Unconscionable employment

Abstract

The increased part played by good faith can be seen in the law of contract more widely; in this jurisdiction and abroad. The Canadian Supreme Court accorded good faith the status of `organising principle’ in the major case of Bhasin v Hyrnew and has recently returned to the concept in the employment context in Heller v Urban Technologie . This chapter looks at the impact that elevation to this degree of good faith might have on the employment contract. Mention of terms such as good faith and fair dealing would be likely to cause employees to focus on what they gain from the bargain. It is also the case that notions of reciprocity comprise a key element in relational contract theory. Historically the common law paid little attention to claims of unfairness or exploitation ensuing from inequality of bargaining power. The position has changed radically where the employment contract is concerned as judicial decisions at the highest level from a number of jurisdictions demonstrate. Against that backdrop, one might have expected unconscionability to come into play but that has yet to occur. It will be seen that the courts remain understandably wary of assessing whether or not an exchange is fair. Where consumer contracts are concerned it has been said ` The determination of fair prices often raises complex, technical, issues, requiring evidence of general market conditions, for which individual litigants are a poor source and with which judges may be unfamiliar.’ Such complexities are mirrored in the employment context which explains the lack of judicial appetite for an extension of common law controls. The courts are more than content to defer to the legislature. Good faith is instead deployed to ensure that the parties are faithful to the bargain struck; construction and implication of terms are important tools in this regard. Discretionary clauses are regulated and must be exercised in good faith. Developments in the law of economic duress will also be assessed. Will this provide a route to address the perennial problem of unilateral variation? The role given to good faith would also appear to have implications for the issue of contracting-out; an issue which at least in principle has never been resolved in the case of mutual trust and confidence. It would seem difficult though to contract-out of an organising norm or equivalent doctrine.