You are here

Employment Law Is Just Rock, Paper, Scissors

It amazes me how few employers truly understand the sources of law, and their interaction, which impact the employment relationship. In trying to understand the various statutory, contractual, and common law influences on the employment relationship, all they need to know are the rules of rock, paper, scissors.
 
Although I didn’t really play this game as a youngster, I understand the basic rules are that paper defeats rock, scissors defeat paper, and rock defeats scissors (purists would say paper covers rock, scissors cut paper, and rock crushes scissors). As it happens, these same rules are applicable to the world of employment law, such as such as the law of wrongful dismissal.
 
When there are no other legal influences (such as a contract or a statute) by which to interpret the relationship, there is always the common law. This is the accumulation of law as developed in the reasons for judgment issued by judges in court every day.
 
There are dozens, perhaps hundreds, of wrongful dismissal cases decided by judges every year. In their reasons, judges have developed a number of so-called implied terms which are imposed on the employment relationship.
 
Perhaps the best known of these is the obligation of the employer to give reasonable working notice of termination of employment (in a not-for-cause situation). If the employer fails to satisfy that implied obligation, the employee can be said to have been wrongfully dismissed and can claim damages (in lieu of notice) in court.
 
There are numerous other terms imposed on the employment relationship by the common law. In the absence of a binding contract or a statute which speaks to a particular element of the relationship, these imposed or implied terms prevail. That’s why I think of the common law as the “bedrock” of employment law, and that’s why it plays the role of “rock” in the rock, paper, scissors game.
 
The parties to an employment relationship always have the freedom to enter into a binding contract containing the terms of the employment. An employment contract will govern if it speaks to a subject which would otherwise be implied by the common law.
 
Using the example of working notice of termination, an employment contract may (and should!) contain a termination clause. That clause should set out the working notice (or pay in lieu) to which the employee is entitled upon a not-for-cause termination. Generally, such clauses will provide an entitlement which is less than that which would have been imposed by the common law.
 
If the employment contract has been implemented properly, the termination clause will supersede the common law implied term of reasonable notice. And, because contracts are (preferably) printed on paper, the employment contract assumes the role of “paper” in the rock, paper, scissors game.
 
One key to drafting employment contracts is to ensure they comply with the relevant statutes or legislation. In B.C., such statutes include the Employment Standards Act, the Human Rights Code, the Labour Relations Code, and the Workers Compensation Act. Every province (and the federal jurisdiction) has equivalent legislation.
 
The basic requirement – the “golden rule” if you will – is that employment contracts must meet at least the statutory minimums. It is, generally, illegal to contract out of the employee’s statutory entitlements. So, for instance, an employer could not (legally) ask an employee to enter into a contract which permits the employer to discriminate against the employee on the basis of race.
 
Again using the example of the entitlement to working notice of termination, a termination clause in a contract must (at least) meet the statutory minimum notice entitlement provided in the applicable employment standards statute. If it does not meet that entitlement, then the termination clause is defeated by the statutory requirement and is of no legal effect. In this way, the statute plays the role of “scissors” in the rock, paper, scissors game.
 
Just as in the game, paper (contract) defeats rock (common law), and scissors (statute) defeats paper (contract). To complete the circular effect of the game, now and then a judge will strike down a statutory provision and will determine that it is of no legal effect. Thus, rock (common law) can defeat scissors (statute).
 
As in all things there are some exceptions to these rules. In B.C., for instance, unions are provided with some discretion to enter into collective agreements which provide less than the minimum entitlements contained in the employment standards statute. Let’s say, then, that the rock, paper, scissors analogy is 90% accurate.
 
So, if you’re involved in an employment relationship or a legal dispute arising from employment and you can’t keep track of the impact of the various sources of law, just think of the rules of rock, paper, scissors. Remember that in the absence of a contract or a statute, there’s always the common law. But, a contract will supersede the common law and a statute will supersede a contract.
 
Robert Smithson is a partner at Pushor Mitchell LLP in Kelowna practicing exclusively in the area of labour and employment law. For more information about his practice, log on to http://www.pushormitchell.com/.