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MCS 3040 Lecture Notes - Independent Contractor, Unemployment Benefits, Wrongful Dismissal

Marketing and Consumer Studies
Course Code
MCS 3040
Joseph Radocchia

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Chapter 26
The Employment Relationship
Employment Law
Employment law in all Canadian jurisdictions (except Quebec) is rooted in the traditions of te English
common law with an overlay of legislation
Both federal & provincial governments have jurisdiction to pass employment legislation
Federal government can make laws that affect employees of the federal government and federally
regulated industries, such as banking, airlines, broadcasting, railway ad shipping industries
About 10% of all employees are subject to federal regulation
Provincial government can make laws that effect all other employees including provincial employees
Both levels of government have made human rights legislation and an array of employee welfare
legislation such as employment standards, occupational health & safety standard & workers
There is also specific regulation which affects only employees in specific jobs
Such as police, teachers, medical personnel, civil servants etc.
Employees may also be unionized in which case labour relations legislation is applicable to the
employment relationship
The Employment Relationship
Employment Relationship: A contractual relationship where an employer provides money to an employee
in exchange for work/service
Independent Contractors: A person who is working in a relationship that doesn't meet criteria of
employment (Eg. doctors, lawyers etc.)
Employee vs. independent contractor:
The difference might be that independent contractors are short term/temporary while employees are
Courts distinguish with tests such as…
o The degree of control exercised over the individual by the employer
o The ownership of tools, chance of profit, and the risks of loss from performance of the requested
o The degree of integration (the type of work performed is considered n relation to business itself)
Implications of an Employment Relationship
Employees have certain statutory rights & benefits such as paid holidays & paid overtime that aren’t
conferred on independent contractors
Employees have certain obligations with respect to employees such as income tax, employment
insurance, pension plan, paid vacations etc. that independent Contractors don't have
Establishing the employment relationship is important to certain legal principles
Employee can initiate an action for wrongful dismissal but contractor cant
An employer is responsible for the tort of an employee committed in the ordinary course of
employment whereas an employer isn’t for the torts of an independent contractor
An independent contractor may be an agent for the employer in which case employer can be
vicariously liable for the acts of the agent under traditional agency principles
Risks in Hiring
The hiring of workers is critical to business and from a legal perspective, hiring well can reduce the
risks associated with the employment relationship
Vicarious Liability
An employer is responsible for the torts of an employee that are committed in the ordinary course or
scope of employment
The employer will be vicariously liable if there is a significant connection between the wrongful acts
of the employee and the creation or enhancement of the risk of the wrongful act by the employer
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