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No Time Limitations on Sexual Harassment Lawsuits

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Employment Law ColumnIntroduction

Many readers will recall the recent Bill Cosby trial for sexual assault.  The crime was allegedly committed in 2004, the criminal charge was laid on December 30, 2015 and the trial occurred in June 2017.  It ended in a mistrial because the jury did not return a unanimous verdict.  The prosecutor promises another trial.

While this is a criminal trial – where generally no limitations periods apply for indictable offences– it reveals the numerous challenges facing the witnesses, prosecutor, defence counsel and jurors, of taking matters to trial long after the wrongdoing is alleged to have occurred.

Civil lawsuits in Canada must normally be filed within two years of the event complained of.  This is called the limitations period.  It is set out in legislation and is strict.  The lawsuit will not be heard and completed in those first two years, but it must be commenced within that time.

Recently, the Alberta government amended the Limitations Act [http://canlii.ca/t/52xm7] to eliminate the limitations periods for civil claims of “any misconduct of a sexual nature”.  This will potentially impact the workplace.

Reasons for Limitations Periods

There are three purposes of limitations periods.  Knowing that evidence degrades over time, it is important to move a case forward sooner rather than later.  Witnesses forget things.  They move away and they die.  Documentary evidence also gets lost, destroyed or is discarded.

Employees who allege “misconduct of a sexual nature” can file lawsuits against co-workers, customers, contractors, vendors and employers without any time limitation period.  The second purpose is that everyone should enjoy “peace and repose” after a certain date.  When the limitations period has passed and no lawsuit has been filed, others (potential defendants and witnesses) can dispose of files and other records.  They can safely move on in their lives without fear of being sued on that issue.

Finally, it is fair that alleged wrongs should be decided in the era in which they arose.  If something was acceptable, or at least not repulsive and legally actionable at the time it occurred, it should not be judged and condemned by significantly different social standards decades later.  For example, there is more clarity and sensitivity around behaviour of even a minor sexual nature today in Canada than there was, say, thirty years ago.

No Limitations Periods for Sexual Misconduct

Bill 2, An Act to Remove Barriers for Survivors of Sexual and Domestic Violence, eliminated the two-year limitation period for:

  • sexual assault;
  • any sexual misconduct involving a minor, intimate relationship or dependent; and
  • any non-sexual assault or battery involving a minor, intimate relationship or dependent.

Employees who allege “misconduct of a sexual nature” can file lawsuits against co-workers, customers, contractors, vendors and employers without any time limitation period.  Corporate employers are vicariously liable for the actions of their employees in the course of the employment, so they also could face a lawsuit decades after an alleged incident of sexual misconduct.

 “Sexual violence” and “sexual misconduct” were intended to be construed very broadly according to the Minister.   In legislative debates, she stated: “[w]e were very clear in selecting incredibly broad and inclusive language. This, in fact, puts Alberta, which was behind every other province in the country, out in front so that we have the most inclusive language of any province…” (Hansard, March 22, 2017).

The Minister added: “to the term ‘sexual misconduct’… these behaviours would include but are not limited to . . . sexual harassment” (Hansard, April 19, 2017 at p. 678).  However, sexual harassment is a human rights  concept.  The Alberta Human Rights Act has its own limitation periods for filing complaints.  Sexual harassment is not yet an established tort on its own, that would be subject to the Limitations Act.

Ontario recently passed Bill 132, Sexual Violence and Harassment Action Plan Act, which likewise abolished time limits for suing for sexual assault, domestic violence, or child abuse.  The recent Alberta legislation goes even further and may expose employers to unanticipated liability for long-past actions of their former employees by making the amendment apply retroactively. The assertion of an old claim will violate all the three principles of limitation periods.

Conclusion

Sexual misconduct and sexual harassment claims are already troubled with a high degree of subjectivity and opposing evidentiary perspectives.  These disputes will now be further destabilized by the addition of unlimited time in which to launch the allegation.

There is little employers can do about old complaints of sexual misconduct.  However, because this amendment potentially increases liability, it does compel employers to discourage future incidents. Employers can start by ensuring that their sexual harassment policies are clear and authoritative.  When incidents do happen, they should be carefully investigated, addressed and documented.

Minimum Notice Limitations are Enforceable

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Employment Law Column Introduction

In Canada, employment is a legal contract.  The collective agreement in unionized workplaces represents the ultimate comprehensive contract between employer and employer.  It sets out the rights and obligations between the parties, including how employment-related disputes are to be resolved.

The concept of a contract makes intuitive sense because both employer and employee voluntarily agree upon obligations which they must fulfill.  Individual (non-unionized) employment contracts may be oral or written, or a bit of both.  Often, they incorporate terms by reference from employment manuals and legislation from the taxation, human rights, minimum standards and occupational health and safety fields.  There are about two to three times as many workers who enter into individual contracts of employment as there are unionized workers.

As separation is to marriage, termination is not something employers and employees like to discuss at hiring.  Individual employment contracts can be of fixed-term duration such as a summer job or time-sensitive projects.  However, by far, most workers start and continue to work indefinitely until one party – employer or employee – quits the other.  Contract law implies a term that either party can terminate that contract by giving reasonable notice.

Employees can quit their jobs and they should give their employers reasonable notice of quitting so the employer can find replacement workers.  Employers may terminate their employees on reasonable notice – this serves as a period for them to find another job.  The notice model is viewed as fair to both parties.  By contrast, non-unionized workers in the United States are not viewed as being in a contract, but rather a mere relationship that exists at the will of both parties.  If one party wants out, one can quit.  This brings the relationship to an immediate end.  Notably, this “at will” approach, while highly responsive, simple and efficient, provides no security or protection for workers.

While the Canadian notice model for indefinite employment appears more compassionate, it suffers a major flaw: what notice is reasonable in each worker’s different circumstances?  Employers, employees and judges might all have assorted perspectives on reasonable notice.  This uncertainty leads to extensive, costly litigation.

This article describes a solution to this uncertainty problem in reasonable notice, at least as it relates to employers dismissing their employees.  We start with distinguishing between minimum and reasonable notice of employment termination.

Minimum versus Reasonable Notice

Every jurisdiction in Canada has enacted legislation which operates as the floor for minimum employment terms.  These legislated minimum “standards” protect workers from the excesses of the marketplace and cover all aspects of work:  hours of work; how earnings must be paid; minimum wages; holidays; layoffs and recalls; hiring children; breaks during and between shifts; maternity, parental, reservist and compassionate leaves; overtime; vacation and terminating employment.

All employers must comply with these minimum standards.  And for termination, these standards are indeed minimal.  Section 53 of the Alberta legislation is a good example:

56   To terminate employment an employer must give an employee written termination notice of at least

(a)    one week, if the employee has been employed by the employer for more than 3 months but less than 2 years,

(b)    2 weeks, if the employee has been employed by the employer for 2 years or more but less than 4 years,

(c)    4 weeks, if the employee has been employed by the employer for 4 years or more but less than 6 years,

(d)    5 weeks, if the employee has been employed by the employer for 6 years or more but less than 8 years,

 (e)    6 weeks, if the employee has been employed by the employer for 8 years or more but less than 10 years, or

 (f)    8 weeks, if the employee has been employed by the employer for 10 years or more.

These standards were enacted in 1996 and are currently under review by the Alberta government.

..few employers choose to take the specific step of contracting out of reasonable notice and limiting employees to minimum notice.  Reasonable notice is a common law standard, set by judges over decades and implied into employment contracts.  They are more generous than minimum standards.  For example, reasonable notice grants approximately one month for every year worked up to a few years of notice.  It considers factors beyond length of service such as employee expectations, employer promises made, and the employee’s age and managerial responsibility.

To contract out of implied reasonable notice, the employer may do so expressly in the employment contract or in a subsequent addendum to it that is otherwise enforceable.  However, few employers choose to take the specific step of contracting out of reasonable notice and limiting employees to minimum notice.  When non-cause termination occurs at a later point, reasonable notice must be estimated and provided.

Machtinger

In 1992, the Supreme Court of Canada, in Machtinger v. HOJ Industries Ltd http://canlii.ca/t/1fsd2 stated:

I would characterize the common law principle of termination only on reasonable notice as a presumption, rebuttable if the contract of employment clearly specifies some other period of notice, whether expressly or impliedly.

. . .  an employer can readily make contracts with his or her employees which referentially incorporate the minimum notice periods set out in the Act . . . Such contractual notice provisions would be sufficient to displace the presumption that the contract is terminable without cause only on reasonable notice.

Reasonable notice is a common law standard, set by judges over decades and implied into employment contracts. They are more generous than minimum standards. Several Ontario cases involved clauses that demonstrated how to rebut the presumption of reasonable notice:  Simpson v Global Warranty, http://canlii.ca/t/g64bh; Roden v Toronto Humane Society, http://canlii.ca/t/1lmtb; Oudin v Le Centre Francophone de Toronto, http://canlii.ca/t/gltc6.

Yet, some judges remain sympathetic to employees who were limited to minimum notice.  In the words of the Oudin court, judges should not “engage in searching for a means to avoid the parties’ commitments.”  For example, notice “in accordance with” minimum notice legislation was determined inadequate to limit notice to minimum standards: Kosowan v Concept Electric, http://canlii.ca/t/1qslp.

 The Nutting Case

This very recent Alberta case, Nutting v Franklin Templeton Investments Corp, http://canlii.ca/t/gvsrk, confirms that well-drafted clauses will rebut the presumption of reasonable notice and provide the certainty of minimum notice.

Mr. Nutting worked for less than 2½ years before he was dismissed without cause by the employer.  His employment contract contained the following provision:

While the Canadian notice model for indefinite employment appears more compassionate, it suffers a major flaw: what notice is reasonable in each worker’s different circumstances? Additionally, your employment may be terminated at any time without cause upon the provision by [the employer] of the minimum notice of termination, or pay in lieu of notice, benefits and, if applicable, severance pay prescribed by applicable employment standards legislation in the province in which you are employed.  The provision of such notice or pay in lieu of notice, benefits and severance pay constitutes full and final satisfaction of all rights or entitlements which you may have arising from or related to the termination of your employment (including notice, pay in lieu of notice, severance pay, etc.), whether pursuant to contract, common law, statute or otherwise.

The employer paid Nutting for the minimum standard of two weeks which is what the minimum notice legislation accorded to him.  Nutting sued for reasonable notice instead, which would attract up to three months of pay.

The Queen’s Bench Master, on summary judgment, dismissed Nutting’s claim.  The  clause in the employment contract was clear and unambiguous, which limited Nutting to two weeks of pay, the minimum notice required by the Alberta Employment Standards Code, http://canlii.ca/t/52bwr.

Conclusion

Employers are largely in control of employment contracts.  They can avoid expensive and intractable lawsuits about what is reasonable notice in every case by inserting clear limitation clauses in these contracts which prescribe that the applicable notice period shall be as set out in minimum employment standards legislation or any other lawful period of notice.  The language should also reinforce the parties’ intention that the minimum notice replaces any other notice requirement that may have otherwise been implied.  One cannot agree below minimum standards.

The employee might wish to bargain and stipulate quitting notice in the same way.  As separation is to marriage, termination is not something employers and employees like to discuss at hiring.  Nevertheless, all employment ends, often without cause.  Ideally, this notice limitation should be discussed and inserted when the contract is made.  When the termination occurs, the party giving the notice can choose to confer more generous notice, but will be under no legal obligation to do so.

Cumulative Cause.2

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Employment Law ColumnIntroduction

The constitutional freedom of expression that Canadians enjoy does not extend to private workplaces.  What are employee limits on speaking out against private employers?

The last Employment Law column narrated the story of Ms. Kim, a media specialist in the position of Senior Communications Manager employed by the International Triathlon Union (“ITU”).  Kim was the ITU’s voice, responsible for all its messaging, including all website content.  Communication was at the core of Kim’s employment.  She was well aware of the importance and accuracy of the written word, not to mention objectivity and discretion.  Nevertheless, she posted numerous derogatory and unprofessional comments about her work, employer and supervisor on social media.

Some of her Facebook and Twitter posts could be interpreted as coming from someone who was fed up with her job or felt harassed in it.  She mentioned “propaganda” as a product of her organization and implied ITU had “no values or morals, we just go wherever the money is.”  Kim was warned many times by ITU that her style and tone of communication was not acceptable.  Her supervisor spoke to Kim “many times, to the point of exhaustion.”

..the employer must document behaviours and progressive discipline and emphasize the ultimatum.  The employer must confront the errant employee.

The warnings went unheeded.  In her blog, Kim published a nasty, rambling tirade comparing her supervisor to her abusive mother.  International contacts working with ITU complained about her communications and petulant behaviour.

At the end of the last column, the question was raised whether these public unprofessional, far-reaching communications made by ITU’s Senior Communications Manager had irreparably harmed the trust inherent in the employment relationship.  Were Kim’s actions incompatible with continued employment with ITU?  Did they comprise sufficient legal grounds for ITU to fire Kim [http://www.lawnow.org/cumulative-cause-1/]?

Judicial Decision

 The Senior Communications Manager challenged her firing by ITU.  In Kim v. International Triathlon Union, 2014 BCSC 2151 [http://canlii.ca/t/gfbm4], the trial judge used context to determine whether Kim’s misconduct constituted sufficient cause.  The severity of an employee’s misconduct must be proportional to the firing (which is considered the capital punishment of employment).

Only in exceptional circumstances will a single act of misconduct justify summary dismissal.  The employee misconduct must be serious and incompatible with the employee’s duties and prejudicial to the employer, or irreparably harm the relationship between employer and employee.  You might think: this looks like ITU had sufficient cause.

Not so fast.  The judge observed that ITU did not rely on a single act of Kim’s misconduct to justify her dismissal for cause.  But had ITU proven cumulative cause to fire Kim?

What is cumulative cause?  If there has been patient, documented, progressive discipline culminating in a clear “final warning” which was then answered by a final act of misconduct, ITU could rely on cumulative cause as a legal basis for firing Kim.

In this case, the judge rejected cumulative cause.  ITU had not progressively disciplined Kim.   Discussions with Kim about her communication style were not disciplinary warnings.  Nor had ITU issued Kim a “final warning.”  The judge wrote:

[219]  .  .  .  no written or oral warning was given to the plaintiff that the impugned social media posts were inappropriate and unacceptable and that if she did not cease and desist from such performance and change her ways that her continued employment was in jeopardy.

[220]  .  .  .    [her supervisor] never reprimanded, disciplined or criticized the plaintiff specifically regarding the content of the social media posts relied upon by ITU for cumulative cause, notwithstanding her insistence that she found them troubling, offensive, and … shocking.  In the result, I find that [the supervisor’s] discussions with the plaintiff about her communication style are not tantamount to, nor qualify as a warning, or warnings to the plaintiff in accordance with the established law on this point.

[221]  .  .  .  I find that ITU cannot rely upon cumulative cause as a ground for the plaintiff’s termination because ITU did not give the plaintiff an “express and clear” warning about her performance relating to the social media posts, and a reasonable opportunity to improve her performance after warning her.

The judge referenced Lowery v. Calgary, 2002 ABCA 237 [http://canlii.ca/t/5grk], the leading case on cumulative cause:

Where the employer alleges cumulative cause for such dismissal, it must prove . . .

  1. The employee was given express and clear warnings about his performance;
  2. The employee was given a reasonable opportunity to improve his performance after the warning was issued;
  3. Notwithstanding the foregoing, the employee failed to improve his performance; and
  4. The cumulative failings “would prejudice the proper conduct of the employer’s business”.

The judge found ITU’s firing of Kim to be wrongful and awarded Kim damages in the amount of five months of wages and benefits on the basis of 22 months of employment.  This amounted to about $30,000.

What We Learn from this Case

It is risky for employees to express their exasperation at work.  It is even more risky to broadcast it to the world on social media.

What is cumulative cause?  If there has been patient, documented, progressive discipline culminating in a clear “final warning” which was then answered by a final act of misconduct, ITU could rely on cumulative cause as a legal basis for firing Kim.

Employers need to have a social media and Internet use policy.   If employers use Facebook and other forms of social media, they also can expect their employees to do so.  Kim said her work and communication style was casual which reflected her workplace.  She claimed that in the absence of a formal written policy, these social media behaviours outside of work would be acceptable to her employer.

Sometimes employers and bosses believe their employees who demonstrate an insolent attitude or are otherwise underperforming must obviously know they are courting dismissal.  Yet they say nothing.  This supervisor’s warnings to Kim about her inappropriate communications ultimately bore no legal effect.  Employers must be specific about what performance is required and what behaviour will not be tolerated, and in a “last chance” or “final warning” letter clearly stipulate that a failure to improve will lead to firing.  In other words, the employer must document behaviours and progressive discipline and emphasize the ultimatum.  The employer must confront the errant employee.

For Kim, five months of reasonable notice period damages under the common law was generous but winning it came at a high cost.  When she was fired, Kim was offered five weeks of pay.  She refused and went to court.  Her out-of-pocket costs of hiring two lawyers to run the five-day trial in 2014 probably exceeded any net proceeds from this legal victory, even after some indemnity from ITU.

There were no winners in this case.

Cumulative Cause.1

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Employment Law Column The workplace “was not a grade five classroom”.

Kim v. International Triathlon Union

Introduction

The workplace is a challenging setting to manage.  One must be proficient at dealing with a range of people with all kinds of personalities, backgrounds and styles.  The manager in small enterprises often also serves as the Human Resources and Legal Departments.  One is expected to know employment and labour law and manage people in precise measure according to the law.  Review of those management decisions may come in the form of a lawsuit years later where all the splendid details are intricately laid out with adversarial obsession before the whole world.

Invariably, the small business manager will not have all the facts, perspectives and arguments – not to mention the legal principles, precedents and distinctions – that will be placed before the judge, who is also a latecomer and stranger to the scene that must be managed today.  The well laid out ordering, after the fact, of what decisions should have been made are neither easy to predict nor do they readily reflect all workplace realities.

This is the first installment of a two-part article that examines the legal concept of cumulative cause.  A recent case from British Columbia considered whether the senior communications manager for a sporting organization went too far in muddling her professional and personal commentary on social media.  Her personal style and criticisms of her employer attracted most of the attention.

This is the first installment of a two-part article that examines the legal concept of cumulative cause.  This part sets out the facts and issues.  The last part, in the next issue, will describe the outcome and enumerate some lessons to be applied from the case.

Senior Communications Manager Tests Limits of Communications

Ms. Paula Kim (“Kim”), with a broadcasting journalism degree from Ryerson University, found her dream job working in the field of sports.  In her early 30s, she was earning $77,000 per year and was travelling the world.  She worked for the International Triathlon Union (“ITU”), the international governing body for the triathlon sports that schedules international triathlons, sets the competition rules and prize money, and certifies officials.

But Kim also was active on her Facebook and Twitter accounts and her blog.  There her inner voice was readily expressed to the world.  After the ITU world championships ended, she wrote: “2012 ITU  season…DONE. now leave me alone until 2013!!” Some interpreted that she was fed up with her job or felt harassed in it.

A recent case from British Columbia considered whether the senior communications manager for a sporting organization went too far in muddling her professional and personal commentary on social media.  She also posted “surprisingly fun congress after-party last night.  Probly [sic] only time I’ll see so many Eboard members hungover & lamenting those tequila shots . . . I wonder if other IF congresses have as much propaganda as ours.”  This tweet came during the important annual Congress, implied that Executive Board members had gotten drunk during the event, and that the international federation of an Olympic sport uses propaganda.  She also tweeted, in reference to her employer, “guess we have no values or morals, we just go where ever the money is” and “hey ITU, remember this next time I fly off the deep end … If I didn’t care, I wouldn’t get mad.”

Kim said she was just trying to be funny, and she had an emotional side.  She said no one had complained to her.

Others found Kim to be rude, unprofessional and insubordinate.  She could be sarcastic, aggressive and grew increasingly negative.  She had fallouts with co-workers, and yelled and swore in front of staff.  A disagreement arose with her supervisor about vacation compensation.  Although the workplace was not amenable to gossip, she took to her blog and, in a nasty, rambling tirade, compared her supervisor to her abusive mother.

Under the title “taking shit” Kim wrote:

…i rarely go home and rarely call because deep down i have never forgiven her and because I remember all too well all the beatings i took. my mother is the only person on earth that was so skilled as making me feel like an insignificant bag of shit and made me feel as though I was never good enough, for anything. until today.  today for the first time in a long time i felt like that kid all over again; beaten, discouraged, alone and scared, after the most disappointing conversation you could possibly have with your boss. the same horrible, sickly feeling of someone above you kicking you down with lies and senseless put downs and insults and zero reality all flooded back in a horrible, despicable wave of nostalgia. and for the first time in many years i actually sobbed (by myself in the bathroom of course) which i almost never do. and of course she’s right, how can i possibly be right when i’m not the authority figure!  just like when I was a kid, i don’t feel like I’ve done anything wrong but it doesn’t matter because this person that i stupidly thought cared doesn’t give a shit and just wants to beat my head in. her perception of reality is so clouded and distorted that all she sees is her own version and not the real version of truth. in the end some people will only believe what they want to believe and and not what’s real. these same people will never find fault in their own actions, no matter how wrong and inappropriate it was. my mother never once apologized to me, and i don’t ever expect one. in fact she used to say it was my fault that she hit me, that i drove her to such anger. how do you argue with that? you can’t, and never will. you can’t fight logically with an illogical person. Some relationships will never rebound from such abuse. never. and if i was 9 again I would stupidly ask why, but i’m older and wiser now so i don’t bother to ask why, because i already know the answer; sometimes life just isn’t fair.  sometimes people change for the worst and sometimes people are just evil pieces of shit and just need to bring you down to make themselves feel more powerful or better than you. not being good enough is probably my deepest insecurity, all thanks to my mother. haunted by this feeling as a kid, i broke free of it slowly through university and then most importantly as an adult in the working world. but now thanks to my current boss, it is back in full force. and as my former colleague used to say, the spirit is broken.

Kim associated her supervisor, the Secretary-General of the International Triathlon Union, with physical and emotional abuse.  She dismissed it as facetious, overly dramatic and theatric because she was a passionate person.  She said no one told her it was inappropriate and she did not think it was damaging to her supervisor’s reputation, although the blog post was read by international colleagues.

In other personal tweets, Kim shared her frank opinions on teams, media, competitors and outcomes.  She referred to the ITU, invoked real athletes in a partisan fashion, and used vernacular language such as “holy crap.”  The British ITU chief wrote a letter starkly critical of Kim for “showing so little regard for the importance of correct and neutral communications … and worse when that person is responsible for the ITU communications policy.”  The New Zealand chief wrote and complained about Kim “getting really mad, yelling and picked up a bowl of candy, threw it into the wall” and telling others they could not work in that room.

After this, some 22 months after she was hired, Kim was dismissed with pay in lieu of notice for her unacceptable “communication style”.  She was paid two weeks salary under provincial legislation and offered a further five weeks of pay if she would sign a release.

She refused to take this package.  Instead, she let fly some more disrespectful and insulting tweets regarding a former ITU President, and a former boss.  She sued for wrongful dismissal where she claimed over $65,000 by way of damages.

Was There Cause for Dismissal?

The employer initially took the position that Kim was dismissed without cause to protect her reputation.  After she sued for wrongful dismissal, ITU changed its position and alleged that it had sufficient legal cause for dismissing Kim.

What do you think?  Was Kim’s behaviour leading up to her firing sufficient to legally justify it?  Or should ITU pay her damages for firing her?  If so, how much money?

The answer to these questions will come in the next issue of LawNow.

Legal Remedies at Human Rights Commissions

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Employment Law ColumnIntroduction

Canada has one federal and separate provincial and territorial Human Rights Commissions established and governed by their respective enabling legislation. These human rights commissions exist to protect human rights, prevent discrimination, foster equality and resolve complaints. The various versions of human rights legislation are fundamentally similar across the country.

This article describes the legal remedies that may be ordered in Canada for illegal employer discrimination in the workplace. To simplify, only the federal (applies only to federally-regulated workers) and Alberta legislation will be compared here.

Scope and Purpose of Remedies

Employers can help their own cause by showing remorse and acting to promptly address the discriminatory practice so it is not repeated. Such measures may soften the consequences.Both Commissions seek to work with the worker and employer to reach mutual understanding and resolution through mediation. If this fails, the Commissions send the matter to their respective quasi-judicial Tribunal for ultimate adjudication.

Both Commissions protect employees from discrimination based on race, ancestry, colour, religion, age, sex, sexual orientation, marital status, family status, and disability. The federal level additionally protects workers from discrimination based on a conviction on an offence for which a pardon has been granted and Alberta protects from discrimination based on source of income.

Human rights legislation “recognizes and affirms that all persons are equal in dignity and rights” [Walsh v Mobil Oil Canada, 2013 ABCA 238], but it is not meant to punish employers [Robichaud v Canada (1987) 2 SCR 84]. Legal remedies ordered by commissions are remedial in nature and are meant to restore workers to the position they would have been in if the discrimination had not occurred. The remedies are also educational and serve to deter future infractions. While the remedies are not intended to punish employers, they can be substantial sanctions to demonstrate public denunciation of human rights violations.

Available Remedies

The remedies available under the Canadian Human Rights Act include orders to [section 53(2) and (3)]:

• cease the discrimination and take measures to prevent recurrence;

• adopt a special program, plan or arrangement (such as an apology or sensitivity training);

• compensate the victim for wages and expenses; and/or

• compensate the victim for pain and suffering up to $20,000 and up to another $20,000 if the discrimination was willful or reckless.

The federal legislation [section 60(2)] authorizes fines against employers for breaching settlement agreements, certain other requirements and for obstructing tribunal process. That money goes to the government, not the employee.

Legal remedies ordered by commissions are remedial in nature and are meant to restore workers to the position they would have been in if the discrimination had not occurred.The Alberta legislation confers broad jurisdiction on the tribunal to redress the discrimination and sets no limit to damages for reckless or willful conduct or for injured dignity and self-respect. The Alberta tribunal can also order costs to a party [s. 32(2)].

Employers need not have discriminatory intent to be liable. They can be liable in both jurisdictions even if they are unaware of an employee’s protected attributes [Robichaud, para 11]. Both tribunals may order more than one remedy.

Determining Remedies

Remedies are given broad and flexible interpretations according to each context. Previous human rights decisions, as well as the nature of the discrimination, its frequency and intensity, and the vulnerability and impact on the complainant are considered to decide the remedy. Despite the guesswork in awarding pain and suffering damages, they are frequently awarded. Employees must show attempts to mitigate their losses by searching for alternate employment, after allowing for a reasonable period to recover from the discrimination.

Employers can help their own cause by showing remorse and acting to promptly address the discriminatory practice so it is not repeated. Such measures may soften the consequences.

Comparing Remedies at the CHRC and AHRC

The Tables below outline random samples of decisions where remedies were ordered.

Canada Human Rights Commission.fw

Conclusion

The Alberta legislation confers broad jurisdiction on the tribunal to redress the discrimination and sets no limit to damages for reckless or willful conduct or for injured dignity and self-respect. All Human Rights Commissions in Canada can award a variety of remedies to both compensate discriminated workers and impose measures to preclude future discrimination. Workers comprise the largest group of complainants.

The indeterminate nature of discrimination poses a challenge for assessing legal remedies. Many factors are considered when determining remedies and damages, including the nature of the infringement, the severity and frequency of the infringement, and the vulnerability and impact on the complainant. Human rights legislation is remedial. Accordingly, tribunals exercise significant discretion in each case.

Constructive Dismissal Still Under Construction

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Employment Law Column“constructive dismissal can [occur when]… a series of acts that, taken together, show that the employer intended to no longer be bound by the contract.”

 – Potter v. New Brunswick Legal Aid Services Commission

[2015] 1 SCR 500  http://canlii.ca/t/ggkhh

 Introduction

Constructive dismissal was revisited by the Supreme Court of Canada last year in the case of Potter v. New Brunswick Legal Aid Services Commission [http://canlii.ca/t/ggkhh].  A unanimous Court expanded the law about constructive dismissal for employees.

Until last year, the main authority was the 1997 case of Farber v. Royal Trust Co. [http://canlii.ca/t/1fr38].  In that case, Royal Trust Co., an affiliate of the Royal Bank of Canada, underwent a major reorganization in June 1984, including the elimination of its regional manager positions.  As a result, David Farber, the regional manager for Western Quebec, who supervised 400 real estate agents and administered 21 offices, was set to lose his job.

Royal Trust offered Farber the manager’s position at the Dollard branch, a position he had held eight years earlier, but did not guarantee him a base salary. The branch was one of the least profitable in the province, which meant that Farber’s income, in his opinion, would decline substantially to about half if he accepted the offer.  Farber sued employer Royal Trust for damages on the ground of constructive dismissal.

The case reached the Supreme Court in 1997 where it was unanimously stated that:

Where an employer decides unilaterally to make substantial changes to the essential terms of an employee’s contract of employment and the employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been constructively dismissed.

To determine whether the “unilateral changes imposed by the employer substantially altered the essential terms of the employee’s contract of employment,” the Court articulated the test of whether a reasonable person, in the same situation as Farber, would have felt that the essential terms of the employment contract were being substantially changed.  It was an objective assessment, not merely the opinion of Farber.

The Court concluded Royal Trust constructively dismissed Farber, because it:

. . .  substantially altered the essential terms of the employment contract.  At the time the offer was made, any reasonable person in the same situation as the appellant would have come to that conclusion.  The manager’s position at the Dollard branch, which was experiencing problems, was a significant demotion for the appellant.  His responsibilities were being drastically cut, resulting in a considerable loss of status and prestige.

Farber was awarded $150,000 as one year’s remuneration in lieu of notice.

Potter v. New Brunswick Legal Aid

David M. Potter was appointed as the Executive Director of the New Brunswick Legal Aid Services Commission for a seven-year term.  The relationship between Potter and the Commission quickly fell apart during the first three years.  The Commission considered buying out the balance of Potter’s contract.  Potter took a sick leave.  Just before his return, and unknown to Potter, the Commission recommended to the Minister of Justice that Potter’s employment be terminated for cause.  The Commission suspended Potter indefinitely with pay before he returned from his sick leave. So, Potter voluntarily resigned and alleged that the actions that prompted his resignation constituted constructive dismissal.  The case was appealed to the Supreme Court which unanimously held that:

[Potter] was constructively dismissed.  In light of the indefinite duration of his suspension, of the fact that the Commission failed to act in good faith insofar as it withheld reasons from him, and of the Commission’s concealed intention to have him terminated, the suspension was not authorized by his employment contract.

The Commission did not have the express or implied authority to suspend Potter indefinitely with pay.  His suspension was a substantial unilateral change to his contract and hence a constructive dismissal.

Up to this point, whether an employee had been constructively dismissed was determined by two criteria:

(1.) the court must first identify an express or implied contract term that has been breached; and

(2.) whether that breach was sufficiently serious to constitute constructive dismissal.

However, in Potter the Supreme Court introduced a new factor: “an employer’s conduct will also constitute constructive dismissal if it more generally shows that the employer intended not to be bound by the contract.” And “it is now sufficient to show that the ‘course of conduct’ pursued by the employer demonstrates an intention to no longer be bound by the employment contract.”

The Court said that:

Given the nature of the Executive Director’s position and the detail in which his statutory obligations were defined in the contract, the Commission had an obligation to provide [Potter] with work… Because the Commission has failed to establish that the suspension was reasonable or justified . . . the suspension constituted a unilateral act.

Conclusion

In 2015, the Supreme Court of Canada added another test for constructive dismissal.  If the employer, in any course of action, demonstrates an intention to no longer be bound by the employment contract, it may be liable to the employee under the constructive dismissal doctrine

Patrick Tapuska is a student at the Haskayne School of Business

Termination for Insolence

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Employment Law ColumnWe hear that “attitude is everything”, and nowhere is this more important than at work. Consider whether the employee’s attitude below should be enough to justify his firing.

Henry, 31, had been working for seven and a half years as an auto body repair technician at the Fox Ford dealership in Woodstock, New Brunswick. He complained that his supervisor, Graham, a few years younger, had a “smug look”. Last year there was a minor shoving incident but nothing came of it.

Henry was a slow worker. One day, he was assigned to remove decals from two vans. Late in the afternoon, Graham came by and said to Henry, “I hope that’s the second truck.” Henry replied, “No, it’s the first. Maybe you’d like to do it yourself.” He became irate, started yelling and swearing at Graham saying, “What’s your fuckin’ problem? You’ve been on my fuckin’ case all day and I’m fuckin’ sick and tired of it.”

Henry taunted Graham five or six times to fire him. Finally Graham relented, “OK, you’re fired.”

Insubordination Versus Insolence

Employee misconduct comes in various forms such as dishonesty, conflict of interest, competing with the employer, breaching trust, disobedience (insubordination), incompetence and insolence. Dishonesty is the worst misconduct: for example, theft, fraud, misappropriation and false statements. Misconduct suitable for firing involves a serious lack of judgment that is incompatible with the employee’s duties.

..insolence is derisive, contemptuous or abusive language or conduct, perhaps expressed in a confrontational attitude, directed by an employee toward the employer.Insubordination is the deliberate refusal by an employee to obey the lawful and reasonable instructions of the employer. In 1959 Lord Evershed stated in Laws v. London Chronicle: “It is, no doubt, therefore, generally true that willful disobedience of an order will justify summary dismissal, since willful disobedience of a lawful and reasonable order shows a disregard — a complete disregard — of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master.”

Several instances of insubordination may cumulatively justify termination. One refusal, like a single incident of absenteeism, will usually not be enough to fire an employee unless it is so serious that it amounts to a repudiation of the employment contract. This is always a question of fact. The firing of a sales executive was upheld where he defied an order forbidding him to directly communicate with the company’s board of directors. Another employee who took home the employer’s proprietary customer information despite a confidentiality agreement prohibiting removal of such information from the premises was justly dismissed for cause.

Disagreeing with the employer, even in the presence of other employees or outsiders, does not necessarily constitute insubordination. A British Columbia judge in the 2010 case of Kokilev v. Picquic Tool Company concluded a manufacturing company vice-president was not sufficiently insubordinate to his employer to justify dismissal. He had expressed strong disagreement with the company’s president on business matters in front of other employees on several occasions. The eight-year employee was awarded damages of ten months’ pay.

By comparison, insolence is derisive, contemptuous or abusive language or conduct, perhaps expressed in a confrontational attitude, directed by an employee toward the employer. In general, several instances of insolence are required to fire someone. However, a single serious insolent act will justify summary dismissal if the employment relationship has been irreparably destroyed. This is judged by:

  1. whether the employee and superior are capable of continuing a working relationship;
  2. the incident undermined the supervisor’s credibility and ability to supervise effectively in the workplace; or
  3. the employer suffered a material financial loss, a loss of reputation or serious prejudice to its business interests as a result of the incident.

One “acrimonious discussion” between an insurance manager and his boss was found not to be sufficient insolence. Likewise, a rude message (“shove it”) faxed to the president of a hockey team was not cause for firing. The fired employee won 28 months pay as damages.

However, many single acts of insolence have led to justified summary terminations. In Blainey v. F.R. Hickey (Ont. 1985), a sales manager continued to interrupt and undermine his superiors at a sales meeting although he had been asked in advance of the meeting not to do so. His firing was upheld.

In Codner v. Joint Construction Ltd. (NL 1989), the sacking of an employee who called the company president a “fucking liar” during a private argument over the misuse of a company credit card was also upheld. In another case, hanging up the phone on a superior was adequate cause.

In Bennett v. Cunningham (ONCA, 2012) a lawyer operating a law firm was justified in firing an associate who sent her a letter accusing her of “dishonesty and negligence”. The relationship between lawyers working in the same office is fundamentally based on confidence, respect and trust, and the highly critical letter had destroyed the employment relationship. The cost of the allegations was not only the lost job. In the end, the employee had to pay for her own lawyer and the legal costs of her former employer through three levels of court.

In Wise v. Broadway Properties Ltd. (BCCA, 2005), the Court upheld the firing of a 10-year resident caretaker of an apartment block who believed for years he was not being paid for all his time and work. He wrote a five-page letter to his employer, venting his frustration at the perceived injustice of his unpaid work. He threatened to sue the employer, which the judge said was not itself a sufficient basis for firing.

Insubordination is the deliberate refusal by an employee to obey lawful and reasonable instructions of the employer.What was found to be unpardonable was this statement in the letter: “I do not expect to be treated as the unfortunate Jews were treated when impressed into working without pay for Mercedes Benz, Volkswagen and Siemens during the Second World War.” The Jewish employer, then in his 80s, (he died before trial), was deeply offended by this comparison and said he could no longer work with this person. The comparison drawn by the worker between his treatment and the treatment of the Jews as forced labourers irretrievably destroyed any chance of a workable relationship between the two men and the firing was upheld even though it was a single incident.

Henry versus Graham: The Outcome

Returning to the facts set out at the beginning of this article, do you think they are sufficiently serious to support firing?

The case is Henry v. Foxco Ltd., 2004 NBCA 22 (CanLII), http://canlii.ca/t/1gsb0. The trial judge concluded the confrontation justified dismissal, and one of the Court of Appeal judges agreed. However, the other two appellate judges reasoned that Henry’s actions did not repudiate an essential condition of his employment, and that this one incident was not serious enough to destroy the employment relationship. Despite the presence of many concerns about the ongoing employment relationship, the public nature of the insolence, and the intensity of the confrontation, the majority said Henry’s misconduct was a mere isolated incident of insolence that should be overlooked. Henry was having a bad day: “many things are said and done in the heat of the moment that, on reflection, are regretted by all. This is one of those cases.”

Consequently, the employer could not establish that Henry’s insolence led to irreparable harm to the working relationship, and that this isolated incident rendered it impossible for Henry and Graham to continue to work together. The employer was ordered to pay Henry $14,200.00 with 7% interest for four years, as well as his legal costs.

Conclusion

In Canadian employment law, there is a distinction between insubordination and insolence, although the terms are sometimes used interchangeably. Insubordination is the refusal to follow an employer’s direction. Insolence, the weakest category of misconduct, is characterized by words and attitudes, which explains why it will be harder to justify termination upon one act of insolence. In most cases there will be evidence of both insubordination and insolence. A single incident of either may be sufficient to justify an employee’s summary dismissal but outcomes in these cases are hard to agree upon and predict.

 

Reinstatement

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Employment Law ColumnIntroduction

Many Canadians will remember the case of Lynden Dorval, the Edmonton public school teacher, who was fired by his school board for dispensing marks of zero to students who did not do their assignments. Recently the case reached the Alberta Court of Appeal on the question of whether Mr. Dorval should be reinstated to his old teaching job.

In addition to cases where wrongful dismissal has been found (especially in labour relations scenarios), reinstatement is authorized under work-related legislation, such as occupational health and safety and human rights legislation.

This article will describe that case and the circumstances where reinstatement can be an appropriate legal remedy, and where it will not be ordered.

Facts

Employers being forced to take back workers they do not want to employ, and where no mutual trust and confidence exists, is repugnant to dignity and choice.Mr. Dorval, a teacher with an excellent performance record over 35 years, was terminated from his job because he refused to follow his principal’s order requiring him to use letter codes describing “student achievement, lack of participation, or behavior related to completion of an assigned task.” Since the code was not a recognizable grade, it played no part in evaluation of the student’s performance. Students who did not complete assignments might have inflated grades compared to their peers who did the assignments, which reduced the incentive to do the assignments.

Instead Mr. Dorval gave a “replaceable zero” to students who did not complete assignments. Students were still encouraged to hand in late assignments for a grade that replaced the zero. This motivated students, promoted accountability and resulted in a work-based evaluation. Mr. Dorval was not the only teacher who defied his principal, but he was the only one disciplined for doing so. On May 17, 2012 he was suspended. Four months later he was fired. Other issues were eventually put forward, such as missing a staff meeting, not grading exams on time, returning to school property without permission and displaying an insubordinate attitude. Over the course of that disciplinary action, hostility had developed between the teacher and his administrative superiors. [Edmonton School District No 7 v Dorval, 2016 ABCA 8 (CanLII), http://canlii.ca/t/gmw5d].

Legal Outcomes

Mr. Dorval appealed his termination. The reviewing tribunal found he had been wrongfully dismissed and ordered the school board to pay him compensation. The Edmonton Public School Board took the case to the Alberta Court of Appeal where Mr. Dorval also asked to be reinstated to a teaching position in the school district.

The appellate court unanimously upheld the finding that Mr. Dorval had been wrongfully dismissed. It ordered compensation to be paid as if the teacher had been dismissed with reasonable notice and without cause.

But what if the worker wants his job back? One might assume that if the courts had concluded he was unfairly and illegally dismissed, it would be a fair and simple matter to allow Mr. Dorval to return to the classroom on the 0.6 FTE basis he sought. As it turns out, even when one is wrongfully dismissed, reinstatement to one’s earlier job is not a right. The reviewing tribunal has discretion to determine if reinstatement is appropriate and an appeal court will assess whether that decision was reasonable.

Principles for Reinstatement

Reinstatement is more common in the collective labour relations sector than in the non-union sector. Ordering an employer to take back a worker is a form of the extraordinary equitable remedy called “specific performance” of the employment contract. Normally, monetary compensation suffices. Reinstatement is one-sided in the sense that the employer cannot seek and obtain it from a reluctant employee. It is also difficult for a court to monitor the work relationship after reinstatement.

Compared to damages compensation, reinstatement should be used sparingly and only in clear cases. Reviewing authorities will consider the following before ordering reinstatement of an employee:

  • does governing legislation, such as the School Act, ordain reinstatement as a presumptive remedy;
  • what is the likely effect of reinstatement on the future relationship between the employee and the employer? Employers being forced to take back workers they do not want to employ, and where no mutual trust and confidence exists, is repugnant to dignity and choice. Reinstated workers may resume historical confrontations and disrupt the work environment. While reinstatement has long been presumed to be the remedy where dismissals are overturned in grievance arbitrations, the Supreme Court of Canada also stated this only applies where the employment relationship continues to be viable: Alberta Union of Provincial Employees v Lethbridge Community College, 2004 SCC 28 (CanLII) at para 56;
  • the employee should not be equivocal about returning to work or ambivalent about the reinstatement succeeding, including letting go of past acrimony; and
  • reinstatement is less appropriate for short-term or seasonal employments and where compensatory damages are already ordered.

As it turns out, even when one is wrongfully dismissed, reinstatement to one’s earlier job is not a right.In Milkovich v. Field Hockey Canada, 2013 BCSC 486 (CanLII), the British Columbia Supreme Court refused to reinstate the coach of the Women’s Junior National Field Hockey Team until his wrongful dismissal lawsuit was completed. The judge considered even temporary reinstatement to be an extraordinary remedy. The employer had lost confidence in his suitability for the job and reinstatement would be disruptive to the team and its new coach.

On the other hand, an Ontario judge upheld an interim reinstatement of an employee pending an arbitration outcome: National Ballet of Canada v. Glasco, 2000 CanLII 22385 (ON SC). Likewise, a Nova Scotia Deputy Minister of Justice was ordered not to dismiss a public employee before his wrongful dismissal action was decided on the merits. Smith v. Nova Scotia (Attorney General), 2004 NSCA 106 (CanLII); aff’d (2004), 244 D.L.R. (4th) 649 (N.S.C.A.); leave to appeal to S.C.C. refused, [2004] S.C.C.A. No. 498.

Mr. Dorval Not Reinstated

The Court of Appeal agreed with the tribunal’s judgment call that Mr. Dorval should not be reinstated, on the basis that the relationship between he and his employer remained irretrievably broken down, even after four years. The fact that Mr. Dorval was near the end of his active teaching career and was only seeking a 0.6 position while collecting on pension, and originally seemed less than totally confident himself that he wanted the job or could do the job, may have all been factors. One might think that the very large school board employer would have been able, more easily than other employers, to accommodate his reinstatement request by posting him at another school. In this case, it appeared to be Mr. Dorval’s own lukewarm and ambivalent desire for reinstatement expressed early in the proceedings that put this extraordinary remedy out of his reach.

Nicole Bowal is a student at the Schulich School of Engineering at the University of Calgary

The Law of Leafleting and Picketing

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Employment Law ColumnIntroduction

Distributing leaflets to people and picketing are longstanding forms of employee expression, commonly to protest or draw attention to employment disputes. Primary picketing is attending at a place of business or employment with an object of persuasion, usually to dissuade others from entering or doing business at that place. Secondary picketing is doing the same at a different location or business – such as at a supplier, subsidiary, head office, retail outlet or customer location – in order to bring pressure on the employer.

Usually picketing involves the physical presence of employees, some of them near the entrance to the targeted premises. They communicate or display information relating to the labour dispute, all for the apparent purpose of attempting to persuade others not to support the employer.

All three involve freedom of expression as an essential component of labour relations enabling workers to enlist public support in their pursuit of better work conditions. In this article, we look at how the law regulates leafleting and primary and secondary picketing.

History of Picketing Law

Judges have determined whether picketing was lawful based on physical and perceptual criteria. The picketing had to be lawfully conducted and the objective had to be to persuade someone in a position to give support.

It follows that secondary picketing was illegal because it failed the second element. In Hersees v. Goldstein [1963] 2 O.R. 81 (C.A.), the labour dispute was between Deacon Brothers Sportswear and the union. Hersees was a third-party retailer that sold clothing manufactured by Deacon Brothers. The union insisted Hersees cancel its clothing orders from Deacon Brothers or it would be picketed. When Hersees refused, the union picketed it. The judge denounced this attempt to “induce breach of contract,” saying:

… the right, if there be such a right, of the respondents to engage in secondary picketing … must give way to appellant’s right to trade; the former … is exercised for the benefit of a particular class only while the latter is a right far more fundamental and of far greater importance … as one which in its exercise affects and is for the benefit of the community at large. If the law is to serve its purpose … the interests of the community at large must be held to transcend those of the individual or a particular group of individuals.

As recently as 1986, the Supreme Court of Canada said in Dolphin Delivery Ltd. 1986 CanLII 5 (SCC):

“It is reasonable to restrain picketing so that the conflict will not escalate beyond the actual parties. While picketing is, no doubt, a legislative weapon to be employed in a labour dispute by the employees against their employer, it should not be permitted to harm others.”

The Kmart Decision [1999] 2 SCR 1083 http://canlii.ca/t/1fqn5

This case approved secondary picketing if it constituted mere leafleting. In 1992, eleven Kmart stores operated in British Columbia. The employees at two stores were represented by a union, which was not certified at the other nine store locations. A lockout was ongoing at the two stores, the primary employer, during the busy Christmas season. Union members went to the other stores which were not part of the labour dispute, the secondary sites, and distributed leaflets.

Groups of up to twelve employees stood mostly within eight feet from the store entrances. They handed out different leaflets to prospective Kmart customers describing their employer’s alleged unfair practices and urging customers to boycott these stores.

The Supreme Court of Canada concluded that B.C.’s legislation prohibiting leafleting to customers at secondary sites inexcusably violated the freedom of expression in the Charter of Rights and struck down these prohibitions (at p. 631):

“Consumer leafleting is very different from the picket line. It seeks to persuade members of the public to take a certain course of action. It does so through informed and rational discourse which is the very essence of freedom of expression. Leafleting does not trigger the “signal” effect [not to cross] inherent in picket lines and it certainly does not have the same coercive component. It does not in any significantly manner impede access to or egress from premises. Although the enterprise which is the subject of the leaflet may experience some loss of revenue, that may very well result from the public being informed and persuaded by the leaflets not to support the enterprise. Consequently, the leafleting activity if properly conducted is not illegal at common law.”

This characterization and decision could be criticized in several ways. In most labour disputes, leafleting and picketing are indivisible physical and emotional flashpoints of the parties’ conflict. The fine legal distinction between leafleting and picketing, and their purposes and impacts, will be lost on the customer. The greater the impact annoyed employees can make on the employer’s overall business operations, the greater the attention and concessionary favour they can expect to receive. However, on what basis should an outside private dispute wrest control from an owner over its own property?

One might also question the Supreme Court’s over-emphasis on the peacefulness of leafleting and its understatement of the degree to which leafleting impedes access to private property. The Kmart case represented a major reversal of the traditional law against secondary picketing, on freedom of expression grounds.

The Pepsi Decision R.W.D.S.U., Local 558 v. Pepsi-Cola Canada [2002] 1 SCR 156 http://canlii.ca/t/51tz

Three years later, in the Pepsi case, the Supreme Court of Canada came full circle and permitted all forms of protest and picketing during a labour dispute. Here the union went on strike against Pepsi-Cola Canada Beverages in Saskatchewan.  The union members picketed secondary retail outlets to prevent delivery of the employer’s products and to dissuade store staff from accepting delivery. They picketed a hotel where replacement workers were staying and engaged in intimidating conduct at managers’ homes.

The Court this time concluded that secondary picketing is generally lawful except where it involves tortious or criminal conduct.  This “wrongful action approach” strikes the new balance between traditional common law rights and Charter values. The character and effects of the picketing are now more important than the location.

Governments can still regulate labour disputes and set appropriate limits for secondary picketing within the broad parameters of the Charter. For example, the Alberta Labour Relations Code section 84(2) and (3) empowers the Labour Relations Board to “determine whether any premises are the place of employment” as well as “declare what number of persons may [picket], determine the location and time of [picketing] and make any other declarations that the Board considers advisable.”

Remedies for Illegal Picketing

Criminal behaviour on the picket line is handled by local law enforcement. Tortious acts while picketing can be brought to the Labour Relations Board, typically in the form of cease and desist applications and directives to stop the wrongful picketing behaviour.

In one Alberta example, a dispute arose between the parties and intense picketing ensued. Picketers were targeting trucks entering and leaving the plant. The Board issued a directive prohibiting:

  • placing impediments on or near the roadway leading to and from the employer’s premises;
  • threatening, striking, hitting, vandalizing, throwing objects at or otherwise interfering with the passage of vehicles, goods and equipment and persons to and from the employer’s premises; and
  • engaging in any activities that cause vehicles, goods and equipment, or persons to have to stop when attempting to enter and leave the employer’s premises.

Employers typically request the Board to intervene to stop picketing on private property, verbal and physical harassment of people entering or exiting the business, unduly delaying or obstructing traffic flow in or out of a site, vandalism and other crimes, and intimidating non-striking employees to respect the picket line.

Conclusion

The common law historically deemed secondary picketing illegal until the Pepsi case in 2002 when it was protected as a constitutional right. Criminal and tortious behaviour remain illegal picketing activities. They are dealt with by local law enforcement (criminal) or applications to provincial labour relations boards (tortious). Picketing continues to be an important legal exercise of free expression by employees.

How Bad Behaviour? Employees Getting Away With . . .

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Employment Law Column

Introduction

The last column discussed the need for employers to practice progressive discipline. That concept means employees should be fired – that is, summarily dismissed without notice or pay – as a last resort and only where clearly justified. In this column, we look at some decisions which demonstrate how hard it can be to fire an employee for even egregious misconduct under Canadian law.

The McKinley v BC Tel Doctrine

The Supreme Court of Canada set the bar high for firing misconduct about 15 years ago in its decision in McKinley v BC Tel [2001] 2 SCR 161, 2001 SCC 38 (CanLII) http://canlii.ca/t/521q. This decision was profiled several years ago in this column. The Supreme Court of Canada ruled that the context of the misconduct and its impact on the employment relationship must be considered when determining just cause for dismissal. In giving a pass to dishonest employees, this case forced judges and arbitrators in summary dismissal cases today to conclude that the misconduct must show that “the employment relationship could no longer viably subsist.” The McKinley doctrine still challenges employers who believe they have serious cause to fire a worker. …firing is always a business risk. Paying generous salary and benefits in lieu of reasonable notice may be a wiser employer strategy.

Bad Behaviour Excused

In Soplet v. Bank of Nova Scotia, 2007 CanLII 47145 (CA LA), http://canlii.ca/t/1tknq, an employee admitted to buying marijuana from a co-worker on the work premises. After a suspension and subsequent investigation, he was dismissed without pay. The adjudicator referred to McKinley and analyzed the contextual proportionality of the dismissal. He noted:

  • there was no damage done to the reputation of the bank;
  • there was no financial or operational compromise to the bank’s functions;
  • the employee could be rehabilitated (it was a one-time offence); and
  • the record of performance was exemplary.

The adjudicator found no cause for summary dismissal and awarded damages.

In Cook v Universal Coach Line (2006), Eric Cook, a bus driver with a bus load of passengers, failed a roadside blood alcohol test. While he was being held by police for almost three weeks due to an alleged parole violation, his employer dismissed Cook without reviewing the facts The Ontario Labour Relations Board said it was not clear Patel was aware profanity was against company regulations and also found that the exchange was an isolated incident in otherwise good performance …with him. The adjudicator was not convinced this employer-employee relationship was broken, and noted Cook’s clean record of employment, and the absence of a progressive discipline program. He reinstated Cook from the time of his decision. In this case, illegal purchase and consumption of intoxicants while working was not sufficient cause to fire the worker.

Sexual misconduct at work often turns out to be not enough reason alone to fire someone in Canada. Mark Payne, a bank branch manager in Woodstock, Ontario, engaged in consensual sex with the assistant branch manager, both on and off the bank premises. The woman later complained that Payne was stalking her. After investigating, the employer fired Payne. The adjudicator reversed the dismissal and ordered Payne to be reinstated by BMO. While the matter was serious and could have negatively impacted the employer, the adjudicator said the actual impact was minimal and cited a lack of progressive discipline to rehabilitate Payne. The Federal Court of Appeal unanimously agreed with the arbitrator but ordered damages in lieu of reinstatement. In the end, BMO was ordered to pay Payne ten months salary and benefits and about $74,000 of his legal costs: Payne v Bank of Montreal, 2013 FCA 33 (CanLII) http://canlii.ca/t/fw1vr (merits decision); 2014 CanLII 18861 (ON LA) http://canlii.ca/t/g6kqq (costs decision).

James Burgess admitted to accessing pornographic material at work several times. The employer warned him about this behaviour. Later, when other Internet usage violations continued, Burgess was fired. The adjudicator disagreed and awarded Burgess damages for his dismissal because the employer’s warning about future discipline was ambiguous. The employer should have emphasized to Burgess that he was on his last chance. The adjudicator in Burgess v Halifax Grain Elevator Ltd. (2005) also viewed the subsequent (non-pornographic) Internet violations as not serious. These two cases show that misconduct of a sexual nature, even in violation of company rules, may alone not be enough to fire the worker.

What about verbal or physical altercations? Ravindra Patel told his boss “you’re a fucking idiot” and said “fuck you” five or six times during a verbal exchange on the company shop floor. The Ontario Labour Relations Board said it was not clear Patel was aware profanity was against company regulations and also found that the exchange was an isolated incident in otherwise good performance: Patel v Welsh Industrial Manufacturing Inc., 2008 CanLII 14086 (ON LRB) http://canlii.ca/t/1wdwz. This was insufficient cause for dismissal and Patel was awarded eight weeks pay and benefits.

Mr. Phanlouvong punched and bloodied the nose of a co-worker after a heated verbal exchange. After interviewing witnesses, Phanlouvong was fired. Again, the Ontario Superior Court of Justice said the incident was an isolated case of misconduct and the employer should have considered reasonable alternative disciplinary measures. It awarded Phanlouvong over $45,000 in damages: Phanlouvong v Northfield Metal Products, 2014 ONSC 6585 http://canlii.ca/t/gf9p0.

In the previous two cases the altercations were between workers in the same company. In Ditchburn v. Landis & Gyr Powers Ltd., 1997 CanLII 1500 (ON CA) http://canlii.ca/t/6hb5, the 27-year employee attacked and drew serious blood from a customer at a strip club. Nevertheless, the Ontario Supreme Court found the employer did not adequately support its employee who had an otherwise exemplary record. The Ontario Court of Appeal agreed that beating up the customer in this case was not a firing offence. In the end, the combative employee received almost $200,000 in damages, $15,000 for mental distress he suffered for being fired and most of his costs incurred in suing his employer.

Conclusion

On the topic of “summary dismissal,” eighteen years ago the Supreme Court summarily dismissed the doctrine of “near cause” in employment law in Dowling v Halifax, [1998] 1 SCR 22, 1998 CanLII 834 http://canlii.ca/t/1fqwm, confirming an “all or nothing” approach to bad behaviour at work. Employers either have adequate cause to fire an employee or they don’t and must pay out the full notice period. The Court unanimously said “[w]e do not accept any argument relating to near cause”. …misconduct of a sexual nature, even in violation of company rules, may alone not be enough to fire the worker.

The law does not exhaustively lay down what constitutes sufficient grounds to fire a worker. Employers must act quickly on the realities before them. Fired employees suffer greater stigma than notice employees and are more likely to challenge the firing. Years later, even in clear cases of serious employee misconduct, a judge can easily take a view sympathetic to the employee, who enjoys the benefit of the doubt. Therefore, firing is always a business risk. Paying generous salary and benefits in lieu of reasonable notice may be a wiser employer strategy.

We can harvest other lessons from these cases. Bad employee behaviour is likely not sufficient cause for firing where:

  • it was a single, isolated incident;
  • the behaviour was only bad and not egregious by prevailing social standards;
  • the employer’s expectations and what constitutes dismissible behaviour were not clearly communicated;
  • no specific warning was issued that future failure to meet these standards would end in dismissal;
  • employee had a long record of good performance;
  • the employee was not given a reasonable opportunity to rehabilitate;
  • the bad behaviour was ignored in the past; and
  • progressive discipline was not attempted.
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