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Chapter 18

BU231 Chapter Notes - Chapter 18: Wrongful Dismissal, Independent Contractor, Constructive Dismissal

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Valerie Irie

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BU231 Chapter 18 The Contract of Employment
Development of the Law Governing Employment
-The principles of modern employment law are derived from the common law rules defining the
relationship of master and servant the contractual relationship between an employer and an
-Statutes have been passed to establish minimum standards for safe and fair working conditions; this
branch of the law as is known as employee welfare legislation
-The organization of labour into trade unions has led to the evolution of the collective agreement; a
separate body of law known as labour law or the law of collective bargaining governs the relationship
between employers, trade unions, and their members
Relationship of Employer and Employee
Compared with Agency
-The relationship of employer and employee is established by a contract that gives one party, the
employer, authority to direct and control the work of the other party, the employee
-The services that are contracted for may or may not include making contracts with third parties as
agent for the employer
-Both principals and employers may be liable in tort for the acts of their agents and employees
Compared with an Independent Contractor
-An independent contractor undertakes to do a specified task such as building a house
-The contract between the parties does not create an employer-employee relationship because the
contractor is not subject to the supervision of the person engaging him
-His job is to produce a specified result, but the means he employs are his own affair
-When a firm undertakes work as an independent contractor, any liabilities it incurs in carrying out its
task are almost entirely its own
-A person engaging an independent contractor is not generally responsible for the contractor’s
Employment Relationship at Common Law
-At common law, the relationship of employer and employee carries with its responsibilities about:
-the employer’s liability to third persons
-the notice required to terminate the relationship
-the limited reasons an employer could terminate the relationship without notice
-assessment of damages for wrongful dismissal
The Employer’s Liability to Third Persons
Liability in Contract
-The promisor will be liable for breach of contract should its own employees do improper work
Liability in Tort
-A business is liable for damages to a third party for the consequences of any tort an employee may
commit in the course of employment
-When an employer has been held liable for the negligence of an employee, it has a right to be
indemnified by the employee; it may sue the employee

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BU231 Chapter 18 The Contract of Employment
Notice of Termination of Individual Employment Contracts
Implied Term of Reasonable Notice
-One way employment contracts differ from other contracts is that they do not usually say how or when
they will come to an end
-Notice advance warning that the employment relationship will end
-Fixed term a contract of employment with defined start and end dates
-Indefinite hiring a contract of employment for an undetermined length of time, with no expectation
of termination or described end date
Length of Reasonable Notice
-In the absence of an express term about termination in a contract of employment, the common law
rule is that reasonable notice the acceptable length of notice of termination considering the nature of
the contract, intentions of the parties, circumstance of the employment, and characteristics of the
employee shall be given
-The usual minimum reasonable notice for a weekly hiring is one clear work-week, and for a monthly
hiring, one clear work-month
-Key considerations are the length and character of employment, the age of the employee, and the
availability of similar employment, given the education, training, and experience of the employee
-If an employer wants to dismiss an employee immediately, it may satisfy its obligation to give
reasonable notice if it pays the employee for a period equal to the time required for reasonable notice
-Payment in lieu of notice payment of the amount of compensation the employee would have earned
during the reasonable notice period - Employers commonly terminate this way to avoid friction with the
now-terminated employee
-An employee who decides to leave voluntarily also has a contractual obligation to give the employer
the same amount of notice as he himself would be entitled to receive for dismissal
-Demotion transferring an employee to a job with less responsibility and/or income potential
-Constructive dismissal a substantial change to an employee’s job that amounts to termination of the
existing employment
Grounds for Dismissal without Notice
The Contractual Basis
-An employer need not give notice of termination when it can show that the employee was dismissed
for cause
-Dismissal for cause dismissal without notice or further obligation by the employer when the
employee’s conduct amount to breach of contract
-May be a crime associated with employment
-Employers set their own standards of conduct for misconduct
-Codes of conduct addressing activities such as harassment, discrimination, privacy, and use of
technology are used to set standards of appropriate behaviour for employees
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