Labour Law – Overview

Typically, when people hear the term labour law, they think of employees working for bosses. However, within Ontario labour law there are two different types of employment relationships. The first is known as an agent relationship and the second is the traditional employment relationship. Labour law encompasses both forms.

A services contract (Independent contractor) is a distinct kind of employment arrangement. While technically, agency and employment are ‘contract’ relationships, the services contract relationship is viewed as a ‘supplier’ contract relationship versus a labour relationship. Generally, any services contract contains the details and conditions of the relationship within the terms and conditions of the services contract.

For the purposes of this chapter, we will focus on the topic of labour law consisting of the two key relationships: agency and employment. The distinction is important because each relationship type is formed differently and has different obligations and rights.

Vicarious Liability

Before proceeding, it is important to understand the concept of vicarious liability because this concept applies to both agency and employment.

Vicarious liability comes from tort law and establishes that the principal or employer, depending on the relationship, is responsible for the actions of the agent or employee when completing their work. In effect, the ‘business’ is responsible for the actions of employees and agents. For example, if an employee or agent were to assault a customer at a store, the owner of the store could be held liable for the conduct of the employee if the customer filed a lawsuit. Business owners should be aware that the actions of their agents and employees are their responsibility. Effective employment practices and procedures are key to reducing the risk of agents and employees who act against the interests of the business.