Logical illogical road sign

In the past, the Ontario Board of Inquiry has shown a willingness to abide by the remedial principles of the Code and make complainants “whole”.  Future prospective lost wage orders were not balked at. See the 1992 decision, McKee v. Hayes-Dana Inc. et al.[i] for example. Mr. McKee had worked for the Respondent for over thirty-two years. He was a 57 year old foreman when his employment ended. The Board found that McKee’s age played a material role in the employer’s decision to compel him to choose between indefinite lay-off or early retirement. Two younger foremen were retained, while the two older foremen (including McKee) were forced out. In addressing remedy, the Board stated at page 22:

It is ordered that the Respondent, Hayen-Dana Inc., compensate the Complainant, Allen McKee, for lost wages and benefits from October 1, 1985 to the date of his 65th birthday.

This remedial order, aside from ordering 8 years lost wages, included future prospective lost wages that had not yet crystallized. Notably, the Board did not implement any contingencies to address the fact that Mr. McKee may find alternative employment.

With the changes to the human rights system in 2008, things changed. The “complainant” became the “applicant” and future prospective lost wage orders, for one reason or another, became a thing of the past.  Frankly, I find this surprising given that the remedial principles of the Human Rights Code aim to restore applicants to the position they would have been in had they not experienced discrimination, along with the fact that many applicants are still unemployed and experiencing wage loss on the day of hearing and into the future. There appears to be two primary reasons why future prospective lost wage orders are remote (or perhaps “non-existent” is the more appropriate term):

  1. The Human Rights Tribunal of Ontario fears speculation and recognizes that the Tribunal cannot assess an applicant’s mitigation efforts post-hearing, and
  2. Applicants rarely seek future lost wage damages, perhaps because they are so rarely ordered.
HRTO Jurisprudence Considering Future Prospective Lost Wages

In order to understand the Tribunal’s reluctance to order future lost wages, it is helpful to briefly review two recent decisions addressing the issue.

Loutrianakis v. Clair de Lune, 2010 HRTO 2137

In this case the Tribunal found that the respondent terminated the applicant because of her disability and stated that the “applicant is entitled to compensation for the wages she lost because of the respondent’s actions”. The applicant sought “her prospective wage loss up to the point in time at which it would be reasonable to expect the applicant would have found alternate employment.” Notwithstanding a finding discrimination and recognition of the remedial principles of the Code, Vice-Chair Sheri Price declined to order prospective future lost wages, stating at paragraph 65:

I decline, however, to order the respondent to compensate the applicant for the prospective wage loss she expected to continue to incur following the hearing. Although the applicant invited me to pick some date in the future at which point it would be reasonable to expect her to have found other employment, I find that I lack a sufficient evidentiary or other basis upon which to grant this remedial request.

With this very basic explanation, the applicant was denied future lost wages notwithstanding that she may ultimately be unemployed and experience wage loss well into the future.

Pilon v. Cornwall (City), 2012 HRTO 177

In this decision, the Tribunal found that the respondent had discriminated against the applicant on the basis of disability.  The applicant sought lost wages to the age of fifty-five, when she could have retired. Vice-Chair David Muir declined to order future lost wages, stating at paragraph 14:

As noted by the respondent, the Tribunal has not yet made an order of post-hearing wage loss. In my view such an award would be extraordinary and not likely to be made except in exceptional circumstances. One reason for this conclusion flows from my view that the obligation of the applicant to mitigate his or her damages runs together with a claim to damages for lost wages. It is obviously impossible to assess an applicant’s ongoing efforts to mitigate a wage loss post hearing. As such, any award of post-hearing damages for lost wages would be almost entirely speculative in the majority of cases. [underlining added]

The Tribunal’s concern, in my opinion, is without merit. Other decision-makers are able to deal with the speculative nature of future lost wages awards and the duty to mitigate. For example, in Adjemian v. Brook Crompton North America,[ii] a 2008 summary judgment decision of Justice Perell, the Court ordered damages for payment in lieu of notice for a period which concluded after the trial date. Rather than refuse to order these damages or shy away from the summary judgment process, Justice Perell stated at paragraph 28:

Although Ms. Adjemian is entitled to judgment, her judgment has come so quickly that it comes during the period in which she continues to have an obligation to mitigate. In these circumstances, the court can impose a trust requiring her to account for any mitigatory earnings…

Fear of Speculation Trumps the “Make Whole” Remedial Principles of the Code

In fairness, the Tribunal’s concerns have some merit. Yes it is difficult to assess an applicant’s job search efforts after the hearing. And yes the damages are “speculative” – the applicant could find new work tomorrow or pass away. Are these factors enough for the Tribunal to justifiably conclude that future lost wages would not be ordered except in the most “exceptional circumstances”?

In assessing the proper balance, the Tribunal fails to recognize that the speculative nature of these damages is also a significant concern for applicants. An applicant who has been terminated for discriminatory reasons and is still without a job come the hearing date has significant reason for “concern”.  Applicants are often in financially-tenuous situations, have families and dependents to support and good reason to question where and when they will get their next paycheque. Perhaps most important in the analysis is the reason why future employment and the quantum of lost wages is speculative – it is because the respondent has violated the applicant’s rights under the Code!

In fact, these factors were explicitly recognized by the Tribunal when dealing with another “speculative” area of loss – opportunity loss. In Chaudry v. Choice Taxi of Cornwall Inc.,[iii] Vice-Chair Leslie Reaume considered whether to order an applicant to become a shareholder as opportunity loss. In grappling with issues very similar to those raised in the two cases already addressed, the Tribunal stated:

…There was no evidence that the applicant was unsuitable as a candidate for shareholder in Choice, in fact, quite the opposite was proven. On the other hand, in April 2007, Choice was not actively looking for new shareholders…After April 2007, there was no reasonable or serious possibility that the applicant would ever have been offered the opportunity to become a shareholder.

Vice-Chair Reaume was uncertain as to whether the applicant would have become a shareholder but for the discrimination. It was “speculative”. Notwithstanding that uncertainty however the Tribunal correctly understood why the Applicant was in that position, ordered the applicant the opportunity to become a shareholder, and remained seized to deal with issues arising from that order, stating, inter alia:

…[the uncertainty] exists because of the conduct of the respondents and not the qualifications of the applicant…I cannot say exactly when after April 2007 the applicant might have become a shareholder but for the violation of the Code, but that is due to the conduct of the respondent… [underlining added]

Practical Realities of the Tribunal’s Refusal to Order Future Prospective Lost Wages

The unfortunate reality is that the refusal to order future prospective lost wages ensures that the Tribunal cannot place an applicant as reasonably as possible into the position he or she would have been in had the discrimination not occurred. Rather, the Tribunal is hinging the “make whole” principles on a superficial and tenuous factor – the hearing date. This carries undesired practical realities.

Respondents will inevitably be motivated to complete the hearing as quickly as possible, knowing that applicants’ wage loss ceases after the matter is concluded. We may see a decline in Tribunal-offered mediations. Why would a respondent mediate after all, when mediation extends the time to a hearing by approximately three to five months? Applicants on the other hand are motivated to extend the length of time to the hearing, which may motivate them to seek otherwise unnecessary adjournments or raise preliminary issues which will likely delay the hearing on the merits.

Hearing dates are mainly dependent on the Tribunal’s case load at any given time and the schedules of legal counsel. It is inherently unfair to cap an applicant’s remedy on this unprincipled and superficial basis.

Is there Hope for the Future?

While extensive jurisprudence has made it clear that the Tribunal does not apply the analysis used at common law in wrongful dismissal actions (character of employment, length of service, age and availability of similar work having regard to experience, training and qualifications of the employee), does that mean there isn’t anything that can be adopted from the common law approach when assessing future prospective lost wages?

Yes, the theoretical underpinning of the two damages are different – wrongful dismissal damages arise out of contract (an implied term in the employment contract), whereas human rights lost wage damages are compensatory. While the reasonable notice analysis does not apply in the human rights context, these concepts could very well apply to a future lost wage analysis beyond the date of the hearing. After all, isn’t that analysis primarily concerned with awarding a period of time that is reasonable in the circumstances for an employee to find alternative employment. Moreover, the reasonable notice period is often assessed prior to the completion of that period, making it, yes, get ready for it – speculative! Mitigation efforts are assessed at the time of trial. Courts do not simply cap the notice period because there is a speculative portion after trial, as we’ve already seen in Adjemian. There are other, more just ways to deal with issues that may arise.

There is some indication the Tribunal may be warming up to these damages (although Pilon, a later decision, seemingly suggests otherwise). In 2010, Vice-Chair Judith Keene released a well written and reasoned decision – McLean v. DY 4 Systems.[iv] In this decision the applicant sought prospective future lost wages and Vice-Chair Keene considered the following factors in determining the issue:

  • There were no performance concerns warranting termination;
  • The applicant enjoyed her work and had no plans to resign;
  • The applicant would have retired when she reached the age of 65;
  • The respondent was in a fortunate position, doing well and hiring more staff;
  • The applicant had a high school education, no “paper qualifications” and developed her skills entirely on the job, and
  • Given the applicant’s “significant disabilities” it would be difficult to find a job (supported by the fact that she was unable to find a job to the date of the hearing).

Rather than dismissing these damages as speculative, Vice-Chair Keene correctly assessed whether the applicant was likely to incur future prospective lost wages by looking at the employment relationship and the likelihood that the employee would have remained employed ‘but for’ the discrimination. The Tribunal also dealt with the risk of an employee finding new employment over a period of time, stating at paragraph 96:

If the applicant finds employment on a short-term or permanent basis, corresponding deductions can be made in the relevant 15-month timeframe between the date of the hearing and the date the applicant would have retired in any event…

One decision in the past two decades is not promising, but McLean offers hope for the future.

What Can Applicant Counsel Do?

Ask for prospective future lost wages. Cite McLean and build off the glimmer of hope Vice-Chair Keene has offered. The Tribunal’s reluctance to order prospective future wage loss is only part of the problem. Another, perhaps more important problem, is that these damages are rarely sought by applicants. Future wage loss (like reinstatement orders) are rarely requested and so rarely ordered. In turn, practitioners assume that future lost wage orders (like reinstatement) are rare and unrealistic. It is time for applicant-side legal counsel to request these damages and ensure that applicants have the opportunity to truly be placed in the position they would have been in “but for” discrimination – even after the hearing date.

End Notes

[i] (1992) 17 C.H.R.R. D/79 (Ont. Bd.Inq.)

Choosing the Right way instead of the Wrong one.

Last Friday, I presented at the Law Society of Upper Canada’s Six-Minute Employment Lawyer program. In front of a large audience, comprised on several management-side employment lawyers, I attempted to explain why the law in Ontario relating to disabled employees and frustration of contract is wrong. If I’m correct in my assessment, it means that employers across the province will be unable to, or at least have a much more difficult time, ending the employment relationship for employees who are absent for medical reasons for lengthy periods of time. I’m not sure I was the most popular presenter in the room (in fact, I’m certain I wasn’t), but perhaps the most nervous. In any event, I tried to provide a thorough analysis of the issue, which is difficult to do in only six minutes. Here is a detailed analysis of the argument I raised.

Let’s start with an example that I will refer to throughout this blog:

For the past 11 years George has been employed as a labourer at Vandalay Industries, a large manufacturing employer in Ontario. 4 years ago, George was diagnosed with depression and been on a medical leave of absence from the workplace since. George has regularly updated his employer on his medical status and last week provided the most recent update, which confirmed that he is still unable to return to work and will be unable to return for the reasonably foreseeable future.

Is George’s employment with Vandalay Industries at an end? Is his employment contract with Vandalay contract “frustrated” (no I don’t mean literally, but rather can the contract no longer be performed or is something so different from what the parties contemplated when George was first hired)? If it is, George’s employment is over.

The Common Law Doctrine of Frustration of Contract

Justice Swinton effectively summarized the doctrine in Antonacci v. Great Atlantic & Pacific Co. of Canada:

The doctrine of frustration applies when a contract became incapable of performance because, in the circumstances, performance would be radically different from that contemplated by the parties at the time they made the contract. Many cases have emphasized that the frustrating event must be beyond the contemplation of the parties…1

In the employment context, frustration of contract typically occurs when an employee becomes injured to the extent that they can no longer perform the essential duties of the job which formed the contract of their employment, or when an employee is temporarily injured, unable to perform their job, it is uncertain when they can return to work and they have been absent from work for a lengthy period of time.

The Common Law meets Statute: Frustration of Contract & the Ontario Human Rights Code

The doctrine of frustration of contract is only one consideration in the example above however. Another, equally important consideration that must be taken into account if the employee suffers from a disability (remember, most injuries or illnesses will be considered a disability for the purposes of the Ontario Human Rights Code) is the duty to accommodate to the point of undue hardship as set out in the Code.

Frustration of contract will not occur until the employer has satisfied the duty to accommodate. 2 The duty to accommodate ends when an employer establishes that it has accommodated an employee to the point of undue hardship. How is the doctrine of frustration reconciled with the duty to accommodate to the point of undue hardship?

If I asked the majority of employment lawyers (or even judges and adjudicators) this question they would likely point to Hydro Quebec, 3 a 2008 decision of the Supreme Court of Canada. This case stands for the proposition that undue hardship is established and the duty to accommodate ends when an employee has been absent for a sufficient period of time and is unable to return to work for the reasonably foreseeable future.

The only additional elements required by the undue hardship threshold in the Code is that the employee, even if accommodated, be unable to return to work for the reasonably foreseeable future. IF this is the correct recital of the current state of the law in Ontario then George is likely out of luck and his employment will come to an end.

Ontario Courts and Tribunals Misapply Hydro Quebec – The Law is Wrong (arguably)

Luckily for George, this quite arguably, is not the correct recital of the law. Let me explain. In Hydro Quebec the Supreme Court clarified the test to be used in assessing undue hardship. The statute the Court was dealing with was the Quebec Charter of Rights and Freedoms. In this statute, the Quebec Legislature did not explicitly set out the factors to be relied upon in assessing undue hardship and the test was left to the courts to determine. That is precisely what the Supreme Court did.

This case has subsequently been applied in Ontario without question and it is here that those courts and tribunals have arguably erred. Unlike the Quebec statute in question in Hydro Quebec, the Ontario Legislature has specifically and explicitly set out the factors to be applied in assessing undue hardship. The three factors set out in the Code are:

1. Cost,
2. Outside Sources of Funding, if any, and
3. Health and Safety Requirements. 4

When the Legislature has specifically set out the factors to be used in the analysis, the common law test set out in Hydro Quebec is unnecessary, and inapplicable. In other words, we don’t need the Court to tell us the test, because the Legislature, our elected representatives, have seen fit to do that for us. In this situation, courts and tribunals are simply tasked with applying the law.

Are the Three Factors to be Applied in Assessing Undue Hardship Exclusive?

One may argue that the factors set out the Legislature are “inclusive” rather than “exclusive”, meaning the courts and tribunals are permitted to consider factors other than those explicitly set out the Legislature.

In my opinion, this is incorrect. The Legislature did not use language to consider those are only “some of the factors” and there are others that can be considered. Rather the Legislature used language to suggest that undue hardship is assessed using the three explicit factors. Its relatively straight-forward – the three factors are exclusive. They are the only factors that can be considered by courts and tribunals. It is inappropriate to assess undue hardship using any other considerations that don’t substantially impact the legislated factors. There is considerable support for this position:

First, in a case commonly referred to as Meiorin, 5 the Supreme Court of Canada itself recognized that the common law test may be inappropriate when the factors have explicitly been set out by the Legislature. Specifically, in relation to the factors to be used in assessing undue hardship, the Court stated at paragraph 63:

…The various factors are not entrenched except to the extent that they are expressly included or excluded by statute. [bolding added]

Second, in Air Canada Pilots Association v. Kelly, 6 the Federal Court found that the Canadian Human Rights Tribunal was unreasonable in relying upon considerations other than those explicitly set out in the Canadian Human Rights Act (which are health, safety and cost). In other words, the Court was suggesting that those factors are exclusive.

Thirdly, the Ontario Human Rights Commission’s position is that three factors are exclusive. In their Policy and Guidelines on Disability and the Duty to Accommodate, the Commission states:

The Code sets out only three considerations. This means that no other considerations, other than those that can be brought into those three standard, can properly be considered under Ontario law…the Ontario legislature has seen fit to enact a higher standard by specifically limiting undue hardship to three particular components…7

Finally, in McDonald v. Mid-Huron Roofing, 8 the Human Rights Tribunal of Ontario addressed undue hardship and the factors that can be considered, stating at paragraph 42:

…The factors to be assessed are spelled out in section 11, and the applicable principles of statutory interpretation suggest that nothing other than those factors and any regulatory provisions be considered. Morale in the workplace has been suggested as a factor in assessing “reasonable accommodation” by the Supreme Court…however, that decision and others were based on human rights legislation of other jurisdictions, which are differently worded…

If Vice-Chair Keene recognized this principle in 2009, why is it that courts and tribunals since that time have applied Hydro Quebec in Ontario without question? Over the past decade decision-makers in Ontario have demonstrated a tendency to follow leading Supreme Court of Canada cases even when the Ontario statute in question or legal framework in Ontario is different. Call it what you will, it does not mean that the legal analysis is proper and often results in legally unsound law (like the application of Hydro Quebec in Ontario).

If the Hydro Quebec is Inapplicable in Ontario, What is the Law on Frustration of Contract and Undue Hardship?

If Hydro Quebec is inapplicable in Ontario what does that mean? It means that undue hardship can only be established through an assessment of the three factors set out in the Code. Taking this a step further it also means that undue hardship will be not established in Ontario solely on the basis that an employee cannot return to work for the reasonably foreseeable future. This means, that frustration of contract is much more difficult to apply in Ontario than previous thought (and likely still thought by counsel who are unwilling to question what they perceive to be established legal principles).

As previously mentioned, it is well-established that an employment contract will not be frustrated in relation to employee in Ontario with a disability until the employer has discharged the duty to accommodate and established undue hardship. If undue hardship can only be established in relation to the three legislated factors, this poses a significant problem for employers.

Only one of the three legislated factors is related to a lengthy absent and the inability to return to work in the reasonably foreseeable future – cost. Jurisprudence has demonstrated that the threshold to establish undue hardship through cost is a high. The Ontario Human Rights Commission’s position on this issue is that costs must be “so substantial that they would alter the essential nature of the enterprise, or so significant that they would substantially affect its viability”. 9 It is possible that undue hardship can be established in a situation where an employee is absent for a considerable period of time, the employer is relatively small, and the costs of permitting the employee to remain employed on a leave are prohibitive. In most cases, for most employers however, this will simply not be the case.

In relation to employees with disabilities, frustration of contract is not dead per say, but with the correct application of the undue hardship analysis, it is close. The good news is, George might get to keep his job at Vandalay Industries.

One final point I’d like to address is the practical implications of the position I have put forward. Yes, employers may be unable to terminate employees who are absent for a considerable period of time and that may not be desirable by all – or most. To be clear I am not advocating that this should or should not be the case, I am simply advocating for proper legal analysis and sound legal principles. If the outcome is undesirable in your view, it would seem to me that your issue lies with the Ontario Legislature who legislated the three factors to be relied upon in the undue hardship analysis.

ENDNOTES

(1) Antonacci v. Great Atlantic & Pacific Co. of Canada, [1998] O.J. No. 876 at paragraph 37.

(2) Ontario Human Rights Commission v. Jeffrey, [2007] O.J. No. 3767 (Ontario Divisional Court) at paragraph 71.

(3) Hydro-Quebec v. Syndicat des employe-e-s de techniques professionelles et de bureau d’Hydro-Quebec, section locale 2000 (SCFP-FTQ), [2008] 2 S.C.R. 561 (Supreme Court of Canada) at paragraphs 12, 17 and 18.

(4) Ontario Human Rights Code, R.S.O. 1990, c. H.19 – sections 7 and 11.

(5) British Columbia (Public Service Employee Relations Commission) v. BCGSEU (“Meiorin”), [1999] 3 S.C.R. 3 (Supreme Court of Canada) at paragraph 63.

(6) Air Canada Pilots Association v. Kelly, [2011] FCJ No. 152 (Federal Court) at paragraph 402 . (Note this decision was overturned by the Federal Court of Appeal in 2012 FCA 209, however not on the issue of the Federal Court’s interpretation of the Canadian Human Rights Act).

(7) Ontario Human Rights Commission’s Policy and Guidelines on Disability and the Duty to Accommodate, located online at http://www.ohrc.on.ca/en/book/export/html/2461 at page 22 of 36 (under Section 5 entitled “Undue Hardship”).

(8) McDonald v. Mid-Huron Roofing, [2009] O.H.R.T.D. No. 1277 (Human Rights Tribunal of Ontario – Vice-Chair Judith Keene)

(9) Ontario Human Rights Commission’s Policy and Guidelines on Disability and the Duty to Accommodate, located online at  http://www.ohrc.on.ca/en/book/export/html/2461 at page 25 of 36 (under Section 5.3.1)

3D Man Showing Like Thumbs Up isolated over white background

O.P.T. v. Presteve Foods Ltd. – Overview of Case

Last week, the HRTO released a landmark decision – O.P.T. v. Presteve Foods Ltd., 2015 HRTO 657. The Respondent, Presteve Foods, hired two migrant workers, properly referred to as temporary foreign workers, into their fish processing plant. A number of allegations of misconduct were raised during the course of their employment against Jose Pratas, the owner of Presteve Foods, which included unwanted sexual solicitations and advances, sexual assault and touching, a sexually poisoned work environment, discrimination on the basis of sex, and reprisal for claiming Code rights.

The findings of fact were extensive and the Tribunal found them to be “unprecedented.” The Tribunal found, amongst other things, that Mr. Pratas forced one employee referred to as O.P.T. to perform fellatio on him on several occasions. Mr. Pratas engaged in intercourse with O.P.T. on a number of occasions. He regularly threatened to send O.P.T. back to her native country (Mexico).

In order to keep her job and avoid deportation, O.P.T. felt she had no other choice but to comply with Mr. Pratas’ sexual demands. O.P.T. was the sole provider for her two children, her husband having been tragically killed previously. Being a temporary foreign worker, O.P.T. was completely dependent upon Presteve Foods. Employers do not require a reason to end a temporary foreign worker’s employment and when that occurs the worker is repatriated to his or her home country without any right to appeal.

$150,000.00 Awarded as General Damages

While this Decision is extremely important in that it recognizes the unique position of vulnerability of temporary foreign workers, it is equally important in that the quantum of damages is unprecedented. Vice-Chair Mark Hart ordered Presteve Foods and Mr. Pratas to pay damages to O.P.T. for compensation for injury to dignity, feelings and self-respect (also known as general damages) in the amount of $150,000.00.

Last year, I wrote a blog article praising a 2013 decision of the British Columbia Human Rights Tribunal, Kelly v. University of British Columbia, where the Tribunal awarded $75,000.00 in general damages. I concluded that blog with hope that Ontario would follow suit and increase their general damage awards. It appears that hope has been realized.

O.P.T. v. Presteve Foods Ltd. is precedent-setting. Even though the award is proportionate to existing HRTO jurisprudence given the unprecedented facts as pointed out by the Tribunal, it is still three times greater than the highest award ordered previously by the HRTO. Two very courageous applicants willing to see the process through, represented by superb legal counsel, and a Vice-Chair with the courage and conviction to break away from the pack and award a meaningful and justified general damage award that has never been seen before in Ontario, has resulted in a decision that I can only hope is the beginning of increased general damage awards across the board. While there will certainly be those who suggest this is an outlier decision given its unique facts, one thing is for certain – the ceiling has been raised.