Tuesday, January 15, 2013

Can an employer sidestep the Human Rights Tribunal?

The Human Rights Tribunal is designed to be accessible, and many employers feel that the system treats them unfairly, and not without reason.  The relatively accessible design of the Tribunal means that an individual can often bring an application against an employer without the need for legal assistance potentially forcing the employer to incur significant legal fees to respond to the application.  In fact, the Ontario system goes a step further now, providing free legal assistance and representations to applicants, via the Human Rights Legal Support Centre.

Only to applicants, though.  Respondents - usually employers - have to foot the bill for their own defences.

And cost sanctions are unavailable at the HRTO:  An applicant, without incurring any legal fees personally, can bring a vexatious and frivolous application against an employer, and force the employer to incur substantial legal fees, and there is absolutely nothing the employer can do to recover those fees.

There are reasons for the system to be set up in such a way.  But it's hard to fault an employer for feeling victimized after successfully responding to an HRTO Application.

Some critics, such as Sun TV's Ezra Levant, have argued that the Human Rights Tribunal should be scrapped, and that people should be able to hire a lawyer and go to Court when human rights have been infringed in ways calling for a remedy, so that the final decisions will be made by judges, so that trivial applications will be more limited, and so that the losing party can be required to contribute to the winner's legal fees.

The Superior Court very recently released a decision in a case where an employer asked the Court to decide the essential questions underlying an HRTO Application:  Power Tax v. Millar.

The Facts

Ms. Millar was a manager working for Power Tax.  She took parental leave, starting shortly before the birth of her child in early 2011.  Power Tax asked her to return early, but she declined because of difficulty obtaining care for her child, and therefore she was going to stay until the end of her parental leave.

Shortly before her anticipated return to work, Power Tax notified her that her position no longer existed.  They claim that they were restructuring, and that any positions which entail interactions with CRA now require a law degree, to protect solicitor client privilege, so they no longer had a position for her.  She takes the position that she was dismissed because of her insistence on taking her full maternity leave.

The Process

In February 2012, Millar commenced an application to the Human Rights Tribunal, seeking reinstatement, back pay, and other damages, based on her allegation that the dismissal was discriminatory.  In May 2012, Power Tax commenced a Superior Court Application seeking a determination of rights, including a declaration that the termination of Millar's employment was for "valid business reasons".  Power Tax argued that the matter included an interpretation of what constituted valid business reasons pursuant to the employment contract, and that the HRTO didn't have jurisdiction to interpret the contract.

Power Tax then unsuccessfully sought a deferral from the Human Rights Tribunal, and Millar brought a motion to the Superior Court seeking a stay of the Court proceedings.

The above-linked decision is the decision on Millar's motion.

The Decision

Justice Goldstein concluded that Power Tax's Application was an abuse of the Court's process, and should be stayed, for several reasons:

  1. There is no reason for Power Tax to bring its Application to Court, instead of simply responding to the HRTO proceedings.
  2. Bringing the application forces Millar to wage a "two-front war".
  3. Permitting the employer's Application to proceed where no wrongdoing is alleged of the employee would open up the floodgates, allowing employers to do end-runs around the HRTO.
  4. The results of the HRTO proceedings would almost certainly estop any relitigation in Court.
  5. Permitting the Application to proceed would encourage forum-shopping, multiple proceedings, and delay.
Justice Goldstein astutely rejected the employer's contention that it was an issue of contractual interpretation that the HRTO could not address:  If the termination of employment violated the Human Rights Code, then it could not be for a valid business reason.

In any event, even if the Court Application were not an abuse of process, Justice Goldstein would have stayed it anyways, because it would be obviously unjust to Millar to allow it to proceed, and dismissing it would have no prejudice on Power Tax.

My Thoughts

This was an interesting case, but on face value of the decision it is hard to see how it could have had any other result.  Both sides were represented by experienced counsel, and Millar's lawyer argued that 'the only purpose of the Application is to intimidate and harass Ms. Millar' - the judge didn't go that far, but accepted that it was possible.

Millar's lawyer is also on record in the HRTO proceedings, but it is impossible for me to know if Millar began the proceedings on her own and only retained counsel after the Application was commenced, or if Millar had counsel from the outset.

I have blogged before about the options that employees have if they think that have been improperly dismissed because of pregnancy.  Indeed, there are no fewer than three processes available to an employee (Court, HRTO, or Ministry of Labour), and one can easily imagine cases in which one would be preferable over the other for the employee.  And it is the employee's choice.  In this case, it appears that Power Tax was confident in its ability to rely on the written employment agreement, which would explain why Court may not have been the preferred venue for Millar - Power Tax may have felt that it was more likely that a judge would be convinced to adhere to the termination provisions of the contract.

On the other hand, there's the British Columbia Kooner-Rilcof case I blogged about in September, where an employee dismissed because of pregnancy was awarded pay in lieu of only 4 weeks' notice, total (plus a relatively modest award for injury to dignity, feelings, and self-respect), because of a contract which purported to seriously limit her entitlements on termination - the BCHRT acknowledged that the contract wasn't determinative in the case of a discriminatory termination, but still felt that the contract might inform the scale of damages available.

There is also one rather interesting paragraph in the decision:
I do not wish to be taken as saying that the doctrine of abuse of process should be invoked in all cases where litigants are brought to different forums.   There are obviously appropriate cases.  As has been pointed out in other cases, the HRTO process can be slow and complex.  There may be a basis for employers to go to court in order to deal with obviously frivolous or trivial claims while the ponderous HRTO process works itself out.  I do not know if Ms. Millar’s case has merit, but Power Tax itself has never taken the position, either in this Court or before the HRTO, that Ms. Millar’s case is frivolous.
So, novel and unlikely as Power Tax's argument was in this case, it appears that the Court is leaving the door open to the same argument in slightly different circumstances.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

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