The Divisional Court decision is out. Rob Ford won his appeal, on the basis of the argument that Council did not have the authority to order reimbursement of donors, as it did, in August 2010; the order was a nullity, and so there was no pecuniary interest at stake for Ford in voting to reverse the order in February 2012. No pecuniary interest = no conflict of interest. (This was the sole successful ground of appeal. The other arguments, about 'error in judgment', the small amount at stake, or the non-application of the MCIA, were rejected by the Divisional Court.)
In my last entry on this topic, I commented that I would have liked to have seen Justice Hackland deal with alternative arguments on this point: From the outset, I considered this to be something of a weak link in Magder's case, but I felt that the particulars of the February 2012 vote meant that it shouldn't matter. Remember: The alleged conflict of interest dealt with the February 2012 vote; not the August 2010 vote.
In February 2012, in the vote in issue in this matter, Ford voted in favour of a motion "That City Council rescinds the previous decision made under item CC 52.1 [the August 2010 vote] and directs that no further action be taken on this matter. [Emphasis added]"
The Divisional Court found that Council did not have authority to order Ford to reimburse donors. That's fine; not to say that Justice Hackland's interpretation was in any way nonsensical, but in some ways I prefer the Divisional Court's reasoning on that point.
However, what is much harder to accept is that a politician can vote to kill follow-up from his own breach of the Code of Conduct. As I noted before, consequences of breaching the Code of Conduct can include a suspension of remuneration: Council was empowered to dock his pay by $43,200, if it felt that that was an appropriate response to his misconduct. There's a clear pecuniary interest in the outcome of Council's dealings with Code of Conduct issues.
Besides which, I'm not sure the connection is that solid from 'CC 52.1 was ultra vires' to 'Ford didn't have a pecuniary interest in overturning it'.
Bottom line: I think there are reasons to doubt the correctness of this decision.
However, there are obstacles to further appeals.
The case law on these matters suggests that there's no available appeal from the Divisional Court, based on the wording of the MCIA. Frankly, I'm reluctant to read those cases too literally: I think there would be real question as to whether or not the Legislature could possibly deprive the Court of Appeal or Supreme Court of Canada of jurisdiction to hear appeals. However, at a minimum, there's an argument that the Court of Appeal can't, or doesn't have to, consider an appeal on its merits. I would have bet against them staying his removal from office, if he had lost today.
Even if the Court of Appeal were to hear the appeal on its merits, it is unlikely that we would get a significantly expedited hearing or decision - we would probably be looking at another year, give or take, before we get a decision, and potentially a further appeal to the Supreme Court of Canada from there. In other words, even in the best case scenario for Magder, by the time we get a final word on the matter, it's around election time.
So, regardless of what comes next, this is a huge win for Ford.
*****
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.
Friday, January 25, 2013
Thursday, January 24, 2013
Chicken Wings and Charity
The Superior Court just released a decision in English v. TravelCentres Canada, dealing with an alleged wrongful dismissal in Woodstock.
It's an interesting case for several reasons, not the least of which is that the fact pattern bears significant parallels to the Rob Ford MCIA saga (in which the Divisional Court will be releasing its decision in the morning).
The Facts
Ms. English started working at a truck stop in Cardinal in 1993; in 2001 she was transferred to a Woodstock service centre which was later purchased by TravelCentres. Over time, she rose through the ranks, and was promoted to General Manager in December 2006. She reported to head office in Ohio.
The service centre had some commercial tenants, including NAL insurance. NAL ran a "Truckers for Wishes" campaign in support of the Make-a-Wish Foundation, and English brought TravelCentres in on the campaign as well. She was excited about the goodwill it could generate for TravelCentres.
There were a few different prongs to the fundraising: Donation boxes, candle sales, a garage sale, and - finally - chicken wing sales at a truck show in summer 2007. English's supervisor, Matuszewski, wasn't thrilled with the participation in the truck show, but left it up to her to make the final decision.
Unfortunately, the chicken wing promotion became a nightmare. They ordered 140 cases of wings - over 50,000 chicken wings (and 550 lbs of carrot and celery sticks) - at a cost of over $12,000, and lacked the facilities and manpower to adequately handle the volume (in addition to their usual business). A communication breakdown with NAL resulted in nobody arranging transportation for the food to the truck show, and the time it took to find a transport to help cost them time. NAL had issues with health inspectors at its stand at the truck show, causing further delays. Ultimately, the sales at the truck show were "dismal": They only sold about 12% of the wings.
A number of issues arose from this - presumably, nobody had really contemplated such a catastrophic failure. NAL was to reimburse TravelCentres for the food sold at the truck show. They took this literally, and paid only $1500, for the wings which were sold. The rest of the wings were TravelCentres' problem. The supplier of the wings, GFS, had supposedly told English, when negotiating the deal, that they would take back and sell any leftover cooked product, but GFS ultimately disagreed with English's interpretation of that conversation. Bottom line: They paid for a huge amount of product that they hadn't moved. Many had to be thrown out, a few more cases were sold, but TravelCentres ended up burdened with a huge surplus.
This is where things got bad. On the findings of the trial judge, English concealed the extent of the wing catastrophe from her supervisor, and instructed her staff to keep him away from the surplus wings. In October, they finally added wings to the menu, but there were quality issues (and complaints from customers); some of the wings had been thawed, cooked, then re-frozen for months. English's staff rebelled, and went over her head to Matuszewski. It wasn't until December/January that he finally found out what had happened.
Furthermore, English paid GFS' full invoice, but to limit the amount of TravelCentres funds squandered on the fiasco, she raided the other funds which had been raised in the charity drive, from the donation boxes, etc. She got about $1500 there, another $1500 from NAL's contribution, and TravelCentres paid the rest of GFS' invoice.
On January 22, 2008, after finally finding out about the fiasco and coverup, and in particular about the payment of GFS' invoice out of funds meant for charity, TravelCentres asked for English's resignation, and she provided it. The next day, she rescinded her resignation.
The Ford Parallels
The Court concluded that TravelCentres had just cause to dismiss English. Interestingly, the first part of the analysis engaged by the Court is whether or not English's behaviour, in taking the funds meant for charity, was misconduct or simply an "error in judgment". (In a wrongful dismissal context, this is an odd question.)
It appears that English was arguing that her understanding was that the funds were all part of one pot, and therefore that using the proceeds of the garage sale, for example, to subsidize the losses on the chicken wing sale was not improper. The judge did not accept this: She had made representations that proceeds of the garage sale would go to charity, and ultimately directed them to another purpose. This was dishonest.
As they say, it isn't the crime that gets you; it's the cover-up. The catastrophic result at the truck show, and the resulting loss, was a result of relatively minor and relatively understandable errors on English's part. She might have lost her job for it, but it wouldn't have been for cause. But it was her conduct after the truck show that sealed her fate.
English failed to correctly assess demand for wings at the truck show. This isn't entirely her fault; she was forced to estimate based on NAL's description of previous shows; NAL's personnel have no food industry experience.
English failed to confirm, in writing, her understanding that GFS would sell surplus wings. Likewise, she failed to confirm, in writing, her understanding that NAL would pay for all the food (and not just the food actually sold). But these aren't things that one would necessarily expect a 'rise through the ranks' manager to do - it takes more of a lawyer's paranoia to fully contemplate and prepare for the possibility of failure.
After the show, English failed to press GFS and/or NAL on the basis of her understanding of their respective arrangements. Especially with GFS, where GFS was demanding payment of TravelCentres, there was bargaining power to be applied in pursuit of a discount. Readily acceding and paying the full account, where there was material disagreement as to the terms of the contract, may not be appropriate for a general manager. But again, this is minor: It may have called for coaching, but not a for-cause termination.
It was only when she started hiding the facts from her supervisor, and in particular instructing her staff to participate in the cover-up, and failing in other duties to facilitate the cover-up (delaying putting wings on the menu, etc.), that she crossed the line into arguable 'just cause' territory.
My Thoughts
I can't disagree that there was just cause here; the consequences of her misconduct included 'fracturing' the workplace. She lost the trust of her employer; she lost the faith of her subordinates. She made the employment relationship untenable.
Though I do disagree with certain elements of the trial judge's analysis: It seems to me to be relatively thin to treat her as a 7-year employee, instead of a 15-year employee, for the purpose of mitigating factors (or for the reasonable notice period, which is obiter). It also seems to me to be a bit of a leap to the conclusion that her misappropriation of charity funds was actually dishonest: Her interpretation was probably wrong, for the reasons the trial judge illustrates, but given the various other misunderstandings English had with others, I wouldn't discount the possibility that it was a good faith error on her part. But, while the framing of the decision suggests that this is a critical factor, I don't think it is. It is the cover-up itself, and not the mis-allocation of funds, that undermined the trust necessary to continue her employment.
*****
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.
It's an interesting case for several reasons, not the least of which is that the fact pattern bears significant parallels to the Rob Ford MCIA saga (in which the Divisional Court will be releasing its decision in the morning).
The Facts
Ms. English started working at a truck stop in Cardinal in 1993; in 2001 she was transferred to a Woodstock service centre which was later purchased by TravelCentres. Over time, she rose through the ranks, and was promoted to General Manager in December 2006. She reported to head office in Ohio.
The service centre had some commercial tenants, including NAL insurance. NAL ran a "Truckers for Wishes" campaign in support of the Make-a-Wish Foundation, and English brought TravelCentres in on the campaign as well. She was excited about the goodwill it could generate for TravelCentres.
There were a few different prongs to the fundraising: Donation boxes, candle sales, a garage sale, and - finally - chicken wing sales at a truck show in summer 2007. English's supervisor, Matuszewski, wasn't thrilled with the participation in the truck show, but left it up to her to make the final decision.
Unfortunately, the chicken wing promotion became a nightmare. They ordered 140 cases of wings - over 50,000 chicken wings (and 550 lbs of carrot and celery sticks) - at a cost of over $12,000, and lacked the facilities and manpower to adequately handle the volume (in addition to their usual business). A communication breakdown with NAL resulted in nobody arranging transportation for the food to the truck show, and the time it took to find a transport to help cost them time. NAL had issues with health inspectors at its stand at the truck show, causing further delays. Ultimately, the sales at the truck show were "dismal": They only sold about 12% of the wings.
A number of issues arose from this - presumably, nobody had really contemplated such a catastrophic failure. NAL was to reimburse TravelCentres for the food sold at the truck show. They took this literally, and paid only $1500, for the wings which were sold. The rest of the wings were TravelCentres' problem. The supplier of the wings, GFS, had supposedly told English, when negotiating the deal, that they would take back and sell any leftover cooked product, but GFS ultimately disagreed with English's interpretation of that conversation. Bottom line: They paid for a huge amount of product that they hadn't moved. Many had to be thrown out, a few more cases were sold, but TravelCentres ended up burdened with a huge surplus.
This is where things got bad. On the findings of the trial judge, English concealed the extent of the wing catastrophe from her supervisor, and instructed her staff to keep him away from the surplus wings. In October, they finally added wings to the menu, but there were quality issues (and complaints from customers); some of the wings had been thawed, cooked, then re-frozen for months. English's staff rebelled, and went over her head to Matuszewski. It wasn't until December/January that he finally found out what had happened.
Furthermore, English paid GFS' full invoice, but to limit the amount of TravelCentres funds squandered on the fiasco, she raided the other funds which had been raised in the charity drive, from the donation boxes, etc. She got about $1500 there, another $1500 from NAL's contribution, and TravelCentres paid the rest of GFS' invoice.
On January 22, 2008, after finally finding out about the fiasco and coverup, and in particular about the payment of GFS' invoice out of funds meant for charity, TravelCentres asked for English's resignation, and she provided it. The next day, she rescinded her resignation.
The Ford Parallels
The Court concluded that TravelCentres had just cause to dismiss English. Interestingly, the first part of the analysis engaged by the Court is whether or not English's behaviour, in taking the funds meant for charity, was misconduct or simply an "error in judgment". (In a wrongful dismissal context, this is an odd question.)
It appears that English was arguing that her understanding was that the funds were all part of one pot, and therefore that using the proceeds of the garage sale, for example, to subsidize the losses on the chicken wing sale was not improper. The judge did not accept this: She had made representations that proceeds of the garage sale would go to charity, and ultimately directed them to another purpose. This was dishonest.
[96] There are facts favourable to Ms. English. Her seven year employment record with TravelCentres and 230 Truck Stop appears to have been otherwise unblemished. Her position as general manager was well-earned. The amount of money in issue - approximately $1,500, is, indeed, modest. Ms. English did not seek or receive any monetary benefit. She readily disclosed what had been done when asked by Mr. Matuszewski on January 21, 2008.
[97] On the other hand, Ms. English occupied the most senior position in Woodstock. She supervised more than 100 employees. Expectations were high and rightly so. TravelCentres had every right to expect and require that Ms. English consistently and without compromise act in good faith and honestly. [Emphasis added]What Did English Do Wrong?
As they say, it isn't the crime that gets you; it's the cover-up. The catastrophic result at the truck show, and the resulting loss, was a result of relatively minor and relatively understandable errors on English's part. She might have lost her job for it, but it wouldn't have been for cause. But it was her conduct after the truck show that sealed her fate.
English failed to correctly assess demand for wings at the truck show. This isn't entirely her fault; she was forced to estimate based on NAL's description of previous shows; NAL's personnel have no food industry experience.
English failed to confirm, in writing, her understanding that GFS would sell surplus wings. Likewise, she failed to confirm, in writing, her understanding that NAL would pay for all the food (and not just the food actually sold). But these aren't things that one would necessarily expect a 'rise through the ranks' manager to do - it takes more of a lawyer's paranoia to fully contemplate and prepare for the possibility of failure.
After the show, English failed to press GFS and/or NAL on the basis of her understanding of their respective arrangements. Especially with GFS, where GFS was demanding payment of TravelCentres, there was bargaining power to be applied in pursuit of a discount. Readily acceding and paying the full account, where there was material disagreement as to the terms of the contract, may not be appropriate for a general manager. But again, this is minor: It may have called for coaching, but not a for-cause termination.
It was only when she started hiding the facts from her supervisor, and in particular instructing her staff to participate in the cover-up, and failing in other duties to facilitate the cover-up (delaying putting wings on the menu, etc.), that she crossed the line into arguable 'just cause' territory.
My Thoughts
I can't disagree that there was just cause here; the consequences of her misconduct included 'fracturing' the workplace. She lost the trust of her employer; she lost the faith of her subordinates. She made the employment relationship untenable.
Though I do disagree with certain elements of the trial judge's analysis: It seems to me to be relatively thin to treat her as a 7-year employee, instead of a 15-year employee, for the purpose of mitigating factors (or for the reasonable notice period, which is obiter). It also seems to me to be a bit of a leap to the conclusion that her misappropriation of charity funds was actually dishonest: Her interpretation was probably wrong, for the reasons the trial judge illustrates, but given the various other misunderstandings English had with others, I wouldn't discount the possibility that it was a good faith error on her part. But, while the framing of the decision suggests that this is a critical factor, I don't think it is. It is the cover-up itself, and not the mis-allocation of funds, that undermined the trust necessary to continue her employment.
*****
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.
Thursday, January 17, 2013
The Human Rights Tribunal's new Gatekeeper: Itself
It is common today to see critics arguing that Human Rights Commissions and Tribunals will hear too many nonsense claims, putting respondents to the expense of having to defend themselves, without the availability of costs sanctions. As I noted recently, some critics argue for the abolition of human rights processes altogether, advocating for substantive human rights concerns to be adjudicated by Courts.
There are several problems with this argument, not the least of which is that human rights processes have built-in gatekeeper roles, and the Courts don't.
For Court actions, lawyers kind of serve as gatekeepers. If a client wants to pursue a case with little-to-no chance of success, the lawyer will explain that, and the client may no longer wish to pursue it. As well, a proper statement of claim requires a certain expertise, and that expertise is expensive, meaning that most people need a lawyer, so claims that aren't worth paying a lawyer...often don't get to Court.
However, while a lawyer is usually necessary to draft a *good* statement of claim, it is not that difficult or uncommon for self-represented litigants to take a stab at it themselves, where they can't get a lawyer for whatever reason, in which case they only need to pay a filing fee. Which means that it is not so uncommon for the Courts to receive poorly drafted claims, often with extremely tenuous merits. What will the Court do with it? At the start, the same thing it does for every claim: Assuming that certain basic formal requirements are met, it will issue the claim, and take a copy and put it in the file. It's up to the plaintiff to serve the defendant, and once the plaintiff has done so, the defendant has to defend or else have a judgment issued against it. If there's something obviously substantively deficient with the claim, such as not making out any cause of action, etc., it's still up to the defendant to incur the costs of bringing the motion to dismiss the action. And while such a plaintiff may be ordered to pay some or (very rarely) all of the defendant's costs, such plaintiffs seldom have the money to satisfy significant costs awards.
Human rights processes, however, are different, having substantive review at an early stage. Ontario now has a "direct access" system, meaning that applicants apply directly to the Tribunal. However, before getting into the results of that, let me explain the Commission system, which exists in several other jurisdictions in the country, and which Ontario had until 2008:
Ontario's Old Human Rights Process
Until 2008, a complaint of a breach of the Human Rights Code had to go the Human Rights Commission. The Commission would review the complaint, contact the complainant if there appeared to be problems on the face of the complaint, and then would begin an investigation (unless there was a reason to refuse to deal with the complaint up front, such as it being out of time, or being more appropriately dealt with in another forum). Once it completed its investigation, if it was satisfied that there was merit to the complaint, it would refer the complaint to the tribunal for a hearing. Otherwise, the complaint would be dismissed.
If the Commission dismissed a complaint, the complainant's only recourse would be through an application for judicial review, arguing that the Commission made a mistake which should be reviewed by the Courts. Accordingly, the Commission had to dot its "i"s and cross its "t"s in the investigation. Between that, and an immense caseload, a backlog developed. Investigations took years. Also, respondents had no remedies for Commission errors favouring the complainant: If the Commission referred a nonsense complaint to the Tribunal, the respondent couldn't seek judicial review, but rather needed to simply proceed to the Tribunal and fight it there. Accordingly, the Commission had to guard against the risk of judicial review by the complainant, but never by the respondent. Add to that the fact that the Commission had a public interest mandate to protect against human rights violations, and the Commission often looked complainant-friendly, and was perceived as leaning too hard on respondents.
So the Commission would take years to investigate complaints, leaving the litigation axe hanging over the head of a respondent for years, and requiring a prudent employer to retain counsel through the investigation to protect its interests, and then if it found that the complaint was warranted, a whole new legal proceeding went forward. It made more sense to simply go straight to the Tribunal.
However, there was value in the Commission's gatekeeper role. People don't entirely understand what human rights are all about, and so a lot of complaints had absolutely no relationship to the Human Rights Code, and accordingly absolutely no chance of success. The Commission dealt with a lot of chaff, and got it out of the system relatively easily.
The New System
Now, an applicant applies directly to the Tribunal, the Tribunal sends the application to the respondent, the parties exchange documents, and proceed to a hearing. Yes, it's a bit more complicated than that, but that's the gist of the process. The Tribunal's goal was to dispose of files within a year of receiving the application, and while I don't believe they've generally met that goal, it isn't nearly as bad as the old system was.
However, the Tribunal has had to develop ways of getting rid of all the chaff files no longer being filtered out by the Commission. They receive lots of applications which, for jurisdictional reasons, they can't hear on the merits. For example, if the plaintiff made a claim in Court on the same basis, an HRTO application is barred. Applications against federally-regulated employers (i.e. banks) aren't subject to Ontario's Human Rights Code (there are parallel statutes and processes in the Federal sphere). And plenty of applications lack any connection to the Code in the first place - the applicant feels that they were treated unfairly, but without a connection to a prohibited Code ground, etc.
So the Tribunal conducts a gatekeeper assessment of applications at the front end, determining if there are flaws which would make it plain and obvious that the application isn't within the Tribunal's jurisdiction and, if so, issues a Notice of Intent to Dismiss ("NOID"), telling the applicant, 'Unless you give us a reason not to, we will dismiss this application on this basis.' That occurs prior to serving the application on the respondent. And absolutely massive numbers of applications have been dealt with through NOIDs, without the respondent ever even finding out about the process, or being required to spend a dime on legal fees.
As well, there are mechanisms for respondents to request early dismissal of applications, sometimes without being required to provide a response, depending on the circumstances.
A relatively recent turn in the gatekeeper assessments is that, in addition to NOIDs (which are purely for jurisdictional reasons), the Tribunal may direct summary hearings - without necessarily requiring the respondent to participate - to determine whether or not it is plain and obvious that the application cannot succeed.
The Woodwork Case
As a particularly stark example of this, consider the very recent decision in Woodwork v. Halton Regional Police Services: Ms. Woodwork was apparently involved in an altercation in a parking lot: She was standing in a parking spot to reserve it while her mother repositioned the car, and an older man tried to get her to move, allegedly by driving the car into the parking spot anyways, including hitting her with the car. Woodwork claimed that the police didn't take her complaint seriously because she was a young woman and the alleged assailant was an old man. The allegations themselves are clearly appropriate subject matter for an HRTO application - if they can be proven, they certainly could lead to a remedy. But that's a big "if".
So the Tribunal directed a summary hearing be held to determine the question, because it doubted that Woodwork would actually be able to lead evidence capable of supporting a conclusion that the police treatment of her complaint was a result of her age. The Tribunal cited Dabic v. Windsor Police Service for the following proposition:
Sometimes, applicants try to support the inference through timing, and other surrounding circumstances. So, for example, if an employee gets an extremely positive performance review, then the following week tells the employer that she is pregnant, and is fired shortly thereafter, the employee might be able to make out a case on that basis. Other times, applicants attempt to raise systemic discrimination as evidence, arguing that there's a pattern of unfair treatment against people identified by the particular prohibited ground of discrimination. This is usually more difficult, because it usually involves a superficial description of something that appeared to happen to somebody else, where there may be more nuanced considerations involved. Or there are cases where the unfair treatment evidences such obvious hostility and personal enmity from a complete stranger that there must have been some prejudgment.
But you need something. That's clear in the case law, and far too many applicants go to the Tribunal without any articulable reason to believe that their treatment flowed from a prohibited ground of discrimination.
In Woodwork, the Tribunal concluded that Ms. Woodwork would be unable to prove that she was treated unfairly because of her age, so dismissed the application. One might argue that this - being a hearing on the Tribunal's own initiative prior to the disclosure phase of the proceeding - even takes the gatekeeper role a little too far: Not only is evidence usually not necessary in pleadings, but evidence is usually improper content in pleadings. If the case turns on something John did, I'm supposed to plead "John did x". Not "I saw John do x" or "Jane said John did x" or "I think, because of y, that John did x". At the pleading stage, I just make the allegation that John did x - evidence comes later. Some understandable concerns might arise, therefore, from the Tribunal looking at an application and, of its own initiative, expressing scepticism as to whether or not the applicant will be able to prove his or her allegations.
*****
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.
There are several problems with this argument, not the least of which is that human rights processes have built-in gatekeeper roles, and the Courts don't.
For Court actions, lawyers kind of serve as gatekeepers. If a client wants to pursue a case with little-to-no chance of success, the lawyer will explain that, and the client may no longer wish to pursue it. As well, a proper statement of claim requires a certain expertise, and that expertise is expensive, meaning that most people need a lawyer, so claims that aren't worth paying a lawyer...often don't get to Court.
However, while a lawyer is usually necessary to draft a *good* statement of claim, it is not that difficult or uncommon for self-represented litigants to take a stab at it themselves, where they can't get a lawyer for whatever reason, in which case they only need to pay a filing fee. Which means that it is not so uncommon for the Courts to receive poorly drafted claims, often with extremely tenuous merits. What will the Court do with it? At the start, the same thing it does for every claim: Assuming that certain basic formal requirements are met, it will issue the claim, and take a copy and put it in the file. It's up to the plaintiff to serve the defendant, and once the plaintiff has done so, the defendant has to defend or else have a judgment issued against it. If there's something obviously substantively deficient with the claim, such as not making out any cause of action, etc., it's still up to the defendant to incur the costs of bringing the motion to dismiss the action. And while such a plaintiff may be ordered to pay some or (very rarely) all of the defendant's costs, such plaintiffs seldom have the money to satisfy significant costs awards.
Human rights processes, however, are different, having substantive review at an early stage. Ontario now has a "direct access" system, meaning that applicants apply directly to the Tribunal. However, before getting into the results of that, let me explain the Commission system, which exists in several other jurisdictions in the country, and which Ontario had until 2008:
Ontario's Old Human Rights Process
Until 2008, a complaint of a breach of the Human Rights Code had to go the Human Rights Commission. The Commission would review the complaint, contact the complainant if there appeared to be problems on the face of the complaint, and then would begin an investigation (unless there was a reason to refuse to deal with the complaint up front, such as it being out of time, or being more appropriately dealt with in another forum). Once it completed its investigation, if it was satisfied that there was merit to the complaint, it would refer the complaint to the tribunal for a hearing. Otherwise, the complaint would be dismissed.
If the Commission dismissed a complaint, the complainant's only recourse would be through an application for judicial review, arguing that the Commission made a mistake which should be reviewed by the Courts. Accordingly, the Commission had to dot its "i"s and cross its "t"s in the investigation. Between that, and an immense caseload, a backlog developed. Investigations took years. Also, respondents had no remedies for Commission errors favouring the complainant: If the Commission referred a nonsense complaint to the Tribunal, the respondent couldn't seek judicial review, but rather needed to simply proceed to the Tribunal and fight it there. Accordingly, the Commission had to guard against the risk of judicial review by the complainant, but never by the respondent. Add to that the fact that the Commission had a public interest mandate to protect against human rights violations, and the Commission often looked complainant-friendly, and was perceived as leaning too hard on respondents.
So the Commission would take years to investigate complaints, leaving the litigation axe hanging over the head of a respondent for years, and requiring a prudent employer to retain counsel through the investigation to protect its interests, and then if it found that the complaint was warranted, a whole new legal proceeding went forward. It made more sense to simply go straight to the Tribunal.
However, there was value in the Commission's gatekeeper role. People don't entirely understand what human rights are all about, and so a lot of complaints had absolutely no relationship to the Human Rights Code, and accordingly absolutely no chance of success. The Commission dealt with a lot of chaff, and got it out of the system relatively easily.
The New System
Now, an applicant applies directly to the Tribunal, the Tribunal sends the application to the respondent, the parties exchange documents, and proceed to a hearing. Yes, it's a bit more complicated than that, but that's the gist of the process. The Tribunal's goal was to dispose of files within a year of receiving the application, and while I don't believe they've generally met that goal, it isn't nearly as bad as the old system was.
However, the Tribunal has had to develop ways of getting rid of all the chaff files no longer being filtered out by the Commission. They receive lots of applications which, for jurisdictional reasons, they can't hear on the merits. For example, if the plaintiff made a claim in Court on the same basis, an HRTO application is barred. Applications against federally-regulated employers (i.e. banks) aren't subject to Ontario's Human Rights Code (there are parallel statutes and processes in the Federal sphere). And plenty of applications lack any connection to the Code in the first place - the applicant feels that they were treated unfairly, but without a connection to a prohibited Code ground, etc.
So the Tribunal conducts a gatekeeper assessment of applications at the front end, determining if there are flaws which would make it plain and obvious that the application isn't within the Tribunal's jurisdiction and, if so, issues a Notice of Intent to Dismiss ("NOID"), telling the applicant, 'Unless you give us a reason not to, we will dismiss this application on this basis.' That occurs prior to serving the application on the respondent. And absolutely massive numbers of applications have been dealt with through NOIDs, without the respondent ever even finding out about the process, or being required to spend a dime on legal fees.
As well, there are mechanisms for respondents to request early dismissal of applications, sometimes without being required to provide a response, depending on the circumstances.
A relatively recent turn in the gatekeeper assessments is that, in addition to NOIDs (which are purely for jurisdictional reasons), the Tribunal may direct summary hearings - without necessarily requiring the respondent to participate - to determine whether or not it is plain and obvious that the application cannot succeed.
The Woodwork Case
As a particularly stark example of this, consider the very recent decision in Woodwork v. Halton Regional Police Services: Ms. Woodwork was apparently involved in an altercation in a parking lot: She was standing in a parking spot to reserve it while her mother repositioned the car, and an older man tried to get her to move, allegedly by driving the car into the parking spot anyways, including hitting her with the car. Woodwork claimed that the police didn't take her complaint seriously because she was a young woman and the alleged assailant was an old man. The allegations themselves are clearly appropriate subject matter for an HRTO application - if they can be proven, they certainly could lead to a remedy. But that's a big "if".
So the Tribunal directed a summary hearing be held to determine the question, because it doubted that Woodwork would actually be able to lead evidence capable of supporting a conclusion that the police treatment of her complaint was a result of her age. The Tribunal cited Dabic v. Windsor Police Service for the following proposition:
Proving why somebody treated you in a certain manner is often the challenge in HRTO proceedings, and unless the respondent was so foolish as to acknowledge being motivated by a prohibited ground of discrimination, it will often require some inference. But the onus is upon the applicant to lead an evidentiary basis - the respondent is not required to provide a non-discriminatory explanation unless there's a reason to think its actions were discriminatory in the first place.In some cases, the issue at the summary hearing may be whether, assuming all the allegations in the application to be true, it has a reasonable prospect of success. In these cases, the focus will generally be on the legal analysis and whether what the applicant alleges may be reasonably considered to amount to a Code violation.In other cases, the focus of the summary hearing may be on whether there is a reasonable prospect that the applicant can prove, on a balance of probabilities, that his or her Code rights were violated. Often, such cases will deal with whether the applicant can show a link between an event and the grounds upon which he or she makes the claim. The issue will be whether there is a reasonable prospect that evidence the applicant has or that is reasonably available to him or her can show a link between the event and the alleged prohibited ground. [Emphasis added by the Tribunal in Woodwork]
Sometimes, applicants try to support the inference through timing, and other surrounding circumstances. So, for example, if an employee gets an extremely positive performance review, then the following week tells the employer that she is pregnant, and is fired shortly thereafter, the employee might be able to make out a case on that basis. Other times, applicants attempt to raise systemic discrimination as evidence, arguing that there's a pattern of unfair treatment against people identified by the particular prohibited ground of discrimination. This is usually more difficult, because it usually involves a superficial description of something that appeared to happen to somebody else, where there may be more nuanced considerations involved. Or there are cases where the unfair treatment evidences such obvious hostility and personal enmity from a complete stranger that there must have been some prejudgment.
But you need something. That's clear in the case law, and far too many applicants go to the Tribunal without any articulable reason to believe that their treatment flowed from a prohibited ground of discrimination.
In Woodwork, the Tribunal concluded that Ms. Woodwork would be unable to prove that she was treated unfairly because of her age, so dismissed the application. One might argue that this - being a hearing on the Tribunal's own initiative prior to the disclosure phase of the proceeding - even takes the gatekeeper role a little too far: Not only is evidence usually not necessary in pleadings, but evidence is usually improper content in pleadings. If the case turns on something John did, I'm supposed to plead "John did x". Not "I saw John do x" or "Jane said John did x" or "I think, because of y, that John did x". At the pleading stage, I just make the allegation that John did x - evidence comes later. Some understandable concerns might arise, therefore, from the Tribunal looking at an application and, of its own initiative, expressing scepticism as to whether or not the applicant will be able to prove his or her allegations.
*****
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.
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:
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:
- There is no reason for Power Tax to bring its Application to Court, instead of simply responding to the HRTO proceedings.
- Bringing the application forces Millar to wage a "two-front war".
- 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.
- The results of the HRTO proceedings would almost certainly estop any relitigation in Court.
- 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.
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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