correct or incorrect constitutions of corporate groups.
However, Canadian protective labor and employment law uses the concepts of “related
employer,” “associated employer,” or “common employer” to hold that in some
circumstances, discussed in more detail below, inter-related corporations can be made
jointly liable for each other’s obligations. We use all of these terms interchangeably.
145 It is impossible t o p rovide statistical data about the prevalence of this technique because Canadian
enterprises are not required to disclose or register with a governmental agency when th ey create multiple
related entities.
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