Unit 2 - Lesson Objectives

Question 1

What are employers’ obligations under common law?

Answer 1

Work and remuneration. The employer is required to provide work for the employee to perform and provide the negotiated wages for that work.

Notice of termination. The employer must provide appropriate notice of termination. Notice is waived in cases of just cause

A safe worksite. The employer must provide a reasonably safe workplace.

Question 2

What are employees’ obligations under common law?

Answer 2

Good faith and fidelity. The employee must act in a manner consistent with the employer’s interests, and not in any way that undermines the trust relationship between the parties (an example would be stealing from the employer)

The duty to obey. Within certain limits an employee must obey all lawful commands of the employer.

Perform work competently. The employee must, to the best of their abilities, perform their duties in a competent and diligent manner.

Resignation notice. Employees are required to provide the employer with notice of their intent to terminate the employment contract.

Question 3

Why does an asymmetry exist in the parties’ obligations?

Answer 3

Employer obligations are specific and narrow in focus—requiring them to meet a fairly rudimentary standard. In contrast, employee obligations are sweeping and ongoing, and place a burden of action throughout the employee’s engagement with work. Their obligation for fidelity even extends beyond work hours; employees cannot disparage the reputation of their employer in public.

Question 4

How does asymmetry affect the employment relationship?

Answer 4

The asymmetry serves to support and lock in the inherent power imbalance between employer and employee that arises due to the nature of labour and capital.

Question 5

What constitutes misrepresentation in the recruitment and hiring process?

Answer 5

Fraudulent misrepresentation - A common law action based in contract law in which party A knowingly makes a false statement with the intention to mislead party B, and that statement induces party B to enter into the contract. In that case, party B may be able to remind the contract and seek damages for any loss suffered.

Negligent misrepresentation - A tort in which party A, owing a duty of care, makes an untrue statement to party B without sufficient care as to the statement’s accuracy, which party B then relies upon and suffers loss as a result

Question 6

What are the necessary elements of an employment contract?

Answer 6

1. an offer
2. an acceptance
3. mutual consideration

Question 7

Why must one prove an intention to enter into an employment contract?

Answer 7

If there was no intention, then the contract could be considered void. There are 2 tests judges use to determine intent. There is an objective test and subjective test

Question 8

What is the objective test?

Answer 8

A legal test used in interpretation of contracts and statues that asks, “what would be a reasonable person of normal intelligence think if told about the circumstances”? Contrast with subjective test

Question 9

What is the subjective test?

Answer 9

A legal test used in interpretation of contracts and statues that asks, “what was this person actually thinking at the time”? In contrast with objective test

Question 10

What is the difference between expressed, ancillary, and implied contract terms?

Answer 10

Expressed contract terms - Terms of contract that the parties have explicitly agreed to, either orally or in writing

Ancillary contract terms - Terms found in secondary documents, such as human resource policy manuals or employee handbooks, that have been incorporated into an employment contract by agreement of the employer and employee

Implied contract terms - A default contract term invented by common law judges and read into an employment contract when the written terms of the contract (if any) do not address the specific issue addressed by implied term

Question 11

What are examples of restrictive covenant clauses?

Answer 11

Non-disclosure clause
Non-solicitation clause
Non-competition clause

Question 12

What methods do judges use to imply contract terms?

Answer 12

Business efficacy test

Officious bystander test

Question 13

What are the implied terms that regulate the conduct of employees?

Answer 13

• Implied obligation to obey the lawful orders of the employer
• Implied obligation to cooperate in advancing the employer commercial interests
• Implied obligation to not compete and to protect confidential information
• Implied obligation to avoid lateness and absenteeism
• Implied obligation to be honest
• Implied obligation to preform competently and safely
• Implied obligation to avoid intoxication
• Implied obligation to avoid harassment
• Implied obligation to provide reasonable notice of resignation

Question 14

What are the implied terms that regulate the conduct of employers?

Answer 14

• Implied obligation to provide reasonable notice of termination of employment contract
• Implied obligation to provide a reasonably safe work environment
• Implied obligation to treat employees with “decency, civility, respect, and dignity” and engage in “fair dealing”
• Implied obligation to permit employees to report to work
• Implied obligation to compensate employees for work performed

Question 15

What is required to modify an employment contract?

Answer 15

Mutual consideration

Employee agreement

Question 16

What are the different ways a contract can be terminated?

Answer 16

Termination by agreement of the parties
Termination by “frustration”
Termination by an employer with “reasonable notice”
Summary dismissal: termination for cause without notice

Question 17

What is “reasonable notice”?

Answer 17

The period of time that an employer must provide to an employee before the employee is actually terminated.

Question 18

What is the difference between summary dismissal and constructive dismissal?

Answer 18

Summary dismissal: Termination of an employment contract by an employer without notice to the employee in response to a serious breach of contract (i.e. stealing)

Constructive dismissal: A type of wrongful dismissal; it is caused by the employer who commits a fundamental or repudiator breach of an employment contract that the employee treats as having terminated the contract

Question 19

What are the three types of damages awarded in wrongful dismissal cases?

Answer 19

1. Compensatory damages
2. Aggravated or “moral” damages
3. Punitive damages

Question 20

What are the tests for determining whether to apply the three types of damages awarded in wrongful dismissal cases? (tests for recovery)

Compensatory

Answer 20

What losses would reasonably have been contemplated by the parties had they considered what the employee would lose if the employer terminated the contract without giving proper notice?

Question 21

What obligations do employees have when they quit a job?

Answer 21

They must give reasonable notice and make it clear that they have quit.

Question 22

Business efficacy test

Answer 22

An approach used by common law judges to justify implications of a contract term on the basis that the term is necessary in order to make the contact effective

Question 23

Officious bystander test

Answer 23

An approach used by common law judges to justify implication of a contact term based on the presumed intention of the parties. The idea is that a contract term is implied if it would be obvious to an uninterested bystander that both parties intended the termite be part of the contract

Question 24

How do the courts determine reasonable notice?

Answer 24

Courts determine reasonable notice by factors known as the “Bardal Factors”.
There are 4 Bardal factors:
1. Length of Service
2. Age of employee (person who is 21 will be able to find work more easily then someone who is 65)
3. Character of the Employment (Was the employee a manager? Employees in non-manager positions traditionally are granted less notice than managers)
4. Availability of Similar Employment (courts tend to grant shorter notices in economic booms)

Question 25

Reasonable contemplation test

Answer 25

the test of contract damage “remoteness” from the 1854 case of Hadley vs. Baxendale. It provides that damages for breach of contract are available only for harms that the parties would reasonably have contemplated at the time the contract was formed

Question 26

What are the tests for determining whether to apply the three types of damages awarded in wrongful dismissal cases? (tests for recovery)

Aggravated or “moral” damages

Answer 26

Since Wallace v. United Grain Growers Ltd. (1977) the courts assume that the parties contemplated that employees will suffer mental pain and suffering if terminated in a harsh, insensitive, or dishonest manner. Therefore damages are available when employers act this way, applying the rules in Hadley v. Baxendale (1854)

Question 27

What are the tests for determining whether to apply the three types of damages awarded in wrongful dismissal cases? (tests for recovery)

Punitive damages

Answer 27

The employer’s outrageous behaviour is an “independent actionable wrong” beyond the breach of the notice of termination clauses, and the goals of “denunciation, deterrence and retribution” are not sufficiently addressed by the other damages

Question 28

Compensatory damages

Answer 28

Damages that compensate the innocent party for the direct loss of benefits they would have earned had the contract not been violate by the guilty party

Question 29

Aggravated damages

Answer 29

Damages awarded to the innocent party that compensate for mental or psychological pain and suffering caused by the guilty party’s wrongful act

Question 30

Punitive damages

Answer 30

Damages ordered against a party who engages in outrageous or egregious behaviour deserving of special denunciation and retribution

Question 31

Wallace damages

Answer 31

Phrase commonly used in wrongful dismissal decision in Canada to describe damages ordered against an employer for acting in bad faith in the manner in which it terminated an employment contract. Wallace v. United Grain Grows Ltd. (1997) was the supreme court of Canada decision in which these damages were first ordered

Question 32

Duty to Mitigate

Answer 32

A legal obligation on the victim of a breach of contract by the other party to make reasonable efforts to limit the amount of damages suffering as a consequences of the breach

Question 33

Duty to Mitigate key obligations

Answer 33

Two key obligations:

1. to make reasonable efforts to look for a new job
2. to accept a job offer that a reasonable person in his or her position would accept (including a job offer from the employer who has just fired them)

Question 34

Fraudulent misrepresentation

Answer 34

A common law action based in contract law in which party A knowingly makes a false statement with the intention to mislead party B, and that statement induces party B to enter into the contract. In that case, party B may be able to remind the contract and seek damages for any loss suffered.

Question 35

Negligent misrepresentation

Answer 35

A tort in which party A, owing a duty of care, makes an untrue statement to party B without sufficient care as to the statement’s accuracy, which party B then relies upon and suffers loss as a result