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2015 was a year of interesting developments in employment law. As a general theme, the decisions listed below are less about big changes to the law and more about changes to the way that courts handle employment related matters: increasing the possible scope of human rights damages for workplace discrimination, for example, and clarifying when parties can use summary judgment for a faster and simpler resolution of their cases. In general the trend is towards a more straightforward, accessible justice system, and greater compensation for the victims of discrimination.
Number 5: Bray v. Canadian College of Massage and Hydrotherapy
This decision demonstrates the importance of choosing the right forum when seeking compensation. A teacher at a college returned from her maternity leave, was reduced to a teaching assistant role, and had her working hours reduced from 25 to 19 per week. She was told that parenthood would be a “big adjustment” and she should wait and see whether she could “handle” her previous duties. The college did not schedule the instructor for any work in the January term, and gave her no indication of when she would work again.
She sued the college for wrongful dismissal in Small Claims Court. Justice Winny found that the college had constructively dismissed her. He also found that she had been discriminated against under the Ontario Human Rights Code, R.S.O. 1990 c. H.19, because her differential treatment was obviously caused by her status as a parent. The College tried to argue that it reduced the instructor’s hours to zero as punishment for an unsubstantiated allegation against the instructor made by a former student. The Court found that this was a disproportionate punishment and a violation of the duty of good faith in the performance of contractual duties established by the Supreme Court in Bhasin v. Hyrnew, which merited an award of punitive damages.
The Court calculated the instructor’s damages as $17,700.00 as pay in lieu of notice, $20,000.00 for discrimination (injury to feelings, dignity, and self-respect) and $5,000 in punitive damages, for a total of $42,700.00. However, the Small Claims Court only has jurisdiction to award up to $25,000.00, and the instructor’s damages were reduced to this amount.
The decision is important because it is the first time the Ontario Small Claims court has awarded human rights damages, it clarifies when a failure to act in good faith leads to an award of punitive damages, and it shows the importance of picking the right venue. The instructor lost nearly half her award because she brought her claim in the wrong court. The Small Claims Court may have the flexibility to award a wide range of damages, but the amount means that it will often not be a good venue for a plaintiff who has suffered many different types of damage.
Number 4: Wilson v. Atomic Energy of Canada Ltd.
An employee of Atomic Energy of Canada was dismissed without cause. As a federally regulated employee under the Canada Labour Code R.S.C. 1985 c. L-2, he made a complaint under s.240 of that statute, alleging that he was “unjustly dismissed.” If they are successful, these complaints allow an adjudicator to order the employer to pay compensation to the employee, or reinstate them.
For decades, the phrase “unjustly dismissed” in the legislation has been ambiguous, and it was not clear whether a termination without cause was automatically “unjust” and allowed the employee to make a complaint and potentially be reinstated.
In this decision, the Federal Court of Appeal determined that a dismissal without cause is not automatically “unjust.” This means that federally regulated employees can be dismissed without cause, without automatically triggering a risk that they can be reinstated. This is an important decision that reduces the scope of protection available to federally regulated workers. The Supreme Court has granted leave to appeal this decision, and will soon be considering the issue.
Number 3: Paquette v. TeraGo Networks Inc.
This decision provides important guidance on when dismissed employees may seek summary judgment, meaning a quicker decision on their case in a simplified proceeding. In this case, the Court found that the plaintiff was entitled to 17 months’ notice of his dismissal, but that decision was reached approximately 8 months after termination, while the notice period was still ongoing.
Dismissed employees have a duty to mitigate their losses by searching for comparable replacement employment. Any income from their new employment is deducted from their damages for wrongful dismissal. The issue was whether an employee who gets a damage award before the end of his or her notice period should receive a lump sum payment for all of his or her damages, even though he or she still had a duty to seek other employment, which would reduce the damages, in the remaining months of the notice period.
Justice Perell determined that courts should apply a “Trust and Accounting” approach, whereby the plaintiff is paid the full amount of his or her damages, but must account to the employer for any income that they might earn during the remainder of the notice period. If the employee does earn any mitigation income, there is a constructive trust in favour of the employer, meaning that the employee must pay that money to the employer. Justice Perell rejected the alternative “partial summary judgment” approach (in which the plaintiff is paid their damages up to the date of summary judgment and must return to court at the end of the notice period to get the rest of their damages) as “cynical, patronizing, unfair, impractical, and expensive.”
In practice this decision makes it easier for wrongfully dismissed employees to secure summary judgment and thus get full compensation for their dismissal quickly and efficiently.
Number 2: Potter v. New Brunswick (Legal Aid Services Commission)
In this decision, the Supreme Court of Canada offered important clarification of the test for constructive dismissal, wherein an employer dismisses an employee by unilaterally changing a fundamental term of the employee’s contract, and the employee rejects the change.
In clear, thorough reasons, the Court explained that there are two ways to establish constructive dismissal. Either an employer modifies (or breaches) the contract of employment so severely that the employer “turned its back” on the contract, or the employer treats the employee so badly that it would be intolerable for the employee to keep working. Either of these things establish that the employer no longer intends to be bound by the contract, which is what establishes constructive dismissal.
The plaintiff in Potter became ill in the course of negotiations over the buyout of his 7-year contract. His employer, the Legal Aid Services Commission, began taking steps to dismiss him, and in the meantime placed him on an indefinite paid leave. The Supreme Court found that (1) employers can only place employees on leave if their contract actually authorizes this, and Potter’s contract did not, and (2) even where employers have an implied power under the contract to suspend an employee, they cannot do so for “any reason” and must have at least some sound business reason. Potter had been suspended for no given reason in the middle of delicate negotiations and would reasonably have felt that his employer no longer intended to be bound by the contract.
This decision is important because it clarifies the standard for wrongful dismissal, makes clear that employers do not have an automatic right to lay off or suspend employees, and imposes the requirement that employers be reasonable when they do have the power to lay off employees. It is an important clarification of a significant areas of employment law by the nation’s highest court.
Number 1: O.P.T. v. Presteve Foods Ltd.
Our number 1 case, a decision from the Ontario Human Rights Tribunal ,highlights the vulnerability of migrant workers, and the way in which Ontario’s human rights regime responds to acts of blatant sexual harassment and exploitation by employers.
O.P.T. and her sister M.P. T. were temporary foreign workers from Mexico. The terms of their employment were such that their employer, Presteve, could dismiss them and send them back to Mexico at will. They earned 6 times as much in Canada as in Mexico, and used the money they earned here to support their families at home.
These circumstances led to abuse. JP, the owner and principal of Presteve, seized the passports and return tickets of his workers, and sexually harassed both sisters, especially O.P.T. In O.P.T.’s case, JP’s conduct went beyond sexual harassment into sexual assault in the form of forced intercourse. After this had persisted for 8 months, JP was criminally charged with sexual assault, plead guilty to simple assault, and was given a conditional discharge with three months’ probation. O.P.T. and M.P.T. brought a human rights complaint against JP and Presteve.
The Tribunal found that JP had created a sexually poisoned work environment, harassed, and discriminated against both women under the Code. Since JP was a controlling mind of Presteve the company was found liable for his actions. The Tribunal awarded O.P.T. $150,000.00 and M.P.T. $50,000.00, both for injury to dignity, feelings, and self-respect. This is one of the largest damage awards ever made by the Tribunal.
This case is important because it highlights the risk for workers not protected by adequate employment legislation, and shows the willingness of the Human Rights Tribunal to make large damage awards to compensate for the damage caused by egregious discrimination.
As our top 5 decisions demonstrate, employment law continues to evolve, which is why it is important to consult with a professional should you confront an issue related to your employment. If you are an employee or employer with any questions relating to your legal rights and obligations within the workplace, contact Monkhouse Law today for a free consultation.