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BUS 393 (52)
Chapter 10

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Business Administration
BUS 393
Shafik Bhalloo

Chapter 10 1. Identify the distinctions among employees, agents, and independent contractors. The work of independent contractors, such as doctors, lawyers, and plumbers, they work for themselves and act independently, providing a specific service for the person they contract with, whereas an employee is said to be in a master-servant relationship, acting under the direction of the master. Agency is a third type of business relationship, in which one person acts as a go-between in relationships between others.  What is employment? Employment involves one person doing work for another.  Control test Degree of control exercised over an employee is greater than over an independent contractor. A person who is told not only what to do but also how to do it is classed as an employee. But if the person doing the work is free to decide how the job should be down, the person is more like an independent contractor. Whether the person is paid a wage or salary, or is paid by the job, is also taken into consideration in determining if an employment relationship exists. Courts will also look at who owns the tools used and who profits or runs the risk of loss from the work performed.  The organization test Is person an essential part of employer’s organization? A person normally cannot be an independent contractor and an employee at the same time, the same is not true of an agent. Agents can be independent contractors or employees. 2. Explain the law of master and servant.  Obligations of employer:  Pay  Safe workplace: Subjective test  Obligations of employee:  Competent: the employee must possess the skills claimed and exercise them in a reasonably competent and careful manner.  Honesty and Loyalty  Punctuality  Action in employer’s best interests  Fiduciary obligations in some cases: senior level employees who have a fiduciary duty, that duty may continue after the employment ends. Employers often try to impose new, one-sided employment contracts on their employees after the commencement of employment, such as restrictive covenants or terms limiting the period of notice to be given upon termination. When imposed after the fact, these provisions are often not binding because of a failure of consideration. If employer included restrictive covenants in the original contract, for example, employees cannot work in a particular geographic area or in a particular industry after leaving the position, employers have to specify a reasonable time and area. If they are too broad, the covenants will not be enforced. And the purpose of protecting the employers’ interests cannot be against the public interest.  Termination  Where no just cause, reasonable notice of termination is required of both employer and employee  Employer is required to give reasonable notice or pay in lieu of notice-may dismiss an employee with notice for any reason unless it violates human rights legislation.  Reasonable notice  Reasonable notice-legislation sets minimum standard  In setting reasonable notice, courts consider: (1) Length of service (2) Type of job (3) Age of employee (4) Qualifications (5) Availability of similar employment (6) Bad-faith conduct  An employee discharged without adequate notice can sue for wrongful dismissal.  An employee can leave without notice when required to work in dangerous conditions or when work involves immoral or illegal activities.  Just Cause  Just cause dismissal requires no notice  Dismissal without notice must be based on employee
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