Deck 2: Section 4: Economic Forces: Oh Canada, What Is Your Economy Like

Question 1

What fundamental relevant rules address the issue of termination of employment in Canada?

Answer 1

Common Law Rules Requiring Notice of Termination: One rule that judges created, and that forms part of the common law of the employment contract, is a requirement for employers to provide employees with 'reasonable notice' of the termination of the employment contract. How much notice is 'reasonable' is decided by judges, and depends on a number of factors, including length of the employee's service, the employee's age, and the type of work the employee performed. This requirement for employers to give 'reasonable notice' helps employees transition from one job to the next.
Statutory Minimum Notice of Termination: If an employer fails to provide the employee with 'reasonable notice', the employee can sue the employer in court to recover it. Employment standards statutes in Canada include mandatory minimum statutory notice provisions. For example, in Ontario, the Employment Standards Act requires employers to provide the following minimum periods of notice of termination. Both common law 'reasonable notice' and statutory minimum notice are intended to provide employees with a cushion, a period of time to plan for their job loss and to look for another job. These requirements impose costs on employers. However, they are justified on the basis that job losses impose costs on society and employees, some of which should be borne by employers.

Question 2

How do the neoclassical and industrial pluralist perspectives view the appropriate role of markets, management, unions, and labour-related legislation?

Answer 2

The Neoclassical Perspective argues that the forces of supply and demand, if left to operate freely with limited state interference, will ensure optimal assignment of skills and expertise throughout the economy as well as the fairest distribution of wealth. The "invisible hand of the market" will guide actors towards economic and social prosperity. Canadian governments-indeed, governments around the world-are misguided in their attempts to 'protect workers' through regulation such as minimum wages, overtime pay, human rights laws, health and safety rules, and laws that permit or even encourage unionization and collective bargaining. Neoclassicalists are not concerned about working conditions being driven down too low in the absence of worker protection legislation. They believe that the invisible hand of the market will ensure this does not happen. Any attempt by governments to intervene in this process of free bargaining by employers and workers will disturb these 'market-clearing' processes, producing harmful effects.
The Industrial Pluralist Perspective emphasizes the imbalance of power between workers and employers, and the value to society and economies of striking a reasonable balance between the efficiency concerns of employers and the equity concerns of workers. For the Pluralist, the relationship between a business/employer and a worker/employee involves the bearer of power, on one hand, and subordination, on the other hand. In most cases, workers lack the necessary bargaining power to engage in meaningful bargaining about conditions of employment with the result that the business purchasing their labour can in practice set the terms unilaterally. Pluralists support an activist government that intervenes in the work relationship in order to promote decent working conditions and worker 'voice' in the determination of those conditions. Most importantly, the Pluralists believe the most effective way to ensure worker voice, and to promote a healthy distribution of wealth throughout the economy, is to promote collective bargaining and unionization

Question 3

What is the relevance to understanding the labour relationship?

Answer 3

Understanding this relationship sheds a light on the nature of our economy and our society, its standards of fairness and well-being. Employment standards legislation entitles "employees" to a minimum wage, overtime pay, mandatory time off and holiday pay, notice of termination, among other benefits. None of these entitlements apply unless the arrangement is characterized as employment. Similarly, human rights laws prohibit discrimination "in employment", and access to unemployment insurance, public pension schemes, and workers' compensation benefits are often contingent upon a worker having been 'employed' for a period of time prior to making their claim for benefits. From a business perspective, there may be advantages to using workers who are not employees of the business. A business that uses independent contractors or "temporary placement" workers may avoid employment standards laws, or the requirement to pay insurance premiums to workers' compensation systems, for instance. By not employing workers, businesses can avoid some potentially costly requirement and adjust more quickly and with less cost to economic downturns. On the other hand, this can have an adverse impact on individuals who fail to achieve job security.

Question 4

Is there a difference between "employment", and other forms of work arrangements?

Question 5

How does employment equity legislation attempt to break down barriers to diversity within Canadian workplaces?

Question 6

In what way is Canada's labour force considered to be diverse?

Question 7

Why is it important to understand the difference between the Standard Employment Relationship and the Non-Standard Employment Relationship?