Supreme Court of Canada Addresses Costs at Canadian Human Rights Tribunal

I recently made a post addressing some of the challenges of the human rights system.  One of the observations I made is that, with many legitimate claims resulting in entitlements in the 4-digit range, forcing complainants to go to Court for their entitlements would be tragic because of the legal costs of doing so.

A recent decision of the Supreme Court of Canada, in Canada (Canadian Human Rights Commission) v. Canada (Attorney General) illustrates that the same tragedy can result at administrative tribunals where complainants are provided with inadequate systemic assistance and required to retain their own lawyers:  In 2003, the Canadian Human Rights Commission decided to restrict the advocacy assistance it provided to complainants.  As a consequence, it seems, Donna Mowat was required to incur her own legal fees in pursuing her complaint before the Canadian Human Rights Tribunal following sexual harassment and release from her employment with the Canadian Forces.

Following a six-week hearing in 2005, the Tribunal found that she had been sexually harassed and the CF's response had not been adequate, but dismissed the rest of her complaint.  Ms. Mowat was awarded $4000.  She asked for costs, noting that her legal fees were nearly $200,000.  (A six week hearing is exceptional, and speaks to the complexity of the matters in issue, and legal fees of that order do not seem unusual for such a protracted hearing, though the Tribunal was critical of the "lack of precision" in identifying the key issues, which is surprising for a represented litigant.)  Noting the concern that, without a costs order, her victory would be "pyrrhic", the Tribunal looked to its broad jurisdiction to compensate a victim and make her whole, and awarded $47,000 in costs.  The Supreme Court of Canada eventually (recently) concluded that the Tribunal had been wrong to interpret its powers thus, and found that the Canadian Human Rights Act did not empower the Tribunal to award costs:  Costs, in law, are treated differently from compensatory damages, and so the Tribunal's compensatory powers did not include the power to award costs.

While there's a certain controversy and imbalance to Ontario's new approach, having free legal assistance available to applicants, there is a good argument to be made that it is preferable to this alternative, where a human rights remedy is going to usually cost more to obtain than it is worth.

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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.

Back to Basics: A Practical Guide to Wrongful Dismissal Resolution

While there's a new wrongful dismissal case coming out of Ontario's Superior Court of Justice every few days or so, the truth is that the vast majority of dismissals get settled very quickly, often even before issuing a statement of claim.

This post isn't designed to help people see the process through themselves; both sides really do need lawyers, and for very compelling reasons.  I practice on both sides the fence, so I would encourage anyone finding themselves in this situation to contact me.  Rather, I want to give readers a sense of what to expect, to be more comfortable with the process.

Before Termination

Employers should consult a lawyer before terminating the employee in the first place.  (Indeed, you should consult a lawyer before even hiring, to get a good written contract in place.)  If you want to terminate for just cause, you need a legal opinion about it first.  Just cause is very difficult to make out, with risks of increased liabilities - sometimes significantly so - if you fail.  And, where there is no just cause, you need to know what your "notice" obligations may be.  (With a good written contract, drafted by a good employment lawyer and properly executed, these may be minimal.  Otherwise, you're looking at owing "reasonable" notice, which even a good employment lawyer will only be able to estimate and give you a range.)

Upon Termination

Employers:  There's a correct process for termination meetings.  Half of it is common sense (yet frequently not done), but a good portion of it might not occur to everyone in every case.  Have at least two people in the termination meeting, one taking notes.  Be professional.  Don't get dragged into an argument about the reasons for termination - have a script, preferably vetted by your lawyer, and refuse to be pulled off of it.  (In most cases, you won't even want to give any substantive reasons.)  Be discrete and sensitive.  There is a lot to be said about how to behave on terminations, and a lot of it depends on the nature of the workplace and the specific employee.  The termination meeting should be accompanied by the delivery of a termination letter, which will advise them about receipt of their last pay and statutory entitlements (which should be conditional on absolutely nothing), and requiring them to return all company property, reminding them of any ongoing confidentiality concerns, etc.  At the same time, there should be a second letter, marked "Without Prejudice", offering them something further in exchange for signing a full and final release.  (In the wake of Brito v. Canac Kitchens, there's a thought that more than the statutory minimums should be provided upon termination.  I don't think that's yet having any real impact on the standard practice, though.)

Employees:  When you are terminated, you will often receive an offer, conditional on you signing and returning it within x days.  At this stage, there are several things to note:

(1)  You are going to feel a range of negative emotions.  It's almost a grief response.  Anger, betrayal, despair, frustration...these are all perfectly normal.  It's one small part of the reason you will need a lawyer - it's going to be difficult for you to deal productively and professionally with your employer in light of these feelings.  (As a note to employers:  This is also the reason that working notice is seldom a good idea.)

(2)  Do not sign anything until you get legal advice.  Employers are seldom generous with their initial offers, and in the vast majority of cases there is some flexibility for movement on both monetary and non-monetary terms.  Sometimes, the entitlements are significantly more than what has been offered.  Even if you have a written contract limiting your entitlements, termination clauses are hard enough to enforce that it is often worth seeking advice on the enforceability of the contract.

(3)  Even if you have signed something without legal advice, it's still prudent to consult a lawyer.  I have seen some employers put a release to a dismissed employee in exchange for payment of the statutory minimum.  (In one case, the strict deadline was the day before stat minimums were due anyways.  I can't help but think that that was calculated.)  A release on such a basis will often be unenforceable.  The rule is that an employee should never assume, without proper legal advice, that the fact they signed something means they are bound to it.  (Of course, it is almost *never* a good idea to sign anything on the assumption that it will not be upheld by a court.)

(4)  If you can't meet with your lawyer until after the strict deadline is up, don't despair.  I've never seen an employer refuse to extend the timeframes of an offer upon request.  In most cases, they know that, if they get sued, they'll owe more than the contents of the offer anyways.  So they don't usually pull offers off the table.

(5)  In my years of experience, I have very seldom seen offers from employers that I could tell an employee was better than they would likely do in Court.  In the vast majority of cases, I respond with a demand letter for the client's full entitlements. (In the rare cases where an employer is being generous, unlike some lawyers, I do tell my client as much and try to respond reasonably.  If there's room for improvement with non-monetary terms, etc., I'll recommend the request, but an employer who is being generous knows that the offer is generous, and isn't going to move much on the monetary aspects of the settlement.)

(6)  If you haven't been asked to sign anything, it's often because you've only been given your statutory entitlements.  You likely still need to make a demand, and you'll need a lawyer to figure out what to demand.

Employer's Response to the Demand


There are myriad employer responses to a demand letter.  Know that most demand letters will frame the employee's entitlements generously.  Many employers will try to negotiate the demand down.  While there's not much certainty as to reasonable notice periods, there's enough clarity as to the appropriate ranges that both lawyers can tell their clients, "This is the range, and there's a good chance that the other lawyer is telling the other side the same thing."  So the employer tries to negotiate something at the low end of the range, the employee tries to negotiate something at the high end, and neither side really has much of a will to litigate when there are offers inside the range.

By contrast, many employers will completely reject demand letters at the outset.  Even large and sophisticated employers do so.  This is often strategic, and done with employees whose entitlements are fairly limited.  (Sadly, it often also factors in the employee's tolerance for stress.)  This approach is usually rationalized by the logic that, if you make the employee sue for his entitlements, some percentage of employees will simply not do so, and the increased costs and liabilities of dealing with the ones who do will be less than what is saved on the employees who walk away.  In these cases, an employee can often expect that the employer will come to the table promptly upon issuance of a statement of claim.  (Many prominent employer-side firms take the approach that, when served with a statement of claim, they immediately make a semi-reasonable offer to settle and ask for an indulgence so as not to be required to file a statement of defence while settlement discussions are ongoing.  If the offer to settle appears to be in good faith, then most employee-side counsel will recommend granting the indulgence, as they know that a settlement is imminent, and there's little to be gained through hardball at that point.)

The ones that go to trial, these days, usually have a fair bit of money at stake and a real fight about one of a handful of things, such as whether or not there is just cause, enforceability of the written contract, how to characterize one of the factors that defines the reasonable notice period, or a dispute about constructive dismissal.  Without some fundamental factual dispute underlying the calculation of the reasonable notice period or the entitlement to reasonable notice, the margins between what the employer might expect to have to pay and what the employee might expect to get are so small that the cost of litigation is prohibitive for both sides.  Even when there is a fairly fundamental dispute, if there isn't a lot of money at stake, both sides still know that the most cost-effective approach is through an early settlement.  What's a few months' notice for a minimum wage employee beside the amount of money it would cost to get to trial?

That being said, many employers will fight certain cases 'on principle':  Where there's a clear-cut case for cause, an employer isn't going to settle, because it sends the message to other employees that they can act badly then cash out.

It's always important to hire a lawyer who knows what they're doing, but that's especially important for low-value cases.  I've taken on clients whose cases I assessed at being mid four digits.  At a lawyer's hourly rate, it doesn't take long before that all gets eaten up in legal fees, so a lawyer on such a case really needs to be careful about how much time is being spent.  So far, in my practice I've been pretty good about being able to settle efficiently enough that my clients still get to keep most of their money.  On the other hand, I have seen lawyers (even boutique employment lawyers) go five digits into legal fees before even issuing a statement of claim, on files that were not high value.

That's why the choice in lawyers is important.  It is important to me to try to ensure that my client will be better off at the end of the day for having hired me, and if I don't think that's going to happen, I tell the client that.  I offer free consultations to dismissed employees in most cases (some exceptions apply), so I would encourage any dismissed employees to contact me immediately.

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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.

Stranger than Fiction, Volume III: The "Sovereign Man"

I had never heard of this concept before, until reading about it in a recent decision by Justice Brown.  Apparently, some folks have taken to believing that they can simply refuse to recognize the authority of the domestic government and live as a "sovereign man".  They claim that there's a legal logic to it, namely that they can separate into two separate entities - the "juristic person/strawman/legal entity", and the "flesh and blood living man" - and so while the state may have authority over the legal entity, the flesh and blood person can't be held to account for actions of the legal entity.  It sounds almost like a bizarre extrapolation of the corporate veil.  I don't fully understand the whole farce - I suspect because it doesn't actually make sense - but somehow the birth certificate is supposed to be integral to the creation of the legal person.

The recent decision was in MBNA Canada Bank v. Luciani, in which Luciani registered a financing statement under the PPSA purporting to secure a $28 million interest owed to him by the bank.  The bank demanded that he remove it, and he said that he would only if the bank advanced him and his wife a $125,000 line of credit.  "A good old-fashioned shakedown", as Justice Brown called it.  Suffice it to say that the PPSA registration was ordered discharge, with the rare measure of full indemnity costs being awarded to the bank.

The previous decision was in Mercedes-Benz Financial (DCFS Canada Corp) v. Kovacevic (sentencing decision here), and this case involved a fellow who had signed a contract with himself by which the legal himself took on all of the flesh and blood himself's debts, with the result that the flesh and blood self could continue to drive around a financed Mercedes notwithstanding the fact that the legal self hadn't bothered to pay for it.  Even after a Court ordered the return of the car.  Justice Brown found him in contempt of Court and sentenced him to five days in prison.  The car was returned.

It's a hoax, really, similar to the "income taxes are unconstitutional" argument that started in the States and spread to Canada, involving people who come together trying to find a way to justify their desire not to pay taxes, who come up with some constitutional interpretation they think is clever (usually ignoring significant parts of the constitution, and always ignoring the bulk of constitutional jurisprudence), and they enter into a cycle of self-affirmation, in which like-minded people will continue to tell each other that they're right, until they become so confident of the absolute and unchallengeable correctness of their position that they are puzzled and baffled and convinced that there is a conspiracy against them when the authorities, including the Courts, tell them that they're wrong.

I googled "sovereign man" and found a video of a man in a Guelph courtroom...as a first sidebar, note that videotaping court proceedings in Canada is a serious offence...being quite elusive as to his identity (not unlike what Justice Brown described in Kovacevic), nearly getting kicked out of the courtroom before he handed up his birth certificate.  The JP called for a short recess, and left the courtroom, whereupon the 'sovereign man' declared that, as the "judge" had abandoned the court, he was now in charge of the courtroom, and he purported to dismiss the case.  And left.  Further research indicates that he was charged with by-law violations as a consequence of parking his car on his lawn.  The trial continued without him and he was fined $260.  Not to mention the investigation into the video.  I'm surprised he didn't end up being held in contempt himself.

Yet, most of the references to this case on the internet are positive, applauding him and interpreting the video very strangely, suggesting that the JP's departure somehow implied that he had conquered the courtroom and won the day.

I don't expect any of my usual readers will need any such clarification, but let's be clear anyways:  The "Sovereign Man" scheme does not work in Canada.  It does not get people out of having to comply with the law, having to pay just debts, or having to be held to account for their actions.  The fact that anyone believes otherwise is a testament to the down side of the internet - it is an amazing tool for information, but equally powerful for spreading misinformation as well.

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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.

The First of the s.45.1 Cases

I have previously expressed concerns with the Human Rights Tribunal of Ontario's various applications of s.45.1 of the Human Rights Code.  This section allows the HRTO to dismiss an application if the subject matter of the application has been "appropriately dealt with" in another proceeding.  In the linked post, I noted a case in which the Human Rights Tribunal refused to dismiss an application on this ground because it disagreed with the analysis that Arbitrator Surdykowski used in reaching it.

The Divisional Court just released a decision in College of Nurses v. Trozzi on a similar issue.  Trozzi sought a nursing license from College of Nurses.  The College imposed conditions on the license on the basis of certain medical conditions she had, and she challenged the decision at the Health Professions Appeal and Review Board (HPARB).  She lost.

While waiting for the decision from the HPARB, she initiated a Human Rights Application, and the College sought dismissal under s.45.1.  The Tribunal found that the HPARB had failed to apply the correct analysis to the question.  The College sought judicial review.

That the Divisional Court even heard the application for judicial review at this stage is surprising - the Tribunal proceeding is ongoing, and normally this would be regarded as "premature".  But as it went to a "true" jurisdictional question, the Court refused to quash the application for judicial review.

The Divisional Court unanimously allowed the application for judicial review, but there were different sets of reasons.  The majority felt that the HRTO overstepped its bounds by attempting to sit in review of another statutory Tribunal with a "public protection mandate".  Justice Lederer, by contrast, felt that the distinction of "public protection mandate" is somewhat meaningless, and that the Tribunal overstepped its bounds simply by trying to sit in review of another statutory Tribunal at all.

I don't think that this is the last s.45.1 case we're going to see, but the Divisional Court appears to be putting the HRTO in its place pretty firmly.

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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.

The Dangers of Scapegoats

There are two stories in the Toronto Star today about allegations of criminal misconduct against employees.

The 'front page' on the online version is about Oshawa Hospital Foundation firing its CEO, Jim Szeman, and calling the police after a Star report prompted an investigation and "forensic accountants turned up serious money and charity management problems."

Reading the story, it seems like they've done their homework and they're pretty confident that there was mismanagement.  But I have enough experience with media to not take any of it at face value, and I'm particularly doubtful about the strength of the case when the only specific allegations in the story are...less than obvious misconduct.  There's an allegation of self-dealing, that the charity paid a company of his over three hundred thousand dollars...which seems like a lot of money until you realize that this was over a six year period and his annual salary with the charity is over two hundred grand...where it is "unclear" (to the Star) who else on the Board of Directors knew of the self-dealing arrangement.

Reading the news, I always assume that I'm not seeing all the facts.  So it could be that this fellow is a hardened fraudster and the employer's response is reasonable.  Or it could be that he was acting in a transparent manner, taking perks that the general public might not have much patience for in the wake of the e-Health scandal, and that the employer decided it would rather blame let Szeman take the fall than stand behind him.

If it's the latter, there could be real liability risk.

The second story is about a former low-level employee of Durham Region who was fired and charged with fraud.  More to the point, the story is about his acquittal.

Joel Nicholson was an employee with no legal training, in charge of collecting unpaid fines under the Provincial Offences Act.  Then, in 2002, his duties were expanded to include collecting from tenants in subsidized housing who owed rent arrears or money for damage caused.  And he built those debts into the same system he had for collecting other fines, seizing and garnishing assets and income.

Just one problem:  You can't do that.  There are certain actions that you have to take when dealing with residential tenants.  While they're in the rental unit, you need to go to the Landlord Tenant Board for an Order, which can then be converted into a Small Claims Court judgment, and enforced in the Small Claims enforcement process.  After they're out of the rental unit, such claims go directly to Small Claims Court.  The key is this:  You need to get a judgment before you can take enforcement action on a debt.

So Nicholson's actions in collecting these debts were deeply problematic, as was brought to light in 2009.  However, as the Court concluded, the mistakes were innocent on his part.  He didn't realize that he was doing anything wrong.  He didn't know that there was another process he had to use.  And it's not as if he was pocketing the proceeds.  And therefore, he was acquitted.

The story also notes that he is suing the employer in wrongful dismissal.  Likely a solid case, if this Court decision is any indicator.  (It isn't binding.  The burden of proof is different.  In order to convict him, the Crown needs to prove guilt "beyond a reasonable doubt".  To prove that he engaged in misconduct for the purpose of a wrongful dismissal suit, the employer only needs to establish it on a "balance of probabilities".  Accordingly, the fact that he was acquitted doesn't necessarily bar a Court from finding that he engaged in misconduct in a subsequent civil proceeding.)  The judge in the criminal proceeding seemed critical of the Region's managers for not spotting the "flagrant legal problems" in Nicholson's approach, and for failing to consult the Region's legal department.  If these criticisms were picked up by a judge in a wrongful dismissal case, then that could be very bad for the employer.

Where an employer makes allegations of cause which don't pan out, that usually amounts to a breach of the duty of good faith and fair dealing.  (Not always.  There is some case law suggesting that, if the allegations themselves are true and simply don't quite meet the threshold for cause, then there's no reason to think there's bad faith.  Similarly, one can easily imagine a circumstance in which an employer, having diligently investigated allegations of wrongdoing and reasonably, if incorrectly, concluding that the employee is guilty, might not have breached the duty of good faith and fair dealing.)  The more serious the allegations, the more serious the breach of the duty of good faith.  If they bring in the police and an unsuccessful criminal prosecution results, the employer's motives for calling the police will be closely scrutinized, as will their actions in making the police report.  Claims for malicious prosecution, negligent investigation, including aggravated and punitive damages, are easy to imagine in such contexts.

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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.

The Challenges of Human Rights

I've tried to write a policy-oriented human-rights entry a couple of times, and abandoned the attempts before.  The challenge is that I really am a centrist in this area.  Unlike many on the right, I believe in human rights.  I think that they are important to a fair and democratic society, and that their growth is a very positive thing for Canada.  However, unlike many on the left, I do understand the objections to an overly broad approach to human rights.  So I'm trying to strike a delicate balance.

The "Human Rights Have Gone Too Far" Camp

On the one hand, let's look at the far-right, such as polemicist Ezra Levant, who argues that the 'human rights commissions' are out of control.  It's difficult to completely ignore the imprecision and overbreadth in Levant's language:  He generalizes human rights on the national stage based on his experience with the Alberta Human Rights Commission, and there are some very significant differences between systems, relevant to his objections.    He argues that Human Rights Commissions and Tribunals are "kangaroo courts", with unqualified adjudicators appointed by the government.  He also uses criminal language - referring to the initiation of the proceeding as being a 'charge', referring to the proceedings as 'prosecutions', findings of Code breaches as 'convictions', and awards of compensatory damages as 'fines' - all of which is incorrect and misleading, in an attempt to set up an argument that the government should bow out of these essentially civil disputes and let the Courts handle it.

There are no fewer than four massive problems with Levant's position that the Human Rights Commissions and Tribunals are unqualified bureaucrats expanding the interpretation of human rights unduly beyond what it can reasonably bear.

(1)  These are administrative tribunals.  I've blogged about administrative tribunals on several prior occasions, and the key thing here is that they are *everywhere*.  There are literally hundreds of them across the country, of different shapes and sizes, specifically designed to address certain types of disputes.  The point is to take the strain off of Courts, and provide a - hopefully - expedient avenue of recourse for these disputes.  Not to suggest that these processes are perfect - far from it - but neither are the Courts, and in specific contexts the flaws of administrative tribunals are preferable to the flaws of the Courts.  Many lawyers dislike administrative tribunals generally.  The objections Levant raises are common to many of these tribunals, but he treats the human rights processes as being uniquely appalling, and even has a prominent link on his web site seeking "donations" for his ongoing campaign against "the HRC".  And Levant's solution of handing off human rights disputes to the Courts would be catastrophic:  The vast majority of legitimate human rights complaints result in awards in the four-digit range or the low five-digit range.  The existence of such civil claims often create a tragic hole in the 'access to justice' coverage, because even a plaintiff who can afford to pay a lawyer to bring such a claim...won't and shouldn't, because they'll pay more to the lawyer than the claim is worth.

(2)  Human rights proceedings are almost always civil disputes between private parties.  The implication of 'prosecution' is that the 'bureaucrats' are starting these proceedings of their own initiative.  That is very seldom the case.  In most cases, the proceedings are initiated by people who feel that their rights under the Code have been violated; the mandate of the Human Rights Tribunals is to adjudicate these disputes.  This is not unlike the Landlord Tenant Board, adjudicating disputes between residential tenants and landlords.

(3)  Human Rights Tribunals are subject to judicial oversight.  If the Tribunal committed a reviewable error, including misinterpretation of the Code, then judicial review can be sought.  All Tribunals and Courts make mistakes from time to time, and so, outside of the Supreme Court of Canada, no judicial or quasi-judicial body is completely immune from appellate/judicial review.  (Some would argue that the expense of this is prohibitive.  Yes, Court is expensive.  That's a big reason we have the Tribunal in the first place.  Moreover, once you get to that level, one of Levant's key objections to the tribunal process, being the unavailability of cost sanctions, dissolves.)

(4)  Human rights do not exist at common law.  The judges I've talked to about the topic don't want jurisdiction to handle human rights disputes.  At the ground level, these are tricky issues, requiring expertise in terms of how the relationships triggering human rights disputes work.  This is why we don't use judges to adjudicate these decisions, but lawyers and other professionals experienced in labour relations and other Code-related areas.  Indeed, the Commissions and Tribunals simply interpret what the government enacts.  The government is free, subject to constitutional constraints, to change the language if they feel the intention behind it hasn't been correctly interpreted.

Many of Levant's criticisms are anecdotal in nature, taking examples which are on the fringe.  For example, he wrote in November 2010 of a pastor who had been "fined" - not so, it was a compensatory award to a complainant - for writing a letter to the editor "criticizing gay marriage" (which is a *very* mild way of characterizing the letter's contents).  Levant neglected to mention that the Tribunal's decision had, in fact, been reversed on judicial review, highlighting that it was, in fact, a borderline case.

That being said, I don't necessarily disagree with all of Levant's objections.  One of his most persuasive pitches is the one he makes against the anti-hate speech provisions contained in some - that's right, not all - of the human rights statutes in Canada.  That doesn't exist in Ontario, so it's not something I've developed a strong feeling about.  While I understand the policy motivations behind such a provision, I also understand Levant's objections on the basis of free speech, and I'm inclined to think that such a provision is unworkable.  There are clear lines that shouldn't be crossed in criminal legislation, and I think we can leave it there.

It's a shame that this message gets lost when Levant muddies the water with his polemicist rhetoric, crusading with equal vigour against the human rights processes generally and other applications of substantive human rights.

To give a lay perspective, let's look at my father.  My father is a retired police officer, and pretty far right, and we have some interesting conversations.  I've had clients whose workplaces had pretty flagrant human rights breaches...for example, a woman obligated to wear dresses - not pants - even when men performing similar job functions were fine in ripped jeans...and my dad's viewpoint on these cases is that, if these employees knew about the job conditions before going in, and agree to it, they shouldn't really complain about it afterward.  I respond with the question, "Okay, what if somebody agreed to work for $2/hour?  Should they not be able to complain about it afterwards?"  His response was, "Well, we have minimum wage laws, so that would be illegal."  He didn't recognize that human rights and employment standards are similar in the way they legislate over the freedom to contract.

There *are* legitimate human rights issues out there, major issues that the majority of Canadians would agree should be addressed. (Mind you, there are still surprising numbers of people who think that an employer should be able to fire an employee who gets pregnant, judging from public reaction to the Jessica Maciel case.)  There are also more marginal issues, that perhaps don't have the same clear-cut answers, such as Bill Cosby's right not to be harassed on the basis of race by Chris Rock at a comedy club.  And there are trickier questions as well where human rights obligations may conflict with other legal obligations such as occupational health and safety.  (See, for example, the recent decision in Loomba v. Home Depot.)

The Other Side:  Human Rights Breaches are Everywhere


I've mentioned Professor David Doorey before, as having a workplace law blog I follow and sometimes comment on.  He made a post a while back about the Starbucks employment application breaching the Human Rights Code by asking what high school the applicant attended and whether or not the applicant is available to work overtime.

Let's be clear:  There are certain questions which are clearly illegal.  Do you have kids?  How old are you?  Are you married?  What are your religious beliefs?  You can't ask these of a job applicant.  But these questions don't seem so inherently unreasonable.

Ontario Human Rights Commission literature backs him up on the 'high school' question.  And the logic seems to be that asking what school a person went to can reveal a great deal about their religious background, racial background, place of origin, etc.  The overtime question is seen as troublesome because people who have families are far less likely to be able to work overtime.

I have a hard time accepting such a broad interpretation of the Human Rights Code.  The high school question...well, if the fact that a question may reveal factors with a probable connection to a prohibited ground made the question itself illegal, then the result would be that just about any question would be illegal. Heck, the "name" field would likely be illegal.  These questions are clearly not proxies to pick up information to classify people on discriminatory grounds.  And if Microsoft were unable to distinguish between a Computer Science degree received from the University of Waterloo versus some less prestigious institution, that would strike me as being a commercially absurd result, extended the prohibited grounds to covering "where did you get your education"?  (And if an employer wants to see a transcript...well, you can just about forget that, no?)

The overtime question...is trickier.  Yes, people with kids are less likely to be able to work overtime.  Yes, that ends up being a discriminatory result if people are going to be treated differently on the basis of a "no" answer.  Yet the similar extension of this principle would be that it would be illegal to advertise positions for full-time only, or for certain hours.  Or to ask how much travel a potential employee is willing to do.  Again, where it doesn't seem to me that hours of availability are a clear proxy for a prohibited ground, I think that the commercial absurdity of the result is hard to justify.

Problems of Perception


One further difficulty is that people don't really understand what "human rights" means.  Even some very sophisticated people don't understand that it isn't just a venue for dealing with general unfairness.  It addresses unfairness on some very specific bases.  So people think "If I'm treated unfairly, it's a human rights matter", leading to frivolous and vexatious proceedings, leading to others criticizing the Tribunals for hearing such frivolous matters.

Let's be clear.  *Most* human rights applications seem to fall into one of three categories:

(1)  Not in the Tribunal's jurisdiction.  Whether because not based on a prohibited ground, not in an applicable social category, or because of some other jurisdictional bar, the proceeding gets shut down early because the Tribunal can't hear it.

(2)  A case with substantial personal importance and a bona fide human rights-based objection.  For instance, consider the mandatory retirement cases.  Clearly, there are some circumstances in which mandatory retirement might be justified.  That cannot be carte blanche for people to discriminate against the elderly.  Thus, a person facing mandatory retirement, win or lose, can't be faulted for arguing the case before the Human Rights Tribunal.

(3)  A case with deeply unacceptable conduct by the respondent, if perhaps not a great deal of direct personal importance.  A good friend of mine and law school classmate is visually impaired, and uses a service animal.  (The dog has quite the character, too. Very quiet, never made much noise or disrupt classes, but would occasionally snore or snort at times that were very appropriate to the lecture material.)  I noticed a case a while back in the Tribunal's jurisprudence involving her being excluded from a store because of a "no animals" policy.  I doubt my friend was put to great hardship by the exclusion - no doubt she took her business somewhere else.  Yet I don't think she's seeking a big payout - really, if you look at the value of her time on an hourly basis, the award she'll probably get from the Tribunal at the end of the process will be less for her time than she could have billed on client matters.  It's the principle of the thing, and it's an important principle.  Most establishments permit service animals simply because it is a well-known law that they are obligated to.  If we didn't hold people to this obligation, then they would stop, and that *would* generate hardship.

While imperfect, as are all things human, the Human Rights Tribunals serve important policy objectives.  We need to scrutinize them, and decide carefully the form and substance of our human rights, but abandoning them would be a tragic mistake.

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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.

Dismissed CEO Wins Awkward Partial Summary Judgment Motion

There is a recent judgment in the Hinke v. Thermal Energy International Inc. case, by Justice Ray, on a motion for partial summary judgment.

Put briefly, Hinke founded TEI in 1991 and was its principal until he brought it public in 1994, and continued on as its President and CEO.  In 2004, he recruited Timothy Angus into a senior position, and while conducting his due diligence prior to accepting the position, Angus discovered a letter from the TSX-V asking to review certain transactions, which had been received a few weeks earlier but not produced to the Board of Directors. Angus produced the letter to the Board, Hinke resigned as President in February 2005, and Angus became President and CEO.

Hinke's position with the company at this point seems unclear.  His existing contract was set to expire on June 25, 2005, which would have triggered certain severance entitlements, etc.  On June 5, 2005, Hinke and TEI agreed to enter a new employment agreement, and then they went about discussing some of its terms.  It had not yet been finalized when Hinke's employment was terminated, allegedly for cause, on June 23, 2005.

Hinke then sued for wrongful dismissal, among other things, and TEI counterclaimed alleging oppression, breach of fiduciary duties, and negligence.

It should be a simple matter of two arguments about the same facts.  If the facts underlying TEI's claim are warranted, then that probably constitutes just cause, right?  Well, maybe not.  Simply put, while there were disciplinary letters leading up to June, including some threatening termination, the Court concluded that entering a new agreement on June 5 was inconsistent with an intention to terminate Hinke's employment for cause.  In effect, by entering into a new agreement, TEI undermined any case for just cause it was attempting to build.

The Court therefore held TEI to proving just cause based on conduct after June 5, which is a tall order considering how little time had passed since then.

This motion related only to the wrongful dismissal elements of the claim, and was successful.  The remainder of the claim, however, along with the full counterclaim remain outstanding.  (This judgment, however, has been stayed pending disposition of the other issues.)

My Thoughts

The dimensions of an eventual trial have been shifted.  This is a brilliant tactical move, because it shifts the stakes significantly.  The defence is no longer able to challenge the wrongful dismissal allegations, but its allegations of misconduct are limited to proving its own counterclaim now (and damages are often difficult to establish) and the consequences of failing could potentially have brutal consequences in terms of moral damages for breaching the duty of good faith and fair dealing.  This could press a settlement of the other issues.

However, if they don't settle, then think about the trial that results.  Among other things, Hinke is likely to make the same pitch that succeeded here - if his actions were really oppressive and breached his fiduciary duties, then the company would not have entered into the June 5 agreement.  It may not be as strong a pitch, in context, but if it fails, and if the counterclaim does succeed, then we will be left with the Courts saying that the employer was entitled to hold him to account for all that misconduct, but they were not entitled to fire him on a for cause basis.  There's an inconsistency there.

Here's where the inconsistency becomes worse:  In employment law, there is a doctrine referred to as "after-acquired cause".  (See the Lake Ontario Portland Cement case.)  In a nutshell, when an employee is terminated on a for cause basis, and the employer later discovers the full breadth of the misconduct - or even entirely new areas of misconduct - the employer is entitled to rely on those in support of allegations of just cause.  And condonation falls off the rails in these cases, too:  An employer can't be said to have condoned what they didn't know about.  So the possible trouble with the Court's finding that the employer was limited to relying on misconduct from June 5 to June 23 is this:  The employer is also entitled to rely on any misconduct, regardless of when it occurred, that they discovered after June 5, and even after June 23.  (Note:  For all I know, it is entirely possible that the employer may have known the full particulars of the misconduct alleged prior to June 5, in which case this issue wouldn't arise.  While it seems unlikely, that very possibility may justify the Court's decision if it wasn't disposed of in the employer's evidence:  There's an obligation in summary judgment motions to "lead trump or risk losing".  It may be a defect with the employer's case, or it may be a defect in how the employer led its case.)

One other interesting point:  The Court notes that the employer's defence did not claim setoff - i.e. they're counterclaiming for damages, but they didn't lead those same allegations in the defence as a way of saying "Even if the plaintiff's claim is legitimate, we still don't owe him money because he owes us all this".  It's understandable to do so in such a case, because of the natural inclination to think that the success of the claim and counterclaim, on the facts, would be mutually exclusive.  However, such a pleading of setoff likely would have blocked a partial summary judgment motion with such a limited scope as this one.

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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.