Chapter 12: Employment Law Flashcards
Independent contractors definition
a person working for himself who contracts to provide specific services to another
Example: Doctor, lawyer, consultant, plumber
Employee definition
a person who has agreed to perform specified services for another, the employer, in exchange for payment
said to be in a master–servant relationship, acting under the direction of the master.
Agency definition
one person acts as a go-between in relationships between others
The Control Test
The traditional method of determining whether an employment relationship exists is to assess the degree of control exercised by the person paying for the service.
A person who is told not only what to do
but also how to do it is classed as an employee.
But if the person doing the work is free to decide how the job should be done, the position is more likely that of an independent contractor
Control Test definition
a test of whether an employment relationship exists based on whether the person being paid for work is told how, when, and where to do it
Organization Test
a test used to establish whether a worker is an employee or independent contractor; examines whether the worker is providing services integral to
the organization’s business
Agents definition
a person authorized to represent or act on behalf of a principal in dealings with third parties
Example: A sales clerk in a store is both an employee and an agent; a realtor selling housing is likely an independent contractor but also functions as an agent for her client
The Law of Employment
LO 12.2 Detail common law obligations of employers and employees
The Law of Employment
LO 12.2 Detail common law obligations of employers and employees
The main responsibility of the employer, in addition to payment of wages, is to provide
Main obligations of the employer
1) a safe workplace
2) and good working conditions for the employee.
Employment Contract
- includes a commitment by the employer to pay a specific wage or salary
- also set out bonus arrangements, benefit packages, and promises to repay any reasonable expenses incurred
-
Fiduciary obligation / fiduciary duty
With some types of jobs, there may also be an obligation to generally act
in the best interests of the employer
But for those senior-level employees who have a fiduciary duty, this duty may continue after the employment ends
Ordinary employees do not have a fiduciary duty and, unless there is a valid restrictive covenant in their employment contract preventing them from doing so, they are free to compete with their former employer as soon as they leave
The employee also has:
- Duty to act in good faith
- A duty to make full disclosure
- A duty to take corporate opportunities for one’s own benefit
Are employment contracts verbal or written?
are often verbal and not formal or written documents
- must contain all 5 contractual elements
- Should be signed at the time of commencement of employment
Restrictive covenants
Non-compete clause
in property law, a condition imposed by the seller as to what the purchaser can use the land for; in employment law, a commitment not to work in a certain geographical area for a designated period of time
- Must be reasonable
- Very difficult to enforce
- Survives after termination of the employment relationship
- Non-solicitation clause may be more reasonable in some cases (restricts former employee to solicit clients from former employer)
Termination
An employment contract may provide for its own discharge (as when the contract is for a fixed term, say one year, and that term expires), or the
parties can mutually agree to bring it to an end.
Can also be terminated for:
1) Performance - the contract stipulates an end date (i.e. one year)
2) Agreement - Parties can mutually agree to terminate
3) Reasonable notice
4) Breach
5) Frustration
In general, such contracts of
employment can be terminated
(1) by either party giving reasonable
notice,
(2) by the employer giving the compensation that should have been earned in that notice period (pay in lieu of notice), or
(3) immediately with just cause.
Pay in lieu of notice
an amount paid to a dismissed employee in place of notice to terminate
Reasonable notice definition
length of notice to be given to an employee to terminate an employment contract of indefinite term; determined with reference to length of service and the nature of the employee’s position, among other factors
Or in the employers case can pay severance
-If no severance wants to be paid then they can say “in x weeks your job comes to an end)
Charter of Rights and Freedoms prohibit termination when:
it amounts to discrimination on the basis of
physical or mental disability, gender, religion, colour, or other protected ground.
Notice periods
The courts impose notice periods on the basis of such factors as length of service; the type of job; the employee’s age, experience, training, and qualifications; and the availability of similar employment
Just Cause definition
a valid reason to dismiss an employee without notice
In the context of an employment contract, just cause must therefore constitute a serious or fundamental breach of the employee’s contractual obligations
An employee can be dismissed for cause for conduct such as serious absenteeism, open disobedience, misuse of the employer’s property including its computers, habitual negligence, incompetence, harassing other employees, drinking on the job, or immoral conduct on or off the job that reflects badly on the employer
Wrongful Dismissal
termination of employment without reasonable cause and without notice or pay in lieu of notice
Dishonesty and Misconduct
For dishonesty or misconduct to justify dismissal, courts consider whether the behaviour violates an essential condition of the contract
Does it breach the bond of trust that is necessary in light of the position the employee holds?
Dishonesty or misconduct may not constitute just cause for dismissal if mitigating factors are present (example: stealing money to feed a gambling addiction)
Great care must be taken when dismissing employees for dishonesty or criminal behaviour such as theft to ensure that the accusations are accurate and the evidence firm
Disobedience and Insubordination
Although an employee is entitled to refuse to work because of dangerous working conditions, failure to perform a reasonable order is also grounds
for dismissal without notice
Insubordination is likewise grounds for dismissal, as obedience and a willingness to work collectively
is implied in employment relationships
The courts and arbitrators prefer
to see employers use progressive discipline opposed to termination right away
Incompetence
is also just cause for dismissal; however, employers are
well advised to let employees know when the level of performance is unacceptable as soon as it becomes apparent and to provide an opportunity for improvement
This argument will be especially difficult to overcome if
bonuses or wage increases were given to the employee in the past despite the poor performance
Illness and Disability
In the past, employees who became seriously ill, even though not “at fault,” could be discharged without notice if they could no longer perform their job.
However, there is a legislated duty to accommodate disabled workers who are still able to work.
The employer must take great care to accommodate
such disabled workers and to otherwise comply with the provisions of both the applicable human rights legislation and the workers’ compensation legislation, which are designed to protect disabled or injured workers.
Undue hardship
which is hardship that is substantial in nature.
Layoffs
When an employer simply runs out of work for the employee to do or runs into financial difficulties, that is not just cause for termination; reasonable notice is still required.
In the absence of reasonable notice, pay in lieu, and just cause, the employee can sue the employer for wrongful dismissal
Constructive Dismissal definition
unilaterally demoting or changing the duties of an employee, contrary to what was agreed to in the employment contract; conduct that essentially
terminates a pre-existing contractual relationship, which could be treated as dismissal
From a contractual perspective, one party cannot simply impose a change in the terms of a contract without first securing the consent or agreement of the other party
Remedies for Wrongful Dismissal
It is normally the employer, often a corporation, that is sued for wrongful dismissal, but the individual manager implementing the decision may also be sued when defamation or some other actionable wrong has taken place
From lecture:
- Damages - what would the employee have received if proper notice
- Duty to mitigate
- Reinstatement is possible (but very rare)
Wrongful Leaving
Employees are also required to give reasonable notice of their intent to leave, and if the amount is specified in the contract, that is what the courts will enforce
When there is a serious breach of the employment contract by the employer, however, an employee is entitled to leave without notice
Liability of Employer
Although not directly at fault, an employer can be held liable for torts committed by an employee during the course of employment.
-This is vicarious liability
This includes not only incidents arising during working
hours, but also any conduct that takes place as part of the employment activity
Personal Information Protection and Electronic Documents Act (PIPEDA)
This Act applies to all private sector organizations that
collect, use, or disclose personal information in the course of carrying out a commercial activity
Legislation Impacting Employment
LO 12.3 Outline the purpose of various statutes impacting employment
Legislation Impacting Employment
LO 12.3 Outline the purpose of various statutes impacting employment
Employment Standards Act
or
Labour Standards Act
Sets minimum standards in connection with:
- wages,
- overtime, work hours, and rest periods,
- vacation and holiday entitlements,
- maternity and parental leave, and
- termination and severance pay.
Employment contract cannot impose standards less than this legislation
Many workplaces fall under federal jurisdiction
Examples: banks, the military, Indigenous reserves, the post office, telephone and broadcast
companies, airlines, railways, and steamships
The employment relationship in those sectors is governed by the federal Canada Labour Code
Employment Standards
Notice periods less than the common law standard can be set out in employment contracts, and as long as they are greater than the minimum statutory requirement they will prevail
If a notice period is shorter than the statutory minimum, it will be void and the employer will then have to comply with the longer “reasonable notice” provisions found in common law
Termination (under the Canada Labour Code)
Recognizes that no notice is required when the dismissal is for cause; otherwise, notice of
termination is necessary
Where the Code and common law differ is in
the remedies available for wrongful dismissal
Employees who have completed three
months or more of continuous employment are to receive two weeks’ notice of termination (except when the dismissal is for cause)
Additionally, employees who have been employed for more than 12 months are entitled to severance pay of two days’ wages for each completed year of service, plus five days’ wages
Issue Estoppel
a principle preventing an issue from being litigated again on grounds that it has already been determined in an earlier trial or hearing
