Who Pays Wrongful Dismissal Notice When a Building Manager Is Replaced in Ontario?

Who is responsible for paying wrongful dismissal notice when a property management contract changes hands?

The incoming building services provider is responsible. The Court of Appeal for Ontario confirmed in Kondaj v. Crossbridge Condominium Services Ltd., 2026 ONCA 636 (CanLII) that when a new property management company takes over a building contract and refuses to keep an existing employee, it must pay that worker’s full common law reasonable notice—not just the statutory termination pay set out in the Employment Standards Act, 2000.

This was a genuinely novel question: no Ontario court had previously decided which company bears the common law notice bill in a building services handover. The answer now matters for thousands of workers employed by property managers, cleaning contractors, security firms, and similar on-site service providers across the province.

What happened in this case?

A building manager had been employed by the outgoing property management company at a Toronto hotel and residences. When the building retendered its management contract, the incoming company took over and decided not to continue the manager’s employment. The outgoing company also declined to reassign him.

The incoming company paid the statutory minimum—a few weeks of termination pay—and issued the required paperwork. Neither company paid anything toward common law reasonable notice. Each pointed at the other. The employee sued both and brought a summary judgment motion. The motion judge awarded him the equivalent of ten months’ common law notice plus benefits, and the Court of Appeal upheld that result in full.

What does section 75 of the Employment Standards Act actually say?

Section 75 of the Act is the key provision for building services handovers. It says that when a new provider takes over and does not continue an existing employee’s employment, the new provider must comply with the termination and severance provisions of the Act “as if” it had terminated and severed that employment. Section 75(3) goes further: it deems the new provider to have been the employee’s employer all along, for the purpose of those obligations.

The court held that this deemed-employer status is not limited to the statutory floor. Because section 56 of the Act—which defines termination—also triggers common law wrongful dismissal rights, and because section 75 requires the new provider to comply with the same part of the Act that contains section 56, the incoming company inherits the common law notice obligation the moment it refuses to hire the worker.

Does the new provider have to offer a job to every existing worker?

No—the incoming provider has no obligation to offer employment to any of the outgoing company’s workers. Ontario removed that requirement in 1995 amendments to the Act, and the Court of Appeal confirmed that flexibility still exists. The new provider can choose not to hire anyone from the previous team.

The consequence of that choice, however, is that the new provider must pay common law reasonable notice to any worker it declines to keep. The court noted that section 77 of the Act already gives prospective providers a mechanism to request employment details—including length of service—before they bid on a contract, so they can factor potential notice costs into their decision.

Why couldn’t the outgoing company be held responsible instead?

The outgoing company lost the building contract through no fault of the employee, and the Act’s scheme is designed to protect workers in exactly that situation. If the outgoing company bore the common law notice liability, the court reasoned, new providers would have a financial incentive to terminate all existing workers immediately—avoiding the risk of ever accumulating significant notice obligations—while shifting the entire cost onto their competitor. That outcome would undermine the Act’s purpose of promoting employment continuity in the building services sector.

The court also noted a practical inconsistency in the outgoing-company argument: if the new provider does hire a worker and later terminates them, the new provider must count the worker’s entire prior service when calculating notice. It would be incoherent for the Act to treat the new provider as the full employer in that scenario but not when it refuses to hire the worker at all.

What does “common law reasonable notice” mean in practice?

Common law reasonable notice is the amount of working notice—or pay in lieu—that an employee is owed beyond the statutory minimum when their employment is ended without cause. It is calculated based on factors such as length of service, age, the nature of the position, and the availability of comparable employment. For our Ontario employment lawyers, this is often the most significant component of a wrongful dismissal claim because it can be substantially higher than the ESA floor.

In this case, the employee received only a few weeks of statutory pay from the incoming company. The court upheld an award equivalent to ten months’ pay, a figure many times larger. The gap between statutory minimums and common law entitlements is precisely why the question of which party owes common law notice matters so much.

Questions and records to discuss with a lawyer

• Which company issued your Record of Employment, and what reason did it give for the end of your employment?
• Did the incoming or outgoing provider pay you anything beyond the statutory minimum, and do you have documentation of what was paid?
• How long had you been working at the building site, and does your length of service include time with more than one management company?
• Did either company offer you a new role, and if so, on what terms?
• Have you received any written communication from either company about your employment status during the transition?

If you work in the building services sector—or if your company manages properties and is navigating a contract transition—the rules around wrongful dismissal and common law notice are now clearer but also more demanding. Our Ontario employment lawyers can help you understand how this decision applies to your specific circumstances. If you are in the Hamilton or Burlington area and want to discuss a building services employment issue, our team is available to assist.

To speak with a lawyer about your situation, reach out through /connect.

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This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.