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ADMS 3660 : HRM 3420 Miderm and final preparartion.pdf

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Administrative Studies
ADMS 3660
David Doorey

HRM 3420 MidtermFinal Preparation Part 2A The Common Law Issues in Hiring Lecture 2TextChapter 2 just page 30 Christie v York read this case with Seneca College v Bhaudaria below What do they tell you about how the common law deals with discrimination in hiring Chapter 3 Common Law Issues in Hiring pps 6572 up to Anticipatory Breach of Contract 7581Defining the Employment RelationshipOther Required Cases On course blogSeneca College v Bhadauria 1981 124 DLR 3d 193 SCC no common law rule preventing discriminationin hiringRelevant Blog Posts see Blog Entries link on course blogGorsky on Anticipatory Breach of Contract at Ford Mass Dismissals of NonEmployees at Bruce NuclearIs a stripper an employee 1 What is an EmployeeOnly an employee is covered by common law of employment and by Employment Regulation So important to know if relationship is one based on employment or whether the worker is an independent contractor in business for himherself In determining on whether someone is an employee or an independent operator we need to look at other factors either than pay Since at times there is no easy distinction if a person is an employee or independent operator courts have developed tests to determine whether a person is an employee or an independent operator There is a Continuum Clearly an employeeClearly an independent operatorindependent Contractor Between extremes there are lots of difficult cases when is not clear which one are we dealing withTest to distinguish between employees and independent contractors a Control Test Does the organization control the individuals work including where when and how it is performed Is the individual free to hire others to perform the work or to have any clients Does the individual report to the organization during the workday If the individual does not have autonomy and daytoday control over is maintained by the organization the individual is probably an employee b Risk Test Does the individual bare any financial risk of profit or loss other than fixed commissions For example does the individual face the risk for not receiving payment for services performed If not that person is more likely to be considered an employee c Organization Test Are the services rendered by the individual an integral part of the business For example an individual who writes a manufacturings company newsletter is less likely to be an employee than a tool and die maker whose duties are central to the companys operations d Durability and exclusivity of relationship test Courts consider the performance and exclusivity of the partys relationship Where an individual performs work over a long period of time and has no other clients courts are more likely to find an employee relationship 1 HRM 3420 MidtermFinal Preparation e Tool test Does the individual provide his own tools If so this weights in favor of independent contractor status especially if a significant capital investment is involved as a case of truck driver supplying its own truck The tools test is probably the least significant of the tests but its still relevant The court considers these issues in the case of Belton v Liberty Insurance Co of Canada 2004 The plaintiffs were sales agents for Prudential Insurance Even though they were restricted to selling property and casualty insurance for Prudential Insurance but yet they have signed an employment contract stating that they are independent contractors Liberty Insurance bought Prudential Insurance and introduced a new compensation agreement for its agents but the plaintiffs refused to sign the new agreement and as a result they were fired Thus the plaintiffs sued Liberty Insurance for wrongful dismissal The question before the court was whether the plaintiffs were employees or independent contractorsWorker found to be an employee even though contract said he was an independent contractor Due to the fact that the plaintiffs were not permitted to sell any other property and casualty insurance other than of the defendant agents reported to managers at the insurance company the defendant provided the plaintiffs with office facilities telephone and fax machines the clients belong to the insurance company not the agents and the plaintiffs activities were integral to the defendants business the court ruled the plaintiffs as employees Thus courts look beyond the language in contract and apply the tests identified in the text Employers prefer independent contractors over employees because employers have the following obligations to employees but not to independent contractors a Providing statutory benefits such as vacation and overtime pay and protections such as pregnancy and parental leave for employees Independent contractors generally are not entitled to employee statutory benefits The terms of their contract determine their entitlement to benefits b Paying premiums for workplace health and safety insurance Independent contractors must arrange their own coveragec Providing reasonable notice of termination or pay in lieu unless the employment contract states otherwise Independent contractors are entitled to notice of termination only if their contract so provides There is no implied right for reasonable notice d Remitting appropriate health and income taxes and contributing to and remitting Canada Pension Plan and employment insurance premiums Independent contractors remit their own statutory deductions and taxes This reduces both costs and paperwork for the hiring organization Also the organization does not have to pay employers portion of CPP and EI premiums for independent contractors e Assuming liability for an employees deliberate or negligent acts during the course of employment In contrast independent contractors are generally liable to both the third party victim and the hiring organization for misconduct or negligence while on the job2 HRM 3420 MidtermFinal PreparationEven individuals prefer to be independent contractors over employee status because there are tax benefits available to the selfemployed deducting expenses against income no withholding of income tax at source and faster statutory deductions such as employment insurance premiums Independent contractors also enjoy flexibility in working for other organizations other than the principal2 Hiring Common Law IssuesA Discrimination in Hiring Under the Common LawCases Christie v York 1940Bar owner refuses to serve beer to coloured person Thus the person sues the bar for 200 for humiliation Bar argues that a business can choose to whom it may serve or not The question before the court was whether or not a bar owner can refuse to serve customers based on raceThe SCC ruled yes Unless there is statute prohibiting race discrimination in business transactions nothing in the common law prevents a business from refusing to enter into a commercial contract because of raceSCC ruled that there is no common law rule banning race discrimination in formation of contracts This applies to employment contracts too So this case told us that common law doesnt prevent discrimination in employment contracts Need to look to government regulations like human rights code HRC for rules banning discrimination not common lawSeneca College v Bhadauria 1981 Woman B applies for professor job 10 different times but never even gets an interviewshe alleges the jobs were filled with less qualified people who were not East IndianShe sues Seneca alleging discrimination The question before the court was whether there is a common law rule banning discrimination in hiring on the basis of nationality or ethnic origin Supreme Court of Canada rules that there is no common law rule prohibiting discrimination in contract formation including in employment hiringSo under the common law an employer can discriminate in its hiring decisions And secondly the Court rules that the common law should not evolve to recognize a common law rule banning discrimination in contracts because the government has already addressed this issue through human rights legislationThere is no common law rule banning discrimination in employment contracts or hiringComplaints about discrimination must be dealt with by filing complaints under human rights legislation Common law courts do play a limited role in the recruitment stage They have created some rules about representations during recruitment stage There are several considered in section B below3
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