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Case in Point

Legal Developments in Human Resources Law

Federal Court Confirms “Family Status” Applies to Mother-in-Law

Posted in Human Rights

In Canada (Attorney-General) v. Hicks, the Federal Court held that the Canadian Human Rights Tribunal (“CHRT”) did not err when it found that Human Resources and Services Development Canada (“HRSDC”) discriminated against Mr. Hicks in refusing to approve expenses associated with maintaining temporary dual residences after a relocation from Halifax to Ottawa. After Mr. Hicks relocated, his wife remained in Halifax for a period of approximately one year to care for her ailing mother who lived in a nursing home. HRDSC denied his request for reimbursement of expenses. The policy regarding temporary dual residence required that a dependant reside in the home for which the expenses were being sought. As the mother-in-law did not reside in the home in Halifax, the expenses were not approved.

The Federal Court decisively confirmed that the protected ground of “family status” includes eldercare obligations. The Court likened eldercare to childcare in that non-fulfillment can attract both civil and criminal responsibility if not exercised properly.

Perhaps more concerning is that this decision confirms that discrimination may be found even where the employee does not incur a conflict between work and family status obligations. Indeed, the Federal Court upheld a finding by the CHRT that the benefit at issue was “under-inclusive” in failing to provide expense reimbursement for maintaining temporary dual residences for dependants who reside outside of the home. In particular, the Court accepted that discrimination can be found where benefits offered to employees will differ based on a protected ground.

Given this finding, it is worthwhile for all employers to consider whether the benefits they offer to employees could be at risk of being found to be under-inclusive as a result of making a distinction based on criteria which could relate to any protected ground.

Significant Damages Awarded Against Employer for Sexual Harassment of Temporary Foreign Workers

Posted in Human Rights

In a recent decision of the Human Rights Tribunal of Ontario (the “Tribunal”), Vice-Chair Mark Hart imposed a significant damages award against corporate respondent Presteve Foods Ltd. and its directing mind, Jose Pratas (“the personal respondent”).

In O.P.T. v. Presteve Foods Ltd., two Applicants, O.P.T. and M.P.T., alleged that the personal respondent had engaged in harassment and discrimination contrary to sections 5 and 7 of the Ontario Human Rights Code (the “Code”). More particularly, the Applicants, both of whom were in Canada as part of the Temporary Foreign Workers Program, alleged that they were subjected to a sexually poisoned work environment, discrimination in respect of employment because of sex, unwanted sexual solicitations and advances and reprisal.

The personal respondent engaged in a pattern of unsolicited and unwelcome conduct, including unwanted “invitations” to dinner, hugs, kisses and touching. When the Applicants would refuse to engage in these acts, the personal respondent would threaten to send them back to Mexico.

At the commencement of the hearing, the Respondents raised a preliminary objection to a proceeding on the merits on the basis that the Application had not been made within one year of the events at issue. In disagreeing with this position and dismissing the objection, Vice-Chair Hart noted that both Applicants had spoken to legal counsel and to the police about the Respondent’s conduct within one year of its occurrence. Unfortunately, through no fault of the Applicants’ own, the police and legal counsel had failed to inform the Applicants of their right to bring either a human rights Application or a civil proceeding against the Respondents.

Vice-Chair Hart further noted that because the Applicants did not speak English and were not familiar with the legal system, it was not unreasonable that they had relied on others to inform them of their rights. The Applicants’ delay in bringing the Application was therefore found to have been incurred in good faith and the Application was permitted to proceed to a hearing on the merits.

The hearing took place over 16 days and involved substantial viva voce evidence from both Applicants and an expert in the field of Temporary Foreign Workers. The expert, Dr. Kerry Preibisch, had previously testified before the Tribunal in Peart v. Ontario (Community Safety and Correctional Services) (“Peart”) and was determined to be qualified to speak to the Applicants’ particular vulnerability. Significantly, the personal respondent did not give evidence at the hearing. This meant that although Vice-Chair Hart was required to make a determination with respect to the credibility of the Applicants, he was not required to decide between two competing accounts of the events.

Vice-Chair Hart found the evidence of the two Applicants to be credible in respect of all of the allegations raised in the Application, and thus determined that the personal respondent had engaged in unwanted sexual solicitations and had sexually assaulted the Applicants. It was further determined that these acts had occurred at the personal respondent’s office, in his car, while at dinner with O.P.T. and when O.P.T. was alone with the personal respondent at his home.

Notably, Vice-Chair Hart found that each of these locations constituted “the workplace” for the purposes of section 7 of the Code, which provides a right to be free from harassment in the workplace because of sex, sexual orientation, gender identity or gender expression. Even though these incidents occurred outside of the corporate respondent’s physical premises and often outside of work hours, Vice-Chair Hart concluded that these incidents were sufficiently connected to the Applicants’ employment to be regarded as occurring within the workplace for the purposes of the Code.

Vice-Chair Hart also found that the personal respondent’s pattern of persistent and unwanted sexual solicitations, advances and sexual harassment had created a sexually poisoned work environment and that his actions constituted discrimination against the Applicants because of sex in respect of employment.

In light of the objective and unprecedented seriousness of the personal respondent’s conduct, as well as the particular vulnerability as a migrant workers and the impact of the personal respondent’s conduct on the Applicants, O.P.T. was awarded $150,000.00 as compensation for injury to dignity, feelings and self-respect and M.P.T. was awarded $50,000.00 as compensation for injury to dignity, feelings and self-respect. These awards were made following a thorough examination of the Tribunal’s earlier cases concerning sexual harassment and sexual solicitation, where less significant compensation was awarded. Vice-Chair Hart found that these awards were proportionate to the prior awards given the far greater seriousness of the personal respondent’s actions and the particular vulnerability of the Applicants as migrant workers.

Vice-Chair Hart also ordered that the corporate respondent, Presteve Foods Ltd., provide any workers hired under the auspices of the Temporary Foreign Worker program with human rights information and training in the native language of any such hire for a period of three years from the date of his decision.

Finally, although Vice-Chair Hart was also specifically asked to comment on certain aspects of Temporary Foreign Worker programs in Canada, he declined to do so.  He did, however, echo his earlier sentiment in Peart, in which he had noted the particular and special vulnerabilities of migrant workers in Ontario, especially in light of the closed work permit that requires them to be tied to one employer.  Accordingly, though he made no specific comment about Temporary Foreign Worker programs in Canada, he did indicate that such programs generally place the enrolled workers in a uniquely vulnerable position.

BCCA Affirms Order Requiring Google to Render Domains Unsearchable

Posted in Information and Privacy

Last Thursday, the Court of Appeal for British Columbia issued an important decision in Equustek Solutions Inc. v. Google Inc. about the power of a domestic court to make orders against non-party, internet “intermediaries” – in this case, search engine provider Google.

The matter involved an order made to help a network hardware manufacturer enforce its intellectual property rights against a former distributor who had gone rogue. After the plaintiff sued the former distributor, it went underground – essentially running a “clandestine” effort to pass off its own products as the plaintiff’s products. This scheme relied on the internet and, to a degree, Google’s market-dominant search engine.

Google voluntarily took steps so searches conducted at the Google.ca search page would not return specific web pages published by the defendants. The plaintiffs sought and obtained an order to block entire domains and to block searches originating from all jurisdictions. Google appealed, making a number of broad arguments about the impact of the order (and its kind) on comity principles of private international law as well as international (internet-based) freedom of expression.

The Court of Appeal dismissed Google’s appeal, demonstrating significant sympathy for the perils facing the British Columbia plaintiff. And while the Court was sensitive to the principles raised by Google (along with the Canadian Civil Liberties Association and the Electronic Frontier Foundation as interveners), it held that the principles were not engaged in the matter:

[…] Courts should be very cautious in making orders that might place limits on expression in another country. Where there is a realistic possibility that an order with extraterritorial effect may offend another state’s core values, the order should not be made.

In the case before us, there is no realistic assertion that the judge’s order will offend the sensibilities of any other nation. It has not been suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offends the core values of any nation. The order made against Google is a very limited ancillary order designed to ensure that the plaintiffs’ core rights are respected.

This reasoning by the Court of Appeal relates back to a significant admission by Google – an admission recorded by the chambers judge as follows: “Google acknowledges that most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong.”

The Court of Appeal decision is therefore relatively balanced. Global internet intermediaries like Google process and store such significant volumes of information today that their cooperation can be important to advancing a civil action or, like in this case, obtaining an effective remedy. In general, this British Columbia case will help organizations deal with global internet intermediaries. However, global search engine “takedown orders” of the kind issued in this case will not necessarily be easy to obtain and enforce.

Adapted from “All About Information” by Dan Michaluk

Court of Appeal Holds that Non-Party and Participant Experts Need Not Comply with Rule 53.03

Posted in Civil Procedure

Cases dealing with expert evidence have recently been considered by appellate courts. We have discussed two of those cases in our FTR Nows, Court of Appeal Holds that Counsel May Review Draft Expert Witness Reports and SCC Clarifies Test for Qualifying as an Expert Witness.

In Westerhof v Gee Estate, the Court of Appeal for Ontario returned to the topic of expert witnesses. This time, the question was whether Rule 53.03 of the Rules of Civil Procedure applies only to “litigation experts” as described in Rule 4.1.01 and Form 53 or whether it applies more broadly to all witnesses with special expertise giving opinion evidence.

In this personal injury case, the trial judge excluded evidence from various participant and non-party expert witnesses because they did not comply with Rule 53.03. On appeal, the Divisional Court held that the type of evidence (e.g. fact or opinion) at issue determines whether Rule 53.03 applies. Accordingly, Rule 53.03 applies where opinion evidence is at issue.

The Court of Appeal disagreed that the type of evidence was the key factor in determining the application of Rule 53.03. It held that participant experts and non-party experts can provide opinion evidence without complying with Rule 53.03 where:

[60]        […] a witness with special skill, knowledge, training, or experience who has not been engaged by or on behalf of a party to the litigation may give opinion evidence for the truth of its contents without complying with rule 53.03 where:

  • the opinion to be given is based on the witness’s observation of or participation in the events at issue; and
  • the witness formed the opinion to be given as part of the ordinary exercise of his or her skill, knowledge, training and experience while observing or participating in such events.

If the expert witness offers evidence extending beyond the above limits, then Rule 53.03 applies.

The Court of Appeal also confirmed that, as with all evidence, the court retains its gatekeeper function in order to ensure that proper and relevant evidence gets in. For example, a court could order the participant expert or non-party to comply with Rule 53.03. It could also exclude all or part of the opinion evidence of the participant or non-party if the evidence did not meet the test for admissibility.

Sonya Sehgal is a 2015 Summer Student with Hicks Morley.

Courts Differ on Termination Provisions and Need for Future Compliance with ESA

Posted in Employment Law

Over the last few years, courts have been reluctant to enforce different “ESA only” termination provisions due to ambiguity. However, not all judges have taken the same position with respect to what constitutes an ambiguous termination provision. The following two cases offer differing views on termination provisions in employment contracts and future compliance with the Employment Standards Act, 2000 (“ESA”).

In 2011, in Wright v. The Young and Rubicam Group of Companies (Wunderman), the Ontario Superior Court found that the termination provision in an employment contract was void because, in addition to not mentioning benefit continuance, it was possible that it would violate the statutory minimum entitlements under the ESA at a future date. This was the ruling even though at the time of actual termination the applicable termination provision was in compliance with the ESA. In particular, while the plaintiff was paid his statutory entitlement at the time of termination, the contract was not in compliance with the statutory minimums had he been terminated after, for example, 9.5, 10.5 or 11.5 years of service, all of which would “run afoul” of the ESA by 0.5 weeks.

On the other hand, in the relatively recent decision Ford v. Keegan, the Ontario Superior Court disagreed with the reasoning in Wright and held that a termination provision in an employment contract is valid if it complies with the ESA on the date of termination, even though it may not be in compliance at some future point.

The Court’s comments in Ford v. Keegan bring some reassurance to employers that they do not have to draft termination provisions with notice periods “of such a length as to satisfy the legislative requirements in every conceivable circumstance.” It is also good practice to stipulate in employment contracts that the employee shall not receive less than his or her minimum entitlements under the ESA.

(Yet Another) Ambiguous “ESA-only” Termination Provision Unenforceable

Posted in Employment Law, Minimum Standards

Another “ESA-only” termination provision in an employment contract has been found unenforceable by the Ontario Superior Court. In Howard v Benson Group, the Court decided that the termination provision providing only Employment Standards Act, 2000 (“ESA”) minimum entitlements was ambiguous; therefore, the common law applied and the plaintiff was entitled to reasonable notice of termination.

The provision in question read:

8.1.      Employment may be terminated at any time by the Employer and any amounts paid to the Employee shall be in accordance with the Employment Standards Act of Ontario.

The problematic language was “any amounts paid to the Employee”, as it did not make reference to any other minimum entitlements guaranteed by the ESA, such as continuation of benefits during the statutory notice period. Since the provision referred only to “amounts paid”, it was not sufficiently clear that the plaintiff would receive all his entitlements under the ESA and not just the payment of termination and severance pay.

This is yet another decision in a line of cases that has found termination provisions in employment contracts unenforceable because they do not clearly comply with all obligations under the ESA.

It is important for employers to remember that the ESA provides not only for payment (or notice) of termination and severance pay (where applicable), but also continuation of benefits during the statutory notice period, which may include not only group benefits, but also pension contributions, car allowances, etc. (Miller v. A.B.M. Canada Inc.). Also, where the contract is not compliant with the ESA, provision of all ESA entitlements by the employer “does not alter the reality that the employment contract drafted by the employer is contrary to law” (Stevens v. Sifton Properties Ltd.); the termination provision will still be unenforceable despite actual compliance with the ESA.

These cases serve to remind employers of the following:

  1. Courts are reluctant to enforce ESA-only termination provisions which are ambiguous.
  2. A well-drafted employment contract or offer letter is important to have at the outset of the employment relationship as it will provide employers with certainty as to their exposure at the time of employment termination.
  3. Employment contracts or offer letters should be reviewed regularly to ensure that the language of any termination provision is not only compliant with the ESA, but also with the most recent decisions at common law.

Claim Against Employer Arising out of Social Event Allowed to Proceed

Posted in Employment Law

The decision of K.L. v. 1163957799 Quebec Inc. raises a caution for employers when planning social events. The employer hosted an unstructured evening social event at a water park where employees had unrestricted access to alcohol. The plaintiff brought an action against the employer and a supervisor as a result of an alleged sexual assault and forcible confinement that took place at the hands of the supervisor during the social event.

The employer brought a motion to strike out the claims of sexual harassment, sexual assault, assault, battery, false imprisonment and intentional/negligent infliction of mental harm.

The Court accepted that Canadian law does not recognize a tort of sexual harassment and dismissed this claim. However, it held that it was not “plain and obvious” that the employer could not be liable for the remaining causes of action, finding that the plaintiff need only to establish that the employer’s conduct “materially enhanced the risk, in the sense of significantly contributing to it” in order to establish that the employer was vicariously liable for the actions of its employee. In so finding, the Court noted that employer-hosted social events are very much connected to the employer as they generate goodwill and create a more loyal and dedicated workforce. As a result, the Court found that it was arguable that the plaintiff would be able to establish that the employer significantly contributed to the circumstances that gave rise to her assault.

The Court recognized that the test to continue with the action was “very low” and that the plaintiff may “face obstacles in proving her claim.” Employers, though, should continue to take steps to ensure supervision and control during employer-hosted social events in order to minimize their own liability.

Termination Clause in Federal Employment Agreement Enforceable

Posted in Employment Law

The recent decision in Luney v. Day & Ross Inc. is good news for employers. The Plaintiff worked for an interprovincial trucking company subject to the Canada Labour Code (“Code”). The Defendant terminated the Plaintiff’s employment without cause and offered the Plaintiff a severance package that it asserted was consistent with the termination clause in the employment contract.

The Plaintiff brought a summary judgment motion seeking a finding that the termination clause was unenforceable on two grounds: (1) that it was ambiguous and therefore did not rebut the presumption of reasonable notice at common law; and (2) that it violated the Code as it did not provide for benefits.

The motion judge dismissed the Plaintiff’s motion. The Plaintiff then appealed to Divisional Court. The relevant section of the employment contract read as follows:

If your employment is terminated for other than ‘just cause’, or if a competent tribunal should rule that your termination was ‘unjust’, you will be entitled to two weeks notice or pay in lieu of notice and a severance of one week’s regular pay for each full year of service, less statutory deductions. The payments are not to exceed the equivalent of 15 weeks pay.

It is understood and agreed that in the event the aforesaid notice and severance entitlements are not in conformity with the notice and severance provisions prescribed by the Canada Labour Code or other similar legislation, the statutory minimums shall apply and be considered reasonable notice and severance.

Dismissing the appeal, the Divisional Court found that the wording was sufficiently clear to rebut the presumption of reasonable notice. It also rejected the Plaintiff’s argument that the failure to mention benefits was fatal. This was due to the inclusion of the wording that provided if the severance entitlements are not in conformity with the severance prescribed by the Code, the statutory minimums shall apply. The takeaway for employers is to include language indicating that statutory minimums will prevail in order to defend against claims that the language is unclear or otherwise unenforceable.

Federal Court: Unjust Dismissal Complaint for Without Cause Termination Requires Evidentiary Hearing

Posted in Employment Law

In a recent decision, Sigloy v. DHL Express (Canada) Ltd., the Federal Court overturned the decision of an adjudicator which had granted an employer’s preliminary objection and dismissed a complaint of unjust dismissal for lack of jurisdiction because the complainant had been dismissed without cause.

At the adjudication, the employer objected to the unjust dismissal claim on the grounds that the complainant was dismissed without cause and was provided with his notice and severance entitlements pursuant to both the Canada Labour Code and a valid contract of employment. The employer further argued that the only allegation in the complaint was that the dismissal occurred without just cause. Referring to the Federal Court’s decision in Wilson v. Atomic Energy of Canada Ltd., the adjudicator upheld the employer’s preliminary objection and dismissed the complaint on the basis that dismissals without cause were permitted under the Code and that the complaint contained no other allegations to suggest that the dismissal was “otherwise unjust.”

In this case, the Federal Court applied the subsequent Federal Court of Appeal decision in Wilson and held that it is incorrect for an adjudicator to assume that a dismissal is automatically just if it occurs without cause and the complainant receives compensation that satisfies his legal entitlements. Rennie J. directed that “there must be an evidentiary inquiry, whether cursory or extensive, into the circumstances of the dismissal”.

The Court set aside the adjudicator’s decision on the basis that the parties had not turned their minds to the complainant’s entitlement to an evidentiary hearing, which resulted in a breach of procedural fairness.

Interestingly, the Court indicated support for the “outcome” of the adjudicator’s decision despite its finding regarding procedural fairness. The Court also directed that the adjudicator may determine the extent of the evidentiary hearing required in the circumstances but that it is a breach of procedural fairness to dismiss such a complaint on the basis of a “preliminary legal determination.”

Indefinite Suspensions with Pay: The SCC Clarifies the Test for Constructive Dismissal

Posted in Employment Law

The Supreme Court of Canada recently considered the common law doctrine of constructive dismissal in Potter v. New Brunswick Legal Aid Services, where a majority of the Court (with two justices concurring in the result) concluded that placing an employee on an indefinite administrative suspension with pay constituted constructive dismissal. It found that even where pay is provided, employers do not “have an unfettered discretion to withhold work” and that no employer may withhold work from an employee “either in bad faith or without business justification.” Of note, the Court applied its reasoning in Bhasin v. Hrynew, which extended the duty of good faith to the performance of contractual obligations, in finding that the employer failed to act in an honest and forthright manner.

Midway through Mr. Potter’s statutory appointment (a seven-year Executive Director term), relations deteriorated and the parties began negotiating a buyout of his employment contract. He went on sick leave before the matter was resolved. Unbeknownst to Mr. Potter, the Commission wrote a letter to the Minister of Justice recommending his termination for cause. He was advised not to return to work, and subsequently he was suspended indefinitely with pay. Mr. Potter commenced an action for constructive dismissal, which the Commission took as a voluntary resignation.

The Commission prevailed before the lower courts but Mr. Potter was successful before the Supreme Court. In allowing the appeal, the Court clarified the two-branch test for constructive dismissal in Farber:

  • Under the first branch, the determination of a “substantial breach” involves two distinct steps: (1) whether there is a unilateral breach of an express or implied term of the contract; (2)  “if it does constitute such a breach, it must be found to substantially alter an essential term of the contract.” The Court noted that the trial judge erred (in part) by conflating the two steps of the analysis.
  • Under the second branch, an employer’s conduct will constitute constructive dismissal if it more generally shows that the employer intended not to be bound by the contract: “[t]his approach is necessarily retrospective, as it requires consideration of the cumulative effect of past acts by the employer and the determination of whether those acts evinced an intention no longer to be bound by the contract.”

The Court noted the evidentiary shift in burden in cases involving administrative suspensions with pay. It stated that “[i]n all cases, the primary burden will be on the employee to establish constructive dismissal, but where an administrative suspension is at issue, the burden will necessarily shift to the employer, which must show that the suspension is justified.” The absence of such a justification will signal the existence of a breach and the burden will then revert to the employee to prove that the suspension is a substantial alteration to the essential terms of the contract.

The Court found that in the absence of express authorization, an employer’s implied authority to invoke a suspension with pay is subject to a basic requirement of business justification undertaken in good faith, which necessarily involves a factual inquiry. Without such a justification, the suspension is unauthorized and therefore a unilateral change to the employment contract.

Applying the two-branch test for constructive dismissal, the Court noted that it is unlikely an employer could establish there was implied authority for the unilateral change to the employment contract in the absence of demonstrated legitimate business reasons for the suspension with pay, unless the unauthorized suspension was of a particularly short duration. It held that any reasonable person, faced with the employer’s unreasonable and unjustified decision to invoke a paid suspension (i.e. without a legitimate business justification), may permissibly infer that the employer’s conduct evinced an intention to no longer be bound by the contract.

In this case, the Court found, among other things, that a constructive dismissal had occurred because of the indefinite duration of the employee’s suspension, the employer’s failure to act in good faith by its failure to be forthright and by withholding valid business reasons from the employee, and the employer’s decision to conceal its intention to dismiss the employee for cause. In sum, the employee’s awareness of his circumstances was limited to his knowledge that he was being indefinitely suspended when he had been given no reason for the suspension. Referring to Bhasin v. Hrynew, the Court stated that “At a minimum, acting in good faith in relation to contractual dealings means being honest, reasonable, candid, and forthright.”

This case presents a cautionary tale for employers and demands careful consideration of the circumstances in which a paid suspension may be imposed on employees. An employer should ensure that such decisions are capable of being defended by reference to the employer’s legitimate business interests and demonstrable good faith. Further, employers should be sure to communicate the reasons for the paid suspension with a scrupulous forthrightness to ensure that the employee cannot claim to have been left in the dark.