Unit 1.1: Foundations Readings: Law of Work chapters 1 & 4 – Unit 1.1 Lesson Notes Lesson Objectives WHAT ARE THE THREE WORK LAW REGIMES ? ** SCROLL DOWN A COUPLE HEADINGS TO SEE MORE ON THIS ** 1. Common Law Regime: o o This regime is based on legal precedents established by court rulings. It primarily revolves around two types of law: Contract Law, which governs employment agreements between employers and employees. Tort Law, which, while less obvious, becomes relevant in work-related issues like trespass or injury cases, especially during collective actions such as strikes. It emphasizes the historical foundation of legal consistency and precedent, shaping employer-employee relationships. 2. Regulatory Regime: o This regime is shaped by government laws and regulations, also known as statutory law. It includes rules such as minimum wage, working hours, and safety regulations. o The regime addresses the inherent power imbalance in the employer-employee relationship, with employers holding more power due to their ability to dictate contract terms. o Governments create these laws to protect workers' rights and attempt to balance power, ensuring fair working conditions. 3. Collective Bargaining Regime: o Specific to unionized workplaces, this regime regulates the relationship between employers, employees, and unions. o It introduces a third party—unions—that negotiate on behalf of workers, but it is distinct due to the unique legal regulation unions face despite being private entities. o This regime operates within statutory law but focuses specifically on collective worker representation and their rights in the workplace. These regimes often overlap, forming interconnected spheres that collectively shape work law. WHAT ARE THE TWO TYPES OF COMMON LAW RELEVANT TO WORK LAW ? Contract Law: which governs employment agreements between employers and employees. Tort Law: which, while less obvious, becomes relevant in work-related issues like trespass or injury cases, especially during collective actions such as strikes. WHAT IS THE DIFFERENCE BETWEEN EMPLOYMENT AND SELF-EMPLOYMENT, AND WHAT ARE THE TESTS THE LAW APPLIES TO DETERMINE EACH ? The key distinction between employees and independent contractors lies in the degree of autonomy and control. Employees: They sell their autonomy by agreeing to let employers’ control important decisions such as how, when, and where they work. In return, they receive income (wages, benefits) and job security. This relationship is characterized by subordination, where employees are bound to follow the employer's directives and policies. Independent Contractors: They retain a high level of autonomy and control over their work, such as deciding how and when to perform tasks. Contractors operate as their own business, taking on clients rather than being bound to a single employer. While they may be hired to complete specific tasks, they are not subject to the same level of control as employees. However, in practice, it can be challenging to distinguish between the two, as workers often exhibit a mix of autonomy and subordination. Courts, tribunals, and governments have struggled to develop clear legal tests for determining whether a worker is an employee or an independent contractor. Tests Law Applies to Determine Each: 1. Distinguishing Between an Employee and an Independent Contractor To determine whether a worker is an employee or an independent contractor, courts have developed several legal tests that have evolved over time: a) Control Test: Initially, courts used this test to assess the level of control the employer had over the worker. If the employer had the right to dictate how the work was carried out, the relationship was considered an employment one. However, this test was criticized for being too simplistic. b) Fourfold Test (from Montreal v. Montreal Locomotive Works Ltd.): a. Control: The degree of control the employer has over the worker. b. Ownership of tools: Who provides the tools and equipment for the job. c. Chance of profit: Whether the worker has a chance to profit from the work. d. Risk of loss: Whether the worker bears any financial risks. c) Organization Test: This test looks at whether the worker’s role is integral to the business. If the worker is fully integrated into the company, such as through adherence to rules and schedules, they are more likely an employee. d) Sagaz Test (from 671122 Ontario Ltd. v. Sagaz Industries Canada Inc.): The most recent and comprehensive approach, where courts ask if the worker is running their own business. This involves: The employer’s control over the worker’s activities. Whether the worker provides their own equipment. Whether the worker hires their own assistants. The financial risks taken by the worker. Responsibility for investment and management. Opportunities for the worker to make a profit. Ultimately, courts consider all relevant factors and determine if the worker resembles an employee or an independent entrepreneur. 2. Dependent Contractors in the Common Law Regime The concept of dependent contractors serves as an intermediate classification between employees and independent contractors. This category acknowledges that a worker may possess some autonomy and appear independent but still relies economically on a single employer, leading to a subordinate relationship. Key points include: a) Subordinate Economic Status: Dependent contractors are recognized for their economic dependence on an employer, which justifies treating them similarly to employees in certain respects. b) Notice of Termination: They are entitled to “reasonable notice” before termination, ensuring they have time to transition to new employment. c) Assessment Criteria: Courts evaluate whether a worker resembles an employee or a contractor by applying specific criteria, including control, ownership of tools, chance of profit, and risk of loss. If the worker is found to be more contractor-like, a further analysis determines whether they are independent or dependent based on their exclusivity of work for the company. d) Exclusivity Factor: The extent to which a worker performs services almost exclusively for one company significantly influences their classification as a dependent contractor. This framework helps protect workers who may not fit neatly into the traditional definitions of employment yet are still economically vulnerable REVIEWING YOUR PROGRESS WHAT ARE THE THREE WORK LAW REGIMES , AND WHY DID THEY EMERGE AS DISTINCT AREAS? The three distinct work law regimes are: 1. Common Law Regime: This regime is built on legal precedents, primarily focusing on employment as a contract between employer and employee. Two types of common law are relevant here: contract law, which governs the terms and conditions of employment agreements, and tort law, which can address issues like property rights and trespass during collective worker actions. It emerged as distinct because common law governs the basic relationship and obligations between employers and employees, as seen through individual disputes brought before the courts. 2. Regulatory (Statutory) Regime: This regime includes laws and regulations implemented by the government to protect workers, such as minimum wage laws and maximum hours of work. It developed as a response to the power imbalance between employers and employees, where employers often have more control over the contract terms. Governments intervene to ensure basic worker rights and protections, which is why it evolved as a separate regime. 3. Collective Bargaining Regime: Focused on unionized workplaces, this regime involves laws that specifically regulate the relationship between employers, employees, and unions. Unions, while private organizations, are regulated by the state due to their role in collective negotiations. This regime emerged distinctly because collective bargaining introduces a third party (the union) into the employment relationship, necessitating unique rules to govern how employees can collectively bargain for better terms. These regimes emerged as distinct areas to address the various complexities and relationships within labor law, from individual employment contracts to government regulations and collective worker actions. WHY IS THE EMPLOYMENT CONTRACT CHARACTERIZED BY A POWER IMBALANCE? HOW DOES THIS AFFECT THE LAW OF WORK ? Since the employer is in a stronger position than the employee, the employment contract is defined by a power imbalance. This has an impact on the law of work since the employer is able to decide the terms and circumstances of the employment contract, while the employee is unable to negotiate for different or more favorable terms. This has the potential to create an unjust and unequal environment in the workplace. WHAT ARE SOME OF THE CRITERIA FOR DETERMINING WHETHER SOMEONE IS AN EMPLOYEE ? UNIT 1.2: PERSPECTIVES ON WORK LAW Readings: The law of Work chapter 2 & 3 – Unit 1.2 Lesson Notes LESSON OBJECTIVES : WHY MIGHT SOMEONE VIOLATE WORK LAW ? Ignorance: Work-related laws can be complicated and difficult to understand. But ignorance of the law is only part of the story. As noted earlier, sometimes a legal rule is sacrificed because it conflicts with more powerful societal rules and norms. Economic: Other times a legal rule is knowingly violated because, considering all relevant factors, including the odds of being caught and the penalties for non-compliance, it makes more economic sense to someone to break the law than to comply with it. Economists refer to this type of infraction as an efficient breach. Efficient breaches are a common problem with employment regulation because governments lack the resources, capacity, and often the political will to inspect all workplaces, and many employees will not complain for fear of losing their jobs in reprisal. HOW DO INTERNAL AND EXTERNAL FEEDBACK LOOPS AFFECT THE PRACTICE OF WORK LAW ? feedback loop: An explanatory device that demonstrates how outcomes produced by a system (e.g., legal rules produced by a legal system) can influence other systems (e.g., the economic system) and also “feed back” into the original system as information in a process of perpetual learning, experience, and change. Internal Feedback Loop: Shows how the outputs of each regime from chapter 1 “feed back” into the other regimes as information that can influence actors’ behaviour and rule-making processes, and eventually produce new outputs. Internal feedback loops affect the practice of law by fostering a dynamic process of adaptation and refinement, where legal rules and precedents within one regime (such as common law) influence and shape other areas (like statutory law). These loops occur when outputs from one legal system "feed back" into others, leading to adjustments in legal standards and processes. For example, statutory employment laws, such as notice requirements for termination, are often based on common law precedents, where courts developed the concept of "reasonable notice." As these laws evolve, they may later influence the interpretation and application of common law rules, creating a reciprocal relationship. This interaction between legal regimes ensures that as new issues arise or gaps in the law become apparent, legal standards can be revised to reflect contemporary needs and values. This process also helps to align legal practices with societal expectations, as lessons learned from one regime inform future regulations and judicial decisions. External Feedback Loop: The work law subsystem does not operate in a vacuum. It is influenced by its external environment External inputs: 5 subsystems 1. Economic and market subsystem – work law regulates labor markets 2. Broader legal subsystem – it is influenced by developments in many other legal fields, including tax, trade, immigration, competition, business, securities, criminal, intellectual property, social security, privacy, property, constitutional, tort, criminal and contact law. 3. Political subsystem – the law of work is a function of the broader political economy within which it functions. 4. Social, cultural and religious subsystem- powerful determinants of human actions and have key implications for the law of work 5. Ecological/ environmental subsystem – influenced by simple geography External feedback loop – influences the development of the law at various points. The external feedback loop is an analytical tool that draws our attention to the crucial fact that laws are a function of the broader social system in which they exist, and that laws involve an evolutionary process. They are not static. What are the main perspectives that shape the law of work?
