Canadian Employment Law

Sources of Employment Law

• Statute law is created by Parliament and legislatures.
• Constitutional Law is based on the Canadian Charter of Rights and Freedoms.
• Common law is derived from written judicial decisions.

Statute Law: How it is Made

• Public Bills are introduced by Cabinet ministers.
• First reading involves bill introduction.
• Second reading is a principle debate leading to a vote.
• If a bill passes second reading, a legislative committee reviews it clause by clause.
• Third reading is the final legislative vote.
• Royal assent upon a lieutenant governor's signature makes a bill a statute.

Statute Law: How it is Made (cont'd)

• Private Bills cover non-public matters such as corporate charters.
• Private Members' Bills or Members' Bills deal with public matters.
• MLAs (Members of the Legislative Assembly) introduce Private Members' Bills.
• Private Members' Bills are often less likely to be passed than public bills.

Statute Law: Acts and Regulations

• Statutes, also known as Acts, provide the core requirements of the law.
• Regulations offer detailed requirements and can be altered without amending the statute.
• Statutes and regulations are grouped together and referred to as legislation.

Statute Law: Jurisdiction and Interpretation

• Judges and administrative tribunal members interpret legislation during case proceedings.
• Jurisdiction, as defined within a statute, details who can adjudicate and what the issues are, and geographical limitations.
• Several statutes may apply in a single situation.

Statute Law: Rules for Interpretation of Statutes

• Applying the mischief rule involves determining the original purpose of a statute.
• Internal aids refer to analyzing the preamble and statutory definitions.
• External aids use scholarly materials and dictionaries for interpretation.

Authority to Pass Legislation

• The British North America Act (now the Constitution Act, 1867) established Canada's federal structure.
• Provinces oversee about 90% of employees.
• The federal government manages about 10% of employment in nationally important industries, like banking, shipping, and broadcasting.
• Municipalities may create bylaws with provincial approval.

Key Employment Statutes

• Alberta (AB) has employment standards codes, human rights acts, labour relations codes, occupational health and safety acts & regulations, workers' compensation acts, and personal information protection acts.
• British Columbia (BC) has employment standards acts, human rights codes, labour relations codes, occupational health and safety regulations, workers' compensation acts, and personal information protection acts.
• Examples of federal employment statutes include the Canada Labour Code, Canadian Human Rights Act, Employment Equity Act, Personal Information Protection and Electronic Documents Act (PIPEDA), Canada Pension Plan, and Employment Insurance Act.

Canadian Charter of Rights and Freedoms

• Passed in 1982, the Charter outlines a broad range of rights, including equality.
• The Charter only applies to situations involving government activity.
• It is considered "supreme law," meaning it can override conflicting legislation or government actions.
• Section 15(1) of the Charter ensures equal protection and benefit of the law without discrimination based on protected grounds.

Vriend v Alberta

• Vriend, a teacher at a Christian college in Alberta, lost his job due to his sexual orientation, which was not a protected ground.
• The issue was whether Alberta's omission of sexual orientation as a protected ground violated the Charter.

The Charter's Effect on Employment Law

• Employment law may be challenged if it violates Charter rights.
• Infringement of rights may be allowed if it is a reasonable limit in a free and democratic society.
• The notwithstanding clause provides an exception to Charter principles.

The Common Law

• Judge-made law is a distinct source of law separate from statute law.
• Common law decisions are based on precedent.
• Key principles include stare decisis, binding precedent, persuasive precedent, distinguishable decisions, and watershed decisions.

Common Law and Employment

• Contract law requires offer, acceptance, and consideration to be enforceable.
• Damages can be awarded to put parties in a position they would have been in if the contract was not breached.
• Tort law provides a legal remedy for civil wrongs, not breaches of contract.
• Damages are awarded for losses from defendant's conduct, like defamation, negligence or assault.

Hierarchical Court System

• Employment statutes are managed by specialized commissions, and boards.
• Specialized tribunals interpret and enforce the statutes.
• The hierarchical court system in Canada consists of the Supreme Court of Canada, the Courts of Appeal, an array of Superior Courts, Special Jurisdiction Courts, and Administrative Tribunals.

Locating Employment Laws

• Resources for locating employment laws include websites like laws.justice.gc.ca, canlii.org, www.qp.alberta.ca/laws online.cfm, and www.bclaws.ca, along with legal digests, textbooks, and online resources.

Twin Pillars of Individual Employment Law

• Employment law relies on both common law and statute/legislation (statutes and regulations).
• Statutes provide "floor" rights and enforcement mechanisms, while common law supplements this.

Areas of Common Law Liability

• This section addresses common-law liabilities in employment settings.
• Examples include misrepresentation by candidates, wrongful hiring, inducements to resign, restrictive covenants, anticipatory breaches of contract, negligent hiring from background checks, and inducing breach of contract.

Misrepresentation by Job Candidates: overview

• A candidate’s misrepresentation can be grounds for dismissal if it damages the employer or reveals material untrustworthiness.
• Minor misstatements, even deliberate ones not influencing hiring decisions, are not grounds for dismissal.

Misrepresentation: Wrongful Hiring

• Negligent misrepresentation happens when a knowledgeable party makes an inaccurate statement where a special relationship exists (especially in hiring practices).
• The knowledgeable party didn't take care to verify accuracy.
• The other party acted on this info. There is detriment or damage from this.

Misrepresentation: Wrongful Hiring (cont'd)

• Fraudulent misrepresentation occurs when one party knowingly makes a false statement and the other party relies on it.
• The knowledge of falsity and reliance on the statement are key factors.

Use of Executive/Recruitment Firm Misrepresentations

• Employers remain responsible for misrepresentations, breaches, and inducements if a recruitment agency acts on their behalf.
• Firms should abide by all employment laws.
• Indemnification from the firm or agency can lessen the employer's risk.

Inducement (Allurement, Enticement)

• Aggressive recruiting tactics (e.g., inflated promises) can be considered inducement.
• This can result in a longer notice period for termination and increased damages for lost earnings, moving costs, or buying a new home.

Restrictive Covenants

• Restrictive covenants prevent employees from certain actions after their employment ends.
• Agreements may prevent exploiting client relationships or competing with the current employer.
• Covenants during or after the employment relationship have ended.

Restrictive Covenants (cont'd)

• Restrictive covenants need to protect a valid proprietary interest of the employer.
• The covenant needs to be reasonable in terms of geographic location, duration and not overly broad.
• Covenants need to apply only where competition arises for the product.
• Covenants need to be justifiable within the public interest.

Restrictive Covenants: Three-Way Balance

• It involves a three-way balance of public interest (free competition & labor mobility), employee interest (knowledge & expertise), and employer interest (business protection).

Restrictive Covenants (cont'd)

• The burden of proof for reasonableness and validity rests on the employer of restrictive covenants.
• Any doubt is resolved in favor of the employee.
• The bargaining power inequality is recognized and reflected.

Anticipatory Breach of Contract

• Either employee or employer can be liable for breaking the employment contract before it begins.
• This can occur with unfulfilled contract conditions, or if circumstances arise where the position is no longer useful or required.

Background Checks (Negligent Hiring)

• Background checks should align with foreseeable harm to third parties during the hiring process.
• Employers should comprehensively check employment references, educational and professional credentials, credit and police records as well as social media.

Defining the Relationship: Tests for Determining Status

Employee vs Independent Contractor

• The distinction between employees and independent contractors is vital.
• The legal status impacts rights and responsibilities like employment standards & compensation.
• Human Rights and safety acts apply to both types of workers.

Independent Contractor (IC)

• ICs are self-employed workers performing specific tasks for others.
• Hiring ICs is an alternative to hiring an employee & offer certain advantages to the employer.
• The difference between employee and independent contractor can be complex and legally challenging to determine.

Independent Contractor (cont'd)

• Advantages for the employer (e.g., contract, no statutory remittances).
• Advantages for the IC (e.g., tax breaks, flexibility).

Methods/Tests for Determining Status

• This section describes methods for distinguishing employees and independent contractors, including control, risk, organization, and ownership tests.

Methods/Tests for Determining Status (cont'd)

• Control test looks at the decision-making power in tasks and work settings.
• Risk test considers if the worker invests financially in the workplace, such as profit or loss.
• An organization test examines how the work is related integrally to the business.
• Ownership test determines the ownership of tools and resources in the job.

Some Steps to Minimize Risk of IC Being Deemed an Employee

• Clearly written contracts emphasizing independent contractor status.
• Avoid statutory deduction or employment standards deductions.
• Allow the contractor to work for others, or other employers.
• Avoid setting work hours.
• Have the IC purchase their own insurance, and not offer a formalized employee performance review.
• IC should incorporate themselves.
• Minimize integration with the company.

Use of Temporary Employment Agencies

• Companies often hire temporary workers; this trend continues to grow.
• Agencies lease employees to companies, enabling flexibility.

Liability of Client Organization

• Courts consider who is responsible for payments when temporary workers are employed.
• Determining factors include daily control, hiring, discipline, and dismissal.

Types of Employees

• Formal legal differentiation among employee types (e.g., full-time, part-time, temporary, casual, agency workers) is not as common.
• However, companies often classify workers into categories that affect how employment law applies to workers.