Abrupt Sushi Shop Closures Raise Employment Rights Issues

When several downtown Toronto Sushi Shop locations suddenly shut down in March, without any warning to staff or franchisees, employees were left in the dark, wondering about their employment rights. At Union Station, workers arrived to find the doors locked and their jobs gone. Within days, the store reopened under new management, reportedly with a completely new team.

The closures, allegedly orchestrated by corporate owner MTY Food Group, affected multiple locations, including Brookfield Place, Southcore Financial Centre, and Women’s College Hospital. In each case, former franchisees and staff claim they were given no prior notice.

But as troubling as the sudden closures were, the legal implications are just as significant.

As Bram Lecker, a seasoned lawyer on employment rights, explained to the Toronto Star, employees terminated without cause in Ontario are entitled to compensation under the Employment Standards Act (ESA). This includes termination pay, up to eight weeks depending on length of service, and, in some cases, severance pay of up to 26 weeks. These are minimum standards. In many cases, especially for long-serving employees, additional entitlements may apply under common law.

Bram also highlighted a common concern in franchise transitions: employers may attempt to terminate staff, only to rehire them under new contracts that limit their entitlements. These contracts may reset employment tenure, reduce severance, and strip away prior legal protections. Employees should never feel pressured to sign a new agreement without seeking legal advice first.

If proper notice or severance was not provided, former employees may also have grounds for a wrongful dismissal claim. And as long as the employer remains solvent, compensation is still legally owed, even when a business closes or changes hands.

The Sushi Shop case serves as a clear reminder: employers must follow the law when terminating staff, regardless of the circumstances surrounding a closure. Sudden shutdowns do not cancel employee rights.

If you’ve recently lost your job due to a closure or franchise changeover, we can help you understand your entitlements.

Book a no-charge initial assessment: https://leckerslaw.com/contact-us