question archive Mike Smith has owned and operated a restaurant for the last 10 years
Mike Smith has owned and operated a restaurant for the last 10 years
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Mike Smith has owned and operated a restaurant for the last 10 years. After the outbreak of Covid 19, he is no longer able to open his dining room to serve food to his customers for an indeterminate amount of time. Customers of his restaurant have always been able to order takeout food over the phone or online. To date, Mike has never bothered to incorporate his restaurant (named “Super Delicious Dinner”). Mike has decided he is no longer able to keep some of his employees due to the forced shutdown. 1) Mike has decided to terminate his manager who has been working at the restaurant for 10 years. 2) Mike has also decided to terminate his chef because he has caught him stealing from the cash register. 3) Finally, Mike’s dishwasher, Steve, has quit because Mike reduced the number of shifts per week from 6 days per week to 2 days per week. Steve has informed Mike that he will sue him for wrongful dismissal, but Mike feels that because Steve quit, he is not entitled to any money. Discuss what Mike’s obligations are with respect to these employees. Mike is not sure what to do. His rent is $3,000 a month and has 4 years remaining on his lease with his landlord. He is thinking about closing his restaurant for good, but is also contemplating carrying on with his takeout business hoping the pandemic will end soon and he can go back to running his restaurant in a normal way with his dining room full of customers. He is also aware that once Toronto adopts “The Red Zone”, he will be able to partially open his dining room. Mike has also noticed that last month another restaurant just opened down the street with the name “Delicious Dinner” and Mike feels that the restaurant is stealing his customers using a similar name. Discuss the legal issues of both staying open and closing the restaurant permanently. Discuss Mike’s personal liability with respect to both openings and closing the restaurant. Also, address any legal issues regarding the restaurant located down the street with a similar name. Try to include employment law, tort law, forms of business law, and Intellectual property in your assignment.
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ANSWER
Mike's obligations
With regard to terminating the various employees due to the restaurant's inability to keep them during the pandemic, Mike must find justification for redundancy as well as apply procedural fairness in terminating those employees.
Mike must prove that the employees are long their jobs because of redundancy that is caused by the inability of the pandemic to generate sufficient revenues to keep the business moving. Such redundancy is caused by the operational requirements of the restaurant especially now that the pandemic guidelines prevent restaurants to open dining areas.
In order to survive these market conditions, Mike would be forced to lay off the said employees. When it comes to procedural fairness, Mike should not dismiss those employees in a manner that is not procedural but in accordance with the law on account of redundancy.
Legal issues of both staying open and closing the restaurant permanently.
With regard to staying open, Mike will face several legal issues. First, he will be required to continue paying the rent of the building as per the lease agreement. He will also continue facing the risk of operating an unregistered business.
Closing the restaurant will cause him to face other legal issues. First, he will be forced to offset the remaining balance due to the fact that the lease is valid for the next four years. Secondly, he will be required to prove that the landlord violated the lease agreement for him to leave the premises without any consequences.
Mike's personal liability with respect to both opening and closing the restaurant.
Since Mike has never bothered to incorporate his restaurant named "Super Delicious Dinner", he faces will not have any right to that brand name if another restaurant is opened in the same area under the same name. He will also face legal liability for operating an unregistered business.
