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Kondaj v. Crossbridge: How a 24-Day Management Stint Created 10 Months of Notice Liability for an Ontario Employer
When a property management contract changes hands in Ontario, the incoming provider frequently assumes it is inheriting a clean slate that the departing company's employment obligations stay with the departing company. The 2025 Ontario Superior Court decision in Kondaj v. Crossbridge Condominium Services Ltd. (2025 ONSC 3905) confirms this assumption is wrong and can be extremely costly. A new management company that terminated a building superintendent after just 24 days on site was held solely responsible for 10 months of common law reasonable notice calculated on the employee's full tenure with the previous provider. No new employment contract had been signed. No commercial indemnity arrangement protected the new employer. The entire liability landed on a company that had managed the employee for less than a month.
Is your organization taking over a service contract in Ontario that includes existing on-site staff?
Successor employer rules under the Employment Standards Act, 2000 may make you responsible for the full employment history of those workers from day one. Get legal advice on your exposure before the transition not after a claim is filed.
Call: 1-800-771-7882 Speak With an Employment LawyerWhat happened
A long-serving building superintendent had worked for Crossbridge Condominium Services for several years. When the condominium corporation terminated its contract with Crossbridge and engaged Duka Property Management Inc. to replace it, the superintendent remained on site performing the same role. Duka did not provide the superintendent with a new employment contract. Twenty-four days after Duka took over management of the building, the superintendent was terminated without cause.
Duka argued that its notice obligation should be calculated based on 24 days of service the period during which it had actually managed the employee. The Court rejected this entirely. Duka was found to be a successor employer under the Employment Standards Act, 2000 and was held solely responsible for a notice period calculated on the employee's full tenure with Crossbridge. The award was 10 months of common law reasonable notice plus an additional 10 percent for lost benefits.
What the Court found and why it matters
Successor employer status is a matter of law it cannot be contracted around
The Court confirmed that successor employer status under sections 10 and 75 of the ESA is not something parties can avoid through private commercial arrangements. Where a business or part of a business is transferred and an employee continues in their role, service is deemed continuous by operation of law. It does not matter that Duka never signed an employment contract with the superintendent or that the parties never intended the succession. The statutory rule applied automatically.
Deemed continuity applies to common law notice not just ESA minimums
Duka argued that even if successor employer rules applied, the continuity principle should be limited to ESA statutory minimums. The Court rejected this. It found that the continuity of service principle extends to common law reasonable notice obligations as well. Unless a new employment contract is provided that explicitly and lawfully addresses the employee's prior service, the incoming employer inherits the full notice exposure calculated on total tenure.
Commercial indemnities do not protect you from the employee's claim
Whatever commercial arrangements Duka may have had with Crossbridge regarding responsibility for legacy employment costs had no effect on the employee's right to sue Duka directly. An employee's statutory and common law rights against their employer cannot be modified by private agreements between companies. Internal indemnity arrangements may affect how costs are ultimately allocated between the outgoing and incoming provider but they provide no protection against the employee's claim.
Economic conditions justified a longer notice period
The Court explicitly noted that prevailing economic conditions which made finding comparable employment more difficult warranted a longer notice period. The employer's "newness" to the site provided no basis for reducing the award. The Bardal factors assess the employee's circumstances, not the employer's convenience. An economic downturn affecting comparable job availability increases the notice period regardless of how briefly the terminating employer managed the worker.
Four lessons for Ontario employers taking over service contracts
Conduct full employment due diligence before any transition
Before agreeing to take over a service contract that involves existing on-site staff, request a complete census of all affected employees including their original hire dates, current roles, and compensation. This is the foundational step that allows you to calculate your realistic notice exposure before you commit to the contract. Where the liability is significant, it should factor into your commercial negotiation with the party awarding the contract. An exposure you discover after termination cannot be negotiated it can only be paid.
Provide written employment offers that address prior service before the transition
The most direct way to break the chain of deemed continuous service is to provide each affected employee with a clear written employment offer before the transition takes effect. That offer must comply with Ontario's Employment Standards Act, 2000, must not be ambiguous, and must explicitly address how prior service will be treated for termination purposes. Where the offer is designed to limit notice entitlement to something less than full common law, the termination clause must meet the post-Waksdale standard for enforceability. Get legal advice on the drafting before any offer is issued a defective clause will not protect you.
Negotiate commercial indemnities that actually cover your exposure
A commercial indemnity in your service contract requiring the outgoing provider to cover legacy termination costs is a reasonable protective measure but it is not a substitute for proper employment due diligence and it does not prevent an employee from suing you directly. The indemnity is a mechanism for recovering costs from the outgoing provider after you have already paid the employee. For it to work, it needs to be well-drafted, financially backed, and practically enforceable against a party that may no longer have meaningful assets or operations. Treat the indemnity as risk-sharing, not as protection from the claim itself.
Get legal advice on your exposure before, not after, the transition
The Kondaj outcome was entirely predictable and entirely preventable. The exposure that resulted in a 10-month notice award existed before Duka took over the site it just was not assessed. A legal review of successor employer obligations before a service contract transition costs a fraction of a wrongful dismissal award and gives you the information you need to negotiate the contract, structure the offers, and manage the transition properly. Where existing staff include long-service employees, the exposure can be very significant and should be treated as a material term of the commercial deal.
Is your organization preparing to take over a service contract that includes existing on-site employees in Ontario?
Successor employer rules may make you responsible for those employees' full prior service from day one. Our team advises employers on employment litigation and service transition risk. Get advice before the transition not after a claim is filed.
Get Legal Advice Or call us: 1-800-771-7882Practical takeaways for Ontario employers
Questions about successor employer obligations or service transition risk in Ontario?
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