Written by Michael J WeilerBritish Columbia is known for its wild swings in labour legislation. In 1992 when the NDP formed government 40+ changes were introduced to the Labour Relations Code (“Code”) most of which were in favour of unions. Not surprisingly union density rose dramatically as the balance of power was heavily tipped in favour of unions. When the Liberals regained power in 2002 they introduced changes to the Code to restore that balance. The most significant change involved a return to a mandatory vote in certification applications. Prior to that a union could be certified based solely on signed membership cards with no vote if it signed up 55% of the employees in the bargaining unit. In addition the Liberals expanded employer free speech allowing employers to express their views on unionization. Unions and employees were protected as the Code required that a secret ballot vote must be held within 10 days of the application for certification. Not surprisingly unions would often file applications for certification at 4 pm on a Friday thus giving them a further head start.In 2013 I assumed as many did an NDP victory and therefore wrote about the potential changes to the Code: NDP will not say What Changes will be made to the Labour Code. All of those comments were rendered moot by the stunning Liberal victory and therefore no changes were made to the Code.Although the NDP platform is somewhat silent on labour law reform John Horgan made it clear to the editorial board of the Sun and Province on May 1st, 2017 that he would introduce changes to the Code that would eliminate the secret ballot vote and he would also strike a review group to consider other unspecified changes to the Code.With the marriage of the NDP and the Green party on May 29th, 2017 employers need to consider what changes might occur to the Code and how they might protect their operations.In my view, a return to a card-based system and the elimination of the secret ballot vote is the low hanging fruit both the Greens and the NDP will be glad to harvest. Given their anti-resource development stances, such changes will reward their union constituency who might be concerned about the potential loss of high paying union jobs on resource development projects. Given the in-kind donations of the United Steelworkers to the NDP campaign, it would be normal to expect significant changes from an NDP led government in favour of unions.What can Employers do? One way employers might defeat a certification application is to ensure that they have a fully integrated workplace so that a union cannot cherry-pick a small group of employees and then use that as a springboard to unionize the remaining employees. A union does not have to organize the most appropriate bargaining unit (i.e. all employees) but only “an” appropriate bargaining unit. The Labour Relations Board (“LRB”) applies various tests to see if there is a reasonable defensible boundary around the bargaining unit sought. One of the key tests is whether the functional integration between the employees in the group sought to be included and those excluded from the application is such that the unit is not appropriate.All Care Canada (Sidney) Inc. v BCGEU BCLRB No. B83/2017 A recent decision of the LRB provides a good example of where various factors including functional integration will defeat a certification application. In All Care Canada (Sidney) Inc. v BCGEU BCLRB No. B83/2017 the employer operated a private pay long-term seniors’ care home. The Union applied for certification of 79 out of 119 employees based primarily on the extent of their organizing drive versus what would be an appropriate bargaining unit. Payroll and budgeting were administered by a single management team; benefits and compensation were common. The housekeepers frequently navigated the hallways and dining rooms and were found to “often interact with the other staff”. There were a number of other common features applied universally to all employees. There was an overlap of certain duties.The LRB dismissed the union certification application. It considered the 4 factors from the seminal decision of IML to determine if the bargaining unit was appropriate. It found there was no rational defensible line around the proposed unit in terms of skills, interests, duties and working conditions. Given the employer’s horizontal organization the second factor of the physical and administrative structure of the Employer went against the application. All employees worked in the same building and there was no geographical separation between the employees in the unit sought and the rest of the employees that could create a separate community of interest so this third factor went against the proposed unit. Finally, there was significant functional integration given the overlapping and shared duties among employees inside and outside the proposed unit.The LRB concluded:When all of the community of interest factors are considered, none of the factors favours the proposed bargaining unit. I find that the unit applied for is not appropriate for collective bargaining. The scenario of employees inside and outside of the Union’s proposed unit working side-by-side on the same neighbourhood teams with shared and overlapping duties raises the danger of industrial instability and unduly complicated administration of the bargaining unit. These concerns outweigh the consideration of access to collective bargaining in this case.This case is a good template to follow in organizing your workplace to make it harder for a union to certify a group of your employees. In my view, this case is significant as it was authored by Bruce Wilkins, a very senior member of the LRB and the Associate Chair Adjudication.Labour reform in CanadaThere is a trend these days in Canada for labour reform in favour of unions. The Federal Liberal government as one of its first orders of business reversed significant labour legislation introduced by the Conservatives. Alberta under an NDP government has introduced changes. Most significantly, the Ontario Liberal government commissioned a report on changes to the employment standards and labour legislation. On May 23, 2017, the Final Report was issued including 173 recommendations over its 420 pages. The Report recommended that the secret ballot be preserved but recommended additional provisions that would make it easier for unions to certify, including permitting a union to obtain employee lists and contact information if it has the support of 20% of employees in the appropriate bargaining unit: see “Wynne to announce worker legislation” Globe & Mail Tuesday, May 30th, 2017.If the right for employees to decide whether to unionize through a secret ballot vote is taken away then your workplace is likely more vulnerable to unionization. If you think a review of your organization would be useful I would be pleased to meet with your management team.

Written by Michael J WeilerThe most common question from clients with respect to terminations without cause and without notice in the absence of an enforceable employment agreement is “How Much Notice?” Courts will look at four key elements to determine how much is reasonable notice: age, length of service, position and the availability of similar employment having regard to the employee’s skills and qualifications. The court will often look at economic circumstances but will not give that factor undue weight. The highest period of notice, subject to a few exceptions, is 24 months. Please bear in mind that each case will be decided on its own facts and there is no litmus test. Further, the amount of notice will not always equal the damage award as the employee must mitigate her damages and must also prove her loss (e.g. lost benefits or bonuses).The following cases from this past year will give you some idea of the courts’ present thinking on the matter. These can be very important factors in each case, especially dealing with senior executives whose compensation can often exceed $20,000 per month.Case NameEmployee PositionIncomeAgePeriod of EmploymentNotice PeriodLy v Interior HealthManager of team$97,00038 2 months3 monthsRam v Burger KingCook$21,0005524 years12 monthsPrice v 481530 BC LtdManager hair loss clinic and 20% owner$77,000 (commission and salary)4720 years20 monthsWood v Fred Deeley Imports LtdSales/event planner (not managerial)$100,000488 years9 monthsSollows v Albion FisheriesSenior manager$160,000 plus bonus602 years 9 months10 monthsBuchanan v IntrojunctionSenior software engineer$125,000 plus bonus/stock27None [1]6 weeksSletmoen v NafcoMachine operator$66,5005218 years16 monthsMudrovcic v Engenuity ManufacturingResponsible position$81,0004819 years21 monthsNogueira v Second CupManager$125,000478.5 months4 monthsEnsign v Price’s Alarm SystemMedical Alert advisor/salesman$30,000 (salary plus commissions)6312 years12 months[1] An offer of employment was rescinded 2 weeks after being made and prior to employment commencing.

Written by Michael J Weiler

Once again, "close but no cigar"

Maureen Stock, a single mother, worked for Oak Bay Marina for 20 years as a sales agent. She was dismissed on August 5, 2015 with cause. The employer alleged she had engaged in improper conduct by “marking” guest reservations as her own when, in fact, she had not made contact with the guests. The matter was set for a 5-day trial. The defendant brought a summary trial application based on affidavit and discovery evidence to have the action dismissed. The plaintiff in turn brought an application for judgment for wrongful dismissal. The Court held that it could decide the matter on a summary trial despite conflicting affidavits or conflicting evidence because in this case the Court was able to make the necessary findings of fact.Ms. Stock was an excellent employee with a proven track record as a sales agent. The employer had a policy against “marking” reservations. It noted in 2006 that “marking of guest files is not acceptable”. In 2012 it sent an email to employees noting instances where past guests of departed sales agents were “marked” as contacted even though no contact was made. The email stated “This is unacceptable behaviour in that it erodes the trust that is in place around how your guests are dealt with and serviced. Being negligent in honouring this policy can unfortunately result in disciplinary action.” (emphasis added).Ms. Stock was found to have accessed guest bookings and noted them as her own. Her explanation was that she often intended to contact the guest to see if she could upsell them on services. However, there were many occasions where she did not, in fact, contact them.The Court found that, although Ms. Stock had engaged in inappropriate conduct, the misconduct was not sufficient to justify termination for cause.The Court provided a very thorough updated summary of the law on just cause which we reproduce in its entirety (paras. 58-64):[58] The basic principles for determining whether an employer is justified in dismissing an employee on the grounds of dishonesty are well-established, and not in dispute. They are set out in McKinley v. BC Tel 2001 SCC 38, the leading case, and conveniently summarized in Roe v British Columbia Ferry Services Ltd., 2015 BCCA 1 (at paras. 26 and following) and also in Lau v Royal Bank of Canada 2015 BCSC 1639 (at paras. 141 and following), among other cases.[59] In McKinley, at para. 49, the Court set out a two-part test. The court must determine: (i) whether the evidence establishes the employee’s deceitful (dishonest) conduct on a balance of probabilities; and (ii) if so, whether the nature and degree of the dishonesty warrant the employee’s dismissal. Both parts of the test involve factual inquiries.[60] In particular, the test requires an assessment of whether the employee’s misconduct gave rise to a breakdown in the employment relationship justifying dismissal, or whether the misconduct could be reconciled with sustaining the employment relationship by imposing a more “proportionate” disciplinary response (McKinley, at paras. 48, 53 and 57). A “contextual approach” governs the assessment of the alleged misconduct at this stage of the test (McKinley, at para. 51). That assessment includes a consideration of the nature and seriousness of the dishonesty, the surrounding circumstances in which the dishonest conduct occurred, the nature of the particular employment contract, and the position of the employee (McKinley, at paras. 48-57). The ultimate question to be decided is whether the employee’s misconduct “was such that the employment relationship could no longer viably subsist” (McKinley, at para. 29).[61] Mr. Justice Iacobucci, writing for the Court in McKinley, summarized the contextual approach to the assessment of whether the employee’s dishonesty gives rise to a breakdown of the employment relationship as follows:[48] . . . I am of the view that whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct. More specifically, the test is whether the employee’s dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.[49] In accordance with this test, a trial judge must instruct the jury to determine: (1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonesty warranted dismissal. . . .. . .[51] . . . I conclude that a contextual approach to assessing whether an employee’s dishonesty provides just cause for dismissal emerges from the case law on point. In certain contexts, applying this approach might lead to a strict outcome. Where theft, misappropriation or serious fraud is found, the decisions considered here establish that cause for termination exists. . . . This principle necessarily rests on an examination of the nature and circumstances of the misconduct. Absent such an analysis, it would be impossible for a court to conclude that the dishonesty was severely fraudulent in nature and thus, that it sufficed to justify dismissal without notice.[62] Mr. Justice Iacobucci continued (beginning at para. 53):[53] Underlying the approach I propose is the principle of proportionality. An effective balance must be struck between the severity of an employee’s misconduct and the sanction imposed. The importance of this balance is better understood by considering the sense of identity and self-worth individuals frequently derive from their employment . . . . . .[56] . . . Absent an analysis of the surrounding circumstances of the alleged misconduct, its level of seriousness, and the extent to which it impacted upon the employment relationship, dismissal on a ground as morally disreputable as “dishonesty” might well have an overly harsh and far-reaching impact for employees. In addition, allowing termination for cause wherever an employee’s conduct can be labelled “dishonest” would further unjustly augment the power employers wield within the employment relationship.[57] Based on the foregoing considerations, I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship. Such an approach mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behaviour with just cause for dismissal. At the same time, it would properly emphasize that dishonesty going to the core of the employment relationship carries the potential to warrant dismissal for just cause.[63] The trial judge is not obligated to formally balance the length and quality of service with the nature and severity of the misconduct in determining whether there was just cause to dismiss, although it may be appropriate on the facts of a particular case to engage in just such an analysis. The framework adopted by the Court in McKinley focuses on the nature and severity of the misconduct in relation to its impact on the employment relationship; it is not a balancing exercise between the value of the employment to the individual and the severity of the misconduct. See Lau, at para. 145 (citing Steel v Coast Capital Savings Credit Union 2015 BCCA 127, at paras. 28-29).[64] The standard of proof is on a balance of probabilities. The court must scrutinize all of the evidence with care, and the evidence must be sufficiently clear, convincing and cogent to satisfy the burden of proof. See Lau, at para. 146 (citing F.H. v McDougall, 2008 SCC 53, at paras. 46 and 49).*************************The Court held the first part of the test had been met (at para. 71):However, I find that Ms. Stock’s ultimate intention was to claim credit for the guest bookings she accessed, and I find that her conduct amounted to “marking,” as described in Oak Bay’s policy and in Mr. Watling’s evidence. Her conduct was wrongful, and I find that Oak Bay has established the first part of the two-part test described in McKinley.But, (at paras. 74 and 75), the Court held that Oak Bay had not satisfied the second part of the test; it had not established that immediate termination was justified:Ms. Stock’s position within Oak Bay is distinguishable from that of the plaintiff in Roe v British Columbia Ferry Services Ltd., 2015 BCCA 1, relied on by Oak Bay. Instead, Ms. Stock’s situation warranted a more proportionate disciplinary response, taking into account Ms. Stock’s age, her long employment history with Oak Bay, her unblemished record, the fact that she received no benefit from marking the guest records and the lack of any clear warning about the consequences of marking. In my view, her misconduct does not rise to the level of “serious fraud” or “severely fraudulent,” as those terms are used in McKinley. While Oak Bay argues that it should not be required to monitor an employee for potential dishonesty, in my opinion, having regard to the principles stated in McKinley referred to above and Mr. Watling’s evidence that monitoring was available, the appropriate sanction in the circumstances was to give Ms. Stock a strong and final warning, that any further misconduct would result in her immediate dismissal.I find, therefore, that Oak Bay has failed to demonstrate that it had just cause for dismissal. It follows that Ms. Stock is entitled to damages for wrongful dismissal.“Mike what’s an employer to do?”There are two options.First, an employer may apply “progressive discipline” suggested in this case that would include, at a minimum, a strong written warning where further misconduct will result in termination for cause. That delays the inevitable termination for cause. It also is no guarantee that subsequent misconduct will constitute cause. And, of course, failure to act might send the wrong signal to other employees.A second alternative is to have a proper, legally enforceable, written employment agreement that minimizes the damages from a dismissal. The Supreme Court of Canada has said that employers can contract to limit an employee’s rights on termination to the minimum standards under the Employment Standards Act — basically one week of notice or pay in lieu for each year of service up to a maximum of 8 weeks. This advice is not new — I have suggested this many times over the years in our publications and at our seminars. Here, there was no written contract in place and Ms. Stock claimed she was entitled to 20 months’ notice; the employer could have limited its exposure to 8 weeks' wages. The legal fees incurred in defending a wrongful dismissal action would eat up that severance payment in short order.Stock v Oak Bay Marina Ltd., 2017 BCSC 359

Travis W. Brine recently successfully defended a breach of contract claim arising from an alleged agreement to purchase our clients’ business and property.  

In the case of 0827857 B.C. Ltd. v. DNR Towing Inc. 2020 BCSC 717, the purchaser was seeking the remedy of specific performance based on its assertion that the parties had reached a verbal agreement on all of the essential terms for the sale of the business.  Our clients disputed that a final agreement had ever been reached and argued in any event that such an agreement to be enforceable was required to be in writing and signed by the parties.  

In dismissing the purchaser’s claim, Mr. Justice Ehrcke, ruled that the issue was not whether the purchaser subjectively thought there was a legally binding oral contract but rather whether a reasonable objective observer considering all the circumstances would have understood that the parties intended to be legally bound prior to the signing of a written contract.  On the basis of the evidence, Mr. Justice Ehrcke held that a reasonable objective observer would conclude that the parties did not intend to be legally bound until they had signed a written contract.  

In addition, Mr. Justice Ehrcke dismissed the purchaser’s claim on the basis that the transaction involved a sale of real property and as a result the contract had to be in writing and signed pursuant to section 59 (3) of the Law and Equity Act.  The court rejected the purchaser’s argument that exceptions in the Law and Equity Act applied to his case.  As a result, the court dismissed the purchaser’s claim against our clients in its entirety.

Contact Travis Brine with any legal questions - see Profile here

Written by Michael J Weiler

Is This 1992 "Deja Vu All Over Again?

I have been involved with the BC Chamber of Commerce for over 30 years providing advice and input into matters related to labour, employment, workers compensation, human rights and related matters. Every year the Chamber hosts a luncheon with the Premier and the members of Cabinet. Except for the early years of the Liberals assent to power in 2002, for 16 years, the luncheon, addresses and Q & A have not been terribly earth-shattering or exciting in respect of my area of practice. On Friday, December 8, 2017, the Chamber hosted the new NDP Premier and his cabinet ministers. I was fortunate to sit at Minister of Labour Harry Bains’ table as I anticipate the changes to labour and employment laws will be significant (note the Attorney General and not the Minister of Labour is responsible for the Human Rights Code).The Premier sent a letter to Minister Bains on July 18, 2017, outlining the 5 immediate priorities of the NDP government for the Minister of Labour:

1. Establish a Fair Wage Commission to support the work of implementing the $15-per-hour minimum wage by 2021 and to bring forward recommendations to close the gap between the minimum wage and livable wages. (The commission will make its first report within 90 days of its first meeting.)
2. Create a Temporary Foreign Worker registry to help protect vulnerable workers from exploitation and to track the use of temporary workers in our economy.
3. Update employment standards to reflect the changing nature of workplaces and ensure they are applied evenly and enforced.
4. Review and develop options with WorkSafe B.C. to increase compliance with employment laws and standards put in place to protect the lives and safety of workers.
5. Ensure British Columbians have the same rights and protections enjoyed by other Canadians by reviewing the Labour Code (sic) to ensure workplaces support a growing, sustainable economy with fair laws for workers and businesses.

The Fair Wage Commission is well on its way and I suspect we might see legislation in the Spring session of the legislature (although I note that Minister Farnsworth has indicated the Government’s docket will be primarily focused on bringing in legislation in anticipation of the legalization of marijuana which may take up most of the government’s time).It is not clear how the Temporary Workers Registry will work or what its true goal is. I wonder if it will look at the need to employ more of the refugees who have made Canada their home before allowing such temporary workers.The BC Law Foundation will issue its long-awaited report on the Employment Standards Act in 2018 likely in two phases. That report, I suspect, will serve as the foundation of changes to the Act in the Fall session.The government has already made personnel changes at WorkSafe and we will wait to see what further changes are to be made. Expect other legislative and regulatory changes at WorkSafe.Finally, the elephant in the room may well be the 5th priority, namely, changes to the Labour Relations Code. In 1992 the NDP government introduced massive changes to the Code, the vast majority favouring unions. The key change was to eliminate the secret ballot vote by allowing a union to be certified based on membership cards. In 2002, the Liberal Government reversed that decision and reinstated the secret ballot. Now, the leader of the Green Party has stated that he would not favour the abolition of the secret ballot vote in favour of card-based certification. Other changes in 1992 included the Replacement Worker prohibition under section 68. The change of senior LRB personnel at the time affected the interpretation of the Code, most importantly, in the area of appropriate bargaining units (which reflected the government’s priority of extending union representation). The appointment of Stan Lanyon as Chair of the LRB was key to shaping the 1992 legislation. In 2017 Brent Mullin, the long-serving chair of the LRB left the Board and a new Chair will be appointed shortly.Employers must be realistic and accept that many changes will favour employees and unions. The one thing I mentioned to Minister Bains at the Chamber lunch is that I hoped that any changes would be carefully considered from a business perspective as well as from a workers’ or union perspective and that this NDP government would avoid the huge pendulum swing of 1992.The Minister’s appointment letter is found at: https://www2.gov.bc.ca/gov/content/governments/organizational-structure/ministries-organizations/ministries/labour

Written by Michael J Weiler

Total Cost to Employer Nears $1 Million

Melissa Doyle worked for 9 years for the defendant Zochem Inc. She was sexually harassed by the plant maintenance manager whom the defendant considered to be irreplaceable. She was terminated and brought an action for wrongful dismissal and damages for sexual harassment under the Ontario Human Rights Code. The trial judge awarded damages for wrongful dismissal of 10 months compensation, $25,000 for damages for sexual harassment under the Code and $60,000 in moral damages for the breach of its implied contractual obligation of good faith in the manner of dismissal. It was this latter finding that was the focus of the appeal.After considering the examples of sexual harassment the Court noted (at paras. 9 and 10):At a July 14, 2011 production meeting, during which Doyle raised legitimate safety concerns, Rogers and another co-worker, who were aware that Doyle was to be terminated, felt free to ignore the safety issues she raised and demeaned and belittled her in front of the others. She left the meeting in tears. Doyle, unaware that Wrench was going to terminate her and that the termination letter was already in the making, turned to Wrench and made a complaint of sexual harassment. Wrench did a “cursory” investigation of the complaint and heard from Rogers, but did not give Doyle an opportunity to respond. Wrench knew that Doyle suffered from clinical depression for which she was being medicated.Doyle was terminated without cause on July 19, 2011. The trial judge found that Doyle’s gender and her sexual harassment complaint were likely the most significant reasons for why she was terminated.The Court noted the evidence of the impact of the dismissal on Doyle (at para. 11):There was considerable evidence about the impact of the dismissal upon Doyle. She felt betrayed, abused, sad and upset. She was placed upon medication for anxiety as she had been shaking constantly. She had migraines, chest pains and sleep disturbances. A doctor at the Centre for Addiction and Mental Health (“CAMH”) recommended she be admitted to CAMH. Doyle declined but was placed under the care of a psychiatrist. She had significant sleep issues, including nightmares about Rogers’ harassment, and the workplace meeting of July 14. She was diagnosed as having a major depressive disorder, with anxiety.The trial judge awarded $60,000 in “moral damages” based on a number of factors. The Court of Appeal upheld this very significant award.The Court of Appeal provided a useful summary of the law in respect of moral damages (at paras. 12 and 13):Beginning with Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701, at para. 95, the Supreme Court of Canada recognized that there is an obligation of good faith in the manner of dismissal of an employee and, at paras. 88 and 98, specified that damages are available where an employer engages in conduct that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.” Initially, the award, now known as moral damages, involved compensation through an addition to the period of notice. However, in Keays v. Honda Canada Inc., 2008 SCC 39 (CanLII), [2008] 2 S.C.R. 362, at para. 59, the Court essentially did away with the distinction between aggravated damages and moral damages and held that these damages should be recognized through a fixed monetary award rather than through an extension of the notice period: see S.R. Ball, Canadian Employment Law, loose-leaf (2016), vol. 2 (Toronto: Thomson Reuters Canada Ltd., 2007), at § 22: 20.19 (1.1), p. 22-59 and § 22:20.19 (1.2), p. 22-60.The factors relevant to an award of moral damages are not limited to the examples in Honda, at para. 59 and Wallace, at paras. 98, 101. Nor, is the time frame limited to the moment of dismissal. Pre and post-termination conduct may be considered in an award for moral damages, so long as it is “a component of the manner of dismissal”: Gismondi v. Toronto (City), 2003 CanLII 52143 (ON CA), 64 O.R. (3d) 688 (C.A.), at para. 23, leave to appeal to S.C.C. refused [2003] S.C.C.A. No. 312; Ball, at § 22:20.19(1.1), p. 22-50.The question of moral damages is an exercise of determining and weighing the specific facts. In this case, the trial judge considered both relevant and irrelevant matters. In commenting on this the Court of Appeal stated (at paras. 14 and 15):The question of moral damages is a fact-specific exercise. At the outset of the appeal and during oral argument, although arguing that the trial judge considered irrelevant factors, Zochem conceded that an award of moral damages could be grounded on certain factors relied upon by the trial judge, namely, that employees had been instructed by Wrench to “dig up dirt” on the performance of Doyle; that Doyle was told her job was not in jeopardy when, in fact, Wrench had already put the “wheels in motion” with respect to her termination; that an employee advised Wrench about Doyle’s medical condition in breach of her privacy; and that Doyle’s keys were taken from her purse and her car was brought around.In my view, although the trial judge considered both factors that were relevant and irrelevant to an award of moral damages, the award was nonetheless justified.The decision recounts in detail the misconduct of Zochem in dealing with Doyle. The misconduct was extreme and therefore the case should be used cautiously as a precedent. But the award represents a high-water mark in awarding moral damages. Given the fact that such damages are likely not taxable in the hands of the plaintiff, the value of the award was double that of an ordinary damage award for pay in lieu of notice. This is, therefore, a greater incentive for employees to pursue these claims in court.The total damage award, which included $25,000 damages under the Human Rights Code and damages in lieu of notice of $55,000, was $150,000.But the damage award was only part of the bad news for Zochem. The cost awards of the trial judge and the Court of Appeal were just under $500,000.The trial judge awarded costs to the Plaintiff but retired before he could address the cost issue. A subsequent judge heard argument and awarded Doyle significant costs for the 28-day trial. The trial was characterized as follows (in paras. 7 and 30 of the trial decision):The trial took 28 days. It is obvious from Belleghem, J.’s reasons that the trial was hard and bitterly fought. He characterized Zochem’s approach to terminating Doyle, expressed through its employee, Wrench, as hardball and callous. It appears that Zochem maintained that approach during the trial. Zochem certainly maintained that approach in the costs argument before me. …For the reasons that follow, Doyle is entitled to her partial indemnity costs, throughout. I fix her partial indemnity fees at $322,829.98, HST on those fees at $41,967.90, and disbursements at $47,786.45. In addition, I award Doyle a further $12,000, all-inclusive, for the May 12, 2016 appointment to settle Belleghem, J.’s order, and for appearing before me to argue costs. I also deny Wrench her costs.The Court of Appeal took the unusual step of awarding Doyle almost full indemnity for costs in excess of $40,000.Therefore the total cost to Zochem of this one dismissal, taking into account its own legal fees, approached $1 million.Doyle v Zochem Inc., 2017 ONCA 130

Written by Michael J WeilerIt was reported that Fox News recently paid $90 million USD to settle shareholder claims for damages resulting from sexual harassment settlements. Harvey Weinstein’s empire is crumbling under the allegations of sexual harassment and assault. Charlie Rose has left his profession in disgrace. The liberal Democrat Al Franken has tendered his resignation. Christopher Plummer may win an Oscar stepping in for disgraced Kevin Spacey. Serious allegations against the controversial conservative Roy Moore caused many senior Republicans to say the women complainants are credible and that Moore should not run for the US Senate. Moore’s loss in Alabama, the reddest of red states, reflects the change in attitude in America on the issue of sexual harassment and assault. But contrast that with the actions of President Trump and the Republican National Committee in defending and supporting Roy Moore — despite apparently credible claims of sexual harassment — urging voters in Alabama to vote for him. Time magazine named Silence Breakers — women who complained about sexual harassment — “Persons of the Year”. These are indeed remarkable times.One joke circulating these days sadly says it all:All the members of the company’s Board of Directors were called into the Chairman’s office, one after another, until only Ted, the junior member, was left sitting outside.Finally, it was his turn to be summoned.Ted entered the office to find the Chairman and the other four directors seated at the far end of the boardroom table.Ted was instructed to stand at the other end of the table, which he did.The Chairman looked Ted squarely in the eye, and with a stern voice, he asked:“Have you ever had sex with my secretary, Miss Floyd?”“Oh, no, sir, positively not…!” Ted replied.“Are you absolutely sure….?” asked the chairman.“Honest, I’ve never been close enough to even touchher….!”“You’d swear to that….?”“Yes, I swear I’ve never had sex with Miss Floyd, anytime,anywhere…” insisted Ted.“Good. Then YOU fire her.”***********One of the problems in dealing with complex issues such as sexual assault and sexual harassment by way of tweets and 60-second news clips is that many allegations of sexual harassment might not, in fact, or law, be sexual harassment. Not all inappropriate conduct is sexual harassment. And of course allegations of sexual assault require proof beyond a reasonable doubt with the presumption of innocence. Issues such as consensual relationships and the nature and frequency of the misconduct need to be analyzed on a case by case basis. The problem is that the “sting of the allegation” in and of itself is so significant that the impact of the complaint itself may be devastating and the details of the complaints or defenses are often overlooked.With the public spotlight shining brightly on allegations of sexual harassment involving prominent businessmen, politicians, and sports, media and television celebrities, a report recently issued by the federal Liberal government and new legislation was timely, to say the least.The federal government engaged in a year-long consultation process with a number of stakeholders on the issue of harassment in the workplace. They also included an online survey. It issued its Report “Harassment and Sexual Violence in the Workplace Public Consultations: What We Heard” outlining the public consultation process. Under the heading “Next Steps” the government stated, “We listened carefully and are using the information that was shared with us to take meaningful action to counter these profoundly damaging behaviours.”The federal government has also introduced a bill in the House of Commons that would address concerns about harassment and sexual harassment in the workplace. Bill 65 An Act to Amend the Canada Labour Code (harassment and violence), the Parliamentary Employment and Staff Relations Act and the Budget Implementation Act, 2017, No. 1 was introduced in November 2017. It will address harassment, bullying and sexual harassment in two ways.First, the Act will make employers responsible for ensuring that employees are not subjected to “accidents and physical or psychological injuries and illnesses”. The inclusion of “psychological injuries and illnesses arising out of, linked with or occurring in the course of employment” represents a significant expansion of these protections for employees.Secondly, the Act will require employers to create new policies to prohibit inappropriate behaviour and harassment that could cause psychological harm. Federally regulated employers must investigate complaints of harassment and take steps to address those incidents. The Act will require that employers create confidential complaint processes to respond to harassment and provide affected employees who complain with support. If an employee is not satisfied with the employer’s response he/she has the right to ask the Minister to investigate and the Minister must then investigate unless she is satisfied that the complaint was properly investigated, or it is “trivial, frivolous or vexatious”.The Act applies only to federally regulated employers such as banks, broadcasters, interprovincial trucking companies, etc., but it will undoubtedly influence provincial lawmakers. All employers will benefit from reviewing the Act and the Report.Here are the links to the Report and Bill C-65:Federal Government ReportBill C-65

Written by Michael J WeilerThe Supreme Court of Canada has been very active over the years in expanding the protections of human rights legislation which it views as almost constitutionally protected rights. The landmark decision Meiorin 1999 SCR 652 dramatically expanded the obligations on employers in respect of the duty to accommodate. In another landmark ruling issued last month, the SCC has found that discrimination “regarding employment” under the Human Rights Code can be perpetrated by someone other than the complainant’s employer or superior in the workplace. In this case, the perpetrator (“S”) was employed by a separate company on a construction site. He repeatedly harassed an employee (“S-M”) of another company who worked on the same construction site by making highly derogatory remarks to S-M and others about S-M’s sexual orientation, religion and place of birth. S had no direct control over S-M, but the SCC found that S-M could pursue a Human Rights complaint against S and his employer. The case will have significant implications (and create problems) for employers especially those working on multi-employer sites.The case involved two persons working for different employers at the same worksite. S was a site foreman employed by Clemas and the victim, S-M, was a civil engineer working for another company, Omega, and he was in charge of supervising work done by Clemas. S made racist and homophobic statements about S-M. When the harassment continued Clemas first transferred S and then terminated S. S-M brought a Human Rights complaint against Clemas and S alleging discrimination on the basis of religion, place of origin and sexual orientation. S applied to have the Complaint dismissed arguing he was not in an employment relationship with Clemas or S-M and therefore the Tribunal did not have jurisdiction over S under section 13 of the Code that is limited to discrimination against a person “regarding employment”.The SCC held that the Tribunal had jurisdiction to deal with S-M’s complaint against S.The Court confirmed, (in para. 17), that the Code is “quasi-constitutional legislation…[and] attracts a generous interpretation to permit the achievement of its broad public purposes” as set out in section 3. The majority found that the phrase “regarding employment” was broad enough to capture a complaint by S-M against S, even though they were employed by separate employers. It applied what it called a contextual approach that took into account, for example, whether S was integral to S-M’s workplace; did the misconduct occur in S-M’s workplace; and whether S-M’s workplace and work environment were adversely affected. It noted (in para. 56):In my view, while the person in control of the complainant’s employment may be primarily responsible for ensuring a discrimination-free workplace — a responsibility that is recognized in s. 44(2) of the Code — it does not follow that only a person who is in a relationship of control and dependence with the complainant is responsible for achieving the aims of the Code. Rather, the aspirational purposes of the Code require that individual perpetrators of discrimination be held accountable for their actions. This means that, in addition to bringing a claim against their employer, the complainant may also bring a claim against the individual perpetrator. The existence of this additional claim is especially relevant when the discriminatory conduct of a co-worker persists despite the employer having taken all possible steps to stop it.The SCC concluded (in para. 69):Applying this contextual approach to the present case, I find that the alleged conduct by Mr. Schrenk would come within the ambit of s. 13(1)(b). As the foreman of the worksite, Mr. Schrenk was an integral and unavoidable part of Mr. Sheikhzadeh-Mashgoul’s work environment. By denigrating Mr. Sheikhzadeh-Mashgoul on the basis of religion, place of origin, and sexual orientation, his discriminatory behaviour had a detrimental impact on the workplace because it forced Mr. Sheikhzadeh-Mashgoul to contend with repeated affronts to his dignity. This conduct amounted to discrimination regarding employment: it was perpetrated against an employee by someone integral to his employment context. Mr. Sheikhzadeh-Mashgoul’s complaint was consequently within the jurisdiction of the Tribunal pursuant to s. 13(1)(b) of the Code.DISSENTA strong dissent by three justices was authored by the Chief Justice. The dissent (see para. 120) would have found that s. 13 is limited to making employers and their equivalents respondents in workplace discrimination claims. It found that a more limited interpretation of s. 13 on the responsibilities and equivalents is consistent with the jurisprudence — an important element in creating certainty for employers and employees and the Tribunal (in para. 130):First, the broad interpretation proposed by my colleagues would narrow this Court’s decision in McCormick, which confirmed that the nature of the relationship between complainant and respondent is dispositive of whether s. 13(1)(b) applies. If all that is required to link a complainant to a respondent under s. 13(1)(b) is a common work environment or a “sufficient nexus with the employment context” (Justice Rowe’s reasons, at para. 67), it would be unnecessary to consider the relationship between parties, as McCormick instructs. Second, it is difficult to see how someone in a co-worker position like Mr. Schrenk could ever claim a bona fide occupational requirement as a justification for his conduct, as explained in British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3, which provides the governing framework for assessing workplace discrimination claims. On the interpretation I propose, these difficulties do not arise.On the basis of the foregoing, the dissenting justices concluded (at para. 131):For these reasons, I conclude that s. 13(1)(b) is limited to claims arising out of employment or equivalent relationships. I would dismiss the appeal.British Columbia Human Rights Tribunal v Schrenk 2017 SCC 62COMMENTThis decision will undoubtedly create many unanticipated problems for employers. Expanding the scope of the Code beyond employers and supervisors to those in non-direct relationships will have unanticipated consequences. Here, the employer, Clemas, was named as a respondent despite the fact that it took immediate steps to investigate and act on S-M’s Complaint—first transferring S and then terminating S. But what if S were innocent and the Complaint was spurious—what remedies would S have had against S-M? Most harassment policies protect both the bona fide Complainant and the innocent Respondent employee but, under this analysis, the latter may be left without any recourse and a large legal bill defending himself before the Tribunal.It is likely that the Tribunal will now see an influx of cases involving not only employers and supervisors but non-employer entities and contractors.Finally, the SCC has recently found that an arbitrator’s decision on harassment may be binding on a non-employer on a common worksite. Given that the SCC has found that an arbitrator has jurisdiction to apply the Human Rights Code under the collective agreement it may be that employers on a worksite will now have to participate in a grievance filed by an employee of another employer.The only certainty of this decision is that employment and human rights lawyers will be busier in 2018.

Written by Michael J WeilerYes, you read that right! In two recent cases, Ruston v. Keddco Mfg. (2011) Ltd.[1], the Ontario Superior Court of Justice has made this award in favour of a 54-year-old employee who was dismissed as President after 11 years’ service. The Court found the employer did not have just cause for termination. The Court’s award was based upon a notice period of 19 months.The Plaintiff (curiously referred to only as “J.P. Ruston”) was at the highest level of management with the Defendant, a manufacturer and distributor of oil and petrochemical products. Although there were issues regarding his performance, no formal complaints were made, and the employee continued to receive substantial bonuses.The Defendant did not handle the termination very well, first, having the Plaintiff take time off and then cutting off his email. At a meeting with a representative of the Defendant, the Plaintiff was advised his employment was terminated for cause because he had committed fraud. No details of the Defendant’s reasons were provided until the Defendant filed its Statement of Defence and Counterclaim for damages for civil fraud. The Court described the Defendant’s position at trial as follows (at para. 26):The defendant’s narrative is one where the plaintiff’s employment was terminated for just cause primarily as a result of a series of inappropriate actions willfully engaged in by the plaintiff for the intended and sole purpose of the plaintiff’s own financial gain and benefit. The plaintiff inappropriately manipulated the defendant’s financial statements and engaged in several accounting and financial improprieties over a significant and continuous period of time so as to create the illusion of the defendant earning far higher profits than it actually had. The conduct resulted in the defendant providing the plaintiff and other members of the defendant’s staff with bonuses it would not have granted had it known the true state of the defendant’s affairs. In addition to having cause to dismiss the plaintiff, therefore, the defendant has incurred economic losses causally related to the plaintiff’s conduct.In a very detailed decision, the Court determined that the Defendant did not have just cause and the $1.7 million counterclaim was dismissed. That finding sets the stage for an assessment of damages.NOTICEThe Court considered the normal indicia for determining notice, namely, age, length of service, position and available alternate employment. It also noted the Plaintiff could not move as he had to take care of his elderly father. The Plaintiff’s highest level of education was Grade 12 and there were no comparable jobs in the area. The Plaintiff was still out of work 3 years after termination except for some temporary work. The Court’s reasons imply that the biggest factor may well have been the fact that the Defendant alleged and failed to prove serious allegations of cause at trial.The Court relied on the decision of the Ontario Court of Appeal in Singer v Nordstrong Equipment[2] where that court upheld a finding that a 51-year-old President and GM with 11 years’ service was awarded 17 months’ notice, stating (at para. 108):The Court of Appeal upheld this court’s finding of a common-law notice period of 17 months: Singer, at para. 9; see Singer v. Nordstrong Equipment Limited, 2017 ONSC 5906 (CanLII). In reaching this 17-month figure, Diamond J. noted that older, longer-term employees in senior and managerial positions may be entitled to a longer period of notice considering the difficulties they may face in finding new employment. Although the employer had argued that the motion judge over-emphasized this factor in his analysis of the Bardal factors[3], the Court of Appeal disagreed.Given some differences with the facts of Singer, the Court awarded 19 months’ notice.DAMAGESThe Court awarded damages based on monthly base salary ($13,385.75); car allowance ($700); health and dental benefits which the court awarded based on 10% of base salary ($1,338.57); and RRSP/Pension contributions of based on 5% of base salary ($669.28).The bonus was a huge part of the award. The Court found that the Plaintiff received a bonus every year which constituted 41.68 percent over a 3-year average. The Defendant argued no bonuses were paid post-termination, but the Court found no credible evidence was led regarding the Defendant’s treatment of bonuses post-termination. Relying on a 2-year average, the Court awarded $153,835.97 for lost opportunity to participate in the bonus program during the 19-month notice period. The Plaintiff was also awarded $40,484.16 for bonuses owed for the 6-month period prior to termination.PUNITIVE AND AGGRAVATED DAMAGESThe Defendant was incredibly aggressive, not only at the termination meeting with the Plaintiff and in alleging cause, but also in pursuing a counterclaim against the Plaintiff – perhaps adopting the tactic that “the best defence is a good offence”. The Defendant not only failed to prove cause, but it also failed to prove its counterclaim.The Court, at para. 135, relied upon the Supreme Court of Canada’s views in the Honda decision[4] that “[p]unitive damages are intended to address wrongs on the part of the defendant that ‘are so malicious and outrageous that they are deserving of punishment on their own’ ”, whereas, by contrast, aggravated or moral damages “are compensatory damages meant to compensate the plaintiff for the manner in which he or she was dismissed”.The Court canvassed the recent case authority and, applying it to the facts of this case, awarded the Plaintiff $100,000 punitive damages (which, it should be noted, are likely non-taxable). The particular reasons of the Court are interesting. It awarded the Plaintiff $100,000 in punitive damages for the following reasons:

• The defendant’s representative, at the termination meeting, threatened a counterclaim should he sue for wrongful termination, and had done so previously to another employee;
• the defendant had caused delays and significant costs to the plaintiff by initially stating it would be producing 25 witnesses, then reduced that to five and then called only three at trial;
• the first time the defendant provided details of its allegations of cause was in its counterclaim;
• the allegations of cause were performance-based and personal attacks, which allegations were withdrawn when no evidence was brought at trial;
• a second allegation that the defendant had used company funds for personal benefit was also withdrawn when no evidence was brought at trial;
• the defendant’s expert was not able to speak to damages and, on the 7th day of trial, the defendant reduced its $1,700,000 damages claim to $1, suggesting that the defendant was using its counterclaim as a strategy to intimidate the plaintiff;
• after accusing the plaintiff of fraud, the defendant did not call any witnesses to substantiate its claim, suggesting, again, that this claim was a tactic to induce the plaintiff to drop his claim; and
• the serious allegations against the plaintiff were found to be entirely unfounded.

In respect of aggravated/moral damages, for similar reasons to those stated above (but also with an emphasis on the effect on the plaintiff of being accused of fraud and the defendant failing to bring any evidence to support that claim), the Court awarded $25,000 to the Plaintiff.LEGAL FEESIn a subsequent award,[5] the Court ordered the Defendant to pay the Plaintiff $546,684.73 on account of legal fees. The court’s reasons for awarding these costs are important as the reasons relied upon may be applicable in BC for an award of Special Costs. The Court’s reasons were stated at para 3 as follows:I make this conclusion for the following reasons taken together[6]:(1) The costs requested are proportionate to the result. $700,000 was in dispute for the plaintiff’s claim plus $1,750,000 in the counter-claim. Out of a total of $2,450,000 in dispute, the plaintiff was successful on $2,354,628.00, calculated as the amount won, plus the entire value of the counter-claim which was dismissed in its entirety.(2) The defendant pursued unfounded allegations of fraud. This was a matter of utmost importance to the plaintiff. Both his financial and professional future were at risk if the allegations were proven in court.(3) It was the defendant’s conduct that contributed to the plaintiff’s costs. The plaintiff’s costs can be said to be what a reasonable party would expect to spend upon pursuing litigation against a party who engaged in conduct like that of the defendant. The defendant refused to admit facts but failed to contest them at trial. The defendant only provided relevant financial documents after the plaintiff brought a motion. The defendant provided will say statements 14 days in advance of the trial and not 30 days in advance as ordered. The defendant relied on only 45 of the 163 documents it produced on the first day of trial. The defendant caused an adjournment of the first trial less than six weeks before the date scheduled due to the introduction of a 25 person witness list. This led to a one year delay, double preparation and the requirement to have a second pre-trial. The defendant called only two fact witnesses at trial. By this conduct, the defendant caused the plaintiff to incur far greater costs than expected, substantially increasing the costs of trial preparation and the length of trial.(4) The counter-claim rendered this action much more complex than a simple case of wrongful dismissal. Because of the fraud accusations, the plaintiff had to hire an expert witness costing approximately $30,000.(5) The defendant threatened the plaintiff with expensive litigation if he pursued his wrongful dismissal matter and then proceeded to follow through on the threat. The plaintiff would have been denied access to justice had his lawyers not agreed to defer their fees. The plaintiff survived financially by relying on his RRSP’s, selling his house below market value and breaking his car lease.(6) The use of two counsel at trial was reasonable for this case, considering the complexity of the counter-claim and the serious consequences to the plaintiff if he was unsuccessful in defending the counter-claim. Having adjudicated the trial, I observed that the work done during the trial by both counsel was different.(7) The amounts claimed by the plaintiff to prepare the trial record were reasonable as the plaintiff had to determine if it was appropriate to set the matter down for trial. This requires a detailed documentary review to ensure full disclosure and that there will be no need for further motions.(8) Having reviewed the costs outline submitted by the plaintiff, I have concluded that the time spent on various steps in the litigation is reasonable. It cannot be compared to the costs outline submitted by the defendant which is not certified. Further, my observation at trial was that plaintiff’s counsel was well prepared for trial while the defendant’s counsel was comparatively unprepared in that he arrived late or not at all in one instance, could not advise the court of the sequence and timing of his witnesses, failed to effectively use his book of documents and delivered materials at the last minute. The plaintiff’s costs outline is reflective of more time spent than the defendant in preparing for trial. This difference was demonstrated at trial to the detriment of the defendant’s counsel.(9) The plaintiff was awarded both punitive and moral damages. The costs awarded herein are done so to indemnify the plaintiff, as the successful litigant, for the costs of litigation. Any references to the defendant’s conduct are meant to explain why the plaintiff’s costs are higher than one would reasonably expect from litigating a simple claim for wrongful dismissal and in no way reflect an overlap of the punitive or moral damages awarded.SUMMARY The numbers speak for themselves. Few employers could afford such litigation, including having to pay their own counsel, which, based on the Plaintiff’s costs, could have been an additional $500,000. Further, such a win for the Plaintiff may have consequences down the road as a precedent for other employees. This employer may never again allege cause.Employers should not be shy in advancing legitimate cases of termination for cause. Such claim, if done in good faith, would rarely result in a court awarding such punitive damages or “Special Costs”. Alleging cause offers a good lever for the employer to use to settle a case by putting the employee at risk. Having said that, readers of this blog will note other cases in BC where substantial punitive damages have been awarded. Caution then is the prudent course.The full decision is found at: Ruston v. Keddco Mfg. (2011) Ltd. and the decision re legal fees is found at: Ruston v. Keddco Mfg. (2011) Ltd. (legal fees award)********The content in this blog is for your general information and should not be taken as legal advice. If you have a specific problem, please contact KSW Law to discuss your situation. [1] Ruston v. Keddco Mfg. (2011) Ltd., 2018 ONSC 2919 and Ruston v. Keddco Mfg. (2011) Ltd., 2018 ONSC 5022[2] 2018 ONCA 234 (CANLII)[3] Bardal v. Globe & Mail Ltd., 1960 CANLII 294 (ON SC)[4] Honda Canada Inc. v. Keays, 2008 SCC 3 (CANLII)[5] Ruston v. Keddco Mfg. (2011) Ltd., 2008 ONSC 5022 (CANLII)[6] We have corrected spelling errors in the original decision without affecting the substance of the judge’s reasoning.