Business Law I - 2275 – Final Exam Notes

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Western University
Management and Organizational Studies
Management and Organizational Studies 2275A/B
Philip King

Business Law in CanadaFinal ExamSunday April 17 2011700 PMAlumni Hall 201Chapter 10Employment Employmentone person doing work for another but not all worko Independent contractors work for themselves and act independentlyo Employee must be in masterservant relationship The control testo Determine whether an employment relationship exists based on whether the person being paid for work is told how when and where to do it The organization test o Supplements the control testo When the individual is an integral part of the organization working only for that corporation and subject to group controlo May be an independent contractor if free to offer services and bears risks of losso Vicarious liabilityindependent in some circumstances but employee in otherso No general legislated definitioncourts turn to precedents Agents o Person representing and acting on behalf of a principal in dealings with third partieso Can be independent contractors or employees ex sales clerk The employment contract o Obligations of employerProvide a safe workplace and good working conditions including hiring competent employees Payment of wage or salary also bonuses benefits etc o Obligations of employeeFollow reasonable orders and treat property carefully competency Honesty and loyalty Punctuality Fiduciary obligation in some cases ex senior level employees Act in good faith make full disclosure not take corporate opportunities for ones own benefito Often not formal or written good idea thoughinclude provisions such as rate of pay hours description of serviceso Consensus consideration capacity legality and intention required1 o Restrictive covenants must be reasonable specific not be against the public interest and fully disclosed courts reluctant to enforce sometimesTerminationo Contract may provide for its own discharge or stipulate amount of notice to be given or parties can mutually agree to bring it to an endo Most contracts of employment for indefinite periodcan be terminated by o Either party given reasonable noticeWhat constitutes reasonable notice varies with circumstancesCourts consider length of service type of job employees age experience qualifications availability of similar employment badfaith conducto Employer giving compensation that should have been earned in that notice period pay in lieu of notice o Or immediately with just cause Dismissed without notice Serious offences and must be substantiated and proportioned wello Must not violate human rights ex discriminationDisabled workers o Legislated duty to accommodate disabled workers who are still able to work but illness may constitute frustration of a contract and be discharged without notice if they could no longer perform their joblegal duty does not apply when it will cause the employer undue hardship to deal with this most have insurance or policies in benefits packagesDisobedience and incompetence o Failure to perform a reasonable order grounds for dismissal without notice o Incompetence also just cause however employers must inform employees what level of performance is unacceptable and provide opportunity for improvementmust not tolerate otherwise can be taken as acceptance Layoffs o Running out of tasks or experiencing financial difficulties is not just cause reasonable notice required even when layoff is temporaryo Ontario Employment Standards Actif laid off for a period longer than defined temporary 13 weeks employment terminates and employer must compensate but period is extended if payments made during the layoff Wrongful leavingo Key employees may be required to give substantial noticeo Employees can leave without notice if contract breached by employer firsto Employees may be sued for breach of duty2 o Some have fiduciary duty non competeothers may begin competing as soon as they leave but never before Constructive dismissalo Employer breaks contract when nature of job is changed without consent inadvertently or to make the employee uncomfortable and want to leave o Employee sue for wrongful dismissalo Like refusal to perform the original contracto Employee is obligated to mitigate or even accept the positiono Can be considered constructively dismissed even when offered a comparable position ex commute to work relocation etc Remedies for wrongful dismissal o Damages awarded usually based on what the employee would have received had proper notice been giveno Obligation to mitigate losses ex look for a new jobo May also take into account damaged reputation or mental distresspunitive damageso Normally a corporation but sometimes a manager may be suedo Employer must have clear evidence of employees misconduct or incompetence and demonstrate that reasonable opportunity to improve was giveno More sensible to negotiate with employeeo Rare for court to order an employee be given back the job Liability of employer o Employer liable for torts committed by employee while on the job vicarious liability o Generally must be an employment relationship for vicarious liability to applyo Some jurisdictions have legislated the owner of a car is vicarious liable for torts committed by the person driving with the owners consent o Right to turn to employee for compensationusually not able to payo Contracting jobs out sometimes helps to avoido Liability insurance is advisableLegislation o Protection of employeeso Most provinces either the Employment Standards Act or the Labour Standards Actset minimum standards in the areas ofWagesOvertime work hours and rest periodsVacation and holiday entitlementsMaternity and parental leaveTermination and severance pay3
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