Chapter 6 - Agency/Employment

What is wrongful dismissal?

- Usually involves disputes over whether or not adequate notice (or pay in lieu) was given - If just cause, even if found after termination, no notice (or pay in lieu) is required - Claim is for difference in notice received and notice that should have been given - Recent cases severely restrict instances in which compensation may be increased if "bad faith" dismissal - Any harm to the employee's reputation may increase notice period - Must also factor in regular bonuses and benefits - Employee must make reasonable effort to mitigate losses - Damages will be reduced by whatever employee makes during notice period - Reinstatement usually not an option - May be possible if breach of statute - Often allowed under collective agreement

what is collective bargaining?

- Workers banded together in 19th century to fight poor working conditions - Canadian Act modelled on the U.S. Wagner Act which recognized right to organize collectively if supported by majority of workers - Labour relations boards established to deal with disputes - General right for employees to be members of trade union and bargain collectively - Confirmed as a right under Charter of Rights and Freedoms - Management and some essential services excluded - If the required minimum percentage of workers have signed up as members, union may apply to Labour Relations Board for certification

what is *control test* to determine employment?

- independent contractors control their own hours and how they work/what their job is - employees work for and under the direction of the employer and can be told what to do/how to do it *Subject to rules/controls*

How is liability for agent who is an independent contractor different?

- principal only liable if tort causing injury took place during actual exercise of authority granted - agent has to be in the process of transacting the business she/he was authorized to do - usually *restricted* to fraud and negligent misstatement - if agent passed information on innocently, then only principal who gave information is liable

when does actual authority normally end?

- when job is finished - when agent received different instructions - employment or agency relationship is changes/ended also when project becomes illegal or the princial dies, goes bankrupt, or becomes insane

5 reasons why employees quit

1 .Given dangerous or illegal instructions 2. Not properly paid 3. Put into dangerous situations 4. Can no longer perform duties due to disability or illness 5. Any important term of employment contract breached

what is reasonable notice?

- Based on length of service, importance of job, age, likelihood of finding other employment, etc. - Rule of thumb is one month per year of employment - Employment Standards Acts establish minimum required notice BC employment standards act

What is constructive dismissal?

- By demotion, transfer, or otherwise changing conditions of employment, employee may be made so uncomfortable that he/she will quit - Whether intentional or not, this is constructive dismissal

what are restrictions of termination by employee?

- Contract may provide for notice - If no contract, must give reasonable notice. Usually much less than employer is required to give unless employee has special role in business - May be liable for wrongful or inappropriate conduct when leaving - Cannot take confidential information, customer lists, secret formulas, or practices - Cannot persuade customers to accompany employee to new business - Must comply with restrictive covenant in contract if reasonable

what are Jurisdictional disputes

- Disputes between unions as to who will represent new group of employees or who will perform certain work - Resolved by application to Labour Relations Board

what can employees and employers do in a case of constructive dismissal?

- Employee can sue for wrongful dismissal - Employee's obligation to mitigate may require him/her to take alternate position unless impractical - Employer should communicate with employee and try to identify appropriate arrangement

what is employment?

- Historically recognized as master-servant relationship - Relationship now based on contract - Substantial amount of legislation as well - Specialized statutes deal with collective bargaining and unionized workplace

what is just cause? (3 major categories)

- No notice of termination required if just cause dismissal Examples: - Being dishonest with employer or acted immorally - Convicted of crime that interferes with ability to perform job - Disobeyed lawful instruction from employer - Committed an actionable wrong on the job Lied on a resume *Incompetence* - Must clearly inform employee of shortcomings and give him/her a chance to improve - Should have regular evaluations to prove pattern of incompetence *Unacceptable conduct* - May not constitute just cause unless very serious - Provide reprimand and counseling, etc. - Should provide progressive discipline - wrongful conduct must be *egregious* *Inability to perform work* - Human rights legislation requires employer to accommodate disabled employees providing it doesn't place *unreasonable burden on business* - If disability results in permanent incapacity to return to work, employment contract will be terminated due to frustration *Lack of work due to economic downturn is not just cause for dismissal*

what is certification?

- Once bargaining unit is identified and requisite number of employees sign up, union applies to board for certification - In some jurisdictions, with enough signatures, union can be certified without a vote - Most jurisdictions require a certification vote - Once union is certified, employer must deal with union exclusively - Any interference with certification process is an unfair labour practice and prohibited - Criminal offence to fire or intimidate anyone from becoming member and may trigger automatic certification - Employers have the right to comment on organization process and its effects on business - Employers may also join together for bargaining purposes

what are restrictions with bargaining

- Once certified, either party can serve notice to commence bargaining - Members of union must ratify collective agreement for it to be effective - Either party or the government can request mediation to assist with bargaining process - No job action allowed during mediation If unsuccessful, mediator will "book out" Agreement must include certain terms: - Any dispute during agreement (rights dispute) must be handled through a grievance process culminating in arbitration - Strikes and walkouts illegal during agreement - Agreement must be at least one year in length - First contract can be imposed by labour relations board

what are limitations of job action

- Only permitted during interest dispute: Dispute over terms to be included in agreement - Must have bargained in good faith; mediators must have booked out; must serve notice to other side (72 hours in BC)

what are 5 obligations of employees

1. Be reasonably competent 2. Have the skills claimed 3. Be honest, punctual, loyal 4. Perform the work agreed to 5. Owe a fiduciary duty if manager or key employee

what are 2 methods of ratification?

1. may ratify intentionally by expressly ratifying 2. may ratify inadvertently by principal taking some benefit under agreement

What are 3 requirements of ratification

1. must have been possible to enter into contract at time of ratification 2. must have been possible for principal to enter into contract at time agent purported to act 3. must ratify within reasonable time after agent's unauthorized conduct also, the agent must have identified the principal to third party at the time he entered into the contract

What is required under employment legislation?

1. workers' compensation 2. Employment insurance 3. Human Rights 4. Employment Standards

What is apparent authority

3rd party + agents principal does something to lead a third party to think agent has authority third party can rely on representation

what is the *organization test* to determine employment

If the individual is an integral and essential part of the organization, he/she is an employee - Independent contractor works for self

what is picketing

Picketing - Appear at job site attempting to persuade customers, suppliers, and employees not to deal with employer - Cannot attempt to prevent someone from crossing picket line

what is process of termination?

Under common law, must give reasonable notice of termination (in absence of "just cause") - May give notice or pay in lieu of notice - Employment contract may contain terms related to termination - Minimum statutory requirements must always be met, but often employee will receive much more

what are 4 different types of unions

Unions often insist on *union shop* clause - Future employees must join union Exception for those with religious objections - Contract may require a *closed shop*: Only members of union will be hired - Possible to have a *Rand formula agreement*: Not required to join union, but must pay dues and are subject to collective agreement - *Check-off provision* common Employer deducts union dues from pay

what is fiduciary duty?

agent's obligation to act in the best interests of the principal - has duty of utmost good faith - cannot take personal advantage of business opportunity - must disclose all conflicts of interest - must make full disclosure of all information - must act only for one side in a transaction - must not make profit at expense of principal - has duty of accounting - cannot take secret commissions (criminal) - has duty to act competently - cannot delegate responsibilities kickback = agent acting for 2 sides and receiving benefit from both sides

What is agency?

an agent = *someone who represents another (principal) in dealings with third party* -> may be employee or independent contractor - usually involves entering into contracts on behalf of another -> may instead include other services such as filing documents or negotiation of contract

what happens to apparent authority when agency ends?

best to avoid apparent authority from the start where aparent aurthority exists, principal must notify customers and suppliers who deal with agent when agency relationship ends power of attorney that continues after principal becomes mentally incapcitated now possible

what is EI

both employer and employees contribute benefits paid to unemployed workers

when is agency created?

created when principal grants authority to agent to act on his/her behalf, usually by contract - may be created gratuitously - may be inferred from conduct of parties

what does human rights prohibit in the workplace?

discrimination and harassment

what are lockouts

employer closes operations

what is workers' compensation

employer-contributed fund that works like insurance; pays if employee is injured or becomes ill on the job also establish health and safety standards in the workplace

what are the 4 employment standards?

establish minimum standards for 1. wages 2. notice 3. overtime 4. leaves standards cannot be waived by contract unless higher standards are set establish boards to hear complaints

What is actual authority?

expressed authority - when principal directly grants authority to agent implied authority - derived from expressed terms and surrounding circumtances Principal + Agent

can third party sue agent?

generally, third party has no claim against agent if agent has exceeded authority, third party can sue agent for claiming authority not posessed ex: tort of *breach of warranty or authority*

who can warrant a search in case of theft

police and must have reasonable grounds to search

What is *estoppel*

prevents employer from denying someone who has authority where principal does something to lead a third party to reasonably believe that the "agent" has authority to act, the principal cannot later deny such authority based on apparent authority *agency by estoppel*

what is a good method for employee discipline?

progressive discipline - it identifies problems with employees -> progressively more severe consequences - regular evaluation reviews with problems identified - documentation of evidence of behavioural pattern is created for future records in case of subsequent litigation

what doe employer need to prove in case of employee theft

prove beyond reasonable doubt to prosecute

what does statutes imposed for vicarious liability in motors?

statues may impose liability on owner of a vehicle when another has been given permission to use motor vehicle (either expressly or implied)

common law vs statutory law

statutory law is from legislative assembly common law is judge-made law

what is undisclosed principal?

when agent does not disclose she is acting as an agent or refuses to disclose who the principal is, third party may sue the agent when identity of principal is learned, a binding choice must be made as to which party to sue contract for undisclosed principal is not binding if identity of undisclosed principal is important

what is *vicarious liability*? ***

when one person is held responsible for the torts committed by another both principal and agent may be held responsible where agent is employee, there will be vicarious liability if employee acting within scope of employment fundamental question: is the wrongful act sufficiently related to conduct authorized by the employer ?

What is ratification?

where agent exceeds both actual and apparent authority, principal is not bound but may still ratify if the deal is favourable (creating binding contract) grants *retroactive* authority (as if agent always had authority)

what are illegal strikes called

wildcat