EMPLOYMENT LAW
Introduction
The employment relationship goes back to antiquity. It is certainly traceable
to fourteenth century England when legislation was passed to regulate the
wages of employees. The problem was that, because of the plague (Black
Death), labour shortages created the risk of higher wages. The Master
Servant Act of 1867 (later adopted by Canada) placed limits on the length of
time a contract bound the parties, and defined relationships between the
parties. Workers’ Compensation legislation was established in Great Britain
in 1897 and later extended to Canada.
Apart from this legislation, the Common Law (judge-made law) determined
the relationship between the parties. While commercial contracts are based
on the idea of equal parties, employment contracts have never attained such
a form. Indeed, the legal concept of employment embodies “control” by the
employer. There is also an obligation on employers, that of vicarious
liability for the legal wrongs of their employees, in the course of their
employment. More recently, statute law has placed more legal obligations on
employers and employees. Such statutes (mainly provincial, except for those
industries under federal jurisdiction) include human rights, employment,
standards, occupational health and safety, and workers’ compensation.
The Employment Relationship
The common law contract of employment requires the essential elements of
consensus, consideration, legality and intention to create legal relations. An
employment contract usually involves the payment of wages in exchange for
services, but may involve other remuneration instead of, or in addition to,
wages. Such other remuneration may include food, shelter, shares in the
company, contributions by the employer into a pension plan etc.
The law distinguishes the employment relationship from that of the
independent contractor, which also involves the exchange of services for
remuneration. An example of the latter is an individual with a window
cleaning business who contracts with various home owners or businesses to
clean their windows once a month in exchange for remuneration. The
relevance of the distinction between an employee and an independent
contractor lies in the different legal responsibilities imposed on the
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respective parties by both the common law and statute law. The distinction is
sometimes unclear.
In the earlier part of the 20th Century, the test used by courts to distinguish
the employee from the independent contractor was that of “control”. The
party that decided what work was to be done, and where, when, how and by
whom it was to be done, was typically viewed as an employer and his
workers employees. As work became more complex, the “control” test did
not resolve all uncertainty about whether an employment relationship existed
and courts came to examine factors other than the presence or absence of
control of the work. The fourfold test described by the court in City of
Montreal v. Montreal Locomotive Works Ltd. et al. [1947] 1 D.L.R. 161
includes the statement:
In earlier cases a single test, such as the presence or absence of
control, was often relied on to determine whether the case was one of
master and servant, mostly in order to decide issues of tortuous
liability on the part of the master or superior. In the more complex
conditions of modern industry, more complicated tests have often to
be applied. It has been suggested that a fourfold test would in some
cases be more appropriate, a complex involving (1) control; (2)
ownership of the tools; (3) chance of profit; (4) risk of loss. Control in
itself is not always conclusive.
More recently, courts have recognized the limitations of their fourfold test
and are attempting to develop an organization test. This focuses on the
relationship of the provider of services to the business itself. The latter test
considers whether the services provided are an integral part of the business
or is adjunct or accessory to the normal activities of the employer. See Cooperators Insurance Association v. Kearney (1964), 48 D.L.R. (2d) 1;
Armstrong v. Mac’s Milk Ltd. (1975), 7 O.R. (2d) 478.
In Mayer v. J. Conrad Lavigne Ltd. (1979), 27 O.R. (2d) 129, the plaintiff
sold television time for the defendant on a straight commission basis. He
was required to attend regular sales meetings of the defendant each day and
file sales reports. Some direction of the plaintiff’s activities was carried out
by the sales manager, but this was generally limited to where and to whom
to sell. When the defendant failed to pay the plaintiff salesman vacation pay,
he instituted legal proceedings. The relationship passed both the control and
the organization test.
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Modern cases have generally less to do with vicarious liability and more to
do with the distinction between employees and independent contractors. A
significant difference is that, in matters not specified in the contract, an
independent contractor has the right to exercise his/her discretion on how,
when etc. the work is done. However, even this distinction has become
blurred. One reason for the blurring is that professional or expert employees
frequently exercise significant discretion with respect to when, where and
how their work is done in the course of their employment. In such cases, the
organization test is necessary but not necessarily sufficient to determine the
status of the relationship.
The Employer’s Duties
The common law provides implied contractual duties of an employer. These
include the duty to (a) pay wages; (b) provide a reasonably safe workplace;
(c) reasonable notice of termination of employment without cause. However,
many more duties have been imposed on employers by legislation through
the late 19th and early 20th centuries.
(a) Occupational Health and Safety
Legislation requires the employer to create and administer safe workplace
practices, safety equipment and clothing, provide training in safety practices
and knowledge of risks to health and safety from dangerous noise levels,
chemicals and other substances, physical injuries, workplace bullying and
harassment.
Breaches of occupational health and safety legislation can lead to fines
against the employer. Liability is strict, that is, the employer’s only defence
is that it exercised “due diligence” to avoid the breach. See for example the
case The Queen in Right of Ontario v. London Excavators & Trucking
Limited (1998), 40 O.R. (3d) 32. A sub-contractor was excavating a
construction site and was informed by the general contractor that no services
were buried in the area. The sub-contractor’s back-hoe struck concrete
encasing a hydro duct causing an explosion. The sub-contractor was
convicted of breach of the provincial occupational health and safety
legislation and fined. Reliance on the general contractor’s advice was
insufficient to prove due diligence.
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Note that conviction of individuals or corporations under the Criminal Code
is possible, though unusual. The difficulty here is proving that the individual
charged had a guilty mind – that is that he intended to perform the act or
omission that caused injury to another or that he was reckless or grossly
negligent. Note that now directors of corporations can be liable under the
Occupational Health and Safety Legislation or Criminal Law for failure to
meet the standards of conduct imposed by the law. The corporation may
itself be liable for breaches of the law caused by the combined actions of
directors, managers and workers of the corporation.
(b) Employment Standards Legislation
Each province and the federal jurisdiction have legislated minimum
standards of hourly wages and overtime pay, public holidays, vacations,
vacation pay, leave of absence (unpaid) for parents of new-born or adopted
children. Laws also place a daily or weekly ceiling on hours worked. These
differ among jurisdictions.
(c) Human Rights legislation
Provincial and federal human rights law prohibit discrimination by
employers in their hiring practices and in the employment contract on
grounds of age, race, creed, colour, place of origin, sexual orientation, sex,
nationality, physical or mental disability, ethnic origin, and in some
jurisdictions (e.g. Quebec) criminal record. The discrimination may not
necessarily be on grounds of the employee’s race or creed. An employer
refusing to hire a qualified individual because of his wife’s or partner’s race
would be in breach of the legislation unless it could establish a defence to
the charge.
Grounds in Alberta are race, religious beliefs, colour, gender, physical
disability, mental disability, age, ancestry, place of origin, marital status,
source of income, or family status of that person or of any other person.
Sexual orientation is also prohibited in view of the Supreme Court of
Canada decision in the Vriend case. Age applies only to persons over 18.
There is no upper limit on age in the Alberta Act but an employee’s
employment may be limited by the terms of an employer’s pension plan.
Ontario has a ban on mandatory retirement on grounds of age.
The courts have established that discrimination under human rights
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legislation need not be intentional on the part of the employer. That is,
the act may be breached by an act, rule, policy or standard imposed by
the employer that has the effect, but not the intention, of discriminating
against an employee or job applicant on grounds of religion, disability,
sex etc.
A defence that an employer may have to its alleged breach of the Act is
that the job requirement or standard that cannot be met by the
employee is a bona fide occupational requirement (BFOR). The burden is
on the employer to establish that a BFOR exists. For example, an
employee’s job may require her to drive a motor vehicle for 10 hours a
week. If the employee becomes legally blind, the employer can show that it
is a BFOR that a higher level of vision is required for the job than that
possessed by the employee. That is, the requirement of a certain level of
vision is required of the employee for reasons of safety and efficiency. In
this example, the employer can show that there is a rational connection
between that standard of vision required and the nature and purpose of the
job.
In the past, the establishment of a BFOQ would normally entitle the
employer to dismiss the employee because of her inability to perform an
important function of her job. Since the Meiorin case (on the class website),
an employer has a further burden beyond demonstrating a BFOR of the job.
The employer must also demonstrate that it would be undue hardship for it
to accommodate the disabled worker by, for example, assigning her other
work, modifying the job description and requirements, providing technology
to assist the employee in performing certain tasks of the job, etc. A human
rights tribunal will take into account the resources available to an employer
in determining whether accommodation would be an undue hardship.
Accommodation may be appropriate in circumstances beyond disablement.
An employer might have to organize a worker’s shifts to allow him to attend
religious ceremonies, or to allow her as a single parent to avoid working
night shift. Undue hardship depends substantially on the financial cost or
the level of disruption that accommodation would cause within the
workplace.
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