Case Synthesis: Bowes and Wright

This entry concerns two cases I discussed in June:  Wright v. The Young and Rubicam Group of Companies (Wunderman), and Bowes v. Goss Power Products.

The proposition I dealt with from Wright deals with a growing area of employment contract interpretation, where the core principles are becoming pretty well-established in the law:  Namely, that termination language in an employment contract which could violate the Employment Standards Act is void from the start, regardless of whether or not it actually gives the employee his or her statutory minimums at the time of termination.

Bowes was an important case finding that, where a contractual term sets out that an employee can be dismissed on provision of a certain amount of notice or pay in lieu, that term does not automatically include an obligation to mitigate.  (Therefore, though Mr. Bowes found a new job shortly after being dismissed, he was nonetheless entitled to his full contractual pay in lieu of notice.)  If an employer wants to include an obligation to mitigate, that must be expressly included in the contract.

I've now started to see contracts drafted by other lawyers, taking Bowes into account and creating an obligation to mitigate, but which - as I predicted might happen - fail to properly account for the ESA implications, thereby potentially rendering the whole termination clause unenforceable.

So a post-Bowes contract goes something like this [note, this is not actual contractual language, nor is it intended to be; I'm just setting out the basic structure]:  If you are terminated without just cause and without notice, you will continue to receive your remuneration for x weeks [or set out a formula], provided that you make reasonable efforts to secure replacement employment, and that in the event that you obtain replacement employment your further entitlements will be reduced/eliminated/etc.  I've seen percentage-based clawbacks used to incentivize employees to actually find new work, and also to motivate reporting (because it allows the inclusion of a reporting structure, failing which all future income is cut off).  These clauses have been drafted by clever and thoughtful lawyers who are very experienced in the field.

But there's still a problem.  Actually, two problems.

There are a couple of interesting features of ESA pay in lieu of notice and severance:  Firstly, it is not subject to an obligation to mitigate.  Secondly, it cannot be paid in instalments (subject to a proviso that an instalment agreement can be reached in respect of severance payments).  So a contractual provision entitling the employer to provide periodic payments in lieu of notice, on its face, breaches the ESA.  But more importantly, a contractual term which, on its face, purports to entitle the employer to reduce or eliminate its payments, including ESA minimums, due to mitigation earnings or failure to mitigate...will almost certainly be void.

(Caveat:  In the right fact pattern, with a sufficiently generous notice period and percentage clawback, it may be plausible to argue that the language still gives a 'greater right or benefit', and therefore isn't void.  However, that would be the exception, not the rule.)

Remember:  We're not just talking about voiding the mitigation language, but most likely the entire termination clause.  In the vast majority of cases, the termination clause will give lesser value to the employee than the common law (which is applied in the absence of a valid clause).  Mitigation will only be an issue in a relatively small minority of cases, but because of the law as set out in Wright, there is the risk that the language dealing with mitigation may outright void the entire termination clause, leaving in place the common law presumption of "reasonable notice".

The construction of ESA saving language may be an issue, too.  I've seen at least one clause framed using the saving language which I prefer, entitling an employee to "the greater of" the ESA minimums or the results of the contractual formula (which is usually excellent language, in my view), but which goes on to set out the mitigation obligations following an analysis contingent on the contractual formula being applied.  Meaning that the "greater of" language will probably end up looking at the gross figures without accounting for mitigation:  Let's say the stat minimum is $100, and the formula, sans mitigation, is $150.  The formula yields the greater result, so the language says "That's what you get...subject to your obligation to mitigate, which could bring you down to $75."  See the problem?

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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.

Poorly Drafted Golden Parachutes

There's a recent decision from the Ontario Superior Court of Justice, in the Freudenberg Household Products Inc. v. DiGiammarino case, interpreting contractual language:

7.         In the case that the Company would decide to terminate the contract with the employee in the first 4 years after the signature, the Company will pay to the employee an indemnity compensation of two (2) years salary including the bonuses.  In the case the Company terminates the contract following employee’s behaviour that could put the company in financial/commercial danger as a result of illegal or dangerous act, this compensation will not be payable any more.  This indemnity will include any other compensation arising from normal labour regulations. 

After these 4 years, this indemnity compensation will be no more applicable and the potential separation will be regulated by normal Canadian labour regulations. [Emphasis added by the Court]

The golden parachute in the first subparagraph is significant and unusual.  Other comments in the decision suggest that Ms. DiGiammarino was a long-service employee, so I'm guessing that the golden parachute was offered to induce her to give up some other contractual entitlement, or to induce her to accept a transfer into a less secure position.  Either way, the drafting is simply terrible, for reasons I will touch on below.

The decision states that the contract was entered into in November 2011, but that is clearly an error, and it appears that the year was 2007.  In summer 2011, the employer decided that Ms. DiGiammarino wasn't performing to expectation, and they would terminate her employment.

However, to avoid the golden parachute, the four-year term was permitted to run its course.  This attempt was unsuccessful:  The Court found that the golden parachute was triggered by the decision to terminate having been made within the first four years, as opposed to the termination occurring within the first four years.  Because they decided within the first four years to terminate her employment, she gets the benefit of the golden parachute clause.

My Thoughts on the Decision

Unlike the Court, I see two possible face-value readings of the language.  There's structural ambiguity in the sentence itself.  The Court's interpretation is possible.  But so is the alternate interpretation:  Indeed, it's probably the more likely interpretation to call "terminate...in the first four years" a verb phrase, all subordinate to the large verb phrase starting with the word "decides".  (No, that's not legal jargon; it's linguistic jargon.  Mind you, it's been a number of years since I've taken a linguistics course, and while I was pretty good at it at the time, I'd welcome input from linguists.)

However, there's a rule of contractual interpretation that, when there are two possible readings, the Court reads the language in the manner which is least favourable to the party that drafted the contract.  So I'm of the view that the Court's correct here.  While one could certainly argue that the parties didn't intend the word
"decides" to be so heavily weighted - indeed, it looks like it was probably intended as empty verbage - I agree with the Court's analysis that there's no reason to protect the employer's right to arbitrarily fix a termination date that is more favourable to its own interests.

Poor Drafting

I have to say that I really hope this language wasn't drafted by a lawyer.

Firstly, there's the empty verbage.  Courts don't respect empty verbage.  Words are presumed to have meaning - to have some sort of effect on the overall meaning of the clause.  Yet it's common for lay people to try to use more language, and fancier language, to try to make a contract more impressive and legal-sounding, yet ultimately obfuscating the meaning of the contract, and detracting from its precision.  (Hint:  If you don't know how to properly use the word 'obfuscate'...just don't.)  The same issue occurs with the phrase "indemnity compensation".  It's clearly just an attempt to look fancy and formal, because the phrase doesn't really have any meaning.  An indemnity is a specific kind of compensation, and pay in lieu of notice isn't generally regarded as an indemnity.

Ironically, had it been a less formal contract, there would be more room for argument.  In an email, for example, empty verbage might be more acceptable when setting out terms.

Secondly, the second subparagraph is really, really weak.  Let's set aside the fact that there's a difference between labour law and employment law, and this one is the latter, and also the fact that this isn't in the Federal sphere...so "normal Canadian labour regulations" is wrong on pretty much every level.  Clearly, it's trying to say "You'll get only the statutory minimums".  But that isn't what it says.  Even if you read "Canadian labour regulations" as something like "applicable employment standards legislation" (which may be a bit generous), saying that a separation will "be regulated by" applicable legislation is simply empty language.  Of course a separation will be regulated by the applicable employment standards regime.  That's true regardless of whether or not the contract says so...because that's just what employment laws do.

In other words, while it looks like this is an attempt to limit the employee to the employment standards minimums, the case law is very clear that language like this simply doesn't cut it.  (To be fair, the employer seems to acknowledge that; they also asked the Court for a determination of the reasonable notice period, which the Court fixed - as an alternative finding - at 21 months.  Of course, there's still a huge difference between a 21 month reasonable notice period and a 24 month golden parachute:  Mitigation.  Remember Bowes v. Goss Power?  With contractual language of this sort, there's no obligation to mitigate, unless that obligation is specifically set out in the contractual language.

The lesson, for employers, as always:  Contracts are useful, but you need a good employment lawyer to do it.  Spending a few hundred dollars to make the contract a good one at the start of employment is worth the investment down the road, because it could easily save you tens of thousands of dollars (or more) in liabilities and additional legal fees at the end of the employment relationship.

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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.

Tribunal Reconsiders Garrie v. Janus Joan

In May, I explained the HRTO's decision in Garrie v. Janus Joan, involving a developmentally disabled employee who worked for many years for $1.25 or less per hour (to do the same job as non-disabled employees earning at least minimum wage) before being dismissed when the employer decided no longer to employ disabled employees.

And the Tribunal concluded that she was too late to complain about the discriminatory wage rate, though the dismissal was discriminatory, so awarded lost income...at a rate of $1.25 per hour.

The HRLSC subsequently took the case on and sought reconsideration, and the Tribunal released its decision this week.

Reconsideration is often sought and almost never granted.  The Tribunal values finality, and is seldom prepared to go back and second-guess its earlier decisions.  In this case, however, the Tribunal granted reconsideration.

There are arguments regarding whether or not it's proper to award a remedy which flagrantly ignores the minimum wage laws; however, I argued that the 'timeliness' issue was the bigger problem - concluding that the discriminatory wage right surrounded only the implementation of the wage rate ignored the reality that, throughout her employment, she was still being treated unequally.  The latter problem, in my view, subsumes the former.

Strictly, the analysis is whether or not paying discriminatory wages is a series of discriminatory events, and there is some mixed case law on the point.  But I think this falls clearly on the far side of any grey area.  One can imagine a scenario where an employee was denied a promotion on discriminatory grounds, where it would be kind of grey whether or not the subsequent unequal treatment was a series of discriminatory events (I would say not - You're paying the promoted employee more because he was promoted at a discrete point in time; that generates its own remedies, but they don't reach indefinitely into the future.)  A discriminatory raise is even trickier.  But in this case, the difference in remuneration is so stark that it's clear that the right to equality is breached with every pay cheque.

The Tribunal did not reach a conclusion on remedy - it sounds like it will require another hearing.  This is tricky, because of the rather 'all or nothing' aspect of the case:  If the discriminatory wage rate is a series of events, then she is entitled to back pay going back a decade or so.  Probably something in the six-digit range, though ODSP would require repayment out of that.  If it isn't, then...not.  It would be difficult to find a sound legal basis to justify some middle-ground solution where she get's back pay for only a reasonable period of time.  (There also may be ongoing difficulties collecting.)

Edited on the afternoon of October 19, 2012:

The New Test

It seems appropriate to add some discussion regarding the specifics of the principles the Tribunal considered to find that this case regards a series of incidents:

(1)  Is the most recent incident something that could independently establish a breach of the Code?

(2)  Is the most recent incident a "fresh step", rather than simply a consequence flowing from the earlier breach?

(3)  When were the effects of the discrimination manifest for the employee?

The Tribunal concluded that each time the disabled workers were paid less than their non-disabled co-workers, it was an incident of discrimination.  Frankly, I question the language of the "fresh step".  I think the decision is correct, but I still think it would be easy to characterize the facts in issue as lacking a "fresh step".

To my view, requiring a "fresh step", where the most recent incident could independently establish a Code breach, risks rendering injustice.  It's the 'independence' factor which I think is most important.  If you need to look to the original incident of discrimination in order to explain how your rights are still being breached, it isn't a series of events.  So if you get denied a promotion because of your race, you can't bring an Application 5 years later on that basis alone to say "I'm getting paid less, because of my race, than that person who got the promotion" - the rather simple reality is that you're getting paid less because you didn't get the promotion.  Without referencing that discriminatory competition five years earlier, it's absurd to even compare yourself to the person who got promoted.

Consider a scenario where a person with a physical disability, who is generally wheelchair bound and can barely walk, has to take a flight of stairs to his workstation.  He asks for a workstation on the first floor, and the employer says no.  So every day he has to leave his wheelchair behind, to struggle with the stairs.  After a year passes that way, is the employer scot-free, absolved of any need to accommodate this continuing employee, because the "No" stands as the singular act of discrimination, with continuing effects?  No, it seems to me that every day that the employer requires and expects the employee to take the stairs is a new incident of discrimination, even if it flows directly from an old refusal to accommodate.  When explaining the discrimination, it is enough to say "I can barely walk, and my employer expects me to walk up the stairs every day, when they could easily give me a first-floor workstation."  There is no need to appeal to Day 1 of the discrimination in order to make out a cogent case of discrimination.

Continuing causes of action are nothing new, and at common law the limitations clock will often be stalled until the cause of action ceases.  (To use a simple example, consider a case where squatters began occupying your land.  The trespass continues until they leave, and only at that time will a limitations period start running on an action in trespass.)  I would argue that the Tribunal should use a similar analysis, for which no "fresh step" analysis would be required.  Particularly since most of the relationships the Tribunal adjudicates between are ongoing and hierarchical in nature, there are compelling policy reasons for the Tribunal to be relatively open to consider ongoing discrimination.

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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.

Constructively Dismissed Wal-Mart Employee Awarded $1.4 Million

Yes, you read that headline right.  When I first saw it in the HR Reporter, my initial response was to think it must be American...except that American law doesn't really have much in the order of constructive dismissal, to the best of my knowledge.  No, it's Canadian, albeit right across from Detroit.  (No, Rob Ford, it isn't in Manitoba.)

And I can only imagine that the Court of Appeal clerks are already making room for this in their filing cabinet.

Meredith Boucher was an assistant manager at Wal-Mart in Windsor, and alleged that she was subjected to "profane and insulting mental abuse" from the store manager.  Her claims included sexual harassment and discrimination, intentional infliction of mental suffering, and assault - based on allegations that another assistant manager punched her in the arm on two consecutive days.  (This assistant manager was later fired.)

She opted for a jury trial - which appears to be a pretty good idea in a border town - and the jury accepted many of her allegations (though did not find that she had experienced sexual harassment or discrimination), and awarded her significant damages.

According to the HR Reporter, the award was as follows:

1. $200,000 from Wal-Mart for infliction of mental suffering;
2. $100,000 from the Manager (personally) for infliction of mental suffering;
3. $10,000 from Wal-Mart for assault;
4. $1,000,000 from Wal-Mart in punitive damages; and
5. $150,000 from the Manager (personally) in punitive damages.

(Interestingly, I haven't found any indication of pay in lieu of notice.  If she was awarded any, it is dwarfed by the rest of the award.)

Wal-Mart's lawyer has been quoted as calling the award "perverse" and as saying that he has recommended an appeal, which he expects to succeed.  He sounds pretty confident, and not wrongly so.  While juries get a lot of deference from appellate courts on findings of fact, the appellate courts are nonetheless quite prepared to rein in runaway damage awards.

My Thoughts on Appeal

Bear in mind that I don't have firsthand knowledge of this case; I've read several media reports and commentaries, but take it all with a grain of salt.  And, more particularly, I'm not in a position to know if there may have been evidentiary objections or problems with the jury instruction that could give rise to grounds of appeal.

From what I've seen, though, the evidence included fairly dramatic evidence of injury, including weight loss and vomiting blood.

Compensatory Damages

Since Honda v. Keays, it has been exceptionally difficult to get an award of aggravated damages in a wrongful dismissal context.  The Courts have been quite demanding in terms of proof of loss and evidence of causation.  But...and this is important...the jury's finding that she was mistreated, and that she suffered significant compensable loss as a result of her mistreatment, is going to be entitled to very significant deference.  While a judge might have resolved the case differently, the bottom line is that the jury believed her, and there appears to have been evidence on which the jury reasonably could conclude that she suffered significant loss.

Likewise with the assault.  They believed that she was assaulted, and awarded a relatively constrained amount of general damages in compensation for it.

So the findings of liability are likely to be resistant to a successful appeal.  But what about the quantum of aggravated damages?

Well, this is one area where I'm a little puzzled by the coverage:  The finding of liability against Wal-Mart would presumably turn on "vicarious liability" - i.e. that the employer is liable for the actions of its employees, which is especially true of managers.  That's probably not a controversial matter.  However, when an individual is liable for compensatory damages, and an employer is vicariously liable for those damages, they are usually considered to be "jointly and severally liable" - which means that a plaintiff gets one award of compensatory damages against both defendants, and can enforce it fully against either one.  What I'm seeing described in the coverage here appears to be separate awards against each defendant, and I'm not sure what the basis of that is.

Especially when the Manager appears to have been alleged to be the primary bearer of hostility towards her, it isn't at all clear how she could have suffered $200,000 worth of distress from Wal-Mart in addition to those damages for which the Manager was responsible.  (One can imagine a scenario where there are some additional damages against Wal-Mart for their part in the mistreatment beyond what the Manager did, but not a completely separate award, and not two thirds of the total aggravated damages.)  It's possible there's something I'm missing here, not having full context.

As for the numbers, they're high, but the misconduct and harm described (and, again, accepted by the jury) was pretty egregious.  $100,000 certainly wouldn't be out of the realm of possibility, based on the facts which the jury appears to have accepted, and even $300,000 isn't obviously excessive.

But - unless I'm missing something in terms of the apportionment of damages - with the damage caused by the Manager appearing to have been assessed at $100,000, it seems to me that there is good ground for Wal-Mart to argue that an additional $200,000 is unreasonable, and that the correct apportionment of aggravated damages would be $100,000, total, jointly and severally.  (Of course, the converse argument from the plaintiff, on a cross-appeal, is that the jury actually found that she suffered $300,000 worth of aggravated damages, for which both defendants ought to have been jointly and severally liable.)

Punitive Damages

1.15 million dollars in punitive damages is absolutely massive, and unlike anything we've ever seen before in a wrongful dismissal case (in fact, there was a B.C. case recently where a jury awarded less than half that in punitive damages, and that turned a lot of heads in the employment bar).

Again, though, the facts accepted by the jury were pretty egregious.

Let's talk for a second about some of the principles of punitive damages:  Punitive damages are only available where there's a separate actionable wrong (which the jury clearly found there was here), and where the conduct of the defendant is so egregious that a further award is needed to penalize and denounce the defendant for it.  (Based on what I've seen, I don't think that liability for punitive damages is likely to be successfully appealed.)  The quantum should be the lowest award necessary to properly deter the conduct in question.

There's also a matter of proportionality.  In a seminal insurance case, Pilot v. Whiten Insurance, the plaintiff's house burnt down, and the fire insurer refused to pay out on the basis of trumped up allegations of arson.  At trial, the plaintiffs received a million dollars in punitive damages; the Court of Appeal reduced the award significantly, but the Supreme Court restored it, finding that it was at the high end, but that the conduct at issue was particularly severe, and the amounts otherwise at issue in the case (i.e. the compensatory damages on their house burning down, and the associated legal fees) were pretty significant, so ultimately a million dollars wasn't so far out in left field that it should be open to appellate review.

Combine this with the fact that Wal-Mart is an immensely successful corporation, and that a million dollars really doesn't create much in the way of hardship for them (i.e. less won't necessarily force them to rethink how they deal with employee relations), and I might think that, if a $300,000 award of compensatory damages holds up, the punitive damages against Wal-Mart will likely stand as well.

However, the chances of the quantum of punitive damages awarded as against the Manager...I very seriously doubt that that will hold up to an appeal.  Punitive damages against individuals are usually in the four or low-five-digit range.  Even where a person was found to be the criminal mastermind behind a massive insurance fraud scheme, he was penalized by only $100,000 in punitive damages, by contrast to $150,000 against this Manager.  The question is this:  If the Manager only had to pay, say, $25,000 out of his own pocket for punitive damages, would this make him think twice before embarking upon a similar campaign regarding another employee?  I would expect the answer to that to be yes.  For Wal-Mart, a million dollars is chump change.  But for a Wal-Mart Manager, $25,000 is pretty substantial, and $150,000 is potentially a bankruptcy-level award.

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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.

Constructively Dismissed Manager Ordered to Pay $50,000 to Employer

I posted about this case in August, but the recent costs award calls for a reprise.

Mr. Chevalier worked for Active Tire & Auto Centre Inc., and its predecessor, for 33 years, for 18 years of which he was a service centre manager in Niagara Falls.  His employment came to an end in 2008, at which time his annual salary was $45,912.

In fact, Active Tire only acquired the service centre in March 2007, and there were some changes to Mr. Chevalier's circumstances, including a reassignment to Welland, a request to reassign him to Brampton, two months (following on the heels of a sick leave) during which he was required to commute to Toronto, and coaching regarding Active Tire's processes.  Mr. Chevalier felt that he was being harassed, and that the coaching was an effort to pressure him to quit - a contention ultimately not accepted by the trial judge, who felt that Mr. Chevalier, though honest and well-intentioned, had become bitter, and that the "significance of various incidents...became magnified and distorted in his mind over time".  Active Tire's conduct, in the trial judge's view, was directed to bring Mr. Chevalier's performance up to Active Tire's own standards, which the trial judge characterized as "almost missionary-like zeal".

On October 31, 2008, Active Tire placed Mr. Chevalier on a purported "lay off".  On November 13, 2008, Mr. Chevalier commenced a wrongful dismissal action against Active Tire.  Active Tire then obtained legal advice and discovered that Mr. Chevalier's position was correct - they were not entitled to lay him off; the layoff constituted a constructive dismissal and breached their obligation to provide him with reasonable notice of termination.  So, a few days after the claim was commenced, Active Tire apologized to Mr. Chevalier and offered him his job back.  Mr. Chevalier refused the offer and continued the action.  He was unemployed for 17 months, and sought over $64,000 in lost income (representing 16 months' pay) and $30,000 in moral damages.

At trial, Active Tire conceded that it wasn't entitled to lay off Mr. Chevalier, and that the layoff was a constructive dismissal, but argued that Mr. Chevalier should have mitigated his loss by taking the job back when it was offered to him.

Following a 4.5 day trial, Mr. Justice Lococo concluded that it was unreasonable for Mr. Chevalier to have rejected the offer to return to work, and dismissed Mr. Chevalier's claim.  He then ordered Mr. Chevalier to compensate Active Tire $50,000 for its legal fees.

Questions Raised by this Case

(1)  Can a laid off manager be taken seriously by his staff?  The judge found as fact that the employer was entitled to insist on its higher standards from Mr. Chevalier, and did so in good faith.  Accordingly, the coaching prior to the lay off wasn't a constructive dismissal.  The judge also found that the lay off was for good faith performance reasons.  But with a manager who has been the subject of coaching, who is bounced around for several months and then laid off and recalled only after he sues, how compatible are the optics with a productive and healthy return to the workplace?

(2)  What about ESA minimums?  For an employee whose employment is ended by the employer in most contexts (and in the absence of wilful misconduct by the employee), including by a constructive dismissal, the Employment Standards Act, 2000 requires the payment of termination pay and, in some circumstances, statutory severance pay.  If Active Tire is required to pay statutory severance pay to eligible employees (which is not entirely clear, but likely), then for a 33-year employee this amounts to 34 weeks' pay.  (Even without statutory severance, the minimum termination pay for such an employee would be 8 weeks.)  It appears that they continued his pay for only one month following the dismissal.

(3)  Would the "reasonable person" really accept an offer of re-employment from an employer whom he is suing for breach of contract?  As a contractor, I can confidently say that, if I was required to sue an ex-client for what I was owed under a contract, I would be reluctant to accept a further engagement from that ex-client at all, and certainly not without having the initial litigation dealt with first.  This isn't the first time the Courts have said that it is unreasonable to refuse re-employment by the employer you're suing, but given that litigation is adversarial, stressful, and causes all sorts of negative emotions between the parties, is it really reasonable to generally expect employees to be able to continue to work for an employer while going through civil litigation against that employer?

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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.

Pregnancy, Human Rights, and Legal Options

I recently posted about another case involving a woman in B.C. dismissed because she was going to take maternity leave.

I've also posted before about the question of venue - when you're dismissed for discriminatory reasons, you have more than one option on where you can go, but you really have to pick one.

But where the issue is pregnancy leave, there are further choices, with different considerations, because it is a protected leave under the Employment Standards Act.  (As under the Human Rights Code, it is not illegal to terminate somebody's employment who happens to be pregnancy, so long as the termination is solely for reasons unrelated to the leave.  It's important to bear that in mind.)

The Choices

Courts

Being dismissed without just cause, a non-union employee is generally entitled to notice or pay in lieu of notice at common law.  This is the normal 'wrongful dismissal' framework, for which you can sue in Court.  Historically, you couldn't seek relief for discrimination from the Courts.  However, given relatively recent changes to the Human Rights Code, that has changed in Ontario.  In a wrongful dismissal case, a remedy can also be sought from Court for breaches of the Code.

The Tribunal

When you suffer from discrimination in employment on the basis of a prohibited Code ground, you can apply to the Human Rights Tribunal of Ontario (HRTO) for a remedy.  Pregnancy discrimination is, rightly or wrongly, regarded as discrimination on the basis of sex, which is prohibited.  (Nobody's saying pregnancy discrimination shouldn't be prohibited; however, there are occasionally awkward results of that particular framework.)

The Board

Pregnancy and parental leave entitlements are set out in Part XIV of the Employment Standards Act, 2000, and the ESA has an expansive anti-reprisal clause, which prohibits (among other things) intimidation, dismissal, or other penalties against an employee because the employee "is or will become eligible to take a leave, intends to take a leave or takes a leave under Part XIV".  A complaint can be made to the Ministry of Labour for breach of the ESA, and the Ministry's determinations can be appealed to the Ontario Labour Relations Board (OLRB).

NOTE WELL:  Under most circumstances, initiating one process will ELIMINATE or severely limit the availability of the other processes.  Speak to a qualified lawyer before making your choice, as the appropriate choice varies under the circumstances.

So what kind of factors are relevant in figuring out where to go?

Pros and Cons:  Remedies, Costs, and Burdens of Proof

The Courts

Court is complicated and expensive.  Practically speaking, you'll probably need to hire a lawyer to help you, and that isn't cheap.  That being said, if you're successful, you may be awarded a contribution to your costs.

The Courts' available remedies for Code violations are not quite as broad as those at the HRTO:  They can order restitution for losses, and compensation to injury for dignity, feelings, and self-respect.  They cannot order reinstatement, or other public interest remedies.

However, Courts have common law powers which may, in appropriate circumstances, extend to punitive damages.

Ultimately, however, the big advantage of a wrongful dismissal proceeding in Court is that one can be essentially successful even if the Code violation isn't established.  Suppose I'm fired without just cause, and I think it's because of my religion.  If I sue in wrongful dismissal and argue that the termination was discriminatory, then even if the Court doesn't accept that there was discrimination, I still may be entitled to pay in lieu of notice under contract or common law.

The HRTO

The Tribunal is cheaper, simpler, and faster.  And perhaps most importantly, there's the HRLSC, a government agency with a mandate to provide free legal assistance to applicants to the Tribunal.  Which is important, because the Tribunal doesn't award costs to the successful party - if you pay a lawyer, you aren't getting anything from the employer to compensate you for the legal fees.

The Tribunal has an expansive power to order a party to do "anything" to promote compliance with the Code.  This is usually in the form of a 'public interest' remedy - implement a policy, stop discriminating, etc. - and doesn't usually provide direct compensation to an applicant; however, it wrests control of the workplace away from the employer, which most employers are very resistant to, and therefore can be a useful threat or bargaining chip in the appropriate case.  It is possible, though rare, for reinstatement to be ordered.

The Tribunal cannot award punitive damages under any circumstances.

Importantly, the Tribunal can only order compensation for violations of the Code.  Where no unlawful discrimination or harassment is found, the HRTO cannot provide relief for an applicant, even if there was a wrongful dismissal.

The OLRB

This is where getting fired because of pregnancy is kind of different.  Again, the OLRB is simpler, and again, it doesn't have jurisdiction for costs, but it doesn't have an equivalent to the HRLSC.  Which means that, while a prudent litigant will usually hire a lawyer, legal fees are a lost litre.  It won't cost nearly as much as going to Court - usually - but you won't get a contribution to costs either.  (Mind you, that is a double-edged sword, cutting both ways.)

The Ministry's and OLRB's approach to these matters is a little more matter-of-fact.  They aren't looking at the moral elements of how appalling it is to discriminate.  They're simply asking:  Are we dealing with a leave, or eligibility for a leave, which is protected under Part XIV?  If so, was the dismissal a result of that leave or eligibility?  If so, what is the appropriate type of compensation?

So you won't receive an award of damages for injury to feelings, dignity, and self-respect.  You won't get punitive damages under any circumstances.  The OLRB doesn't strictly rule out aggravated damages, but it doesn't award them as a matter of course, as the HRTO does with injury to feelings, dignity, and self-respect.  Like the HRTO, if you don't succeed in terms of the specific elements, you won't get damages for wrongful dismissal (statutory termination pay is very modest by contrast to most wrongful dismissal suits).

For the OLRB, the "presumptive remedy for the unlawful termination of an employee who is on a pregnancy leave is reinstatement to employment, with compensation for wages lost to the date of hearing before the Board."  Reinstatement is regularly ordered by the Board.

So while the remedies available by the HRTO versus the OLRB aren't altogether different, the remedies typically awarded by them differ significantly.

But there's another major difference between the OLRB and the other options:  s.74(2) provides that "the burden of proof that an employer did not contravene a provision set out in this section lies upon the employer."

The reverse-onus is a very big deal in some cases.  At the HRTO, you need to be able to lead evidence satisfactory to support an inference that the termination was the result of a prohibited ground of discrimination (i.e. pregnancy) before the Tribunal will even look to the employer for an alternative explanation.  Leading evidence as to somebody else's motivation can be exceptionally difficult.  At Court, the onus is likewise upon the plaintiff.

Putting the onus on the employer means that the employer has an obligation from the outset to put forward its alternative explanation.  In the absence of a convincing explanation, the employee wins.

So...what kinds of cases are best for each venue?

When an employee has a strong wrongful dismissal case and potentially-significant contractual/common law entitlements, Court is often the best choice.  So, when I have an employee client who is a long-service employee without a contract significantly limiting termination entitlements, I hesitate to recommend any course of action other than a proceeding in Court.  In wrongful dismissal cases, it is relatively rare to see zero recovery.  (Just cause, failure to mitigate, or constructive dismissal cases are periodically 'all or nothing', but most wrongful dismissal cases are just a question of "how much".)  So if you have significant entitlements and a high probability of recovery that way, you need to seriously weigh the question of whether or not the cheaper and faster process and marginal additional remedies available from the HRTO, or the prospect of reinstatement from the OLRB, is worth the risk of zero recovery in the event that the Tribunal or Board isn't satisfied that the dismissal was a result of the pregnancy.

However, in the pregnancy cases, it is relatively infrequent to see employees with particularly substantial contractual or common law entitlements.  There are exceptions, but as a function of demographics and biology, pregnant employees aren't often at the high end of the Bardal factors.

In a case with relatively marginal common law or contractual entitlements, I'm more inclined to recommend the HRTO or OLRB.  There's less risk, less cost, and it's an easier process.  So where the additional benefits potentially available from a Court aren't that significant, it's not such a risk to forego Court.  As for which one is better...that depends on the strength of the evidence, and whether or not the employee wants reinstatement.  If it's a "he said she said", where the employee alleges that the employer expressly alluded to pregnancy as the reason for dismissal, I might be less concerned by the reverse-onus.  In a direct credibility contest, onus is relatively unimportant.  An adjudicator has to decide credibility, one way or another, and unless he or she concludes that neither side is credible (which occasionally happens), it won't come down to burden of proof.  However, if it's a case where we're trying to get an adjudicator to draw an inference, the OLRB might be the better route.  And if reinstatement is desired, the OLRB may be the better route for an employee dismissed due to pregnancy.

*****

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. 

More Bill 168 Cases

As any of my regular readers know, I have closely followed the developments in the interpretation of Bill 168 by the Ontario Labour Relations Board.  Though we're now approaching two and a half years since Bill 168 took effect, there doesn't appear to be a final word on one key question:

Does a complaint of harassment under the policies and programs now mandated by the Occupational Health and Safety Act incur the protection of the anti-reprisal provisions in the Act?

In other words, if I complain in good faith that you're harassing me, and you fire me for making the complaint, have you violated the Act?

I've made plenty of posts about this before (click the "Bill 168" tag at the bottom), based on a strong belief in an affirmative answer.  I interpret the Act as now imposing a substantive obligation on employers to provide a workplace free from harassment and violence, and therefore that a harassment complaint is standing on one's rights under the Act, giving it reprisal protection.  But that isn't the answer the Board has been leaning towards, for reasons first set out in the Investia case.

Still, while in early cases the Board suggested that the answer is 'probably not', most of the case law since has been cognizant of the fact that the answer is not certain, and the Board proceeded to dismiss applications on other grounds.

The recent cases are Amodeo v. Craiglee Nursing Home Limited and McDonald v. Windmill Cabinets.

Craiglee

The employee was subject to directions from the Administrator regarding her job that she thought were unreasonable by the Administrator (and there was some question as to whether or not she had been disciplined), so she sent an email to senior management complaining of the Administrator's conduct.  She was dismissed shortly thereafter.

Vice-Chair Kelly considered the question of whether or not the Board had jurisdiction to hear the complaint, but proceeded to dismiss the Application on other grounds - namely, that the conduct complained of didn't meet the definition of workplace harassment, and the Application had to fail on that basis alone.

Now, I've noted before that the face value definition of harassment in the Act is extremely broad, but that this doesn't concern me because it just about goes without saying that legitimate exercises of employer authority (such as giving instructions or reasonable discipline) will not be captured by the language.  And I fully agree with the Board that, on the facts it has described, there doesn't appear to be much of a case that harassment occurred.

However, this decision is...concerning.  The specifics of her email to management aren't clear (i.e. whether or not she was specifically alleging harassment or raising concerns simply about the instructions themselves), nor whether or not the employer has the required policy and program, nor whether or not this email complied with such a policy.  So it's hard to extrapolate much from the decision, but...

...let me say firstly that, if the email couldn't fairly be characterized as a complaint of harassment, that would be fatal to the Application.  I've made this distinction before in my earlier posts:  The OLRB's power under s.50 of the Act gives it power to hear complaints of reprisals to, among other things, exercises of rights under the Act.  Even under my interpretation of the Act that an employer has a substantive obligation to provide an environment free from harassment, simply saying to the Board "I was harassed" isn't enough to generate a remedy.  What generates the remedy - under my argument - is mistreatment by the employer after and because of a prior complaint of harassment.  So if there was no prior complaint, there's no reprisal protection, and no case - at least, not under s.50 of the Act.

However, if one assumes that the email was a complaint of harassment, then to my mind this decision is simply wrong.  Under any anti-reprisal regime where you are protected for standing on your rights, including the Occupational Health and Safety Act, you need not prove that you were objectively correct in the first place.  If I genuinely and in good faith believe that a working condition is unsafe, then I can refuse the unsafe work.  Whether or not this refusal is protected by s.50 does not turn on whether or not the Ministry agrees with me that the conditions are unsafe.  It is not the case that, if the Ministry determines that the working conditions are acceptable, the employer is able to turn around and fire me for refusing what I had perceived as unsafe work.  The very point of these anti-reprisal provisions is that an employee can stand on his or her rights without being afraid that the employer will turn around and dismiss him or her.

Similarly, whether or not a reprisal complaint for harassment can succeed can not turn on whether or not there was harassment in the first place; simply on whether or not there was a good faith complaint of harassment.

Tilting at Windmills

Vice-Chair Wilson didn't summarize many of the facts in this case.  He alluded to an apparent disconnect between some of the conduct complained of and the applicant's dismissal, and sought more submissions, but he also referred to the Investia case as being an ostensibly binding precedent.  (Which it isn't, as has been routinely recognized by the Board.)

So, not much to speak of in this case.

The Elements

The OLRB has found a lot of reasons to dismiss cases without having to consider the question of jurisdiction.  This is kind of troubling in and of itself - if it doesn't have jurisdiction to consider the merits of these applications...why is it doing so?  Along a similar vein, it is developing a highly sophisticated and narrow test for these reprisal applications...seems like an awful waste if the Investia analysis is correct.

So I've been pondering lately what the perfect test case would look like.

(0)  Actual Harassment

As I explained above, I don't think this should be strictly necessary, but until the law on s.50 is more settled I'd be reluctant to advance a complaint where the merits of the original harassment complaint were tenuous in the first place, because of analyses like Vice-Chair Kelly's in Craiglee.  (I number this "zero" because I don't believe it's actually an element...but it wouldn't hurt, so it's something the 'perfect case' would have.)

(1)  A Complaint of Harassment in Accordance with the Policy

As a slight twist, the absence of the mandatory policy can cut the other way, making the test easier to satisfy for an applicant..  There was one case in which the Investia analysis was determined not to apply because there wasn't a policy in place, so the Board agreed to hear a complaint where the employee made a complaint of ostensible harassment, and was dismissed (because of it?), where there wasn't a harassment policy.  In other words, employers, get that policy and program in place.  But the result is that the absence of a policy and program will mean that the OLRB doesn't have to decide whether or not Bill 116 created a substantive obligation to maintain a workplace free from harassment.

So an employee who has been harassed needs to review the harassment policy and program, and make a complaint in accordance with those terms.  In the absence of a proper complaint under the prescribed policy, that will give the OLRB a preliminary out.

(2)  Reprisal by the Employer

The prohibited actions in s.50, in response to an employee enforcing rights under the Act, are dismissals or threats of dismissals; discipline, suspensions, or threats of discipline or suspensions; imposition of "any penalty"; or intimidation or coercion.

Let's be clear on something here:  Simply a failure to properly investigate or deal with the harassment will probably not get an employee there.  Saying that the 'harassment got worse' would be a very tricky case indeed.

For the clearest case, an employee will have to be able to point to something a little more quantifiable and overt, like a dismissal or formal discipline, demotions or other objectively apparent penalties, or some overt (and provable) attempt to intimidate or coerce.

(3)  A Causal Connection

Proving the causal connection can be very difficult.  An inference can be drawn from timing, but employment relationships and business needs are complicated things, and in most cases the onus is upon the applicant to establish that the negative treatment was a result, in whole or in part, of the action giving rise to reprisal protection.  Proving why an employer took a particular action is seldom an easy thing to do.

The 'perfect' case would involve a scenario where the employer expressly admitted that the termination was a result of the complaint.  It isn't implausible - most managers know better than to admit, for example, that a pregnancy motivated a termination decision, but one can certainly imagine an unsophisticated employer admitting that a more general harassment complaint prompted the termination process.  So perhaps you'll have a situation where a small to mid-size business owner has a temper, and periodically flies off into a rage and berates and swears at his employees for little or no reason.  An employee complains about the harassing conduct, and the owner responds to the effect of "If you don't like how I manage, go work somewhere else", and dismisses the employee.

In order to have a prima facie case sufficient to warrant the OLRB answering the question asked at the outset of this post, an applicant will need to have some evidentiary basis for each of points 1, 2, and 3.  Without that, an application is dead in the water.

*****

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. 

Yet to be asked

Sometimes, you come across a truly unusual fact-pattern, and this is one which I found very interesting, albeit somewhat reminiscent of "shuttlegate" from the Olympics.

The case is Husbands v. Grubb, ORC, and it involves a jockey who was disciplined by the Ontario Racing Commission for "failing to perservere with his mount".  He had successfully appealed the discipline, and then sued for malicious prosecution.

On November 30, 2008, Simon Husbands rode a horse called Bug's Boy in a race at Woodbine.  His brother, Patrick, was also riding in the race (on "Come On Love"...horse names, really), and was having an excellent season - if he won the race, he would have the most wins at Woodbine for the season.  As it happens, Patrick won the race, and Simon placed a close second.  However, many commentators noted that Simon didn't really appear to be trying.  He wasn't whipping the horse, "hand driving" (urging the horse forward with hand movements), or "scrubbing" (hand movements plus rubbing the horse's neck with the whip).

The race announcer commented during the race that Bug's Boy had "yet to be asked" (for his best effort).  A Toronto Star horse racing blogger also wrote a critical post, and other bloggers have argued that Simon obviously wasn't trying to win.

Sounds like the South Korean badminton ladies' doubles teams at the Olympics, no?

Well, not so clear-cut.  The motions judge, in this case, describes Bug's Boy as "an undistinguished horse".  He had never before done better than fifth place, and his owner was "ecstatic" with the result.  In fact, the owner confirmed that Simon had driven Bug's Boy exactly as he had instructed, because the horse responded poorly to whipping and scrubbing.  Nor was this the first time Simon had ridden the horse - he had ridden him the previous week, in a very aggressive style, to a very poor finish.

So the narrative makes sense.  Aggressive riding isn't a winning formula on that horse, as Simon had satisfied himself, so he tried a more laid back approach.  And it paid off, with a second place finish.  But, because it happened to be an important race for Simon's brother, the optics are off.

The malicious prosecution suit was doomed from the outset for exactly that reason.  The ride was innocent enough (there remain those in the horse world, apparently, who think that there was misconduct, but if the owner of the horse - who keeps the purse for winning - wasn't upset, I'm inclined to assume that everything was above-board).  However, the optics really were bad, and there's no reason to think that there was necessarily malice or bad faith involved in pursuing the discipline.  Where there's reasonable or probably cause to prosecute, or an absence of malice, a malicious prosecution action is dead in the water.

*****

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.