Written by Michael J Weiler

Small claims jurisdiction increases to $35,000 and smaller cases move to Civil Resolution Tribunal (CRT)

Important changes to the Small Claims court became effective June 1st, 2017.First the monetary jurisdiction of the Small Claims Court increases from $25,000 to $35,000. This change has been considered for a number of years and the government had originally considered a move to $50,000. Whether further increases to the monetary jurisdiction will be made remains to be seen. While the change seems fairly minor, the fact is employers may well find that they are subject to more litigation in wrongful dismissal and related actions. In many cases employees can claim aggravated or punitive damages related to their dismissal. Those damages will not normally be taxable thus increasing the value of the claim beyond $35,000.At the same time disputes involving up to $5,000 will be now be resolved through the new Civil Resolution Tribunal rather than the Provincial Court. The CRT is an online tribunal that will offer dispute resolution services.If you have any questions regarding these changes please consult the Provincial Court of British Columbia website. http://www.provincialcourt.bc.ca/types-of-cases/small-claims-matters

Written by Michael J WeilerThe Ontario Court of Appeal has upheld a trial judge’s award of $104,000 based on a notice period of 20 months for a long-serving McDonald’s restaurant manager.Esther Brake worked at various McDonald’s restaurants for more than 25 years. She joined the Defendant employer organization in Ottawa in 1999. She was terminated on August 2nd, 2012. At the time of hiring the employer gave her a letter confirming her service credit which stated, inter alia, that she was “…credited with 7 years of Full Time service as of 1999”.Ms. Brake was, it appears from the record, an excellent employee. However in the last few years of her employment she was given less favourable evaluations. She was transferred to a very poor performing store and then placed on a McDonald’s progressive discipline program known as GAP. The trial judge found that the GAP program was arbitrary and that McDonald’s had unfairly assessed Ms. Brake’s performance. McDonald’s claimed Ms. Brake had failed the GAP program and gave her a choice between a demotion to First Assistant or termination. Her salary would remain the same but her benefits would be “meaningful inferior”. She refused the demotion and sued for constructive dismissal. The trial judge was very critical of McDonald’s application of the GAP program to Ms. Brake. He held that any difficulties in Ms. Brake’s performance did not “amount to anything close to gross or serious incompetence and stressed that, by the end of the GAP program, Ms. Brake had met [McDonald’s] ‘new and improved’ standards” and that “she was trending upward at an extraordinary degree when the decision to demote her was put on the table.”The Court of Appeal upheld the trial judge’s decision that Ms. Brake had been constructively dismissed when McDonald’s offered her a non-supervisory position with inferior benefits. She did not accept the demotion. The case provides a very thorough examination of what constitutes a constructive dismissal and applies the analysis of the Supreme Court of Canada decision in the recent decision in Potter v New Brunswick Legal Aid. The Court of Appeal noted that if the employer was in fact arguing it had cause to dismiss Ms. Brake it did not have cause as the trial judge’s findings of fact were a complete answer to that assertion.The court also considered McDonald’s argument that Ms. Brake failed to mitigate by not accepting the demoted position. She would have had to work under a younger man whom she had trained and found that embarrassing and humiliating. The court found that a reasonable person in Ms. Brake’s position would not have been expected to have accepted the demotion to First Assistant.In terms of what was reasonable notice the court upheld the trial judge’s assessment that 20 months was reasonable. One key factor was Ms. Brake’s length of service. McDonald’s argued that its recognition of her prior service with other McDonald’s restaurants was limited to benefits. The court disagreed noting that although the letter of service credit referenced benefits it also suggested that service was to be recognized for all purposes. Simply put McDonald’s had not clearly limited the recognition of service as it now argued. Yet another example of an employer failing to “say what you mean and mean what you say”.Finally the case provides a lengthy discussion of mitigation. It concluded for example that EI payments are not to be deducted. It also held that income earned during the statutory notice period was not subject to mitigation and therefore any income she earned in that period was not to be deducted.What is most important about the decision on mitigation is how the court treated income earned by Ms. Brake during the 20 month notice period but outside the statutory notice period. The majority of the Court of Appeal held that since Ms. Brake had worked at Sobey’s to supplement her income while working at McDonald’s any income earned was not to be deducted. The majority left open for another day the question as to when “supplementary employment income rises to a level that it (or a portion of it) should be considered as a substitute for the amounts that would have been earned under the original contract” of employment and therefore should be deducted.What is very interesting is the concurring decision of Feldman J.A. He held that the income Ms. Brake earned in the cashier position at Home Depot was not to be deducted. He stated:It follows, in my view, that where a wrongfully dismissed employee is effectively forced to accept a much inferior position because no comparable position is available, the amount she earns in that position is not mitigation of damages and need not be deducted from the amount the employer must pay.This finding seems to me to be questionable and appears to run contrary to other authority. In my view while an employee may not have to accept the inferior position, when she does the earnings should be deducted.The Appeal was dismissed with costs assessed at $19,500 which might well have been less than her actual legal fees to defend the appeal.Brake v PJ-M2R Restaurant Inc., 2017 ONCA 402 (CannLII)

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