The Common Law: HIRING 1. Describe key common law issues (both in tort and contract law) that can arise during the hiring process, as well as how to avoid them. 2. Explore legal issues raised by background checks, including social media checks. 3. Understand the common law tests for deciding whether a worker is an “EE” or an “independent contractor” and the legal significance of that difference. 4. Explain the various categories of “EEs” Have you ever misrepresented yourself on your resume or during a job interview? Misrepresentation by job candidate • If it’s material or suggests untrustworthiness, it may justify dismissal later on. p.84 Ensuring truthful exchange of information Misrepresentation by a prospective ER Tort of “negligent misrepresentation” (aka “wrongful hiring”) occurs where EE suffers losses because of ER’s careless, false or misleading statements during the hiring process (Queen v. Cognos) p. 86 Ways to minimize these problems?* In his job interview, Ivan exaggerated his previous salary, saying he earned $75,000 per year when in fact he only earned $64,000. ER fired Ivan - without notice or pay in lieu of notice - arguing that it had just cause based on this fraudulent misrepresentation. Who do you think a court would agree with? Why? How could the parties have avoided this?* George left a job and turned down another good job offer to accept a sales position for a large software firm. Before he was hired, ER had told him that the projected sales quota was over $1,000,000. Soon after starting the new job George realized that this quota was unattainable. George resigned and brought a legal action for negligent misrepresentation against the ER. Who do you think a court would agree with? Why? How could the parties have avoided this?* COMMON LAW ISSUES IN HIRING Legal Principles that Tip the Scales a Bit (i) Allurement/enticement/ inducement (tort) (ii) Anticipatory breach of contract (contract) (iii) Inducing breach of contract (tort) See recorded videos on each of these issues (under Module 3 Minivideos) - for more in-depth explanation Restrictive covenants are contract terms that restrict an EE’s actions even after employment ends. 1. Non-disclosure clause – confidential information from disclosure during or after employment (generally enforceable) 2. Non-solicitation clause – promise not to solicit clients (or even 3. Non-competition clause - P Non-compete agreements: (iv) Restrictive Covenants Effective Oct. 25, 2021, in Ontario non-competes are only legal in NEW employment contracts for • Certain designed senior executives and • Seller in sale of business situations who returns to work for the purchaser Even then, non-compete clause must still be reasonable in terms of scope of prohibited activities, time frame, and geographic scope AND ER must show that a non-solicitation clause would not provide it with sufficient protection. * COMMON LAW ISSUES IN HIRING Negligent Hiring by ER: Background Checks Job Reference checks Negligent hiring (Tort) Esp. where vulnerable pops involved Education and Professional Credentials Checks Educational references 4/10 Credit Checks Police Record Checks – 3 types now Social Media Searches During interview: • • • Avoiding Common Law Claims from Hiring • • Document, document, document Have more than one interviewer (as witness and recorder) Avoid temptation to “embellish” job or “guess” the answer to an important question Make sure at least one ER rep is knowledgeable about the job (job security, wage increases) Ensure all information provided is accurate and complete. Get back to candidate, if necessary, with the answer. Check if candidate is subject to a restrictive covenant* Do background checks (with consent): Avoiding Common Law Claims from Hiring • • • • Check Credentials/ degrees Check Job references, especially if vulnerable populations involved in job Do police and credit checks (where appropriate) Social media search?* In contract and other written documents • Avoiding Common Law Claims from Hiring • • • Include Attestation Clause on application form Include “Entire agreement” clause Include carefully drafted termination clause If ER approaches candidate, document potential candidate’s initial responses (are they already looking?) Don’t be overly aggressively in pursuing candidate*. Key Common Law Question: Who is an Employee? Independent Contractor / EE If true contractor and therefore in business for themselves? • No payroll deductions made for EI or CPP (and no eligibility for same) Significance of distinction? • No deduction and submitting of income taxes • No benefits • No ESA entitlements • No implied right to reasonable notice/ pay for termination • No workers’ compensation coverage (individual must get own) Tests for Independent Contractor: Is this person really self-employed? What Do You Think? DEPENDENT CONTRACTOR More recently there’s a new, intermediate category called “dependent contractor” Developed to protect economically dependent contractors Individuals who work for one organization (almost) exclusively may be entitled to wrongful dismissal damages. More likely to be IC if: Summary Although statute law (i.e. the Human Rights Code) is the most important legal area to consider during the hiring process, there are some common law issues that can arise as well. Common law places a priority on ensuring truthfulness between the parties (using both contract and tort law). Background checks help ERs avoid legal liability, as well as poor hires. Common categories of EEs: full-time, part-time, temporary, “contract”, and agency. There are a growing number of rules to protect “agency” EEs Bill 148’s Equal Pay regardless of Employment Status provisions (in effect from April 1 – Dec. 31, 2018) were cancelled by Bill 47.
