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We Have a Problem of Quality Control in Employment Law Education

In my job as a work law professor, I occassionally come across “test banks” for testing knowledge of work law concepts produced by text book publishers, professional organizations that train managers, and other sources.  I have in the past been asked to write test banks or review the finished questions written by others.  I have never accepted these invitations because of time constraints.  My own text The Law of Work has a test bank prepared by someone hired by the publisher.

However, I was looking over a practice test bank the other day and what I saw

There is a problem of quality control in Employment Law education

There is a problem of quality control in Employment Law education

concerns me deeply.  I won’t mention the source of the questions, but I do want to raise some of my concerns for discussion purposes.   Although I had many more concerns, I will focus on two questions that caused me concern.  See what you think.   Keep in mind that these are multiple choice questions so there is only one correct answer and no room for debate.  Students are expected to identify the correct answer.

Misunderstanding How Notice of Termination Works

I saw a bunch of questions testing knowledge of the rules requiring employers to provide notice of termination.   As I explain in my own book there is both a common law (contractual) obligation to provide notice of termination and a statutory obligation to provide notice, found in employment standards legislation.  It is crucial to understand how these two regimes interact.

Read this question:

An employment contract contains the following clause:  ”The employee may be terminated at any time, without just cause, provided he or she is given prior written notice in accordance with the Employment Standards Act”.   Is this clause enforceable?

a.      The clause is likely enforceable.

b.      The clause is not enforceable.

c.      The clause is enforceable only if the employee had an opportunity to seek independent legal advice before signing.

What is the answer?   If you said (a), like me, you would be wrong according to the marking grid.  According to the drafter, the correct answer is (b), the clause is NOT enforceable.  The explanation is this:  “Modern jurisprudence is divided, and it is very difficult to ensure that the clause which limits employee entitlements to ESA standards could be enforced”.

Firstly, if jurisprudence is “divided”, then how can the answer be that the clause “is not enforceable”.  By definition, if the jurisprudence is divided, then sometimes it will be enforceable.   Therefore, answer (b) cannot be correct.   At best, it may be correct sometimes but not others. Certainly we would expect students who knew of a “divided” jurisprudence to be confused by the options presented.  The drafter appears to be teaching people that a notice of termination clause in an employment contract that requires ESA notice is NEVER enforceable.  That is wrong.

Which leads to my second point:  a properly drafted notice  of termination clause that limits notice to the amount in the employment standards legislation usually will be enforced by a court.  This was made very clear by the Supreme Court of Canada in Machtinger v. HOJ Industries, where the Court dealt with a notice of termination clause that provided for less notice than required by the ESA and was therefore void. The Court explained there that an employer can include a contract clause limiting notice of termination to the statutory minimum and that clause will displace the common law obligation to provide “reasonable notice”.  The Court wrote:

In my view, an approach more consistent with the objects of the Act is that, if an employment contract fails to comply with the minimum statutory notice provisions of the Act, then the presumption of reasonable notice will not have been rebutted. Employers will have an incentive to comply with the Act to avoid the potentially longer notice periods required by the common law, and in consequence more employees are likely to receive the benefit of the minimum notice requirements. …

Moreover, this approach provides protection for employees in a manner that does not disproportionately burden employers. Absent considerations of unconscionability, an employer can readily make contracts with his or her employees which referentially incorporate the minimum notice periods set out in the Act or otherwise take into account later changes to the Act or to the employees’ notice entitlement under the Act. Such contractual notice provisions would be sufficient to displace the presumption that the contract is terminable without cause only on reasonable notice.

The Court’s reasoning, that a notice clause that limits notice to the amount in employment standards legislation, remains the law.

As the Court notes, there are circumstances in which a court may not enforce a contract clause limiting notice to ESA minimums (discussed in Chapter 11 of the Law of Work), including unconscionability and obsolescence (or “changed substratum doctrine”), but these are the exception to the general rule.   There are also cases, such as Wright v. The Young and Rubican Group and Wood v. Fred Deeley Imports, where the contract clause indicated that the ONLY obligation of the employer was to give statutory notice of termination or to pay base salary during the notice period, and the courts found those restrictions amounted to contracting out of other statutory obligations such as severance pay or benefits continuation.  However the language we are given in the test question does not restrict the employer to ONLY statutory notice like in those cases.  As noted by the court in Cook v. Hatch Ltd., absence language indicating a clear intention to contract out of paying severance and other statutory benefits, a clause limiting notice of termination to the amount in the ESA is valid to oust the common law implied obligation to provide “reasonable notice”.  The Court assumes an intention to comply with the other ESA obligations absent evidence to the contrary.

From the ‘What the Hell?’ Category of Employment Law Questions

At least that first question dealt with a concrete and complex legal topic.  My main point there was that it is wrong to conclude outright that the clause is never going to be enforced.  On the other hand, this next question is just outright bizarre.  Here it is:

Which area of law allows equal bargaining power in negotiations between an employer and an employee?

a.   Statute law

b.   Common law

c.   Constitutional law

I can’t even begin to make sense of this.  What would a student looking at this question think?  What does “allow equal bargaining power” even mean? You won’t believe the answer!

Let’s eliminate (c) first.  The guide says this is wrong because “constitutional law has not affected the bargaining power in employment negotiations.”  That is likely an unintended Arthurian (i.e. Professor Harry Arthurs) commentary on the futility of trying to use Charter litigation to improve worker power.

Answer (a) is also wrong, but for the curious reason that “statute law affords one party greater bargaining power than the other”.  Huh?  Which party is that?  Is the suggestion that human rights legislation, by prohibiting an employer from hiring only white people, affords any individual employee “greater bargaining power” than the employer in terms of negotiating working conditions?  This is ludicrous.  I have no idea what the drafter is  getting at here, but maybe the idea is that any statute that restricts the unilateral power of the employer to impose its will on an employee is in fact granting the employee greater bargaining power than the employer. If so, that’s stupid, and wrong.

Fear not employers, in the vast majority of cases, you are still able to unilaterally draft the contract and present it to the prospective employee as a take it or leave it proposition.   For most jobs, very little or no “negotiation” takes places at the point of hiring.

The “correct” answer, according to the answer guide, is Common Law!   Here’s why:  Common law principles have helped strike a balance in the employment bargaining process between the employer and employee”.

Speechless.  The “common law” refers to the system of rules applied by courts interpreting employment contracts.  Its guiding beacon is “freedom of contract”. The drafter appears to believe that common law doctrine has produced equality of bargaining between employer and employee, thus remedying the centuries old truism that employers possess far superior bargaining power.

Appellant courts in Canada and our governments have long recognized this imbalance of power.  Recall that every statute that regulates employment exists as a government response to the realization that a model of pure freedom of contract in the employment setting, where the employer possesses far superior bargaining power almost always, produces unacceptable outcomes (low wages, long hours, dangerous working conditions, discriminatory practices, etc) much of the time.

Recall also the often-cited passage from the Supreme Court’s decision in the landmark case Wallace v. United Grain Growers:

The contract of employment has many characteristics that set it apart from the ordinary commercial contract. Some of the views on this subject that have already been approved of in previous decisions of this Court (see e.g. Machtinger, supra) bear repeating. As K. Swinton noted in “Contract Law and the Employment Relationship: The Proper Forum for Reform”, in B. J. Reiter and J. Swan, eds., Studies in Contract Law (1980), 357, at p. 363:

. . . the terms of the employment contract rarely result from an exercise of free bargaining power in the way that the paradigm commercial exchange between two traders does. Individual employees on the whole lack both the bargaining power and the information necessary to achieve more favourable contract provisions than those offered by the employer, particularly with regard to tenure.

This power imbalance is not limited to the employment contract itself. Rather, it informs virtually all facets of the employment relationship. In Slaight Communications Inc. v. Davidson, 1989 CanLII 92 (SCC), [1989] 1 S.C.R. 1038, Dickson C.J., writing for the majority of the Court, had occasion to comment on the nature of this relationship. At pp. 1051-52 he quoted with approval from P. Davies and M. Freedland, Kahn-Freund’s Labour and the Law (3rd ed. 1983):

[T]he relation between an employer and an isolated employee or worker is typically a relation between a bearer of power and one who is not a bearer of power. In its inception it is an act of submission, in its operation it is a condition of subordination. . . .

This unequal balance of power led the majority of the Court in Slaight Communications, supra, to describe employees as a vulnerable group in society: see p. 1051. The vulnerability of employees is underscored by the level of importance which our society attaches to employment.

The question and answer concludes that there is no longer inequality of bargaining power under the common law model.  It is not clear to me whether the drafter is making a controversial normative claim (like “guns don’t kill people” or “there is no such thing as society”), or just lacks any grasp whatever of employment law.  In either case, the person should not be drafting substantive multiple choice employment law questions.

It’s also curious that the drafter did not include “Collective Bargaining Law”, which would be the closest example of a legal regime that produces equality of bargaining power between employer and employee.  I can only presume that is because the drafter is opposed to unions and collective bargaining, which would be consistent with the belief that the common law solves all concerns about inequality of bargaining power.  If there were no inequality of bargaining power, then a central justification for collective bargaining would simply vanish.  I presume that is the drafter’s secret desire.

At best, this question is the basis for an essay question in which normative points can be debated.  For example, I have used similar questions on employment law exams, like this:   You overhear someone in a bar saying the following: “The Common Law ensures equality of bargaining in the employment relationship.” Discuss this quote using examples from the course.   That is a lot different than what is happening in the multiple choice context, where the “correct answer” simply assumes that employees and employers enjoy equality of bargaining power thanks to common law doctrine, which is a crazy assertion.

My brief experience in reviewing questions used to test knowledge of employment law concepts has left me very concerned about the quality and competence of those teaching work law in Canada outside of the academy.   Some non-academics, including practicing employment lawyers with expertise in the field and people with years of experience applying the law but who may not be lawyers, are no doubt very knowledgeable and capable.  The challenge is that there is an army of people teaching employment law classes all over the place who lack expertise and without any effective oversight by experts of what they are teaching.  Employment law is highly complex, full of pitfalls, and is not an area of law that can be dabbled in.  It matters, because ignorance of the law is a substantial hurdle to effective legal enforcement in our field.



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