Chapter 12: Employment Law
- What is employment?
- One person doing work for another
- Independent contractors: a person working for themselves who contracts
to provide specific services to another
- employee : a person who has agreed to perform specified services for
another, the employer, in exchange for payment
- Agency: one person acts as go-between in relationships between others
- Control test
- Determines employment relationships based on degree of control
- Employee → told is what and to do it, paid by salary or wage
- Contractor → freedom to do whatever , paid by the job
- Other factors: Industries Cabada 671122 Ontario Ltd v Inc., Sagaz [2001] 2
S.C.R. 983
- Central question: whether the person is performing the services as a person in
business on his own account.
- Organization test: a test used to establish whether a worker is an employee or
independent contract; examines whether the worker is providing services integral to the
organization's business
- Courts have supplemented the control test with organization test
- If worker is integral to business → employee
- Person cannot be an independent contractor and employee at the same time.
Agents?
- Ex. Uber → ruling determined drivers are employees, not contractors
- Agents can be both
- Independent contractor: regular contract rules apply
- Important to determine status
- Tax purposes → may double pay the CRA
- Use these test to determine vicarious liability and employee rights
- Law of “Master” and “Servant” (extremely archaic language rooted in very old case law
but unfortunately, technically still exists)
- Employment law: combination of general contract law and additional statues
- Responsibility of employer:
- Payment of wages
- Bonus arrangement, benefit packages, and promises to repay any
reasonable expenses incurred
- Provide safe workplace & good working conditions
- Minimize danger
- Hire competent people
- Ex. inexperienced crane operator hurts coworkers → employer held
liable
- Responsibilities of employee
- Follow reasonable orders
- Honest, loyal, courteous
- Punctual, treat property carefully
- Act in employer’s best interest
- Fiduciary duty (*sometimes)
- Imposed on senior-level employees
- Duty may continue after employment ends
- Restrictive covenants (*sometimes)
- Termination
- Contract term expires
- Employee or employer can terminate
- Note: some restrictions on employers based on human rights and Charter
of Rights and Freedoms
- Prohibit termination based on discrimination (gender, physical or
mental disability, religion, colour, or other protected ground)
- Mutually agree
- Employee terminates → gives reasonable notice → same with employers
- For contracts that are an indefinite period of time
- Reasonable Notice
- Notice periods are based on length of service; the type of job; the
employee’s age, experience, training, and qualifications; and the
availability of similar employment
- Seasonal employees are entitled to reasonable notice depending on the
following qualifications → the length of the seasonal employment
relationship, the pattern of recall or return to work, and the nature of the
industry in question
- Short-term/probationary employees entitled to extended notice
periods if employee has not been informed of evaluation of
performance
- More job security → longer notice period
- Compensation (pay in lieu of notice) → an amount paid to dismissed employee
in place of notice to terminate
- Just cause
- Just Cause: proportionality
- A valid reason to dismiss an employee without notice
- Breach of contract → can be used as arguments against wrongful dismissal
- Wrongful dismissal: termination of employment without reasonable cause
and without notice or pay in lieu of notice
- Dishonesty and Misconduct
- Does behavior violate and essential condition of the contract
- May not constitute depending on mitigating factors → proportionality
- Must ensure accusations are accurate and evidence firm
- Disobedience and Insubordination
- Failure to perform a reasonable order or insubordination
- Incompetence
- Employers must let employees know level of performance is
unacceptable
- Bad Faith - Honda v. Keays
- Disability (Frustration)
- Accommodation & undue hardship
- Termination is justified if employee cannot work
- Legal duty to accommodate employee’s individual needs
- Does not apply if undue hardship
- Disobedience and Incompetence
- Layoffs
- Employee can treat it as termination and demand compensation
- If no reasonable notice → can sue for wrongful dismissal
- Wrongful leaving
- Employees also required to give reasonable notice of intent to leave
- Not worth to sue employee unless they are in key position
- Usually for breach of fiduciary duty or for disclosing confidential
info
- Ordinary employees can compete with former employer but must
start as soon as they leave
- Constructive dismissal
- 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
- Can sue for wrongful dismissal
- Cannot impose changes on contract without getting consent or
agreement
- Employee has obligation to mitigate or accept the new position
- Not obligated if its undue humiliation or impossible working
situation
- Reasonable steps to mitigate damage
- Remedies for wrongful dismissal
- Wrongful dismissal → termination that was improperly done
- General damages awarded based on what the employee would have
received had proper notice given
- Job usually not given back
- Individual manager can be sued for defamation, taken into court for
employee’s damaged reputation or mental distress, and court can award
punitive damages
- Employers should avoid lying to justify dismissal
- Liability of Employer
- Employer can be held liable for torts committed by employee during any
employment activity
- Only happens when there is an employment relationship
- Several jurisdictions have legislated vicarious liability in special situations
- Ex. owner of motor vehicle is vicariously liable for any torts
committed by person driving
- Employer escapes liability if employee hurts plaintiff while “on a frolic of
their own”
- On a frolic of their own → outside of job description
- Employer can turn to employee for compensation → usually doesn’t work
- Work Computer Misuse and the monitoring of employees
- Employers responsible for data transmissions or damages to company
data
- Mitigate by establishing comprehensive communication policies
that are part of employment contracts
- Cybersecurity measures
- Ease of communication by email or text can lead to casualness and careless →
digital trail is created (employee actions can put employer at risk)
- Can discipline employees who misuse
- Privacy concerns from monitoring emails
- PIPEDA restrictions before monitoring → must act in accordance
- Criminal Code prohibition relating to interception of private
communications → must be explicitly clear whether telephone convos
are recorded and must be consented
- Legislation & minimums
- Provincial minimum: Employment Standards Act/Labour Standards Act
- Set minimum wage, overtime, work hours, rest periods, vacation,
maternity and parental leave, termination and severance pay
- Sometimes bereavement and sick leave
- Employment Standards
- Notice periods can be less than common law standard → has to be greater than
minimum statutory requirement
- Less than requirement → void and comply with longer “reasonable
notice” provisions
- Statutory provisions set minimum standard → agreements that waive the
protections or remedies available will be declared void
- Higher standards set either by companies or by law → higher standard
prevails
- Gov can exempt or modify certain provisions depending on
employment
- Termination:
- If dismissal is for cause → no notice is required
- Notice for termination is usually necessary
- Determined by length of employment → not nature of job
- 3 or more months → two weeks termination
- More than 12 months → severance pay of two day’s wages per
completed year of service + 5 day wages
- Federally: Canada Labour Code
- Jobs that fall under federal jurisdiction
- Ossie estoppel - ESA vs. common law
- 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
- Complaints
- Employees can file complaints → investigation and determination will be made
by civil servants
- Employee can avoid costs of litigation
- If earnings are due to employee → payments must be made and
individual directors may be liable personally for up to six months; wages
per employee
- Human rights
- No discrimination and basic rights are protected
- basis of race, national or ethnic origin, colour, religion, gender,
sexual orientation, and in some cases age, marital status, family
status, gender identity and gender expression, physical or mental
disability, and pardoned criminal convictions
- Human rights tribunals established to hear complaints
- Power to investigate, levy fines, and order reinstatement of
employees
- Charter & human rights legislations
- Ex. cannot ask women is with child
- Harassment -> discrimination?
- Harassment, especially sexual, is not good
- Duty to accommodate → if discrimination happens or special needs or religions
- Constructive Discrimination and “BFOR”
- BFOR → bonafide occupational requirement (standard or rule required
for the performance of the job)
- Ex. tax drivers need driver license and good eyesight
- Pay equity: a principle (or statue) requiring equal pay for work of equal
value
- Does not happen if there is financial crisis
- Employment equity: the correction of employment situations where there
has been a tradition of racial, gender, or other imbalance
- Reverse discrimination: prejudice or bias exercised against a person or
class to correct a pattern of discrimination against another person or class
- Corrected through affirmative action
- Preferential treatment of indigenous employees by indigenous
employers
- Mandatory retirement: forced retirement from employment, generally at
65 years
- Laws has been set aside
- Worker’s Compensation
- Some workplaces are covered by Workers Compensation. In Ontario –
Workplace Safety Insurance Board (WSIB)
- Statues establish compulsory insurance programs to provide
coverage for workplace injuries
- Not all workplaces
- In workplaces covered by WSIB, you cannot sue employer if injured
- If employees die on job, payments go to dependants
- Health and Safety
- In Ontario, Occupational Health and Safety Act
- Everyone shares obligation to maintain workplace safety
- Main thrust of occupational health and safety legislation
- provide safer working conditions by requiring fencing of hazardous
areas, safety netting, proper shielding of equipment,
environmental control, and so on
- ensure safe employment practices, such as requiring the supply
and use of hard hats, goggles, and protective clothing
- establish programs to educate both the employer and the
employee on how to create a safer working environment for all
concerned
- Workers rights
- (1) the right to refuse work they believe is dangerous to
themselves or another worker;
- (2) the right to know about potential hazards to which they may be
exposed;
- (3) the right to participate in the health and safety process, mostly
through joint health and safety committees.
- Rights are facilitated by the establishment of board
- Officers can come in anytime without warrant
- When encountering dangerous condition, poor safety practices or
environmental contamination, problem must be corrected or shut
the job site down
- Employment Insurance
- Applies only to those who lost job through no fault of their own
- payments are insurance premiums, and an employee is entitled to
receive only what is set out in the statute and regulations
- Unable to work due to illness, disability, pregnancy, or adoption
- Other legislation
- Pension benefits
- Licensing
- Apprenticeship and trade schools
- Dealing with special categories of employees → teachers and public servants
- Collective Bargaining - Legislation
- Wartime labour relations regulations - 1935 (national labour relations act/wagner
act)
- Promote labour peace and provide stability
- Employee’s right to be a member of union
- In good faith: a characteristic of bargaining that marks every reasonable
effort to reach an agreement
- Canada Labour Code (Federally) and Labour Relations Act (Ontario)
- Recognition disputes: a dispute arising between a union and employer
while the union is being organized
- Include provision that reduce conflict in interest and rights
disputes
- Interest disputes: disagreement between the union and employer about
what terms to include in their collective agreement
- Rights dispute: disagreement over the meaning or interpretation of a
provision included in a collective agreement that is in force
- Jurisdictional dispute: dispute between two unions over which one should
represent a particular group of employees or over which union members
ought to do a particular job
- Labour relations boards
- Supreme Court of Canada: constitutional right to bargain collectively - 2007
- Health Services & Support Facilities Subsector Bargaining Assn v. BC
[2007] 2 S.C.R. 391
- Organization of Employees
- Certification
- Must apply to appropriate labor relations and satisfy the board
- Certification approved → 50% of workforce joined union
- Nowadays its is majority will automatically become a union, 35-
50% a representation vote will be held (over 35% must participate
in that vote and a majority must support)
- Bargaining agent: a body certified to act on behalf of a group of employees or
employers
- Bargaining unit: a group of employees who have been certified
- Collective bargaining: a procedure for settling terms and conditions of
employment by negotiation between an employer and its employees as
expressed through representatives chosen by tem
- Contract is binding on all employees
- Cannot discriminate
- Unfair labour practices
- Cannot threaten dismissal for joining a trade union
- Prohibited unfair labour practices include threats or coercion of
employees by either the union or management
- an employer cannot participate in or interfere with the formation or
administration of a labour union
- Cannot also contribute financially or provide support
- Employer must recognize the bargaining agent
- Employer’s organization: bargaining agents representing groups of
employers
- Bargaining
- Collective agreements
- Union has exclusive authority to bargain on behalf of the employees
- Both sides must bargain in good faith
- Ratifications → vote to ratify collective agreement
- If both sides ratify → binding collective agreement
- Mediation vs arbitration
- Mediation → person to assist both parties in their negotiations in hopes of
communications being facilitated instead of drastic forms of action
- 1. Single officer
- 2. Conciliation board consisting of three mediators
- 3. If none works, then strike
- Arbitrator → authorized to make a decision that is binding on the parties
- Terms of Collective Agreement
- Must satisfy requirements
- Term for at least one year
- If no time limit → default one year
- If industrial relations board imposed → two years
- Retroactivity (negotiated by parties) → takes effect from old date
- Arbitration
- Grievance process: a procedure for settling disputes arising under a
collective agreement
- Settlement → if not reached, submitted to arbitrator → decision is
binding
- Substitute to court action
- Other terms
- Trade unions are democratic organizations established by vote
- Union shop clause (a workplace where new employees must join the
union), closed shop (a workplace where only workers who are already
members of the union can be hired), Rand Formula (agency shop),check
off provision, maintenance of membership
- Subject to human rights legislation → fair treatment, no discrimination
- Strikes and Lockouts
- Work stoppages: strikes and lockouts
- Limited to after agreement expired
- Lockout: an action in which the employer prevents employees from
working
- Strike: withdrawal of services by employees
- Regulated → stoppages only happen if other actions fail (mediation, bargaining
of good faith, etc) and term is expired
- Work to rule: job action in which employees perform no more than what is
minimally required so as to pressure an employer
- Picketing: job action during a legal strike when employees circulate at the periphery of
the job site to persuade others not to do business with the struck employer; peaceful and
communicate info
- Secondary picketing: picketing by striking employees not just of their own
workplace but also of other locations where the employer carries on business
- Ex. shopping mall
- Vs. Leafleting
- Public Sector and Essential Services
- Strikes by public sector and essential services considered inappropriate
- Resolving → collective bargaining and compulsory arbitration
