Vertical Disintegration and Related Employers: Attributing Employment-Related Obligations in Ontario

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Canadian Labour and Employment Law Journal. Volume 13, Issue 1 (2006), p. 107-146.


The traditional basis for attributing employment-related rights and obligations has been the personal, bilateral contract of employment. However the decline of the vertically integrated firm as the dominant model of economic production, and the rise of complex new forms of business organization in which employment functions may be divided among a number of entities, have created significant challenges to using the traditional conception of employment in order to identify the employer This paper considers how courts and legislatures have sought to address the problem of attributing employment-related responsibilities among multiple employing entities. It does so by examining the concept of "associated" or "related" employers in three legal contexts, with an emphasis on Ontario: the contract of employment at common law, employment standards legislation, and collective bargaining legislation. The authors argue that while some attempts have been made to move away from a bilateral approach to the employment relationship and an emphasis on the legal form of the corporation, those attempts have been piecemeal, and have been undermined by the tendency of courts and tribunals to limit the intended scope of protective legislation by ignoring the statute's language and purpose, and by applying instead contract or corporate law principles.

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