HRMT 386 Lecture Notes - Lecture 5: Inequality Of Bargaining Power, Unconscionability, The Employer
22 May 2018
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HRMT 322 Cases
In Section II, you are provided with the names of eight key cases. You must choose five of these cases and identify
their contribution to employment law in Canada by
• identifying the primary issues addressed, and
• very briefly describing the major principles or guidelines that were established.
This section may be answered in point form, if you wish.
Pointe-Claire (City of) v. Quebec (Labour Court) [1997] 1 S.C.R. 1015 This Supreme Court of Canada case
draws attention to certain essential elements of the employer-employee relationship as defined in law. It
deals ith the uestio, Who is a eploe i a tipatite situatio?
In Pointe-Claire, the labour commissioner and, on appeal, the Labour Court, both decided that, according to
the Quebec Labour Code, the City of Pointe-Claie as the eploe eause it had otol oe that eploees
working conditions and the performance of her work. Further appeals to the Superior Court of Quebec and the
court of appeal of Quebec were dismissed. On further appeal, the Supreme Court of Canada decided that the
lower courts were justified in finding that the worker was an employee of the City.
The appellant city hired a temporary employee through a personnel agency to work for 6 weeks as a
receptionist and then for 18 weeks as a clerk. Duig the to ok assigets, the eploees ages
were determined and paid by the agency, which submitted an invoice to the city. The employee
performed her work under the direction and supervision of a manager working for the city. The general
working conditions, such as hours of work, breaks and statutory holidays, were dictated by the city.
the Labour Court used a comprehensive approach by not basing its decision solely on the criterion of
legal subordination. It certainly gave greater probative value to working conditions and the criterion of
legal subordination, but it also considered other factors that define the employer-employee
relationship, such as the role of the agency and the city with respect to remuneration and discipline, and
the speifi fats of the eploees ase. No did the Laou Cout igoe the ages ole i euitig,
training and evaluating the employee. However, it justified giving predominant weight to working
conditions and the legal subordination test by relying on the ultimate objective of the Labour Code.
The Codes oe ojetie is to failitate elatios etee a eploe ad the epesetatie of its
employees, with the aim of setting adequate terms of employment and fostering industrial peace. The
Code further seeks to achieve these ends for the benefit of the parties to the collective agreement, and
the present and future employees it contemplates. In the type of tripartite relationship at issue in this
case, all of the traditional elements of an employment relationship exist between the agency and its
employee. Such an agency typically interviews, tests, hires, trains, negotiates a work assignment with,
sets the wages for, and establishes its disciplinary measures as regards these employees. An agency and
an employee will conclude a contract whereby that employee agrees to fulfill intermittent temporary
eplaeets of pesoel of the ages liets, ude the patiula liets supeisio, i ehage
for an hourly wage and other employment benefits.
Blackmore v. Cablenet Ltd., (1994), 8 C.C.E.L. (2d) 174 (Alta QB) This 1994 case illustrates the rule of
unconscionability, a principle established by courts to ensure that a party to a contract who is in a dominant
or controlling position does not take undue advantage of his or her unequal bargaining power.
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Blackmore exemplifies how employers can and will act irrationally or inequitably, without due regard for the
consequences to themselves, their employees, and particularly, to the organization. The employee was dismissed
to save money because he was earning too much commission—presumably by being super-efficient (in one year,
he earned $115,000 in commissions on his sales). The employee was terminated with no cause and no notice. His
employer and managers put him under considerable pressure to sign a release, whereby he would agree that he
would have no cause of action against the employers on receiving severance allowance; when he received his
seeae, a palt aout of oe eual to . eeks eaigs as paid to hi as a lup-sum separation
allowance.
The employee, Mr. Blackmore, consequently suffered depression and distress. Even the psychologist brought in by
the employer conceded that the plaintiff suffered from what was described as an adjustment disorder. The
employer did not even follow its own policy, which clearly stated that the company would do its utmost to assist
an individual affected by termination to find new employment and would provide either adequate notice of
termination or provide a level of continuing financial assistance.
When sued, the employer relied on the release that the employee had signed. Blackmore claimed that the release
was signed under duress, and was unconscionable. The court first looked at the settlement, which, in legal
teiolog, as foud to e i aod ad satisfatio, eaig it et oo la stadads fo eleasig
parties from a contract. One argument raised in this case by the plaintiff was that the language of the release was
ambiguous. The court disagreed and found that the release language was clear and unambiguous. The plaintiff,
therefore, would be bound by it, unless some other principle of the applicable law negated the release. The
important relevant issue, therefore, was for the plaintiff (employee) to prove that the contract suffered from
unconscionability. This was not an easy task. For a claim of unconscionability to succeed, the plaintiff must prove
that three elements are present. First, there must be inequality of bargaining power—because of ignorance, need
or distress. The circumstances under which the release was signed must be examined to see whether evidence
shows that there was an inequality of bargaining power. Second, the plaintiff must prove that the stronger party
used pressure on the weaker party to sign the release (i.e., the stronger party made unconscionable use of its
bargaining power). Third, the settlement covered by the release must be substantially unfair to the weaker party.
Applying these principles, the court found that the release the employee was forced to sign was unconscionable.
The court, therefore, set it aside. In this case, the court examined previous English and Canadian cases on
unconscionability to arrive at the conclusion that the employee was treated with unconscionable conduct. The
court reasoned that an unequal bargaining position existed between the employer and the employee, the
employer used its position to obtain the release, and the settlement was grossly unfair to the employee. The court
therefore set aside the release agreement—payment for 7.25 weeks in lieu of notice—and substituted it with
paet fo fou oths aeage eaigs.
Blackmore did not, however, succeed in his claim for damages for mental distress. The court conceded that,
although the eploes ade a old-heated usiess deisio ad the ethod seleted as ot e
osideate, thei odut did ot ostitute etee ehaiou, o illful iflitio of etal suffeig
(Blackmore v. Cablenet Ltd., 1994, para. 57). This ruling reminds us of the debate about how effectively common
law protects the interests of employers.
Petrone v. Marmot Concrete Services Ltd. [], C.C.E.L. d Aleta Cout of Quees Beh This
1996 case illustrates how an employer—in addition to enforcing either summary dismissal for such situations
as gross incompetence or dismissal by giving contractual notice—is in a very strong position vis-à-vis an
employee.
This was an action for damages for wrongful dismissal. The plaintiff had worked in construction involving
concrete pouring since 1957. He was hired by the defendant as a supervisor under a two year contract
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after it had obtained a sidewalk reconstruction contract. Major problems arose because improper forms
had been used to construct one block. The sidewalks had to be replaced at a cost of $45,000. The
plaintiff was demoted to assistant supervisor until the job was completed. He was terminated before the
two year contract expired. He claimed he was wrongfully dismissed and sought the amount of wages
lost from termination to the date the contract would have ended. The defendant counterclaimed for
damages.
HELD: The action was allowed. The counterclaim was allowed. The plaintiff had been wrongfully
dismissed but failed to mitigate by seeking other employment. Earnings from other sources were to be
taken into account unless the contract of employment provided otherwise. Despite his demotion, the
original contract remained in place until he was terminated. He was entitled to damages on termination.
The defendant had the right to affirm the contract or to treat it as discharged. Here the defendant had
not treated the demotion as a discharge. The change had not been made with notice that the contract
was being terminated. As to the counterclaim, the plaintiff had impliedly agreed to adequately supervise
the work. It was reasonably implied that the contract had an implied term that he would use reasonable
care in supervising work carried out under his supervision. He was liable for breach of the implied
obligation to supervise.
This action is for damages for wrongful dismissal. The plaintiff is held to succeed. The defendant
succeeds on its counterclaim for breach of an implied term of contract in respect of the failure of the
plaintiff as an employee (assistant superintendent) of the defendant to adequately supervise the work
of his subordinates. They used the wrong form to construct more than one block of concrete sidewalk in
Edmonton which as a consequence had to be replaced. A counterclaim for damages for loss of profit is
dismissed.
After being hired, Petrone asked Marmot to sign a contract (Exhibit 1) which had been prepared by his
brother. That was done. The contract read as follows: As previously agreed between Mike Petrone and
Marmot Concrete Services Ltd., the conditions of employment between the two parties were as follows:
(a) Yearly salary $44,000.00. (b) Full salary regardless of inclement weather, or work stoppage due to
other circumstances. (c) Use of company pick-up truck for 12 months of the year. (d) Profit sharing after
second year. (e) Health care and dental care benefits (f) A 2 year contract renegotiable by the two
parties after the second year.
Applig M. Justie “eatos easoig to the ase at a, thee is o epess te of ideifiatio.
However, Petrone was employed as superintendent. Knowledge of the correct form to be used in the
pour of concrete was a skill which he presented to Marmot that he had, by virtue of his experience in
and ability to do the work. By virtue of that representation and the fact that Marmot obviously relied on
it when it hired him to superintend the work, it can and should reasonable imply that there was a term
implied in his employment contract that he would use reasonable care to see that the work was done
properly. That term would require him to supervise the work carried out by his subordinates, to check to
see that the right form was used by them and to correct and error when he noticed it. ¶ 54 Petrone was
employed as superintendent. It is reasonable to infer that his responsibilities continued after he was
demoted to assistant superintendent. His failure to carry out the responsibility established by that title
to supervise led to the major error. He is therefore liable in damages for breach of the implied obligation
to supervise the work of his subordinates and on the pleadings, solely responsible for the damages
incurred by Marmot. ¶ 55 Petrone may not, on the evidence at trail, be found to have had sole
responsibility. However there is no claim for contribution or indemnity advanced by Petrone on the
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Document Summary
In section ii, you are provided with the names of eight key cases. You must choose five of these cases and identify their contribution to employment law in canada by identifying the primary issues addressed, and very briefly describing the major principles or guidelines that were established. This section may be answered in point form, if you wish. Pointe-claire (city of) v. quebec (labour court) [1997] 1 s. c. r. 1015 this supreme court of canada case draws attention to certain essential elements of the employer-employee relationship as defined in law. It deals (cid:449)ith the (cid:395)uestio(cid:374), (cid:862)who is a(cid:374) e(cid:373)plo(cid:455)e(cid:396) i(cid:374) a t(cid:396)ipa(cid:396)tite situatio(cid:374)? (cid:863) Further appeals to the superior court of quebec and the court of appeal of quebec were dismissed. On further appeal, the supreme court of canada decided that the lower courts were justified in finding that the worker was an employee of the city.
