Statutory Layoffs, Constructive Dismissal and Covid-19

BY SIMRAN BAKSHI, ASSOCIATE LAWYER

The Covid-19 pandemic has proven just how adaptive and resilient we are as a society. In the face of this crisis, we have embraced drastic changes to how we live, work, shop and even interact with one another.

Consider the actions that have been necessary in the employment law context.

With businesses across the province forced to shut down with little to no notice, many employers have had to make the difficult decision to lay off or downsize their workforce to stay financially afloat.

While in the normal course, such actions would be governed by the Employment Standards Act (ESA) and the common law, there are real questions in these unusal, pandemic times about whether the applicable laws will change or be re-interpreted.

It is generally settled law that despite the ESA's explicit layoff provisions, at common law, an employer in Ontario is not permitted to temporarily lay off an employee unless there is an employment contract permitting such action, or implied or express acceptance by the employee.

If the employer nonetheless imposes a layoff, the employee can treat such action as a constructive dismissal of her employment, and seek common law notice entitlements in a court acion for damages.

As the Ontario Court of Appeal affirmed in Elsegood v Cambridge Spring Service 2001 Ltd., 2011 ONCA 831 (CanLII):

[14] At common law, an employer has no right to lay off an employee. Absent an agreement to the contrary, a unilateral layoff by an employer is a substantial change in the employee's employment, and would be a constructive dismissal.

If the usual law is strictly applied to Covid times, any employer who has laid off employees to comply with the state of emergency may have constructively dismissed the laid off employees, unless the employer is relying on a layoff provision in an employment contract, or it has the employee’s consent.

To put this in context, as a result of Covid-19 closures, thousands of business across Ontario may have inadvertently severed their employment relationships with their employees, making them liable to pay hefty severance packages or damages awards.

The million dollar question remains, will our courts really allow this to happen, or will exceptions be made in interpreting the usual law of layoffs, in order to address the present reality?

Ontario Regulation 228/20, enacted by the Ford government on May 29, 2020, seems to signal that a new approach to Covid-related employment law claims may emerge.

This Regulation amends the Employment Standards Act to retroactively deem employees whose hours or wages have been temporarily reduced or eliminated due to Covid-19 to be on an infectious disease emergency leave, as opposed to being subject to a statutory layoff or constructive dismissal. 

It further deems that complaints filed with the Ministry on this basis as not having been filed at all, and protects employers from statutory termination and severance pay obligations otherwise arising from unlawful layoffs that may otherwise have given rise to constructive dismissal.

The Regulation, however, does not address the common law of constructive dismissal, nor does it bar an employee from bringing a civil claim for damages for constructive dismissal.

That, of course, brings us back to the question of what Ontario's Courts are likely to do with such claims

It would not be surprising if the Courts take a cue from the Ford government, finding that temporary layoffs necessitated by Covid-19 did not amount to a constructive dismissal.

The concern is that if employers are held liable for unlawful layoffs relating to Covid-19, there will be a floodgate of claims before the court, with a domino effect to follow of permanent business closures and bankruptcies. From a policy perspective, limiting constructive dismissal claims, at least temporarily, would provide much needed economic relief and stability, particularly to small and medium sized businesses that are otherwise on the brink of financial ruin. 

On the other hand, such an approach would eliminate an employee’s choice to assess whether an employment relationship has truly been severed. This will not always lead to a fair outcome. Legal advice should be obtained as to your rights and entitlements, if you wish to consider advancing a constructive dismissal claim.  

Many employees will be keen to return to work, irrespective of whether a Covid-19 layoff was technically sound. It may only be in circumstances wherein an employment relationship already stood on shaky ground that a layoff will be challenged. 

Even then, the context in which the layoff occurred will almost certainly be taken into account.

Going back to the basics, the act of unilaterally laying off an employee has typically been considered a constructive dismissal because it repudiates the expectation of continued paid employment.  There can be no such expectation if an employer is mandated by law to temporarily shut down its business due to the pandemic. The same cannot be said however, for an employer who seeks to take advantage of circumstances.

Our courts have always favoured a balanced approach when faced with competing interests and concerns.

Perhaps the most likely outcome is for the court to leave the door slightly ajar for exceptional claims of constructive dismissal, which arise during the Covid-19 period, looking closely at the actions and motivation of the parties.

- Simran Bakshi, Toronto

Visit our Toronto Law Office website: www.wiselaw.net

Ford Government: Ontario's 13-Week Layoff Limit Eliminated During COVID Emergency

The Ford Government has made a crucial, temporary change to Ontario's Employment Standards Act (ESA) that will impact countless employers and employees in the Province.

By operation of Ontario Regulation 228/20, published on May 29, 2020, the ordinary 13-week limit on the duration of workplace layoffs has effectively been suspended. This time-limit will not apply to employees who have been laid off due to COVID-related slowdowns and closures.

The Regulation will apply from March 1, 2020 until six-weeks after the Government ends its March 17 emergency COVID-19 declaration. It repesents a significant change that many employers have been clamouring for.

Ordinarily, where an employee is not recalled from a layoff within 13 weeks, the layoff is deemed to be a termination of employment by operation of section 56 (2)(a) of the ESA. 

There are certain exceptions in the Act to this deemed termination rule. These occur:

• Where the extended layoff is less than 35 weeks in any period of 52 consecutive weeks, and 
• The employee continues to receive substantial payments from the employer and
• The employer continues benefit payments for the employee.

Essentially, this Regulation means employers will no longer have a risk of liability for statutory notice or severance payments to employees who have been laid off for more than 13 weeks due to COVID-19, or to those whose hours or compensation are reduced during the COVID period.

In addition, the Regulation provides that no COVID-related reductions in employees' hours or compensation on or after March 1, 2020 will be treated as a constructive dismissal under the Act.

Many Ontario workplaces that are still closed due to COVID would have been approaching the statutory, 13-week layoff limit within the next week or two.

There was great concern among small employers and profesional practices, in particular, that they would face enormous, mandatory severance obligations to multiple employees at once at the end of the 13 week layoff period, even if they were still unable to open.

For some employers, such severance obligations could have become bankruptcy-triggering events.

As examples, most restaurants and mall-based retail outlets are not yet legally permitted to fully reopen, and after months of closure and partial-closures due the the Emergency Declaration, many could not possibly have withstood the costs of mandatory notice and severance obligations.

Similarly, many Ontario dentists - who until changes announced May 31 remained subject to significant regulatory restrictions that prevented them from providing non-urgent care, seeing recall patients or offering dental hygiene services - have simply been unable to re-open or to recall employees, given the potentially low demand for the few services they had been able to provide.

While some have argued that this Regulation represents a major blow for employees, I'm not pursuaded that there is much truth to that.

With the elimination of the 13-week layoff limit, employees ultimately get some degree of job protection. They will not automatically be deemed to be terminated. Many love their jobs and are chomping at their collective bits to get back to work, as soon as possible.  They are prepared to work collaboratively with their employers toward re-opening and do not want to be automatically dismissed by operation of the ESA.

For those that ultimately will not be returning, their entitlements to notice and severance have been delayed, not eliminated. Most are currently receiving EI or other government benefits, in the interim. That's not a perfect solution, of course, and the uncertainty about the future remains.

Without this Regulation, however, many workplaces faced a serious risk of insolvency and closure due to notice and other statutory obligations, alone.  This legislation temporarily removes that immediate risk, and gives employers additional time to get back on their financial feet so that jobs can be preserved.

Beyond that, this Regulation 228/20 gives employers and employees the flexibiity - with mitigated legal risk - to implement the gradual, staged approach to re-opending mandated by the Province and by public health authorities.

COVID closures were not the fault of employers or employees. This Regulation appears to be a fair effort to share the burden, balance the respective interests and at very least, to buy some much needed time.

As a final note, while the Regulation addresses the statutory standards set out in the ESA, it does not at first glance appear to impact or preclude Court-based claims for damages for wrongful dismissal or constructive dismissal. This is particularly important for those employees who did not expressly agree to their current layoffs and those who have not signed valid employment agreements that permit such layoffs.

It should also be noted that his new Regulation will not be applicable to those whose workplaces reduce hours or compensation for discriminatory or improper reasons that are unrelated to COVID, or to employers that otherwise go rogue. 

As always, there remains uncertainty as to how the Courts will ultimately address such claims.  Legal advice should be obtained by any employee with concerns related to COVID in the workpace.

To arrange a consultation with a Wise Law workplace and employment lawyer, click here.

- Garry J. Wise, Toronto

Visit our Toronto Law Office website: www.wiselaw.net

Employee or Contractor? Apply the Duck Test...

BY SIMRAN BAKSHI, ASSOCIATE LAWYER

How do Ontario Courts determine if someone is really a contractor or an employee?

It may surprise you to learn that the answer is actually quite simple and straightforward.

Just apply the duck test: If it looks like a duck, swims like a duck and quacks like a duck, then lo and behold, it probably is a duck. 

In other words, if the “contractor” works like an employee, is managed like an employee, and overall appears to be like an employee, chances are this “contractor” is actually an employee under Ontario employment law.

As the Supreme Court of Canada perhaps more eloquently summarized:

47      Although there is no universal test to determine whether a person is an employee or an independent contractor, I agree with MacGuigan J.A. that a persuasive approach to the issue is that taken by Cooke J. in Market Investigations, supra.  The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account.  In making this determination, the level of control the employer has over the worker’s activities will always be a factor.  However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker’s opportunity for profit in the performance of his or her tasks.

While an employer may have many cost incentives for prefering to work with a contractor rather than an employee (some being of dubious legality), denying a worker the protections and entitlements that come with employee status can be a very costly mistake for both employer and employee. 

We often hear our employer clients say, "but we agreed in writing that this person would work with us as a contractor", to which we just as often have to respond, "unfortunately given the nature of your working relationship, this contracting agreement is probably not legal or binding." 

It is not enough to simply call someone a contractor.  For the contracting relationship to be legally binding, the very essence of the working relationship itself needs to have the markings of independence and exclusivity. 

Perhaps our best advice to our employer clients is to start from within, by frankly considering how a worker is likely perceived within the company itself.  If there is a degree of control, dependency and answerability, it is quite possible that this individual is an employee, no matter what you call him or her, and has legal status as an employee that provides for numerous employment  entitlements, and entitlements upon termination of employment and wrongful dismissal. 

- Simran Bakshi, Associate Lawyer Toronto

Visit our Toronto Law Office website: www.wiselaw.net

Heckling the Home Team: Off-Duty Conduct and Dismissal for Cause

BY NITIN PARDAL, LAWYER, WISE LAW OFFICE

Can you be fired for booing the home team?  As this Toronto Star article points out, it might not be out of the question, at least in New York City.

While attending a New York Knicks game at Madison Square Garden with his supervisor and two clients, Anthony Rotondi yelled out, "Carmello, you stink!" [referring to Knicks' player Carmello Anthony].

The seats, owned by Mr. Rotondi's employer, ING Financial Services, were situated four rows behind the Knicks' bench. 

Mr. Rotondi's remark led to:  

• his ejection from the arena;
• his arrest and charges for "tampering with a sports contest and criminal trespass"; and
• the dismissal of his employment of 12 years with ING Financial Services. 

If he were employed in Ontario, Mr. Rotondi would arguably have a cause of action against his former employee for wrongful dismissal.  In its defence, ING Financial Services would likely argue that Mr. Rotondi's off-duty conduct justified his dismissal. 

This begs the question:  What kind of off-duty conduct could justify an Ontario employee's dismissal for cause?

Dismissal for Off-Duty Conduct

As the Newfoundland Superior Court noted in a 1992 case, Strowbridge v. Re/Max United Inc., in order to establish that an employee's off-duty conduct constitutes cause for dismissal, an employer must show that there was a nexus or connection between the employee's off-duty conduct and the employment relationship and that the conduct:

• detrimentally affected the employer's reputation;
• caused the employee to be unable to discharge his/her employment obligations;
• caused other employees to refuse to work with the employee; or
• adversely affect the employer's ability to direct or efficiently mange the production process.

Here are some examples of cases where an employee's off-duty conduct did justify dismissal for cause:

• In Hyland v. Royal Alexandria Hospital, a 2000 decision from the Court of Queen's Bench of Alberta, a Internal Auditor participated in an GST-avoidance scheme when purchasing a private vehicle.  The court upheld his termination for cause;
• In Whitehouse v. RBC Dominion Securities Inc., a 2006 decision from the Court of Queen's Bench of Alberta, a senior employee brought prostitutes to the employer's premises during off business hours.  His dismissal for cause was upheld; and
• In Marshall v. Pacific Coast Savings Credit Union, a 1995 decision from the British Columbia Supreme Court, an employee failed to pay off a credit card debt after arranging a loan from the defendant employer for that purpose. This led to a lack of confidence in the employee's integrity and according to the Court, justified his dismissal for cause.

The Case at Hand

Returning to Mr. Rotondi and his dismissal from ING Financial Services, can it be argued that his conduct at Madison Square Garden, was in fact not "off-duty?" Consider the fact that he was attending the game with his supervisor and clients, and that the seats for the game were owned by his employer.  Clearly his behaviour in this context did reflect on his employer.

Its a question of degree - it would be far more difficult to establish that the mere heckling of a professional athlete during the course of a sports event "detrimentally affected the employer's reputation" unless the heckling behaviour was seriously out of the ordinary, extreme or "over-the-top."

As for Carmello Anthony, the player at whom Mr. Rotondi's remarks were directed, he ended up with a game high of 34 points and led his team to a 89-85 win against the Detroit Pistons. 

Perhaps Mr. Rotondi's comments served as the catalyst for the Knicks win.

- Nitin Pardal, Toronto

Visit our Toronto Law Office website: www.wiselaw.net

Ontario Employment Law: Prejudgment Interest On Wrongful Dismissal Damages

In Chandran v. National Bank, Pollak J. in his endorsement on costs dated July 21, 2011, neatly summarizes how prejudgment interest is calculated in a wrongful dismissal action as follows:

... [T]he prejudgment interest on the damage award is calculated as follows: - first, the interest owed from the beginning of the notice period to the end must be calculated monthly on the basis of what was owed at that time; - second, the interest on the total amount of the award outstanding at the end of the notice period must be calculated from the end of the notice period to the date of judgment.

Two calculations essentially need to perform to arrive at a figure for prejudgment interest. In the case, prejudgment interest was determined to be $15,931.93 for an employee with an annual salary of $98,824.00 and an entitlement to 14 months of pay in lieu of reasonable notice.

Pollick J. neatly set out his calculation of prejudgment interest, as follows:

This Court’s calculation of appropriate prejudgment interest on a monthly basis prior to the expiry of the notice period in this case as follows:

(i) Annual Salary of $98,824.00/ 12= $8235.33 a month

Interest Calculated Monthly:

Month 1	$8235.33 x 4.5% per annum for 14 months	$432.32
Month 2	$8235.33 x 4.5% per annum for 13 months	$401.44
Month 3	$8235.33 x 4.5% per annum for 12 months	$370.56
Month 4	$8235.33 x 4.5% per annum for 11 months	$339.68
Month 5	$8235.33 x 4.5% per annum for 10 months	$308.80
Month 6	$8235.33 x 4.5% per annum for 9 months	$277.92
Month 7	$8235.33 x 4.5% per annum for 8 months	$247.04
Month 8	$8235.33 x 4.5% per annum for 7 months	$216.16
Month 9	$8235.33 x 4.5% per annum for 6 months	$185.28
Month 10	$8235.33 x 4.5% per annum for 5 months	$154.40
Month 11	$8235.33 x 4.5% per annum for 4 months	$123.52
Month 12	$8235.33 x 4.5% per annum for 3 months	$92.64
Month 13	$8235.33 x 4.5% per annum for 2 months	$61.76
Month 14	$8235.33 x 4.5% per annum for 1 month	$30.8
	Total	$3242.40

(ii) Lump-sum prejudgment interest on the damage award from the end of the notice period to the date of the decision:

• the notice period ended mid November 2008. The award was made on April 26, 2011. The Plaintiff calculated the exact number of days in this period as being 893.

• the total damage award was $115,294.66 x 4.5% a year= $5,188.26 a year

• $5,188.26/365 days in a year= $14.21 interest a day

• $14.21 x 893 days= $12, 689.53 (total lump sum prejudgment interest owed)

On the basis of these calculations a total of $15,931.93 prejudgment interest is owed on the damage award.

This case demonstrates that  the method of calculation for prejudgment interest in a wrongful dismissal action is not something that can be ignored or taken lightly - it can amount to a significant add-on to the damage award.

- Robert Tanha, Toronto

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Ontario Employment Law: Summary Judgment In Wrongful Dismissal Actions

In Thorne v. The Hudson Bay Company, a case decided September 21, 2011, the Plaintiff, a 37.5 year employee who had been dismissed without just cause sued for wrongful dismissal after receiving a bare-bones severance package that was limited to her Employment Standard Act minimums.

The Plaintiff, an Allocation Associate,  moved for summary judgment, arguing that since there were few factual issues which were contentious between the parties, the judge could rule on the period of reasonable notice she was owed "without the need for the forensic machinery of a trial".

Based on consideration of the legally relevant factors, the Defendant employer took the position that she was owed 12-16 months of pay in lieu of notice. Considering the same factors, the Plaintiff employee took the position she was owed 24-30 months, a very divergent position indeed.

Under Rule 20.04 of the Ontario Rules of Civil Procedure, summary judgment motions are appropriate where the court is satisfied that there is "no genuine issue requiring a trial."

In the affidavits filed by the parties upon the motion, they took starkly contrasting views on the character of the Plaintiff's employment. While she did not have a supervisory function, the Plaintiff claimed that her job was far from entry-level and clerical. She, for example, provided operational support to the high volume merchandise industry which required a solid grasp of the employer's business. The Defendant argued that the Plaintiff's job was clerical, and stated she merely produced purchase orders.

Campbell J. held that a trial would be required to resolve the disagreement:

Having carefully examined the evidence that has been provided by the parties on this issue, it is apparent that they view the nature of the plaintiff’s job very differently. Their disagreement on this issue is not just a matter of the appropriate legal characterization of the job, but rather extends to the nature and details of the responsibilities performed by the plaintiff. The evidence filed by the parties on this motion, none of which has yet been subjected to cross-examination, is in stark conflict. In my opinion, it is simply not possible to fairly and appropriately resolve this important issue without the machinery of a trial. 

Faced with this fundamentally conflicting evidentiary record it is simply not possible to resolve this important factual dispute without the forensic machinery of a trial. Without hearing viva voce testimony from these witnesses as to their understanding of the specific details of the plaintiff’s job responsibilities, and being able to assess their credibility and the reliability of their evidence, and seeing the impact of cross-examination, there is simply no fair and accurate way of resolving the dispute between the parties on this important issue.

Hence, Justice Campbell concluded that in all the circumstances there was a genuine issue for trial given that character of employment remains a relevant factor in the determination of reasonable notice:

I appreciate that the court is entitled to assume that the parties have put forward their best evidence on the summary judgment motion and that, if the case were to go to trial, no additional evidence would be presented. See: Rogers Cable TV Ltd v. 373041 Ontario Ltd., 1994 CanLII 7367 (ON SC), (1994), 22 O.R. (3d) 25 (Gen.Div) at para. 4; Bluestone v. Enroute Restaurants 1994 CanLII 814 (ON CA), (1994), 18 O.R. (3d) 481 (C.A.) at para. 30; Dawson v. Rexcraft Storage & Warehouse Inc. 1998 CanLII 4831 (ON CA), (1998), 164 D.L.R. (4th) 257 (Ont.C.A.) at para. 17. But in some cases, like the present one, that assumption is of little assistance in actually resolving the factual dispute between the parties, as the court is limited to paper review of the evidence provided by the parties, without greater explanation, and wholly untested by cross-examination.

As an aside, for those judges and academic who have doubted the importance of character of employment in the determination of reasonable notice, Justice Campbell had this to say:

. . . it cannot be said that the resolution of this factual issue is of no importance to the outcome of this case. There are authorities which suggest that the character of the employee’s employment may be “a factor of declining relative importance” in the overall analysis of all of the Bardal factors. See: Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469 (CanLII), 2011 ONCA 469, at para.22-29; Medis Health and Pharmaceutical Services Inc. v. Bramble 1999 CanLII 13124 (NB CA), (1999), 175 D.L.R. (4th) 385 (N.B.C.A.) at para. 64; Vibert v. Paulin 2008 NBCA 23 (CanLII), (2008), 291 D.L.R. (4th) 302 (N.B.C.A.). Nevertheless, unless and until the governing legal standard for determining “reasonable notice” is changed in a more fundamental way, the character of the employment of the employee will properly remain a factor that must be taken into account in an appropriately “holistic review” of all of the Bardal factors. The fact that the parties in this case have devoted so much energy to producing evidence on this issue demonstrates their own appreciation of this legal reality.

When it comes to what he himself refers to as the "controversial scope of summary judgment motions", there is no doubt that Justice Campbell's reasons for decision raise as many questions as they do answers.

- Robert Tanha, Toronto

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Ontario Employment Law: Determining The Appropriate Period Of Reasonable Notice

In Harvey v. Shoeless Joe's Limited, a May 26, 2011 summary judgment ruling of Stinson J. of the Ontario Superior Court of Justice, the Court deals with the two of the questions that are central in every wrongful dismissal action:

1. Is the Plaintiff entitled to reasonable notice of termination at common law?
2. If so, what length of notice period is the Plaintiff entitled to receive ?

In quickly disposing of the first question, Stinson J. pointed out the Defendant's written offer of employment to the Plaintiff contained no provision with respect to notice of termination and that there was no evidence of discussion between the Plaintiff and the Defendant that could be taken to limit or otherwise vary the "implied contractual right to reasonable notice of termination."

With respect to the second question, the appropriate period of notice, Stinson J. turned to the oft-cited Bardal factors.

Length of employment

The Plaintiff was a short-term employee with only 5.5 months of service which strained towards a lower period of notice. That said, Stinson J. decidedly rejected the employer's argument that awarding a short term employee of less than 6 months of service more than a month's salary would open the floodgates to claims by short-term employees:

The defendant argues that granting a notice period in excess of one month would “open the floodgates” to claims by short term employees. I do not accept that submission. Firstly, the Bardal factors have stood the test of time for half a century, and have been repeatedly applied and accepted by trial and appellate courts in determining appropriate notice periods in a wide range of cases. Where trial judges have been too lenient or too strict, appellate courts have stepped in to correct errors in the application of the principles. Secondly, as the defendant unsuccessfully attempted in the present case, it remains open to an employer to protect itself by requiring the prospective employee to agree to a contractual termination arrangement that would take their relationship out of the common law notice scheme.

Character of employment

The Plaintiff held the position of Vice President Operations at a salary of $130,000.00, which involved many supervisory duties. This factor supported a higher period of notice.

Age

The Plaintiff's age, 41, was a neutral factor.

The availability of similar employment

Given that it took the Plaintiff 10 long months to find new work, this factor spoke for itself and favoured a higher period of reasonable notice.

In light of these four factors, Stinson J. concluded that the Plaintiff was entitled to 2.5 months of pay in lieu of notice.

If you believe you have been wrongfully dismissed, please contact a lawyer who can advise as to your rights under the Ontario Employment Standards Act and at common law.

- Robert Tanha, Toronto

Visit our Toronto Law Firm website: www.wiselaw.net

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Ontario Human Rights Tribunal Digest - April 1-30, 2011

Each week, Wise Law Blog reviews important decisions from the Ontario Human Rights Tribunal.

SUBSTANTIVE RULINGS

Kerry Pinkney v. Datex Billing Services

In this case, the applicant alleged discrimination on the basis of sex in employment, contrary to the Ontario Human Rights Code. The applicant also claimed that she had been subjected to sexual harassment, sexual solicitation and reprisal. Specifically, the applicant alleged that she was terminated because she refused to have sex with the immediate supervisor of the respondent employer and that he, throughout the course of her employment with the respondent employer, continually badgered her to have sex with him.

The applicant identified the following incidents of sexual harassment:

1. The supervisor would regularly approach her while she was in the office, making unwelcome sexual advances towards her;
2. On one specific occasion, he threw himself at her and groped her;
3. He continued such misconduct even after the applicant emailed him asking that he discontinue such behaviour.

The respondent employer, in its evidence, claimed that the applicant had been terminated for cause. It pointed to the applicant's use of the company phone for personal business, among other things. According to the respondent, the applicant had had a close personal and social relationship with the supervisor and his wife, and that none of the conduct towards her had been unwelcome. In fact, the employer alleged that the applicant had been a willing participant and had often initiated the flirting with her supervisor, who denied that he had received an email from the applicant at any time indicating that his conduct had been unwelcome and asking for it to stop.

As is often the case in cases of sexual harassment, there were no witnesses to the alleged incidents of sexual harassment. Nonetheless, the Tribunal concluded that no sexual harassment or breach of the Code had occurred in the case, noting the following in support of its position:

1. The applicant had continued to socialize with the supervisor, including attending at their hot tub parties and going into a hot tub with him, even though according to her, he was continuing to make unwelcome sexual advances towards her;
2. If the applicant was trying to fend off repeated sexual advances from her supervisor, why had she voluntarily given him a massage at work when they were alone together in the office?;
3. The applicant had willingly sent her supervisor provocative pictures with titles that were somewhat suggestive;
4. If the applicant was being continually sexually propositioned, why had she not confided in the supervisor's wife, a woman with whom she was very close; and
5. The apparent email sent to the supervisor, objecting to his alleged sexual harassment, was riddled with irregularities, which could not easily be explained away.

With respect to the reasons for termination and the applicant's reprisal claim in that regard, the Tribunal accepted the respondent's position that the applicant had been dismissed for insubordination and for making personal phone calls. The fact that the supervisor might have overreacted, in taking the decision to fire the applicant, did not amount to "discrimination" as defined by Code.

PROCEDURAL RULINGS

Smith v. Meineke Car Care Centre and Michael Colacci

In this case, the applicant alleged discrimination under the Code. The mediation stage had been reached in the matter, and a Notice of Mediation had been sent to both the applicant and the respondent parties; neither had been returned as undeliverable. On the scheduled date of mediation, the applicant failed to attend and did not communicate with the Tribunal to explain its failure in this regard.

The Tribunal wrote to the applicant asking that he advise within ten days of his intentions with respect to the Application. Having received no response within the requisite time period, the applicant was deemed to have abandoned the Application and the Application was dismissed.

Jerry Smith v. Prodomax Automation Inc.

In this case, the applicant alleged discrimination in employment due to age contrary to the Code. The hearing stage had been reached, with a start time of 1:30 p.m for a summary hearing by way of conference call. In accordance with its usual practice, the Tribunal waited until 1:50 p.m. before proceeding with the hearing. At as that time, the applicant, who had been given notice of the summary hearing by conference call, was still not present for the call.

Rule 3.13 of the Tribunal's Rules of Procedure states that the Tribunal may proceed with the hearing, if a party has been notified, in the party's absence and to take any action that it deems appropriate.

In dismissing the applicant's case as abandoned for non-attendance, the Tribunal explained the justification behind this specific procedural rule:

The applicant did not attend at the hearing although notified of the hearing. The respondent incurred the costs of attending at the hearing. The Tribunal also set aside the time and resources for the hearing, which are precious given the caseload of the Tribunal and the expense required to facilitate these hearings.

Abdul v. Inside Out Toronto

In this case, the applicant alleged discrimination in the area of services, goods and facilities on the basis of race and place of origin. Specifically, the applicant believed she had been discriminated in her communications with the executive director of the respondent employer when she tried to adduce information and make inquiries about the mentorship workshops offered by it to members of the public in 2009. She says that despite her numerous inquiries, she was never informed of the dates, times, and location of the workshops. The executed director's stated lack of knowledge, the applicant says was a ruse for the organization's and director's deep-seeded racism.

The discrete procedural issue before the Tribunal, was whether the claim was time-barred for reason that the last incident of discrimination in the applicant's Application occurred more than one year before the application was filed, in 2009.

Section 34 of the Code provides as follows:

(1) If a person believes that any of his or her rights under Part I have been infringed, the person may apply to the Tribunal for an order under section 45.2,

(a) within one year after the incident to which the application relates; or

(c) if there was a series of incidents, within one year after the last incident in the series.

(2) A person may apply under subsection (1) after the expiry of the time limit under that subsection if the Tribunal is satisfied that the delay was incurred in good faith

The applicant, in her verbal submissions before the Tribunal, argued that the last incident of discrimination actually occurred in 2011, when the applicant had communicated with the Director for the sole purpose of restating her concerns about the discrimination she believed he and his organization had subjected her to.

In finding that the one-year limitation period had been violated, the Tribunal stated:

The Tribunal has set a fairly high onus on applicants to provide a reasonable explanation for the delay. . . The mandatory one-year limitation period is consistent with the Code's objective that human rights claims should be dealt with fairly and expeditiously. Thus, the Code requires an individual to act with all due diligence, and file their application within one year, when they seek to pursue a human rights claim.

I reject the applicant's contention that the alleged discrimination she experienced in 2009 continued until, or reoccurred in, 2011 simply because she attempted to recommunicate her concerns at that time. To allow an applicant to revive an out of time claim by simply restating old concerns would under the purpose of section 34 of the Code.

- Robert Tanha , Toronto

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Ontario Employment Law: Can A Wrongfully Dismissed Employee Plead Systemic Misbehaviour By The Employer?

Unlike trial rulings, decisions on motions in the area of employment law rarely grab the attention of legal commentators, let alone employers and employees. A March 23, 2011 decision by Ontario Superior Court Master M.J. Sproat in Covelli v. Sears Canada Inc., however, is a definite exception to the rule.

The motions to strike brought by the Defendant employer, Sears Canada Inc., against a former employee, Mr. Covelli, raised the following two interrelated issues of fundamental importance to the parties:

1. Can a bald allegation of systemic misbehaviour by a Plaintiff employee in a wrongful dismissal action be struck for lack of particularity?

2. Whether a plaintiff employee can claim moral and punitive damages for alleged mistreatment of the plaintiff and other employees pursuant to this policy or practice?

In the case, Sears sought to strike the following allegations in their former employee's claim:

"11. Mr. Covelli pleads that Sears has adopted a corporate policy or practice of terminating employees for just cause, notwithstanding that it knows or ought to know that no just cause at law exists, as a means of unlawfully evading its statutory and common law obligation to provide employees with notice of termination or compensation in lieu of notice. Pursuant to this policy, Sears has engaged in similar conduct with other (now former) employees, which is also the subject matter of litigation. Mr. Covelli further pleads that Sears' cavalier and reprehensible conduct in this regard will invariably exacerbate his ability to secure alternate, comparable employment."

The Defendant emphasized the lack of particularity in the Plaintiff's allegation of systematic misconduct against it. It further took the position that circumstances leading to the termination of other employees is irrelevant and further, would lead to discovery of "monstrous proportions".

With respect to whether an allegation of a systemic wrong is relevant to an analysis of bad faith or punitive damages, Master Sproat cited and ultimately agreed with the following passage from Craig-Smith v. John Doe, [2009] OJ No. 4041, per CW Hourigan J.:

I reject the the submission that an allegation of systemic wrong is not relevant to an analysis of bad faith or punitive damages. There are many cases where such allegations are considered in the context of punitive damages or bad faith analysis (see, for example, Whiten v. Pilot Insurance Co.).

In other words, punishing a defendant appropriately for its systemic misconduct, which can be said to to be so "reprehensible" as to be deserving of a court's censure, in relation to a single plaintiff may call for consideration of other similarly placed individuals even where, as here, the plaintiff is the first to make such a claim against its employer for punitive damages for this alleged misconduct.

With respect to the lack of particularity in the allegation of a systemic wrong, Master Sproat stated:

. . . the case largely turns on whether there is a risk of "limitless" discovery or discovery of "monstrous proportions". I agree with the plaintiffs' counsel's submission that the discovery plan process can be used to place parameters on the information that can be obtained. . . The Rules also provide for the principle of proportionality to address discovery issues . . .

Master Sproat, also, stressed that "discovery" might not be monstrous in this case in any event:

If the impugned pleadings are permitted to stand, there will be fewer than 200 file reviews and likely far less than that number once it is conclusively determined how many of these cases are actually relevant . . . these are matters that can be explored in the discovery plan process and on discovery

If this decision is correct, the answer to the question posed in the title to this post, is a resounding "yes."

- Robert Tanha, Toronto

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Ontario Employment Law: Entitlement To Benefits During The Period Of Reasonable Notice

A June 2010 ruling of the Ontario Superior Court in Simpkin v. Ability Machine and Manufacturing Inc. demonstrates that in wrongful dismissal cases, quantification of damages is not confined to wages that would have been earned during the notice period, but will also include the replacement cost of benefits during this period.

In Simpkin, after awarding sixteen (16) months to a wrongfully dismissed, long-term machinist turned shop foreman, Justice Trotter fixed the replacement cost of benefits during the notice period at $275.00 per month, awarding the plaintiff-employee $4,400.00 for lost benefits.

As a note, this ruling was made on an unopposed summary judgment motion.

As this case illustrates, where an employee is wrongfully terminated, there is an entitlement to the value of lost employment benefits during the notice period, in addition to lost wages.

If you believe you have been wrongfully terminated, please contact a lawyer who can advise as to your rights and entitlements under the Ontario Employment Standards Act and at common law.

- Robert Tanha, Toronto

Visit our Toronto Law Firm website: www.wiselaw.net

TORONTO EMPLOYMENT LAW • TORONTO CIVIL LITIGATION & ESTATE LITIGATION • TORONTO FAMILY LAW & DIVORCE

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