1. Chapter 3 COMMON LAW ISSUES

2. There are various areas of common law liability in employment law Misrepresentation by Candidates: dismissal is only acceptable if the misrepresentation goes to the root of the qualifications required for the job or if it indicates an inherent lack of honesty. Misrepresentations which are minor or negligent do not justify dismissal. Employers can protect themselves by using “attestation clauses” on application forms

3. Negligent Misrepresentation by Employer: making inaccurate statements during the hiring process, even if the employer believed them to be true Employees hired under false pretenses usually bring wrongful dismissal claims Employers protect themselves by having accurate job descriptions, being candid at the interview, using employment contracts, not being misleading in any way

4. Employers are bound by representations made by employment agencies they hire to locate candidates Inducements occur when an employee is lured from a position through aggressive recruiting – includes repeated contact to encourage the employee to switch jobs If an employee is induced to leave secure employment and is subsequently terminated, this can lead to increased damages in wrongful dismissal, such as a higher notice period

5. Restrictive Covenants are clauses in employment contracts which may prevent employees from working for competitors or in certain locations. This can affect how a new employee is able to perform the tasks of their job. These types of clauses are only enforceable in reasonable circumstances and cannot go beyond what is necessary to protect legitimate business interests

6. Anticipatory Breach of Contract: when one of the parties rejects the employment contract through conduct or statements before the employment has begun An offer of employment has to have been made and accepted, subsequently rejected and damages must have been suffered Background Checks/Negligent Hiring: employers should exercise due diligence to ensure applicants have been honest

7. This includes asking for references and contacting them, contacting past employers – with written permission from the applicant It is important to keep records of this background check process Foreign references cannot be treated as less valuable than Canadian references Confirmation of education is an important step Employers must notify applicants in writing if they wish to run credit checks

8. If an Applicant is rejected because of the results of a credit check there is a duty to advise of the agency used and the specific information relied upon Criminal records check can only be done with the consent of an applicant and may be required where the employment is with vulnerable persons Background checks usually take place after a conditional offer of employment has been made

9. Contractors vs. Employees  A contractor is someone who is self- employed to perform specific work and is not an employee  The benefits to hiring independent contractors are – less legal obligations (no holiday pay, vacations, benefits, WSIB premiums, notice periods, tax deductions or liability from negligence  Disputes over dismissal and payment of statutory premiums often create disputes regarding status as an employee

10. Common law tests to determine if someone is a contractor or employee are:  Control test – who controls the work (when, where, how), is sub-contracting allowed?  Risk test – is the person taking a financial risk of not being paid?  Organizational test – are the services provided integral to the business  Durability/Exclusivity test – is the business the only client? How long has it been the only client?

11.  Tools test – does the person provide their own tools for the work? What is the value of the tools?  Courts will focus more on how the relationship plays out in reality then how it may appear on a written contract  To ensure an individual will be found to be a contractor, parties should have a contract for a fixed term, the business should not take tax deductions, there should be no vacation pay/holidays, employee benefits provided

12.  The business should avoid making set hours, reimbursing expenses, not provide tools or uniforms or give performance reviews  The contractor should be able to work off- site, should be able to accept or decline work and should have their own insurance Agents can be employees or independent contractors – IE...real estate agents, travel agents but usually will be found to be employees who are entitled to notice

13. When using a “temp agency” the employee usually remains employed by the temp agency and not the company where they are completing the work. The temp agency becomes responsible for vacation pay, employment standards, etc. Courts will look at length of employment, who pays the employee, etc The government has revised the ESA to ensure temp workers are protected