Good talent is hard to find, especially with the unemployment rate at a generational low. With the scales of supply and demand tipped heavily in the employee’s favour, it’s no wonder many companies have turned to temporary employees to fill the next empty cubicle.
But just as fast as a temporary employee’s tenure can come to an end, the associated legal issues will land on HR’s desk. Fortunately, however, Canadian employers get to call all the legal shots — as long as they don’t misfire with them.
There are a number of things an employer can do to protect itself while keeping its obligations to temporary employees.
Create a fixed term contract.
Employers frequently bemoan the amount of severance they must pay. However, employees are not entitled to advance notice of termination when their initial contract of hire has already set out that date. In permanent employment arrangements, a fixed-term contract does not usually make sense: courts will scrutinize the language used and the content of the arrangement, typically looking for a reason to ensure a long-service employee is not bereft of severance.
But with a truly temporary employee, these same issues do not arise. Therefore, for employees hired to complete a certain task or replace a permanent employee on a temporary leave, consider entering into a fixed-term employment arrangement.
Properly engage an independent contractor.
Employers can neatly avoid many of the issues that can plague typical employment arrangements by creating a commercial employment arrangement with an independent contractor.
This relationship presents fewer ongoing legal obligations and less paperwork. It is generally less expensive than hiring an employee since the employer is not responsible for providing statutory benefits, paying insurance premiums, remitting income taxes or providing reasonable notice. Moreover, employers may be vicariously liable for the negligent acts of employees, while contractors will typically incur their own legal liability.
While it is commonly believed creating an independent contractor relationship is a question of drafting a proper contract, this is not the case. What the parties call themselves is generally irrelevant. It’s how they behave that truly matters. Contractors should, for all intents and purposes, be maintaining their own business entity and providing a service to the employer.
Consider using staffing agencies, but be aware of the risks
. Many companies believe they are immune from typical employment law problems when hiring a temporary employee from a staffing agency. In most situations, employees provided by a staffing agency are employees of the agency and not the employer where they are placed.
However, employers are not absolved of liability. There may be situations, especially where an agency employee has worked for an organization for a long time, where the organization itself becomes the employer for certain purposes. If an individual hired through an agency is no longer needed by the organization after several years, a court may decide the individual is an employee of the organization for wrongful dismissal purposes. Moreover, organizations have occupational health and safety responsibilities towards everyone in the workplace, regardless of who is the true employer.
Similarly, employers should ensure temporary employees are treated no differently than permanent employees when it comes to human rights protections and internal complaint and remedial procedures.
Recognize proprietary and confidentiality issues.
Temporary employees are exposed to a company’s valuable assets and confidential information. They are generally introduced, in one way or another, to a company’s methods, clientele and business ideology. These employees pose similar risks to an organization following their departure as any other employee, yet many companies fail to protect themselves in the same manner as with their permanent employees.
Employers should, therefore, develop and have temporary employees execute confidentiality agreements and be sure to remind them of their obligation to return all company property following their departure.
As with any document a permanent employee is asked to sign, the rules of enforceability will apply in the same way to a temporary employee. Employers and their counsel should, therefore, be engaged to ensure the document, and the objective for creating it, will be satisfied.
Daniel Lublin is a Toronto employment lawyer specializing in the law of discipline and dismissal. He can be reached at firstname.lastname@example.org or www.toronto-employmentlawyer.com.