Study 3 - Employment Practices Liability and Kidnap, Ransom, and Extortion Flashcards
Jurisprudence
The culmination of employment law sources. Includes:
- Legislation (acts, regulations, codes and charters)
- Common Law
- Contract Law
Employment standards set out by Provincial legislation
- Hours of work
- Vacation and public holiday entitlements
- Rights to pregnancy and parental leave
4 Areas of Law where courts have enabled greater employment security, resulting in more wrongful dismissal lawsuits
- Breach of Contract
- Constructive Dismissal
- Violation of Public Policy
- Breach of Good Faith
Breach
Failure to meet the conditions or warranties contained in a specific policy of insurance
Breach of Contract
If an employer terminates an employment contract before its expiry date, the employee can claim breach of contract
Constructive Dismissal
When the employer unilaterally changes the terms of the contract to the detriment of the employee with the intention of causing the employee to voluntarily leave. This may include;
- A reduction of salary or position
- Forced relocation of premises
Violation of Public Policy
An employer cannot compel an employee to break the law. An employee who refuses to abide such an unlawful directive is protected by law. For example, an employer cannot request that an employee:
- Commit perjury
- Fire another employee who is required to sit on a jury
- Fire another employee because of race, colour, gender, or sexual orientation
Breach of Good Faith
An employer cannot deprive an employee of a financial benefit already earned. For example, if the employee is owed a bonus or is entitled to the benefits of a pension plan, the employer is liable for it
Factors that influence the amount of notice
- Position or level of responsibility within the company
- Age of the employee
- Length of service
- Whether the employee was enticed from a secure position
- The ability of the employee to obtain similar employment elsewhere
Termination for cause
Situations where the employer is not obligated to give notice. Can be based on:
- Gross misconduct
- Insubordination
- Fraud
- Dishonesty
- Behavior that is inappropriate to the business’s goals and objectives
Employment Practices Liability Insurance (EPL)
Insurance that provides protection for an employer against claims made by employees, former employees, or potential employees.
Covers:
- Discrimination (age, sex, race, disability, etc.)
- Wrongful termination of employment
- Sexual harassment
- Other employment-related allegations
Covers the firm, including its directors and officers
Characteristics of EPL Policies
Typically written
- on a claims-made basis;
- defining the insured to include directors, officers, and employees;
- to pay on behalf of the insured rather than indemnify the insured;
- with a duty to defend;
- with a broad definition of wrongful employment conduct; and
- with an optional discovery period
Exclusions one would expect on an EPL policy
- Any dishonest, fraudulent, or criminal act
- gaining of any personal profit
- amounts owing due to a government pension act, severance package, stock option, vacation pay, or owed travel and expense accounts
- fines, penalties, or taxes; and
- exposure that are uninsurable by law
Underwriting and Rating Considerations regarding Kidnap, Ransom, and Extortion
- The name and number of foreign operations and overseas branches
- A schedule of directors and officers and other staff members at risk
- Information and financial status of other family members at risk
- Estimated travel from Canada to other countries
- Details about loss prevention activities
- Any special security precautions
- Any previous attempts, threats, or incidents
- Company financial information
- A description of the insured’s operations
- Limits of insurance required
- Aggregate reinstatement feature
- Need for additional protection available, such as accidental death or disability coverage
