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Are volunteers unpaid interns or employees?

Are Volunteers Unpaid Interns or Employees?

(Or…How to “Hire” a Volunteer).

The job market in a number of professions such as marketing, legal and non-profit has become increasingly competitive in recent years. It is not unusual for young professionals entering the job market to enhance their résumés by volunteering or completing internships.

Volunteering as an intern is a win-win scenario.  For the individual interning it is an excellent way to gain experience. Many companies value the “try before you buy” approach to hiring.  For the purpose of recruiting a volunteer or intern a company may wish to enter into a formal intern agreement, and to that end we have included a sample volunteer/intern agreement linked to this article.

 

Recruiting volunteers has led to some problems for employees and employees, often in the situation in which such volunteer positions carry with them the types of responsibilities and demands which would normally be expected from an employee. Based on the increase in unpaid positions in various industries, the Ontario Ministry of Labour (the “MOL”) has begun to ask the question: Are unpaid internships or volunteer positions legal?

The answer has proven to be surprisingly complex. Although an employer may call an individual an intern, by itself that is not enough to prevent a court from finding that the intern must actually be considered to be an employee who is protected under the Employment Standards Act (“ESA”).

The MOL has taken action to determine whether interns are being treated properly by employers. In a 2014 Blitz report, out of 56 well-known employers inspected for their internship practices, 13 employers had internship programs with ESA contraventions. These employers were handed compliance orders.

How these rules affect non-profit and charity organizations that engage volunteers is yet to be confirmed by the MOL. However, so long as a volunteer’s responsibilities do not mirror the responsibilities of an employee, a volunteer will not likely be found to be an employee.

To assist you in drafting an intern agreement we have supplied a sample intern agreement here.

In the event an unpaid internship issue is brought forward in a tribunal or court, the judge would consider a number of factors on a case-by-case basis to determine whether the individual was actually functioning as an employee.

This topic is still being hotly debated between proponents and opponents of unpaid internships, so keep an eye out for possible amendments to employment legislation.

The Ontario government has provided strict conditions for having an unpaid intern. Such conditions include:

  • The training received by the intern is similar to training received in a vocational school;
  • The training benefits the intern more than it benefits the organization;
  • The internship is not a prerequisite for an employee position; and
  • The intern is informed and consents to an unpaid internship.

Note that some experts have gone as far as saying that the organization should incur no benefit from the intern.

 

Since the rules on whether an intern is an employee are not crystal clear, it is a good idea for the hiring organization to consult counsel before entering into an intern agreement.

 

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Santa's Got A Brand New Brand

Toronto’s Yorkdale Shopping Centre (“Yorkdale”) has forever changed the way we will visualize Santa Claus. Paul Mason, aka “Hot Santa”, was hired by Yorkdale to portray a modern Santa Claus. Through the gift of social media, Hot Santa went viral, with many oogling over the transformation of how we view Santa Claus. And, Paul Mason received instant stardom.

Source

This year, Yorkdale was not successful in re-hiring Paul Mason for the role of Santa Claus, so hired an equally handsome and modern Santa Claus, Adam Martin.

Now, Yorkdale Shopping Centre and Paul Mason are fighting over the ‘Fashion Santa’ brand that both parties took part in making a success.

A question I never thought I would ask: who has the legal rights to the “Fashion Santa”?

Both parties have filed for trademarks to ‘Fashion Santa’, and Hot Santa started registering the copyright for Fashion Santa long before he was featured at Yorkdale Shopping Centre. However there are other legal issues that need to be taken into consideration, including:

  • Whether an employment/consulting agreement was entered into between Yorkdale and ‘Fashion Santa’ and who retained ownership of the brand;
  • The similarities between the ‘Fashion Santa’ character and the new Yorkdale character.

The latter will be a complex issue, since both parties have applied for trademark registration of ‘Fashion Santa’. Since Yorkdale filed their trademark application first, it is likely that they will get priority for the trademark.

This is not the first time a character has been disputed between an employer/company and the person actually playing the character. Recently, Stephen Colbert reincarnated his famous Colbert character from The Colbert Report on his new night show.

He publicly stated his limitations due to copyright, but instead introduced his old character’s ‘twin’.

Including the following sort of clause can help protect an employer from having a person hired to play a character from taking the character with him:

“The employee/consultant understands that all proprietary information and work product is the property of the company. In addition, the employee/consultant hereby agrees to assign to the company, without further consideration, all existing and future rights that the employee/consultant may presently have or may acquire, free and clear of all liens and encumbrances, in and to the proprietary information and work product, which shall be the sole property of the company, whether or not it is registrable intellectual property.”

The contract drafter can also define ‘proprietary information’ and ‘work product’ based on the specific circumstances the contract is being drafted for. This will help to create greater certainty.

You never know what idea is going to attract instant fame, so it is always a good idea to protect yourself with the right legal document. Make sure Santa Claus has the right clause!

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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What legal documents do I need for on-boarding employees and directors to my start-up?

As your startup grows, you will find yourself needing to hire more and more people. If you’re bringing employees onto your team it’s important to have a solid employment agreement ready to go, with clearly outlined expectations in relation to work responsibilities and long-term goals. It is equally important to know how to welcome and train new board members. This will make the process of on-boarding go far more smoothly, saving you a substantial amount of time and money.

Director On-Boarding

Expanding your board of directors requires preparation and careful thought. Directors are often brought in on the basis of being complementary to the company—he or she has a skill set or resources that are useful to and advantageous for the startup. This can be attractive to both parties, but the company should also inform the incoming directors of the duties and legal responsibilities associated with being a board director.

Some general points to cover include:

  • Directors are legally liable for and have a fiduciary duty to the company
  • Directors have a duty of care to the company, and as such are required to supervise and manage its affairs such that, if done wrong or omitted, can leave them liable
  • Directors do have options when it comes to protecting against liability, like obtaining insurance
  • Payment terms, if there are any, including how directors are to be compensated (e.g., cash, options, or a mixture of both)

Perhaps a subtler point, but one that should still be made known to an incoming director, is that in smaller startups, shareholders are often far more involved in the business through the use of a unanimous shareholders’ agreement. This can replace the board of directors to some extent, restricting their powers but at the same time reducing some of their responsibility for liability.

In any event, while welcoming incoming board members, the company should also impress upon them that directing the company is a responsibility that should be treated with great thought and care.

pexels-photo

Employee On-Boarding

On-boarding is popularly discussed in terms of building a friendly and supportive work environment for a new employee to make the transition easier so they can reach peak productivity faster.

That’s definitely something that should be done. However, another side of on-boarding involves making sure employees have the appropriate employment documents to make the terms of their employment very clear.

These documents can include:

  • A comprehensive offer letter that provides details related to payment terms and benefits
  • A non-disclosure agreement, otherwise known as a confidentiality agreement
  • A rundown of federal and provincial employment policies that outline the company’s rights and liabilities in relation to the employee’s
  • An Employment Handbook or Manual, which serves a dual purpose—to inform the employee of further offer terms such as time off, but also to explain work culture and work towards workplace integration

 

To see a standard employment agreement, visit our Small Business Law Library!

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Agents and employees, watch out! It’s all in the hands of the principal…

When drafting a limitation of liability clause, ensure that all persons who may be covered by the liability exemption clause are included and specify the degree of coverage.

Courts have stated that persons acting as agents on behalf of an employer may also be extended the benefits of a limitation of liability clause so long as an agent-principle relationship has been properly created. This relationship is created when:

1. there is clear intention to create an agency relationship and to protect the relationship;
2. the contracting party is contracting not only for himself but also for the agent(s);
3. there is authority to act as an agent (or subsequent rectification); and
4. consideration flows from agent to contracting party.

For example, in New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite & Co. Ltd. [1975 – PC], there was a contract between Satterthwaite and another company, to carry a drill. This contract included the following limitation of liability clause:

“It is hereby expressly agreed that no servant or agent of the carrier (including every independent contractor from time to time employed by the carrier) shall in any circumstances whatsoever be under any liability whatsoever to the shipper, consignee or owner of the goods or to any holder of this bill of lading for any loss or damage or delay of whatsoever kind arising or resulting directly or indirectly from any act neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this clause, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the carrier or to which the carrier is entitled hereunder shall also be available and shall extend to protect every such servant or agent of the carrier acting as aforesaid and for the purpose of all the foregoing provisions of this clause the carrier is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servants or agents from time to time (including independent contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to the contract in or evidenced by this bill of lading.”

The carrying company hired New Zealand Shipping’s stevedores to unload the drill. The drill was dropped by the stevedores and damaged. The court held that the limitation of liability clause extended to the stevedores because they were acting as agents to the contracting party.

Similarly, employees may benefit from a limitation of liability clause found in a contract between an employer and client if two requirements are satisfied:
the limitation of liability clause, expressly or impliedly, extends its benefit to the employee(s) seeking to rely on it; and the employee(s) seeking the benefit of the limitation of liability clause must have been acting in the course of their employment and must have been performing the very services provided for in the contract when the loss occurred.

London Drugs v Kuehne & Nagel [1992 – SCR], stands for a precedent of this rule.

In this case, London Drugs (the customer) delivered a transformer to Kuehne & Nagel for storage pursuant to terms and conditions of a standard form contract of storage. The contract for storage included a limitation of liability clause stating that the warehouseman’s liability on any one package is limited to $40 unless the value was declared in writing to be more than $40 and additional insurance was purchased. London drugs did not purchase the additional insurance. Kuehne & Nagel’s employees dropped the transformer while loading it causing close to $34,000 in damages. London Drugs sued the employees that dropped the transformer. The court stated that the employees should not be held liable because:
1. the contract between the employer and customer impliedly extended the benefit of the limitation of liability clause to the employees; and
2. they clearly were acting in the course of their employment.

In some cases, the courts have even allowed employers to rely on an exemption clause even when the damage occurred was intentional or negligent. For example, in Photo Production v. Securicor [1980 – HL], the Defendant, a provider of patrol guards, entered into a contract with the Plaintiff to guard the Plaintiff’s factory. The Defendant’s employees, guarding the factory, deliberately started a fire to warm up but the fire got out of control. The damage caused was 615 000 Pounds. The Defendant successfully relied on the exemption of liability clause. The court started that exemption clauses are to be interpreted the same as any other term regardless of whether a breach has occurred and the clause can be relied on even though the cause of damage was intentionally initiated.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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4 Important Points to Remember about Wrongful Dismissal

Whether you are a valued employee dismissed for wrongful reasons, or an employer who has essentially been forced to dismiss an employee without any bad faith, Coppola v Capital Pontiac Buick Cadillac Gmc Ltd (2011 SKQB) and Rodrigues v Shendon Enterprises Ltd. (2010 BCSC) show that there are 4 points to consider about all wrongful dismissal cases.

The Dismissal

  1. When dismissing an employee, an employer should either (a) dismiss the employee with just cause, or (b) dismiss the employee without cause, but with reasonable notice of termination.
  • Just cause requires employee behavior to be seriously incompatible with the employee’s duties, such that it fundamentally strikes at the employment relationship and results in a breach of employment contract.
  • Reasonable notice is to be determined on a case-by-case basis, based on four factors set out in Bardal v. The Globe & Mail Ltd., 1960 Ont. S.C. (most recently applied by the Supreme Court of Canada (SCC) in Honda Canada Inc. v. Keays, 2008):                       

a) The character of the employment – the employee’s experience and qualifications is what matters, and may trump the employee’s position in the management hierarchy.

b) The length of service – the general rule is to award one month of notice for each year of service. However, to avoid giving this factor disproportionate weight, considerations such as whether the employee had been enticed to leave secure employment or if the employee had been made to believe that his/her position was secure have been factored in to avoid unfair punishment of short service employees.

c) The age of the employee

d) The availability of similar employment, having regard to the experience, training and qualifications of the servant.

2. Terminating an employment relationship without just cause and without proper notice of termination constitutes a wrongful dismissal, and a breach of the employment contract. This is because the law has long recognized that all employment contracts include an implied term of proper notice of termination. To compensate the employee for the breach of contract, the employer must pay the employee an amount that substitutes for a reasonable notice.

The Employee’s Mitigation:

3. Just like any other breach of contract situation, a wrongfully dismissed employee has a duty to take all reasonable steps to mitigate the loss consequent to the employer’s breach.

Therefore, a wrongfully dismissed employee should attempt to secure subsequent employment, the earnings of which would reduce the damages the employee would receive for the wrongful dismissal.   

The Potential Damages:

  1. In addition to the compensatory damage for the breach of the employment contract, an employer who has wrongfully dismissed an employee may also be subject to compensatory damages for mental distress that it caused the employee, and/or punitive damages.  
  • Compensatory damages for mental distress will be awarded if a wrongfully dismissed employee can prove that the manner of the dismissal (a) caused the employee mental distress, and (b) may reasonably be contemplated by the parties at the formation of the contract to result in the damages. This is limited to situations where the employer engaged in unfair or bad faith conduct during the course of dismissal, such as falsely accusing the employee of fraudulent conduct and misrepresenting the reason for the dismissal. A lack of bad faith in an employer’s actions during a wrongful dismissal would not give rise to this type of damage.
  • Punitive damages will be awarded only if the employer’s conduct in dismissal was so extreme that damages in addition to compensatory damages are necessary for the purpose of deterrence, denunciation and retribution.

Key Take-Away

  • An employer has an obligation to terminate an employee either based on (i) just cause; or (ii) without cause and with reasonable notice
  • An employee has an obligation to mitigate the losses consequent to an employer’s breach
  • An employee who has been wrongfully dismissed may receive compensatory damages for the breach of contract, for potential mental distress, and punitive damages.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Inter-lapping Business Documents and Employees’ Private Property

Links from this article:
Read the article here.

The article discusses an employee’s general duty of confidentiality to an employer. Although there are some circumstances where there is an implied duty of confidentiality, it is better that the employer have a confidentiality agreement in place. One item the article recommends mentioning in a confidentiality agreement, is which information is not included in the definition of confidential information as it is in the public domain.

In particular, an employee’s social media or LinkedIn contacts may be included in information that the company deems confidential. This was considered acceptable in a UK case but has yet to be determined elsewhere. Employers should consult legal counsel when considering whether to include social media contacts in the definition of confidential information.

Read the article here.

 

Take away:

  • In a NDA, it is important to clearly define what constitutes as confidential information, especially where it may interlap with the employee’s private property.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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