Management and Organizational Studies 2275A/B Lecture Notes - Lecture 2: Vicarious Liability, Independent Contractor, Fiduciary
14 Jun 2018
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EMPLOYMENT:
• Every employment relationship is contractual whether the contract is in writing or not.
• Managing people is the most difficult thing/job for managers.
➢ because people are irrational and emotional, unpredictable and inconsistent.
➢ Behaviours vary a lot on daily basis.
➢ Single most Reliable indicator of business success is people.
➢ If people do’t uit so less turnover. Cost of recruitment is low.
➢ Average knowledge level per employee is high. Good customer-supplier relation. Good
products and services. Profitability.
Treat people with respect and dignity, wont get sued, fair treatment, wont have to go in front of humans
rights commission**
Law of master and servant (its was once called this):
freedom of contract outs did’t itefee ith your contracts because they joined it and worked for
us freely, this was the reason for a long time, outs did’t do aythig aout ufai teatet eause
you signed the employment contract yourself).
These factors influenced labour laws: (workers more protected now)
• Development of middle class: o disetioay ioe efoe i people’s hads, ut the afte
industrial revolution and middle class birth, people had more money and a social conscience
• Equality of women in politics: they ee’t i politis iitially, ut the they eae ioled,
they championed oke’s rights, lead to law development for workers and vulnerable ones in
workplace
• Labour unions: profound impact on labour landscape, they bargained on behalf of its workers,
collectively they had bargaining power unlike an individual.
Distinguish between EMPLOYMENT and INDEPENDENT CONTRACT.
• Same factor in independent contractor and employment: people working for money.
Still have freedom of contract here but it has been greatly modified by legislation and law, e.g.
any working conditions can be offered but not to be dangerous ones no matter what
1. Vicarious liability: From tort law, employer is vicariously responsible, firms can outsource to prevent
such responsibilities, so that independent contractors are responsible
2. Employment legislation: Health and safety act, minimum wage, leaves, vacation
3. Income tax deductions: When you get paid, you get net amount, employer deducts certain amount
and remits it to govt
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1. Control test:
• Who exercises control over the workplace people, if they are under my control then I am
employer, or are they working under their own control?
2. Organization test
• The more integral they are, the more part of my organization they are, they are most likely to be
employee, otherwise they are independent contractor
3. All other factors
e.g. I tell person how to do the work, I exercise control so she is employee but to a plumber I just tell
what to do, they decide all that themselves, they control so independent contractor
e.g. name at her door of my firm, is integrally involved, member of my firm, unlike the plumber with no
such thing
e.g. employees will be provided everything by the firm, with written agreement unlike plumber, who
buys her tools herself
• some firms want independent contractors and not employees, but they all seem to be affiliated
with the firm, okig ude supeisos, ae’t alloed to ok ude thei o hous, they
are still employees, here agreement is an exception, its just one minor factor which is not too
important, improper characterization of people, can get sued for vicariously liability, CRA can
charge for various deductions and penalties
Obligations of employers:
• pay salary or wages
• poide safe working conditions
• honor employment contract
Obligations of employees:
• ok competently, honestly
• e punctual
• e loyal
• fiduciary duty (maybe): If they are an agent, if they are very very senior employees only then fiduciary
duty applies
Termination of employment without cause:
• ust e i good faith: a’t e ufai, disiiatoy
• provide ESA notice, severance: providing notice is statutory requirement
• poide easoale otie: common law notice
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Can be with/without cause (with/without a reason e.g. found someone who's better or reorganizing) *
Employers can terminate whenever they want but there are restrictions on how they can do it*
ESA notice: 1 week/year, max 8 weeks
ESA severance: 1 week/year, no max (if annual payroll ≥ $2.5 illio)
➢ Statutory notice
➢ Someone who is employed for 4 years they are entitled for 4 weeks of notice up to a maximum
of 8
➢ Hee is a heue fo 8 eeks, that’s 8 eeks otie, pay i lieu of notice). Must be paid until
and unless there is a cause for firing
Severance: only if employer has 2.5 m or more spent on payroll + employee is employed for more than
5 years. Severance must be paid in a lump sum unless agreed otherwise.
• ESA notice can be lump sum, notice of termination, or combination of both
• ESA severance must be lump sum payment on termination
Reasoale otie is ased o:
• age
• seioity
• skills, taiig, eduatio
• aility to fid alteatie eployet
**Courts say, even if there is no written agreement, its an implied term, that reasonable notice must
be given, so this exist in all cases. What's reasonable (its from the perspective of employee not
employer)
➢ Reasonable notice is high if less chance of finding another job.
➢ Purpose of this notice: is to provide a transition for employees to move between jobs
➢ 2-4 weeks notice for employment per year.
➢ Employed for 12 years, 24-8 eeks’ otie would be given in general
Employee a’t pusue oth legally (severance + failure to give reasonable notice) *
Under severance: the case is filed, its easy
find more resources at oneclass.com
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Document Summary
Employment: every employment relationship is contractual whether the contract is in writing or not, managing people is the most difficult thing/job for managers. Because people are irrational and emotional, unpredictable and inconsistent. Behaviours vary a lot on daily basis. Single most reliable indicator of business success is people. Average knowledge level per employee is high. Cost of recruitment is low. products and services. Treat people with respect and dignity, wont get sued, fair treatment, wont have to go in front of humans rights commission** These factors influenced labour laws: (workers more protected now: development of middle class: (cid:374)o dis(cid:272)(cid:396)etio(cid:374)a(cid:396)y i(cid:374)(cid:272)o(cid:373)e (cid:271)efo(cid:396)e i(cid:374) people"s ha(cid:374)ds, (cid:271)ut the(cid:374) afte(cid:396) industrial revolution and middle class birth, people had more money and a social conscience. Equality of women in politics: they (cid:449)e(cid:396)e(cid:374)"t i(cid:374) politi(cid:272)s i(cid:374)itially, (cid:271)ut the(cid:374) they (cid:271)e(cid:272)a(cid:373)e i(cid:374)(cid:448)ol(cid:448)ed, they championed (cid:449)o(cid:396)ke(cid:396)"s rights, lead to law development for workers and vulnerable ones in workplace.
