Jan 30

Top five Employment Cases 2014


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The Top 5 Ontario Employment Law Cases/Trends of 2015

With another year behind us, it’s worth taking a look back at the deluge of decisions which the courts released in 2014 in a search for the landmark decisions which will undoubtedly affect future litigation. These cases were chosen because they impacted employment law, and employment law in Ontario specifically; the decisions from the Supreme and Federal Courts can, of course, have a huge impact across the whole country.
These cases (or grounds of cases) have made the top 5 because they provide clarification on important perennial issues (punitive damages, just cause, discrimination, etc.) and have the potential to advance and significantly change the law. 2014 may wind up being a very significant year indeed.

Number 5: WSIAT Decision No. 2157/09

WSIAT Decision No. 2157/09 may represent the beginning of a significant shift in the way that workplace mental health injuries are treated and compensated for by the law. In this case, a nurse was harassed for 12 years by a doctor who yelled at and demeaned her in front of colleagues. When her co-workers informed her team leader, they were ignored. When the nurse informed the team leader about a particularly egregious incident where she had been told to “shoo” out of a room in front of patients, she was told that her responsibilities would be significantly reduced, and that she would be effectively demoted.
The nurse became unable to work due to this workplace-related stress. She filed a claim for compensation with the Workplace Injury Compensation Board (WSIB). Her claim was rejected because sections 13(4) and (5) of the Workplace Safety and Insurance Act, 1997 (the “WSIA”) required that claims for mental stress result from “an acute reaction to a sudden and unexpected traumatic event.” In other words, there was no denial that the nurse had suffered a mental injury, but she could not get compensation because her injuries had built up over years of ill-treatment instead of being caused by a single traumatic shock.
The WSIAT found, in this decision on the nurse’s appeal, that sections 13(4) and (5) of the WSIA violated the guarantee of equality provided by section 15(1) of the Charter of Rights and Freedoms, and struck them down as unconstitutional. It found, in particular, that the requirement of sudden shock perpetuated stereotyping and disadvantage suffered by people with “gradual onset” mental injuries, because it was based on the presumption that they were somehow less deserving of benefits than people who suffered trauma or physical injury, and that they represented a burden on society.
The extent of Decision No. 2157/09’s impact has yet to be seen, it has at least two aspects with important implications for the future: it has made it possible for workers with mental injuries based on years of harassment to obtain compensation, and it has implicitly rejected the notion that mental stress injuries are somehow less “real” or significant than physical injuries, as well as any law based on that notion. This marks an important step towards the legal recognition of the full impact of mental stress-related injury.

Number 4: Hamilton-Wentworth District Schoolboard v. Fair, 2014 ONSC 2411 (CanLII)

Hamilton-Wentworth District Schoolboard v. Fair (“Fair”) was a matter which also focused on mental health issues. Fair worked for the schoolboard for 16 years. In 2001, Fair developed generalized anxiety disorder (which evolved into depression and post-traumatic stress disorder), largely caused by job-related stress. She left work in October 2001, and in 2004, shortly after her long-term disability benefits had run out, the Board decided that it could not accommodate her or place her in another position, and terminated her employment.
Fair filed a complaint with the Ontario Human Rights Commission in 2004. In 2009, with the proceedings still unfinished, she asked to be reinstated. In 2012, the Human Rights Tribunal made two decisions: one finding that the Board had failed to accommodate Fair, and the other granting her damages and reinstatement.
The Board appealed to the Superior Court, and in 2014 they handed down this decision, upholding the Tribunal’s use of the reinstatement remedy, even though it had been more than 10 years since Fair had last worked in the position. The Board complained about the length of time that had passed, and the unusual nature of the memory, but in the Court’s view those things didn’t matter: The Board held that Fair shouldn’t have been punished for the fact that the proceedings took over 10 years, and the simple fact that the remedy was unusual didn’t mean it was inappropriate.
Fair is an interesting decision because it demonstrates the expansive range of the remedies which the Human Rights Tribunal is able to provide to applicants, reinforces the high standard for the accommodation of disabled employees, and shows that the courts are willing to respect and uphold decisions to use remedies such as reinstatement; just because they are unusual does not mean they are inappropriate or extreme. As such, this decision may lead to more frequent use of this remedy in the future, perhaps with a greater degree of deference shown by the courts on judicial review.

Number 3: Canada (Attorney General) v. Johnstone, 2014 FCA 110 and Canadian National Railway Company v. Seeley, 2014 FCA 111

These two decisions establish a new standard for determining when someone has suffered discrimination based on their family status. Johnstone was a Border Services employee whose superiors refused to adjust her shifts so that she could continue working full-time while taking care of her children, effectively converting her into a part-time employee. Seeley was a railway employee who was suddenly recalled to a terminal hundreds of miles from her home. She asked her employer for accommodation (like work at a closer terminal) because she couldn’t find any way to care for her children while she was gone; her employer refused, and terminated her.
Both brought complaints under the Canada Human Rights Act, which eventually gave rise to these decisions setting a new standard for family status discrimination. In both cases, the Federal Court of Appeal found that “family status” doesn’t just refer to whether you’re a member of a particular family unit. It includes your responsibilities as part of a family, so failure to accommodate an employee’s need to fulfil those responsibilities is a form of discrimination.
The Court also set out a new test in Johnstone for establishing a case of discrimination based on family status (as it relates to childcare obligations). An applicant has to establish that (i) a child is under their care, (ii) the obligation they are being prevented from fulfilling is a legal obligation they cannot ignore, as opposed to a personal choice, (iii), that they have made reasonable efforts to find childcare arrangements, but that none are available without accommodation, and (iv) the employer’s actions or policies interfere in a way that is more than trivial.
The Canadian Human Rights Tribunal awarded Johnstone compensation for the value of her lost wages from when she was forced into part-time work until the date of its decision. It also awarded her $15,000 for pain and suffering, and $20,000 in special compensation, because the conduct of her employer had been wilful and reckless. It also ordered her employer to develop a childcare accommodation policy. The Tribunal ordered that Seeley be reinstated with no loss of seniority, that she be compensated for the wages she would have earned had she not been fired (with a 30% reduction based on the idea that she could have mitigated her damages), and that she be paid $15,000 for pain and suffering, and $20,000 in special compensation. The Federal Court of Appeal upheld these awards.
These cases are important, and have made the top 5, because they expand the scope of the protection offered by the Federal and Provincial human rights regimes to benefit employees whose childcare obligations may conflict with their professional obligations, and provides a clear guide for doing so.

Number 2: Hyrniak v. Maudlin 2014 SCC 7 and Beatty v. Best Theratronics Ltd, 2014 ONSC 3376

Another pair of cases which may have a sweeping impact on the future of employment law. Hyrniak is one of the year’s most important decisions because, simply put, trials can be lengthy and expensive. The Supreme Court’s reasoning in this case seems to be part of a judicial effort to alleviate that problem.
Ontario’s Rules of Civil Procedure allow courts to grant “summary judgment,” in which the court, on a motion, looks at the evidence submitted by both parties before trial in order to determine whether the case or some of its issues can be settled then and there, without the need for a potentially lengthy and expensive trial.
The rule governing motions for summary judgment—Rule 20.04—has recently been modified so that summary judgment can be granted if there is no issue which would require a trial (as opposed to the old wording which asked if there was an issue for trial). In Hyrniak, the court emphasized the change of wording as a way to encourage trial courts in Ontario to make more extensive use of summary judgment in order to settle disputes more quickly and less expensively.
Under the new test laid out in this case, a judge on a motion for summary judgment should first ask whether the evidence presented by the parties will allow them to make the necessary findings of fact and apply the law to those facts; this will generally be the case in simple, document-driven actions with few disputed facts. If these (admittedly rather vague) criteria are met, there is no issue requiring a trial, and the judge should grant summary resolution of some or all of the issues in the case.
The court talks at length about ways to make summary judgment work—judges should use their rule 20 fact-finding powers to find additional facts if the evidence initially presented doesn’t disclose enough information, and they can “salvage” failed summary judgment motions by declaring which particular issues may be summarily disposed of, even if the case as a whole cannot be. It seems clear that the Supreme Court is encouraging lower courts to use summary judgment as a tool for efficiently disposing of cases.
The potential impact on employment law and wrongful dismissal litigation is huge. Many employment law cases are heavily document-driven and turn on relatively simple questions of how long a plaintiff’s reasonable notice period ought to be. The Hyrniak decision opens the door to a more speedy and economical resolution for employment litigants, especially if the parties can reach an agreed set of facts.
Following in Hyrniak’s shadow, Beatty v. Best Theratronics Ltd, 2014 ONSC 3376 provides a wonderful example of how the new summary judgment test can be applied to employment litigation. It also provides insight into how the courts have begun to apply the important reasoning in Hyrniak.
The court in Beatty reads Hyrniak as prescribing a three-step process on a motion for summary judgment: (1) assume that the evidence before it is all the evidence that would be available at a trial, (2) decide whether it can make the appropriate findings of fact and fairly resolve the issues on the basis of that evidence, and (3) if there are any issues which can’t be fairly resolved on the basis of that evidence, decide which issues can be resolved, which can’t, and what steps should be taken to resolve those outstanding issues. The court should then seize itself of those extra steps, meaning that it (i.e. the same court or judge hearing the summary judgment motion) should be the one to preside over those additional proceedings.
Beatty is a good example of this process in action. The court determined that the length of the employee’s notice period, and the question of whether he had mitigated his losses, were simple issues which it could resolve on the basis of agreed facts without hearing from witnesses, and it did so. The employee in Beatty also claimed punitive and aggravated damages. Because these issues depended on disputed facts and witness statements about what was or was not said in particular conversations, the court decided to hold a separate summary trial (essentially an abbreviated, simplified form of trial) to determine those issues after hearing witness evidence. Beatty therefore makes the year’s top 5 as an excellent demonstration of how the Supreme Court’s earlier decision might make life easier for parties in wrongful dismissal cases.

Number 1: Boucher v. Wal-Mart Corp, 2014 ONCA 419 Rollback

The number 1 case is remarkable for touching on the contentious issue of punitive damages, and for the large sums involved. The Plaintiff, Boucher was an employee whose manager asked her to falsify a temperature report for food storage (because this falsification would help his upcoming assessment as a manager). After she refused, this manager repeatedly humiliated her in front of the other staff; he at one point publicly grabbed her and forced her to count aloud to ten, in order to prove that she could. Boucher’s complaints were rejected by Wal-Mart, which concluded that she was trying to undermine her manager’s authority and told her that she would be disciplined for complaining. Boucher sued for constructive dismissal, and her manager was visibly “overjoyed” and was explicit about having wanted to force her to quit.
Boucher won her case, and the jury at trial awarded her $250,000 in damages against her manager, as well as an extraordinary $1,200,000 against Wal-Mart: $200,000 in aggravated damages for the harmful way in which she was dismissed, and $1,000,000 in punitive damages. Wal-Mart was vicariously liable for the award against the manager, and it had to pay $140,000 in trial costs. The question in this appeal was whether Boucher could keep these unusually high punitive amounts.
Punitive damages are awarded on a very high standard, which asks whether the offender has done something so drastic and reprehensible that not only must the wronged party be compensated, but the offender must be punished to send a message to others. Here the court focused on the principle that the amount of a punitive award has to be weighed together with any compensatory awards (so in the manager’s case, $100,000 of the damages were to compensate Boucher for the intentional infliction of mental suffering, and $150,000 punitive damages were meant to punish the manager for behaving so terribly), and the punitive damages combined with the compensatory damages must not be “inordinately” high, and in excess of what is needed to punish the offender.
The result is that the awards were upheld in principle but the amounts fell drastically. The punitive award against the manager fell to $10,000; the punitive amount against Wal-Mart fell from $1,000,000 to $100,000. A punitive award of $1,000,000 on which Boucher relied was found to be distinct because in that case an insurance company had refused to pay a fire claim and knowingly maintained a false accusation of arson throughout a two-year trial. That, in the court’s opinion, was $1,000,000 of awful behaviour, but Wal-Mart’s harsh reaction to Boucher’s complaint was only worth $100,000 in combination with the other awards against it.
Boucher is an interesting and important case because it offers clarification on the often-difficult area of punitive damages. First, it confirms that when calculating the amount of these damages, they should be weighed in context with all other damages in order to avoid a result which is too punitive; second, while the amount of the damages was reduced, it remained fairly high, and this decision confirms that repeated harassment and negligent investigation of complaints by employers can give rise to punitive damages. In other words, harassment and mockery in the workplace is being treated here as an important issue which can meet the high standard for awards of punitive damages.

Honourable Mention: Fernandes v. Peel Educational, 2014 ONSC 6506

The plaintiff in Fernandes was a teacher, at one time considered exemplary by his employer, who falsified student marks in a course. He was terminated for cause as a result of this dishonesty. Even though the judge found that he had lied to both his employer and the court, it his dishonesty was not found to be cause for dismissal. The decision emphasizes the importance of making the sanction against an employee proportionate to their conduct. Fernandes had a long and otherwise unblemished record; he had falsified marks for some students in one part of one of several courses he taught. Further, the school had partially condoned his conduct by sending out marks that it knew were false to students; the court took this to mean that the dishonesty wasn’t particularly important to the school.
Fernandes’ reasonable notice period, for a 56 year old teacher with 10 years of service, was calculated at 12 months, but this is not the extraordinary part of the case. Fernandes became ill as a result of stress when he was told that he had been fired. Several days later, during his notice period, his illness intensified and developed into major depression. Fernandes asked for the necessary forms to apply for long-term disability (LTD); his employer did not supply them until well into the litigation, and his application was denied by the insurer because it was outside of the requisite notice period.
The court found that if not for the actions of his employer in wrongfully dismissing him without cause and failing to send the forms, Fernandes would have applied and would have been found eligible under the policy. Relying on Egan v. Alcatel Canada Inc., the court determined that where an employee is denied disability benefits because coverage is wrongfully denied by the employer, the employer is liable to pay for the value of the benefits which the employee would have obtained. Fernandes would have been covered until the age of 65 under the policy, and in light of his total disability would not have worked again. Therefore, as part of his damages, his employer was obligated to pay for the whole value of his disability benefits between the ages of 56 and 65; he was 62 at the time of the decision. The court was not immediately able to calculate the value of these damages, but they are likely quite large.
This case provided an important confirmation of the high standard for just cause for dismissal, and the importance of a nuanced approach to treating employee dishonesty as cause. Making accusations of cause without careful consideration, and failing to extend the employee’s benefits throughout their notice period, can result in very significant damages.

It’s trite to say that 2014 was an exciting year for Ontario employment law; no year is every truly quiet. But it was a year filled with interesting developments, and it can only be hoped that the decisions relating to summary judgment, in particular, will make it easier for litigants to access their rights in the coming year through efficient and timely litigation. If you are an employee or employer with any questions relating to your legal rights and obligations in the workplace, contact Monkhouse Law today for a free consultation.