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Canada (161,777)
MCS 3040 (228)
Chapter 20

Chapter 20

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Marketing and Consumer Studies
MCS 3040
Joseph Radocchia

Chapter 20: The Employment Relationship Employment Law • An employee is subject to either federal or provincial jurisdiction, and it is not unusual for employees working in close proximity to be subject to different employment legislation • Both levels of government have enacted human rights legislation and an array of employee welfare legislation, such as employment standards, occupational health and safety standards and workers compensation • Legislation of general application, governments have passed legislation that affects employees in specific jobs • Public sector employees, such as police officers, teachers, medical personnel, and civil servants, are commonly affected by specific legislation The Employment Relationship • Employee Relationship: A contractual relationship whereby an employer provides remuneration to an employee in exchange for work or services ◦ Not everyone who works for another or provides services to another is an employee • Independent Contractor: A person who is in a working relationship that does not meet the criteria of employment ◦ Usually doctors and lawyers provide services in the capacity of independent contractors, rather than as employees of their patients/clients ◦ Benefits are tax savings, flexibility, and independence in arranging a work schedule ◦ An employer may prefer to engage independent contractors because the relationship offers simplicity and fewer financial and legal obligations Employee Versus Independent Contractor • The distinction between an employer and an independent contractor is not always readily apparent • it is common to think of independent contractors as being short-term and temporary, while employees are long-term and permanent • The courts have used a variety of tests to distinguish between the two relationships, including the following: ◦ The degree of control exercised over the individual by the employer. The more direction and supervision provided by the employer, the more likely that the relationship is employment ◦ The ownership of tools, chance of profit, and the risk of loss from performance of the requested service. Sharing profits and losses and the ownership of tools are indicative of an independent contractor ◦ The degree of integration. The nature of the work being performed is considered in relation to the business itself. The question is whether the work being performed is “integral” to the business, or is “Adjunct” to the normal work of the business. The more the work is integrated into the company's activities, the more likely it is that the individual is an employee • Supreme Court of Canada has indicated that there is no one conclusive test that can be applied • Read case on pg 503 Implications of an Employment Relationship • Employees have certain statutory rights and benefits, such as paid holidays and paid overtime, that are not conferred on independent contractors • Employers have certain obligations with respect to employees, namely deduction of income taxes and employment insurance premiums, the payment of Canada Pension Plan premiums, the provision of paid vacations, and which they do not have with respect to independent contractors • Consequences of incorrectly characterizing a work relationship as an independent contractor arrangement can include: ◦ retroactive responsibility for paying benefits ◦ Liability for penalties and interest charges • An employee can initiate an action for wrongful dismissal, but this avenue is not available to an independent contractors • An employer is responsible for the tort of an employee committed in the ordinary course of employment, whereas the employer is not usually responsible for the torts of an independent contractor committed in the course of carrying out the product. • An independent contractor, may be an agent for the employer, in which case the employer can be vicariously liable for the acts of the agent under traditional agency principles Risk in Hiring • Hiring the candidate who is best suited for the job results in the optimal use of resources • From legal perspective, hiring well can reduce the risks associated with the employment relationship, in particular those associated with vicarious liability and negligent hiring Vicarious Liability • 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 • Jurstification for holding employers responsible for their employees actions include the following: ◦ Employers have the ability to control employees and therefore should be liable for the employee's conduct ◦ Employers benefit from the work of the employees and therefore should be responsible for liability incurred by employees ◦ Employers are usually in a better position than employees to pay damages ◦ Employers have an incentive to try to prevent torts from occurring in the first place • The employee may be liable to the employer for breach of the employment contract; however it is rare for an employee to pursue an action against an employee because of the inability of the employee to pay damages and the negative publicity associated with the legal action Negligent Hiring • An employer has a duty to use skill and care in hiring employees (the extent of the duty will vary according to the position the candidate is to fill) • If an employee injures another employee or causes harm to a third party, there may be an action against the employer for being negligent in having hired that employee's • This action differs from vicarious liability which holds the employer strictly liable for the actions of the employee as long as the actions are sufficiently related to the employment • It requires the plaintiff to prove that the employer was careless in, for example, hiring, training or supervising The Hiring Process • Hiring process involves a number of steps: ◦ Develop job descriptions ◦ Advertise the positions ◦ have candidates complete an application form or submit a resume ◦ short-list candidates ◦ check backgrounds or references ◦ interview selected applicants Human Rights Requirements • Federal, provincial, and territorial governments have enacted human rights legislation whose objective is to provide equal access to employment opportunities for all • Human Rights Commissions: An administrative body that oversees the implementation and enforcement of human rights legislation Prohibited Grounds of Discrimination • Human rights legislation does not prohibit all discrimination in employment, but only discrimination on certain prohibited grounds • The following are prohibited grounds of discrimination under all Canadian Legislation: ◦ Martial status ◦ race ◦ colour ◦ physical or mental disability ◦ religion or creed ◦ sex ◦ age • If a particular ground of discrimination is not included in the human rights legislation, the exclusion may be challenged as a violation of the equality provisions of the Canadian Charter of Rights and Freedom • If the challenge is successful, the courts may “read in” the ground ◦ Example: alcohol dependency is included in physical disability; pregnancy and sexual orientation are included in sex Discrimination Defined • Discrimination: The act of treating someone differently on the basis of a prohibited ground • Adverse Effects Discrimination: Discrimination that occurs as a result of a rule that appears neutral but in its effects is discriminatory • Systemic Discrimination: Discrimination that results from the combined effects of many rules, practices and policies Defences to Discrimination • Bone Fide Occupational Requirements (BFOR): A defence that excuses discrimination on a prohibited ground when it is done in good faith and for a legitimate business reason • Example: A requirement that a person have valid drivers licence discriminates against some persons with physical disabilities, but a valid driver's licence is a BFOR for the job of truck driver • The Supreme Court of Canada in Meriorin set out a three-step test for determining whether a discriminatory standard qualifies as a BFOR • Test includes: ◦ Duty of Accommodate: The duty of an employer to modify work rules, practices, and requirements to meet the needs of individuals who would otherwise be subjected to unlawful discrimination • In effect, this means that employers, when designing standards, requirements, and the like, must consider the need for individual accommodation • This does not mean that the employer must change working conditions in a fundamental way • Rather it means that the employer has a duty, if it can do so without undue hardship, to arrange the employee's workplace or duties to enable the employee to do his or her work • The Supreme Court of Canada has indicated that undue hardship does not require the employer to show that it is impossible to accommodate the employee's ◦ The court declined to set strict guidelines as to what constitutes undue hardship, since every employee's condition and every workplace is unique ◦ Factors such as size of the organization, its financial resources, the nature of operations, the cost of the accommodation measures, the risk the accommodation measure will pose to the health and safety of employee and his colleagues and the public and the effect of the accommodation measure on other employees Penalties • Failure to avoid or eliminate discriminartory practices can result in a complain to a human rights commission • If the board finds the complaint to be valid, it can order that the employer stop its practices, hire a particular individual, pay monetary compensation, write a letter of apology, reinstate an employee or institute an affirmative aciton place • To reduce the risk of a human rights complaint, an employer needs to review all aspects of the employment process • look at pg 509 for example to reduce the risks Employment Equity • may affect hiring decisions • attempts to achieve equality in the workplace by giving underrepresented groups special consideration in hiring • Employment Equity Legislation: Laws designed to improve the status of certain designated groups • The federal Employment Equity Act targets the under representation of women • It requires employers to: ◦ Consult with employee representatives regarding the implementation of employment equity ◦ Identify and eliminate barriers
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