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Textbook notes Ch 18.docx

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Wilfrid Laurier University
David Scallen

Chapter 18: The Contract of Employment Economic and social changes in the past have changed the employment relationship in two aspects: 1. Statues have passed employee welfare legislation: to establish minimum standard for safe and fair working condition 2. Labour Law (law of collective bargaining): separate body of law that governs the relationship between employers, trade unions, and their members The liability of an employer may be wider than principals An independent contractor undertakes to do a specified task such as building a house. The contract between the parties do not establish a employer-employee relationship. • When a firm undertakes work as an independent contractor, any liability it incurs in carrying out its task is almost entirely its own. Checklist: Characteristics of an Independent contractor • Hired to complete a task or deliver a result for a fee • Owns the tools necessary to do the work • Controls his own hours and time of work • Controls how the work is done • No tax, pension, benefit, or government deductions withheld from payment • Invoices for work done and charges GST/HST • Pays his own expenses • Assumes the risk of profit or loss Employment relationship at Common Law • Employer’s liability to third persons • Notice required to terminate the relationship • Limited reasons an employer could terminate relationship without notice • Assessment of damages for wrongful dismissal Non-competition Clauses: • Courts are hesitant to enforce because they go against public policy • Exceptions: business sale and employee-employer • Terms must be reasonable in terms of time, geography, and activity Employer’s liability to third persons Liability in contract: the promisor remains liable for satisfactory performance- vicarious liability Liability in tort: all the injured party needs to establish is that the employee caused the damage while engaged at work • Employer not liable when damage was done off-duty to take care of personal matter • Employer not liable if employee delegated the work to someone else without consent • The duty being carried out must be closely linked with its authorized employment and its duties • Defense: “it was an independent act” Notice of Termination of individual employment contracts Employment contracts usually do not say how or when they will come to end • Common law requires a notice requirement • If contract is on a fixed term, no notice required Length of Reasonable Notice Reasonable Notice: acceptable length of notice of termination considering the nature of the contract, intentions of the parties, circumstances of the employment, and characteristics of the employee • Sometimes reasonable notice may be established from customary practices that are followed regularly by the firm • Minimum reasonable notice for a weekly hiring is one week; a monthly-hiring is one month • Some have specifically set down minimum length by statue; any attempt to impose a shorter notice would be void. Checklist: Otherwise, length of reasonable notice are determined by: • Length of employment • Character of employment • Age of employee • Education or training of employee (more required the longer notice) • Experience of employee • Availability of similar employment in the industry (market conditions) If firms want to release them quick, they can use the payment in lieu of notice, to pay off the salary that they would have earned in the remaining course of employment before officially being fired. Employee who voluntarily leaves also has contractual obligation of the same amount of notice to the employer (that he would be entitled to receive himself).  If no reasonable notice is given by the leaving employee, the employer may sue for damages  No notice required if justified that he was working under dangerous conditions that the employer refused to correct. Employee welfare legislation states that they must work in safe environment.  No notice required if ordered to do an illegal act Constructive dismissal: when an employee’s job descriptions changes substantially that it’s pretty much being fired of the old job  entitled to reasonable notice. (Ex. demotion) Reasons for Terminating without notice By Breach • Contractual Basis: dismissal for cause- breach of contract of employee, requires no notice • Misconduct: crime associated with employment (Ex. embezzlement) or can be dismissal for cause related to conduct outside of employment - Grossly immoral conduct: bring employer’s business into public disrepute or disturb the morale of other employees; or causing employer direct financial loss - Evidence of lack of integrity is often instant dismissal; it is enough that the employer can no longer trust him • Disobedience: wilfu
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