The British Columbia Court of Appeal has ruled that an accounting firm was not a “common employer” in a wrongful dismissal claim, striking the claim against it and reversing a lower court’s decision.
The ruling clarifies the threshold for establishing common employer status and underscores the necessity of pleading material facts to support such a claim.
Background
G.C. worked for nearly 40 years in a periodontal dentistry practice owned by Dr. Lee Inc. She alleged that in the last months of her employment, James McCallum & Associates Ltd. (JMA), an accounting firm, exerted control over her job duties and payroll administration. Based on this, she named JMA as a common employer in her wrongful dismissal claim.
JMA applied to have the claim against it struck under Rule 9-5(1)(a) of the Supreme Court Civil Rules, arguing that no material facts were pleaded to support the allegation that it was a common employer. The Supreme Court of British Columbia dismissed the application, allowing the claim to proceed. JMA appealed that decision.
Court of Appeal’s analysis
The Court of Appeal found that G.C.’s pleadings failed to establish an arguable claim that JMA was a common employer.
“A claim for damages for wrongful dismissal is based on an allegation of breach of the employee’s employment contract,” the court stated, emphasizing that a common employer claim must be based on an objective intention to create an employer-employee relationship.
The court reaffirmed that common employer status typically arises in cases involving related corporations that exercise common control over an employee.
“Where two corporations have a ‘sufficient degree of relationship’ and common control over an employee, and where the employee has a reasonable expectation that both were parties to the employment contract, they may be found to be common employers,” the decision noted.
However, the court found no such relationship in this case. G.C.’s pleadings did not suggest that JMA had an ownership interest in Dr. Lee Inc. or was otherwise related to it. “The claim as pleaded is not arguable,” the court concluded.
Insufficient facts to support claim
The court highlighted several deficiencies in G.C.’s claim. While she alleged that JMA took over payroll functions and reviewed employee compensation, these activities alone did not establish an employer-employee relationship.
“Some degree of direction and control may be one element of being a joint employer, but in the context of her pleading, it is not enough because it could also apply to an agent of the employer, a professional advisor, or another employee who is in a supervisory position,” the court stated.
Additionally, the court noted that G.C. had consistently been employed by Dr. Lee Inc. for nearly four decades, with JMA’s involvement arising only in the final months of her employment.
“She pleads that only in the last six months of her employment prior to her termination, her duties changed and she received directions from Dr. Lee’s wife and from JMA,” the ruling said.
The court also pointed out that G.C. did not allege that JMA issued her paycheques, provided her termination notice, or directly benefited from her work. “She pleads that Dr. Lee Inc. failed to pay her following the termination, not that it was JMA’s responsibility to do so,” the court noted.
Appeal allowed, claim struck
Based on these findings, the Court of Appeal overturned the lower court’s decision and allowed JMA’s appeal. “In summary, there are insufficient facts pleaded that, even if accepted, would support a conclusion that JMA became a common employer with Dr. Lee Inc.,” the ruling stated. The claim against JMA was struck.
For more information, see James McCallum & Associates Ltd. v. Courchene, 2025 BCCA 82 (CanLII).
