"That Indispensable Figment of the Legal Mind": The Contract of Employment at Common Law in Ontario, 1890-1979

“The 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, however much the submission and the subordination may be concealed by the indispensable figment of the legal mind known as the 'contract of employment'.” Otto Kahn-Freund , Labour and the Law (London: Stevens, 1977)

This study examines the legal evolution of the common law of employment contracts in Ontario between the 1890s and the 1970s. It focuses on the changing relationship between notions of property and contract in employment, as visible through the judicial discourse of reported common law cases.

I argue that between the 1890s and the end of the 1970s Ontario saw the emergence and consolidation of two different conceptual paradigms for regulating work at common law. The common law of employment contracts was framed and reframed over different eras of the 20th century through what the courts understood of the nature of the exchange between the parties, the property interests involved and the legal tools necessary to manage that exchange. Contrary to the traditional narrative in the field, the courts of Ontario first conceptualized employment as an exchange as of the turn of the 20th century. This first paradigm emerged in tandem with the province’s second industrial revolution, and sought to regulate the discretionary nature of white collar professional work. The second paradigm was entrenched in the 1960s and 1970s. It is over these years that workers in Standard Employment Relationships (SER) first began to bring employment-related claims to the common law courts, a few decades after it emerged as the paradigmatic form of work around which Ontario’s labour market and employment laws were fashioned over the mid-century. The basic premises of the SER, of long-term employment, job security and internal career advancement, fundamentally changed the psychosical and economic terms of employment. But faced with workers’ claims for recognition of these new terms in law, the courts instead chose to entrench a limited legal framework which denied job security as an enforceable contract term.