Sexual harassment in the workplace is, as was noted in 1989 by Chief Justice Dickson of the Supreme Court of Canada:1

An abuse of both economic and sexual power, one which constitutes a profound affront to the dignity of the employees forced to endure it. By requiring an employee to contend with unwelcome sexual actions or explicit sexual demands, sexual harassment in the workplace attacks the dignity and self-respect of the victim both as an employee and as a human being.

These words ring true even as we speak today.

The legal issues of sexual harassment in the employment context are not straightforward.

This book reviews the legal remedies afforded to those who have fallen victim to acts of sexual harassment that are available through the human rights administrative process and also in the civil courts.

Also reviewed are other related remedies such as constructive dismissal, the use of traditional tort remedies in the civil courts, such as assault and/or battery, which are often coupled often with a claim of vicarious liability to hold the employer accountable for the conduct of its employees.

In addition, there is a review under what circumstances the employer may rightly terminate such persons who have sexually harassed other employees in the workplace.

Further consideration is given to the need to conduct a proper investigation of any workplace sexual harassment complaint within the administrative process and also the claim which may follow by a person terminated based on such unfair allegations in this context.

The administrative remedy for sexual harassment under the statutory human rights process is also considered in depth.

Compensatory damages through the human rights process, while still noticeably lower than the sums awarded in comparable tort actions in civil courts, have become more realistic. The claim for lost income, when pleaded properly, can lead to substantial recovery, which often will be much more powerful that a wrongful dismissal claim in the civil court.

The case of Impact Interiors, a decision of the Ontario Court of Appeal, provides a good illustration of this principle. In this instance, one of the two complainants had been employed for two days, at which time she quit due to the sexual abuse she suffered. One applicant was awarded her income loss by the Board of Inquiry for a period of two years and 18 weeks, up to the date of hearing. This is far beyond the sum a wrongful dismissal claim would have allowed.

Reinstatement is also a potent remedy which may be employed by the human rights board. The human rights administrative remedy can be quite powerful. The evidentiary and interpretative rules are much more liberal than those of a common law court in the case of a tort claim.

The issue of sexual harassment remains a serious issue in today’s workplace. This text may be of assistance to legal counsel, human resource professionals and all persons seeking knowledge of the law on this subject matter.


The definition of what conduct may fit into the definition of sexual harassment is important for a number of reasons. The first is to understand the term is as it is used in the human rights administrative process. The second is the common law applications which include employment issues such as conduct which may give rise to termination for just cause and constructive dismissal. 2

In 1989, The Supreme Court of Canada defined sexual harassment in an employment context to be:

Unwelcome conduct of a sexual nature that detrimentally affects the work environment or leads to adverse job-related consequences for the victims of the harassment.

The case in question arose from a human rights complaint under the Manitoba statute. These words have, however, been used to define sexual harassment in both common law and administrative cases.

In Janzen, two waitresses employed by Pharos Restaurant had complained about the sexual harassment suffered by them due to the conduct of the cook employed at the restaurant.

They had voiced their concerns to owner, who had failed to take any corrective action.

The Manitoba Human Rights Commission had found that they were both victims of sex discrimination, a finding upheld by the Court of Queen’s Bench.

As was the case with the typical legislation then prevalent, the Manitoba statute did not refer specifically to sexual harassment as a ground of discrimination and hence the complaint was founded on gender3. The case thus required a finding that sexual harassment was actionable based on gender discrimination.

The Manitoba Court of Appeal reversed and, oddly enough, determined that the offensive conduct in question was based on the personal attractiveness of the two complainants, not gender and hence there was no actionable discrimination. These words appear incongruous in the modern context.

Twaddle J. A. stated that sexual harassment which was based on the “sex appeal” of the complainant did not constitute gender discrimination.

This reasoning seems completely bizarre today, which illustrates the change in social mores, keeping in mind, in fairness, the legal issue before the Court and the wording of the legislation.

This was the case which was presented to the Supreme Court of Canada. On this specific point, Chief Justice Dickson was direct in stating his disagreement:

To argue that the sole factor underlying the discriminatory action was the sexual attractiveness of the appellants and to say that their gender was irrelevant strains credulity. Sexual attractiveness cannot be separated from gender.

The broad definition of sexual harassment set out above by the Supreme Court in 1989 remains an accepted touchstone as of today.

The Ontario Court of Appeal,4 in overturning a trial award in a wrongful dismissal case, which was defended by allegations of sexual harassment, also looked to the Supreme Court decision in Janzen for guidance and stated the following definition, as was recited in Janzen:

Any sexually-oriented practice that endangers an individual’s continued employment, negatively affects his/her work performance, or undermines his/her sense of personal dignity. Sexual harassment is a complex issue involving men and women, their perceptions and behaviour, and the social norms of the society. Sexual harassment is not confined to any one level, class, or profession. It can happen to executives as well as factory workers. It occurs not only in the workplace and in the classroom, but even in parliamentary chambers and churches. Sexual harassment may be an expression of power or desire or both. Whether it is from supervisors, co-workers, or customers, sexual harassment is an attempt to assert power over another person.

The employer may assert such a plea against a person who has been terminated due to such allegations of harassment5. The plaintiff may be a person who has been accused of such conduct and seeks a remedy such as wrongful dismissal or defamation. Alternatively, the victim  may assert that the conduct in question was sufficient to constitute a constructive termination and sue civilly. There are many distinct contexts in which the issue of sexual harassment may arise in legal proceedings.

The legislature of many Canadian jurisdictions has defined sexual harassment in very similar words. The New Brunswick statute uses the definition as sexual harass to mean “engage in vexatious comment or conduct of a sexual nature that is known or ought reasonably to be known to be unwelcome”.

The P.E.I. Employment Standards Act defines sexual harassment to be “any comment, gesture or contact of a sexual nature” that (a) is likely to cause offence or humiliation, or (b) that might be, on reasonable grounds, be perceived by that employee as placing a condition of a sexual nature on employment or on any opportunity for training or promotion.

The Nova Scotia Human Rights Act defines the offence as (i) vexatious sexual conduct or a course of comment that is known or ought reasonably to be known as unwelcome, (ii) a sexual solicitation is a solicitation or advance made to an individual by another individual where the other individual is in a position to confer a benefit on, or deny a benefit to, the individual to whom the solicitation or advance is made, where the individual who makes the solicitation or advance knows or ought reasonably to know that it is unwelcome, or (iii) a reprisal or threat of reprisal against an individual for rejecting a sexual solicitation or advance.

Some jurisdictions, such as B.C6., do not offer any statutory definition at all and use the words of the Supreme Court of Canada as above7. The statute in B.C. simply states that sexual harassment is adverse treatment due to gender8.

By and large with occasional niceties, the law in the human rights remedy is the same in each jurisdiction9. In each instance the meaning of the term emanates from the Supreme Court decision.


The classic test to be met by the successful applicant in a workplace sexual harassment complaint is to show:10

1. An employment relationship; and

2. Conduct which was unwelcome, when assessed objectively; which

3. Emanated from an employee or agent of the employer;

4. Or from the directing mind of the legal entity which was the employer11;

5. The harassment was connected to the workplace, and

6. The offensive conduct was due to the sex of the victim

It is well known that the remedy is not one uniquely available to females. Any gender may make a complaint as the facts may allow.

While many cases are indeed initiated by women, men certainly may be the subject of harassment12. Essentially, the field is wide open. Harassment remedies will apply to any permutation of gender mix imaginable. The mission is to keep the workplace free of sexual harassment of any genre.

The Ontario Code, by example, provides protection from harassment due to “sexual orientation, gender identity, gender expression”13. There is no need, however, for each statute to contain such a protective definition.

The “key indicia (and harm) of sexual harassment is the use of sex and sexuality to leverage power to control, intimidate or embarrass the victim”, “because of sex” which “captures the concepts of gender, sexuality, and sexual categories, as well as sexual characteristics, and therefore includes sexually-related discrimination and harassment”14. It may be recalled that the seminal decision came from a statute which prohibited adverse treatment due to gender15.

Similarly the victim need not prove that he or she truly had the sexual orientation which was the subject of the bullying taunts16. The complaint in one case had asserted that he was the subject of homophobic bullying commentary, although he did not identify himself to be homosexual. The tribunal stated that this issue was not relevant, as all was required to be proven was the homophobic slurs directed towards him.

In any event, whether or not the name-calling was intended to hurt is irrelevant, since it is the effect of the conduct, or action, not the intent of the harassers, that is relevant in determining whether discrimination has occurred17. The correct interpretative approach is to avoid a “strict grammatical approach” and apply a broad liberal interpretation.

An essential component of the test of conduct which may be said to sexual harassment is that the conduct must be unwelcome. This does not place the obligation upon the victim to state that this is so. The test is whether a reasonable person would see that the conduct was unwelcome18, that is the questioned conduct was known to be unwelcome or reasonably expected to be unwelcome19.

The issue of the inherent power imbalance in a workplace environment is often considered an issue in the analysis of this issue20.

Frequently the complaint from the victim is not uttered contemporaneously with the event. Many courts have noted that the reason for this is because the accuser often may be in a vulnerable position and reluctant to speak out against her aggressor.21

Recognition has been given to the other means that the victim often shows their discomfort to the offensive action, including “nervous laughter, silence, or avoidance of the harasser”.22

Indeed, conduct which may be seen objectively as “acquiescence” may in fact be the victim’s means of avoiding an escalation.

The same observation was made in an Ontario decision23, confirming that the victim of abuse often suffers silently under the fear of losing her employment. The statement made by the offender that he considered his conduct was “welcomed” due to the lack of an immediate complaint has been found to be “incredulous” and far from the realities of sexual harassment. The court noted that “recipients of harassing behaviour”….”oft times cannot immediately express how distasteful or offensive they find their treatment, because of fear of repercussions in the workplace, the ultimate fear being that they will be terminated.”

The judge24 also was very critical of the theory advanced that the victim must complain to create an obligation on management to act. This argument perpetuates the very problem that the law wishes to outlaw.

In a proper context, a co-worker may be able to assert that he believed his colleague had consented to such conduct as sexual banter and that hence the questioned conduct could not be reasonably seen as “unwelcome”. Such a defence is not available to management employees upon whom a higher standard is imposed to ensure the workplace is free of such inappropriate conduct. Such conduct goes to the issue of a poisoned work environment25 and also personal liability of the management staff.26 27

There is an extensive range of conduct which can be found to constitute sexual harassment under the human rights codes and at common law.28 The questioned conduct need not relate to a direct touching or a demand for sexual favours in exchange for promises of improved work benefits29. It may be subtle, obvious, verbal or nonverbal. It may be physical or psychological.30 It may be found in “more subtle conduct such as gender based insults and taunting”31, which may be objectively seen as conduct was creates a negative psychological and emotional work environment.

The Supreme Court of Canada summed it up best when it referenced the wide range of behaviours which may be offensive:

…Harassment behaviour may manifest itself blatantly in forms such as leering, grabbing, and even sexual assault. More subtle forms of sexual harassment may include innuendos, and propositions for dates or sexual favours.

It is clear that one singular event may give rise to a finding of sexual harassment. A pattern of repeated behaviour is not required. A sexually explicit remark that is clearly demeaning will create a violation of the statute. Offensive comments32 made on one unique occasion have been found to suffice to be a violation of the Ontario Code33. Repeated conduct is not necessarily required if the offensive remark is “clearly demeaning”34. Similarly a finding that the wrongdoer had “flicked” the nipple of the complainant35, or exposed himself to a co-worker36, both on singular occasions, have been seen, naturally enough, as code violations37.

The theory which drives these cases, namely that the offensive conduct must be shown to such that it is “known or ought reasonably to be known to be unwelcome38” could allow for no other result. Such conduct is clearly offensive and should not be tolerated.

The Ontario Court of Appeal in considering the defence of the employer to a wrongful dismissal case based on the harassing conduct of the plaintiff, noted that a “wearing persistence” is not required to be shown to succeed in this defence39.

On this particular issue, the Court of Appeal overturned the trial judge on a point of law. More significantly, however, was the court’s observation that modern case law must reflect societal changes in attitude to this issue:

It is my conclusion that the trial judge demonstrates in his reasons a complete lack of appreciation of the modern concept of equality of the sexes. He uses such expressions as “she gave as good as she got” and “it takes two to tango”, both catch phrases from another era.

The same decision raised an important distinction in a case involving just case allegations to defend a wrongful dismissal claim. The question to be answered, the court stated, was whether the conduct was “nevertheless unwelcome”, even though consented to.

The issue arose in the context of an alleged consensual relationship between a management person and his subordinate employee. Presumably this means that in such a relationship, even though apparent conduct of the employee would reflect consent, it was behaviour which was tolerated as opposed to welcomed due to the position of economic dependency. This represented a fundamental distinction in the examination of a workplace “consensual” romantic relationship, given a power imbalance.

The Court stated that the responsibilities of a person as a manager require him or her to be mindful of the adverse consequences of his conduct as it may impact other employees and the workplace.

It is clear that the court was addressing the consensual romance as one which should be not allowed, given the potential impact on the specific employee and the workplace at large. This was a watershed decision on an important aspect of everyday employment life.

The definition of what conduct may be actionable sexual harassment becomes contextual, based on the issue between the parties. A single event of a comparatively minor nature may be actionable as a human rights complaint seeking monetary compensation only or a public interest remedy, yet will likely not support a constructive dismissal allegation or a poisoned work environment40, using the vocabulary of the human rights process.

The offended party must be cautious as to how they respond to the conduct. An assertion that the wrongdoing is sufficiently grave to amount to a repudiation of the working relationship may ultimately be proven to be wrong, even though a code violation has been proven. Such a circumstance may find the victim having proven their case, yet unemployed with a modest compensatory award.

The result of such a decision by the victim, of course, would be much worse if civil proceedings had been commenced, given the adverse costs consequences, which are not present in a human rights complaint.

This standard is applied by a civil court in the determination of the very same issue in a civil context. Human rights violations, like all conduct which is the subject of scrutiny to determine a “fundamental breach” to support a constructive dismissal plea, must be examined to see if this test has been met.

Generally speaking, a single incident will not be sufficient to support a poisoned workplace. There may be an exception for outrageous conduct, but this remains the general rule41.

Just as there is an assessment of the severity of wrongdoing in a human rights complaint and in a civil action to determine the nature of the remedy available to the victim, the same analysis applies to assess whether there is just cause to allow for the summary termination of the wrongdoer in a wrongful dismissal action.

There is a graded scale of just cause in a sexual harassment case. This was noted by the Alberta Queen’s Bench;42

In assessing the seriousness of a particular instance of sexual harassment, it is necessary to develop a context. Clearly there is a scale or continuum of seriousness from the relative innocuous joke with a sexual connotation through groping and other conduct which is unmistakably sexual to acts of sexual violence. It seems to me that where impugned conduct falls on that continuum, would depend upon the circumstances in which the acts occurred or the words were spoken, the intent of the offender, the reaction of the victim, and the reaction of others who have seen or heard the offending behaviour.

The 1980 decision of the Board of Inquiry43 was an early case, in the fact the first case, to consider a sexual harassment issue in employment in Ontario.44

The Board stated that there was a fine line between steps taken to eliminate sexual harassment and conduct which would at that time be considered acceptable social interaction. This led to the then famous, now infamous, quotation that “an invitation to dinner is not an invitation to a complaint”:

The prohibition against such conduct is not without its dangers. One must be cautious that the law not inhibit normal social contact between management and employees or normal discussion between management and employees. It is not abnormal, nor should it be prohibited, activity for a supervisor to become socially involved with an employee. An invitation to dinner is not an invitation to a complaint. The danger or the evil that is to be avoided is coerced or compelled social contact where the employee’s refusal to participate may result in a loss of employment benefits.45 Such coercion or compulsion may be overt or subtle but if any feature of employment becomes reasonably dependent on reciprocating a social relationship proffered by a member of management, then the overture becomes a condition of employment and may be considered to be discriminatory.

This decision would not follow today. The need for a finding of “coercion or compulsion” as “overt or subtle” marks the very reason why this is no longer a rule of law.

Early decisions also concluded that sexual references which were “crude or in bad taste” may not be to be a code violation in Ontario46, and similarly that telling “sex jokes” would not be a code violation.47

However, times change and what may have been considered permissible in 1982 will be viewed in a different context as these words are written.

In one case48, the employer’s conduct in the telling of sexual jokes and also of conduct simulating sexual groping was found to be a violation of the Code resulting in a compensatory award of $3,000, as the definition of unwelcome was met. Both the joke and the sexual gesture were each determined to be violations of the Code.

The early case law must be read in the context of the era in which it was decided. One such decision noted an example of a positive comments made by a company representative of a female worker’s legs and stated that a woman who wore a mini-skirt to work “might well invite such comments”49 and further that a clear statement would be expected from her to advise that such comments were unwelcome, following which, a repetition of such a similar statement “could well cross the line”.

It is difficult to be believe that this could be an accurate statement of the law today. The passage reflecting this view is virtually comedic in today’s context:

For example, a comment about one’s legs might be returned with a gratitude for a perceived compliment, with repartee or with a clear statement that such comments are not acceptable to the individual involved. Subsequent comments in the face of the last response could well cross the line of harassment. Of course, much will depend on the circumstances. A businessman who wears shorts to work or a secretary who wears a mini-skirt might well invite such comments.

The same case considered a work environment in which words which would normally be considered offensive were apparently accepted and “enjoyed” by other employees. The Board noted that such conduct was the norm of the workplace and it was hence the duty of the offended employee to speak up and protest:

Where there is general acceptance but where an individual employee does not care to participate, that feeling should be expressly directly and unambiguously. The objective standard could then be applied to that individual in light of the additional fact50 of expressed disapproval.

This fact situation paralleled that before the Court of Appeal51 in which this court reversed the trial judge and dismissed the plaintiff’s wrongful dismissal action due to his failure as a manager to ensure a safe and proper work environment. The theory of an implied acceptance of an abusive work environment has no place in modern society.

The onus should not rest upon the recipient of the unwanted comments to reply in a manner to defend her self-respect. Such offensive conduct, simply put, should not be permitted:

No female should be called upon to defend her dignity or to resist or turn away from unwanted approaches or comments which are gender or sexually oriented. It is an abuse of power for a supervisor to condone or participate in such conduct.

The significance of the case is not only its protective statement, but more importantly, the inherent and indeed, direct, acknowledgement that times do change.

Such a finding today in a human rights context would readily lead to the employer’s failure to provide a proper working environment and a poisoned work environment52.

Reflecting much the same sentiment as was stated by the Court of Appeal, the Tribunal53 spoke to the employer’s obligation to ensure a proper working environment:

While the complainant may be culpable for his own use of inappropriate language, this does not excuse or nullify Graham’s discriminatory misconduct towards the complainant. Nor does it excuse the failure of Lyons, Clark Menzies and the corporate respondent to take steps to address the existence of a poisoned work environment. The evidence established that the complainant was disgusted by, and protested, when Graham subjected him to crude remarks and exhibitionism. Based on this evidence, it is apparent that the respondents knew, or ought to have known, that Graham’s behaviour was unwelcome. Further, regardless of whether anyone objects to, or everyone participates in, sexually charged behaviour, the employer has a duty to take steps to ensure the workplace is free from vexatious comments or conduct;

The Tribunal’s decision continued to note the onus rests upon the employer to ensure this standard is met.

The prevailing theme of a new order was repeated in the decision of the Divisional Court54 in reviewing an arbitrator’s award under the terms of a collective agreement. The Court reversed the arbitral award of suspension and reinstatement and found that termination of employment was the appropriate remedy.

The decision spoke strongly of the employer’s need to provide a safe work environment, particularly with reference to the recent amendments to the Occupational Health and Safety Act. It is reflective of a more strict approach to conduct of sexual harassment in a modern work environment:

Employees are entitled to a workplace that is free from sexual harassment and employers have a responsibility to ensure that their employees are not exposed to this type of behaviour.

The legislature has reinforced these obligations in Bill 168, which involved a series of amendments to the Occupational Health and Safety Act that deal with violence and harassment in the workplace.

This issue of society’s changing view of what may be offensive conduct is an important consideration. Times indeed do change and court and tribunal decisions certainly reflect such shifting mores.

AN OVERVIEW OF REMEDIES – Statutory or Common Law

Option A The Statutory Process

The first remedy is to file a complaint with the relevant human rights body. This relief, of course, is available to any person in Canada.

Option B Civil Law Suit – Ontario Only

In Ontario, presuming that the individual is governed by provincial and not federal law, there is a second manner of seeking a human rights remedy. Ontario amended its legislation55 on June 30, 2008 to allow civil claims for a breach of a human rights violation when included with another civil claim. Hence a plaintiff suing for wrongful dismissal, or any other remedy, may also add a claim, where appropriate, for damages and other relief for a human rights violation.

Prior to June 30, 2008, civil actions alleging human rights violations were used to support an argument of a claim for breach of good faith and fair dealing as was contemplated in Wallace v United Grain Growers, discussed below.

OPTION B2 The Offensive Behaviour may lead to aggravated or punitive damages – all jurisdictions

In October of 1997, the Supreme Court of Canada decided in Wallace v United Grain Growers that the employer owed a “duty of fair dealing and good faith” to employees at the time of termination.

The Court also stated for the first time, that if there was a breach of that duty, the court should increase the usual notice period.In this case, the company had made cause allegations against the plaintiff, which it dropped on the eve of trial – this was the basis of the breach of the duty of good faith.

After Wallace, many trial and appellate decisions allowed for an increased notice period based on a violation of the human rights statute.56 These cases are no longer good law as a further Supreme Court decision57 released in the summer of 2008, changed the common law remedy dramatically.

The Supreme Court then determined that had such a breach of the human rights code been actionable, that a court should not increase the notice period to compensate for emotional harm, but rather should award damages for emotional distress, where proven.

The Court also determined that absent a contrary provision in the enabling legislation, the sole remedy for asserting a breach of the relevant human rights legislation is the administrative complaint process under the pertinent human rights statute.

Accordingly the earlier cases using a human rights code violation to increase the notice period are no longer good law.

It remains arguable the conduct which may fit the rubric of sexual harassment may be argued as unfair conduct, where termination has resulted from such conduct, and hence be used to support an aggravated damage claim within this definition.

To do so, the claim would require different vocabulary to describe the conduct in question other than sexual harassment, such as a common law tort, as such a claim based solely upon a breach of the Code was no longer actionable.

OPTION B3 The Traditional Torts

A civil action may also be commenced independently of the relief set out in the relevant statute, using traditional common law tort claims. Such actions have included pleas based on the intentional infliction of mental distress, assault, battery, breach of fiduciary duty, and negligence58 against the employer for failing in its duty to maintain a safe work environment. Tort claims, it must be recalled, are not closed. The innovation of counsel may well lead to new actions.

Where there is a criminal conviction, in Ontario, a civil claim may invoke the provisions of the Victims’ Bill of Rights, in the case of a sexual assault or an attempted one. In that event, emotional distress damages are presumed, as is the case in the tort of battery.

Aggravated damages and claims for prospective lost income, when awarded in the tort claims, have tended recently to be higher than the awards expected in the human rights forum. In addition, most human rights tribunals are not empowered to award punitive damages and when empowered to do so, tend to be modest or are capped by the statute.

These issues are discussed in detail subsequently.


General Principles of Interpretation

The well-accepted mode of interpretation is to allow for a “fair, large and liberal interpretation”59 of human rights statutes, given the inherent remedial intent and “the special nature and purpose60” of such legislation. Human rights legislation has been described as “not quite constitutional, but certainly more than ordinary”61. Such legislation is not to be interpreted “on a strictly grammatical analysis”62. Such quasi-constitutional statutes must be read contextually63.

Limitation Period

The limitation period is very important. The time to commence a claim varies from jurisdiction to jurisdiction. Some statutes allow for an extension of the stated time period, usually conditioned by a requirement that the delay was incurred in good faith and that the employer will suffer no prejudice.

B.C., at one time, had shortest limitation period of 6 months. It has recently been amended to 12 months. It also allows for an extension where in the public interest and no prejudice is shown. Nunavut is similar although the period is set at 2 years and also allows an extension where the delay was occasioned in good faith and again no prejudice has been suffered.

Manitoba sets a 1 year proscription period and allows for a similar extension where there is no prejudice and it is an individual who seeks the extra time and not the Commission.64

New Brunswick allows for a 1 year period and a general discretion to extend without any set guidelines on the face of the statute, as does Saskatchewan.

P.E.I. fixes a 1 year absolute period, as does Newfoundland and Alberta. Quebec’s Charter requires the case be commenced within 2 years and similarly there is no provision for an extension.

Nova Scotia and Ontario set a 1 year period and each allow for extensions where there is no prejudice. Ontario requires the applicant to also show good faith. N.W.T. has a 2 year period with extensions available on the same terms as Ontario, which is the same law as the Yukon, apart from the set time period which is 18 months.

The federal law sets the filing period as 1 year and allows for a residual discretion to extend this time period.

The issue will arise as to when the limitation clock starts. In sexual harassment cases, the question often arises as to whether there was a “series of events” which had occurred. If such is the case, and the last of such events is timely, this will allow the entire history of past conduct to be admitted as part of the complaint.

The test is whether the questioned conduct fits a pattern of similar behaviour, as opposed to the converse of discrete and separate issues 65.66 .

The Workplace

To establish a code violation, there must be an employment relationship to support a sexual harassment complaint.

For a sexual harassment complaint to be in an employment context, there must be a definition of what types of working relationships may be covered. For example, would a business relationship such as a contractor-principal be covered?

Secondly, presuming that the nature of the relationship is one that falls within the rubric of employment, what type of conduct would then be caught? Must it be confined to the physical premises, or take place within working hours?67

There typically is not a conclusive definition in the relevant human rights statute setting out what is or is not employment. It is the jurisprudence of the human rights tribunals and the courts which offer interpretation of the term “employment”.

B.C.’s Human Rights Code, for example, does not define employment but does state that this term includes “the relationship of master and servant, master and apprentice and principal and agent, if a substantial part of the agent’s services relate to the affairs of one principal”.

Similarly, Nova Scotia’s statute states that an “employer includes a person who contracts with a person for services to be performed by that person or wholly or partly by another person”.

P.E.I.’s Human Rights Act has a similar provision, as does that of the North West Territories.

Alberta’s Human Rights Act offers no definition or even such an inclusionary provision, as does the equivalent statute in Ontario.

The first step in the determination of whether there may exist an employment relationship is to apply the common law test68. The burden is upon the applicant to prove jurisdiction.

The leading case on this subject is the Supreme Court of Canada decision in 671122 Ontario Ltd. v Sagaz69, in which the Court concluded that although there was no direct path to the answer, the accepted popular test was set out as below70.

The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker’s activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker’s opportunity for profit in the performance of his or her tasks.71

Should the application of this common law test not show an employment relationship, then regard must be had to the principle that a “purposive, functional approach to determining the test of employment72” must be used to determine the jurisdiction of the human rights statute73.

Accordingly, the jurisdiction of the human rights tribunal will not be limited to purely a common law employment relationship but rather will include more than the traditional employer-employee relationship74, which is reflective of the broad purposive interpretation required for this remedial legislation.75

A good example of this principle is shown by the conclusion that the use of a management corporation by which the applicant has been paid was not been successful in depriving the tribunal of jurisdiction76. A similar reflection of this view was found in one case in which a taxi cab brokerage company was found to be covered by the Ontario code in its dealings with the owner of a taxi licence seeking a brokerage company for his licence77.

The test, as noted by the Supreme Court, is essentially one of control and dependency78. The real issue is whether “the employer” is in a position to “remedy any discrimination” and hence whether it “controls working conditions and remuneration79” which has created a consequential dependency on the part of the employee.

Findings which have been made of employment or otherwise for other legal purposes have been held not to be binding upon the human rights tribunal80.

“Sufficient Employment Connection”

The Supreme Court of Canada again considered this issue of jurisdiction in a complaint made against a worker of a company, which entity was not the complainant’s direct employer.

S-M worked for a company, Omega and Associates, as a civil engineer on a construction project. Omega was responsible for the oversight of the primary construction general contractor, known as Clemas. One of the employees of Clemas was Schrenk.

S-M accused Schrenk of certain racist and homophobic comments, resulting in S-M making this human rights complaint against him.

Schrenk moved unsuccessfully to strike the complaint before the B.C. Human Rights Tribunal which was followed by an unsuccessful judicial review application. This, in turn, was appealed to the Court of Appeal which sided with Schrenk. The case was then appealed to the Supreme Court of Canada which reinstated the application.

The case then considered this issue of jurisdiction and whether the claim was caught by the employment definition within the statute.

The submission made by Schrenk was that he was not the employer of S-M, nor was he, his superior in the workplace.

The majority decision held that the purpose of the Code was “not limited to protecting employees solely from discriminatory harassment by their superiors in the workplace. Rather, its protections extends to all employees who suffer discrimination with a sufficient connection to their employment context.”

This interpretation was broad enough to encompass adverse conduct by a co-worker, even such a co-worker with a different employer.

The decision noted that human rights laws generally are given a broad and liberal interpretation to allow the fundamental rights to be achieved in society. Indeed it reinforced the view that human rights statutes are quasi-constitutional in nature which hence allows for a “generous interpretation to permit the achievement of its broad political purposes”.

The operative wording of the B.C. Code forbade adverse treatment against a person “regarding employment”. The opening words addressed the issue of such adverse treatment by “a person”, which was read to include a person beyond one with economic authority over the complainant.

These words were seen as prohibiting discriminatory conduct which targeted employees as long as there is a “sufficient nexus between the discrimination and the employment context”.

The test for such a finding will include a review of the following factors:

  1. Was the respondent integral to the workplace of the complainant;
  2. Did the questioned conduct take place in the workplace;
  3. Was the complainant’s work performance or work environment negatively effect.

Partnership Issues

The Supreme Court of Canada considered this issue resulting from a complaint made by an equity partner in a large law firm based in Vancouver. The partnership agreement required such a person to resign as an equity partner at the end of the calendar year in which they became age 65.

The law firm moved unsuccessfully, initially, to strike the complaint due to lack of jurisdiction based on the submission that the applicant was a partner and not an employee. This decision was set aside by the B.C. Court of Appeal and was upheld in turn by the Supreme Court.

The issue hence presented was whether the facts allowed, in this case, an equity partner to be regarded as an employee for purposes of the Code.

The Court of Appeal had concluded that a partner could never be considered, for this purpose, an employee, a position with which the Supreme Court disagreed, notwithstanding that in this instance, it found that there was no employment status.

The critical issue for the determination of employee status, the Court concluded, was “the degree of control and dependency”. The essential question used in this test is “whether the employer controls working conditions and remuneration, resulting in dependency on the part of the employee”.

The majority stated:

Control and dependency, in other words, are a function not only of whether the worker receives immediate direction from, or is affected by the decisions of others, but also whether he or she has the ability to influence decisions that critically affect his or her working life. The answers to these questions represent the compass for determining the true nature of the relationship.

As to the  issue of a partnership itself, the Court noted that the control over the workplace conditions and remuneration rests with the partners and hence, “in most cases”, the partners will not be regarded as employees.

This being said, the decision maker should provide a functional review of the true factual foundation of the relationship. While the applicant here was found factually to have been “someone in control of, rather than subject to, decisions about workplace conditions” and hence not an employee, this will not necessarily follow in every situation as  it will not follow “form should trump substance”.

The Court parenthetically noted that partners still by statute owe a duty of “utmost fairness and good faith” to one another which may in another context raise the issue of discriminatory conduct as actionable.

Section 3 of the Ontario Code

Ontario’s Code contains as provision which states as follows:


  1. Every person having legal capacity has a right to contract on equal terms without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, marital status, family status or handicap. [1981, c.53, s.3; 1986, c.64, s.18(3).]

B.C’s Code does not contain this provision.

This provision would very likely allow for jurisdiction to challenge a similar contractual agreement in Ontario. Saskatchewan is the sole other jurisdiction with a comparable term in its human rights statute.

Did the Conduct Take Place Within the “Employment” Relationship?

Apart from the finding of whether or not the relationship is one under the jurisdiction of the relevant statute, the next issue which frequently arises is whether the questioned conduct is within the context of an employment relationship. Not surprisingly, often conduct which is alleged to be sexual in nature occurs outside of the physical confines of the office or work environment and also often beyond normal working hours.

The cases which follow deal with essentially fact finding endeavours to determine whether conduct which was external to the work environment in geography or time may nonetheless be work related.

Apart from the analysis of these cases, which clearly advocates a broad liberal approach to the question, any threats of adverse workplace consequences, or conversely positive employment-related rewards based on sexual advances, no matter where such events may occur, are most assuredly within the jurisdiction of the tribunal81.

The Ontario Court of Appeal in Simpson v Consumers Association of Canada82 dealt with the issue of conduct which did not take place in the immediate workplace, but rather in settings beyond the physical premises of the office.

This was not a human rights complaint but a civil lawsuit brought by Mr. Simpson against his employer who had terminated him because of allegations of sexual harassment. Mr. Simpson was not only successful at trial, but ironically was also awarded incremental damages for unfair conduct.

CAC appealed successfully. One of the issues considered by the Court of Appeal was the impact of the finding that certain of the alleged events of misconduct took place at locations external to the office premises as the employer was required to prove workplace misconduct.

Three of the occasions alleged against the plaintiff took place at company meetings or retreats held at hotels which business meetings, yet with a social component, were held. The fact that such events occurred after the completion of business meetings did not mean, the Court determined, that such conduct was outside the workplace and hence external to the employment context.

This conclusion that such events were work-related may have been seen to be predictable, but the events which took place at the plaintiff’s cottage raised a different dimension. Again, the context was seen as work related. Staff had been present at the cottage because the plaintiff was on vacation and his advice was required on certain timely issues. Following the work assignment, the staff were invited to remain and recreate.

Notably the Court of Appeal overturned the trial judge on this issue:

It would be artificial and contrary to the purpose of controlling sexual harassment in the workplace to say that after-work interaction between a supervisor and other employees cannot constitute the workplace for the purpose of the application of the law regarding employment-related sexual harassment. The determination of whether, in any particular case, activity that occurs after hours or outside the confines of the business establishment can be the subject of complaint will be a question of fact. In this case, the trial judge erred by making an overall finding without considering the individual circumstances of each incident.

The moral of the story is that a work relationship is not one confined to the office or business premises, but rather a broad contextual view must be applied to determine whether there is an employment connection to the event83.

A similar conclusion was reached in a human rights context in which the alleged offensive conduct took place at a firm retreat in South Carolina84, which was considered to be a team building event.

To the same effect was the finding in a civil trial in the context of an after-event party in a hotel room, which was owned by the employer, attended by employees and spouses85, and a barbeque where social aspects of the event were seen as work-related86, as, in part, the event was seen as a celebration of the progress of the employer.

Essentially the decision maker will undertake a fact finding analysis to determine if the questioned conduct was in the context of an employment relationship, even though it may have occurred off hours and outside the physical boundaries of the workplace setting.

Email messages, twitter and Facebook accounts or other internet postings will face such a test. There is no reason why such comments made in cyberspace could not fit into the category of workplace communications87 in the appropriate context.

The decision of the Tribunal in S.S.v Taylor (Flaherty) noted that while some of the events took place outside the business premises of the restaurant, that nonetheless, they were “sufficiently connected” to the workplace to allow for jurisdiction.

More importantly, the decision spoke to the issue that such comments made by the respondent “had job-related consequences” for the applicant:

Importantly, all of the incidents, regardless of where they occurred, had job-related consequences for the applicant. Perhaps the clearest example of this is the applicant’s evidence that could not face returning to work at the Restaurant knowing that her boss and some of her co-workers had thought and talked about her as described in the voicemail message.

The conclusion that “work-related consequences” as the sole factor would allow for jurisdiction appears excessive. If so, any exchange between two people, where ever this may take place, who happen to have the same employer, would give rise to jurisdiction. This factor ought not to suffice as a stand-alone test.

A similar fact based analysis was undertaken in the decision of the Canadian Human Rights Tribunal (Theberge, Dionne and Jakhu) in the December 1992 case of Cluff v Department of Agriculture, in this case finding that there was no activity which took place in the course of the employment relationship and hence declined jurisdiction.

The complainant had alleged that the personal respondent had sexually harassed her at the annual conference organized by her for the Eastern Canada Farm Writers Association. The complainant was then employed by the Department as an information officer, while the personal respondent held the position of program officer. The event was not an employer function but was nonetheless work related.

The complainant’s prime responsibility was the preparation of radio programmes. It was with the approval and support of her employer that she became active on the executive of the ECFWA. Her participation at the conference was agreed to be during normal working hours. Her registration fee for the conference was paid by the employer.

The questioned events took place at the hospitality suite arranged for the conference.Adjoining the suite was a bedroom portion which was separated from the remaining area by an archway, as opposed to a locked door.

The events of the evening affair commenced at 9 pm in the hospitality suite. By 2 am, the complainant was alone in the suite accompanied by the personal respondent, also an employee of the Department and senior to her in responsibility and another male person unrelated to the employer. It was between 2 and 3 am that the alleged event of sexual harassment took place.

The following test was adopted for the purpose of determining whether the alleged harassment took place “in the course of employment” and/or “in matters relating to employment”:

An employee is in the course of employment when, within the period covered by the employment, he or she is carrying out:

1. Activities which he or she might normally or reasonably do or be specifically authorised to do while so employed;
2. Activities which fairly and reasonably may be said to be incidental to the employment or logically and naturally connected with it;
3. Activities in furtherance of duties he or she owes to his or her employer; or
4. Activities in furtherance of duties owed to the employer where the latter is exercising or could exercise control over what the employee does.

The Tribunal concluded (as referenced in the Federal Court decision):

An employee is still in the course of employment when he or she is carrying out intentionally or unintentionally, authorised or unauthorised, with or without the approval of his or her employer, activities which are discriminatory under the CHRA and are in some way related or associated with the employment. However, an employee is considered to have deviated from the course of his or her employment when engaged in those activities which are not related to his or her employment or are personal in nature.

On the facts of the case, it was determined that the complainant’s role in the conference was not one which was mandated as an employment term with the Department which had no control or power over the ECFWA. The attendance of the personal respondent was also not related to his employment. For these reasons, the panel declined jurisdiction.

The decision was reviewed in 1993 by Gibson J. of the Federal Court, who upheld the decision, but for differing reasons which are of significance to the analysis. The Federal Court, in applying the standard of correctness, agreed with the four fold test set out by the Tribunal, noting that these factors are disjunctive.

The Federal Court disagreed with the conclusion that the activities in question were not “in the course of employment” as the first two tests were each met.

The Court concluded, in essence, that once the hospitality suite closed, so did the employment relationship which ended the day for employer liability. Gibson J. stated:

At some time during the night in question, before 2:00 a.m. and at or shortly after the time the hospitality suite effectively closed, the complainant ceased to be in the course of employment or engaged in matters related to employment. To conclude otherwise would place an intolerable burden of responsibility on employers of those who travel in the course of their employment and of those who attend conferences and the like on behalf of their employer.

The issue then being determined was the existence of an employment relationship at the time of the assault. Liability would not necessarily have followed as the federal Code contained a due diligence defence to the employer liability88, an issue which was not reviewed. The Court concluded that liability would have automatically followed, which was not correct.

It is difficult to countenance the reasoning that had the harassment occurred during the currency of the social event, apparently an employment relationship would be found, yet an event which took place later in the evening failed to be caught by the relationship which brought her to the evening itself. This decision stands at odds with the reasoning of the British Columbia and Ontario Court of Appeal referenced above and that of the definition of “job-related consequences” set out in S.S. v Taylor.

The test set out by the Federal Court has had a questionable reception. It has been largely ignored in most jurisdictions, yet remains the accepted standard in the Alberta human rights tribunal decisions89 and the federal human rights tribunal.

The Role of the Human Rights Commission

The status of the body known as the “Human Rights Commission” can be confusing. In all jurisdictions, apart from those that have implemented the direct user access system, the case starts by the complainant contacting the human rights commission, which investigates the allegation and initiates the case, often with the individual also as a party.

The jurisdictions with the “direct user access” system, by which the complaint process is started by the individual complainant, without the investigation of a human rights commission, are Ontario, B.C. and Nunavut.

In Ontario, the human rights commission usually is not a party to the case. It acts as an advisory body to the public and in cases of wide scale public interest or one involving an important legal issue, may seek to add itself as a party to the case. Typically the complainant is shown as the only party initiating the case. The applicant is a distinct and separate party at the hearing before the Tribunal. He or she has the right to participate and may take positions that are different from those expressed by the Commission, should it decide to seek an order to add itself to the case90.

British Columbia re-introduced the human rights commission in November of 2018. It will take effect in November of 2019. It will be similar in substance to that of Ontario.

Nunavut remains the sole jurisdiction which does not have a body known as a human rights commission.

The tribunal which hears the case is referred to as a human rights panel, board, tribunal or board of inquiry.

In Alberta, the complainant is a party, as also is the Director of the Human Rights Commission in every case. Saskatchewan follows the same process, as does Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland& Labrador.

Quebec’s Charter of Rights and Freedoms allows the Commission to have carriage of the case. Should it decide not to pursue the claim, the individual may continue the case on his or her initiative.

The statute of the Yukon is a hybrid, incorporating elements of both systems. The user files the complaint and the Human Rights Commission then investigates the merits of the action. The Commission may advocate the position of either adverse party at the hearing before the panel, which is a welcomed novel approach.

The law of the North West Territories permits the complainant to commence the complaint or the Commission, in which latter case it is a party. The Commission may also advise the panel in which event it is also a party.

Naming Personal Respondents

The issue of whom should be added in a human rights complaint for sexual harassment is regrettably complicated. The answer to this question depends very much on the statute of the relevant jurisdiction and also the nature of the remedy which is sought.

There are different types of remedies which may be sought in a claim which has emanated from conduct which is sexual harassment. The first is a pure claim alleging such abusive conduct. The second is more general complaint by which the applicant asserts the existence of a poisoned work environment and/or reprisal due to the filing of a complaint. The type of relief sought will have an impact on the question of whom should be added as a respondent.

In a pure sexual harassment complaint, the initial view often presumes that the employer has liability. This need not be so in many jurisdictions, as set out below. Many statutes allow for an employer “due diligence” defence. Ontario’s code creates for most human rights violations deemed employer liability but denies its application to a sexual harassment case.

The liability of the corporate employer in a human rights administrative process presents real difficulties for the applicant in a sexual harassment complaint.The individuals who are responsible for the offensive conduct must be named in the proceeding as respondents.

The employer in most cases should nonetheless be also named as a respondent. Any apparently related companies that may be involved in the business should also be named.

The principle of vicarious liability will generally mean that the employer is legally responsible for the acts of its employees which take place in the course of employment. Most human rights statutes deem that the company is responsible for the actions of its employees, officers and directors in that circumstance. Absent such a provision in the relevant statute, the leading case on this subject has also determined that the employer should be responsible for human rights violations of its employees in the course of employment91.

There are, however, some important exceptions to this concept.

Many jurisdictions by the relevant legislation have amended the principle by which an employer has been determined to be responsible for the actions of its employees, as described below.

Ontario’s statute92 has a deeming provision holding an employer responsible for the conduct of its officer, official, employee or agent in the course of their employment.

This provision, however, does not apply to freedom from harassment in the workplace93, sexual harassment in the workplace94, and sexual solicitation and freedom from reprisal connected to sexual solicitation.

There, hence, is no deemed liability upon the employer for wrongdoings under these remedy sections.

Thus, under the Ontario Code, the deeming provision holding the employer responsible for the acts of its employees, agents or officers, does not apply to sexual harassment. Such a complaint must be brought personally against the individual who is accused of the offensive conduct95.

B.C. does not have such a statutory provision. Accordingly the relevant law is the common law by which the employer is responsible, in a human rights context, for all acts of its employees committed in the course of the employment relationship96.

The law is the same as in B.C. in Saskatchewan, Nova Scotia, PEI, Newfoundland & Labrador, NWT, Nunavut and Quebec.

Other jurisdictions have allowed the employer what is essentially a “due diligence” defence to the complaint.

Manitoba has enacted legislation which defines the concept of employer liability for the acts of its employees. Provided that the conduct was in the course of employment, the employer is deemed responsible. The employer may, however, show a defence by proving (1) it did not consent to the conduct and (2) took all reasonable steps to prevent it and (3) then took all reasonable steps to minimize or avoid the effect of the offensive actions.

The substance of this provision is repeated in the legislation of the Yukon.

New Brunswick has similar legislation with respect to a complaint of sexual harassment, which deems the actions of the employee to be those of the employer, and then allows the employer a defence of showing it used due diligence to prevent such conduct97.

Essentially the federal legislation now allows for a “due diligence” defence to be raised against the assertion of vicarious liability. The employer must show that (1) it did not consent to questioned conduct, (2) and it used all due diligence to prevent event and (3) did all it could to minimize or avoid the adverse consequences.

This does not, however, end the analysis of employer liability, again to a complaint of pure sexual harassment.

This concept of “organic liability” provides an argument that the employer company is responsible for the conduct of its principals. It is different from vicarious liability. The theory is that a legal entity can only act through its principals and hence the company will held liable for such conduct of its “principals” or “its directing mind” in a sexual harassment case, or a similar situation where the statute’s deeming provision of liability upon the employer does not apply.

This is essentially what New Brunswick codified in its legislation. There is no need, however, for the relevant statute to state such a principle.

The persons who act as the “directing mind” of the corporation will not only allow for the liability of the corporation for their actions98 but will also attract personal liability99. This is true for all administrative jurisdictions and, indeed, in a comparable common law claim in tort.

Other Aspects of Employer Liability due to Sexual Harassment

This does not close the subject of employer liability under the relevant human rights statute due to a sexual harassment allegation.

Firstly, there may be liability under the Ontario statute for a failure to investigate the complaint. It may suffice to say presently that the human rights remedy is uncertain in Ontario as to whether there is direct liability on the employer100 under the statute for such a failing101. No other jurisdictions in Canada have imposed direct employer liability on a failure to investigate a human rights assertion independently of the substantive issue.102

The remaining jurisdictions in Canada do not follow the Ontario model on this issue of reprisal due to sexual solicitation.103 As noted above, most jurisdictions104 use the common law interpretation of employer liability105for which such conduct, the employer would face liability. Other jurisdictions make conduct which is retaliatory to a refusal to comply with a sexual advance part of the definition of sexual harassment106 and then apply the relevant law on this subject to determine employer liability.107

A complainant for a general reprisal remedy stands alone108. Success in the substantive complaint is not required. The applicant must only show that rights were claimed or threatened to be claimed under the Code and she was the subject of adverse treatment or the threat of as a result109. The applicant in such a case simply must show that rights under the code were claimed and she was then the subject of threats of, or actual adverse consequences.

Unlike a complaint of adverse discriminatory conduct which does not require proof of intent110, a claim of general reprisal requires proof that the action or threat was indeed intended as a retaliation to the claim to or enforcement of a right under the Code.

A claim of general reprisal requires proof that the action or threat was indeed intended as a retaliation to the claim to or enforcement of a right under the Code.

Such intent may be inferred from circumstantial evidence111, but there must be evidence to support the proposition that the decision maker was aware of the steps being taken to enforce Code rights112.

Reprisal is discussed in more detail subsequently.

The remains a third possibility of employer liability for a sexual harassment allegation due to the existence of a “poisoned work environment”113. This liability is not exempted from the deeming provisions of the Ontario Code. Management employees who fail to take remedial action to eliminate such a work environment and the corporation may both be liable for a breach of this obligation114. In essence, a company which has failed to deal with Code violations prevalent in the workplace will take on this liability due to its failure to assure a proper and safe workplace.

Proving the case

The law on this subject evolved in an era115 in which it was necessary to prove the intent of the wrongdoer. Due to the inherent difficulty in so doing, two important human rights interpretative principles developed.

The first was the need to prove a prima facie case, which then put to the respondent the need to call evidence. The second principle was that of reasonable inference from circumstantial evidence.

While the need to prove motive has long gone, these two concepts have remained firmly entrenched.

Prima Facie Case

The legal test for the establishment of a prima facie case is “one which covers the allegations made and which, if they are believed, is complete and sufficient to justify a verdict in the complainant’s favour in the absence of an answer from the respondent-employer”116.

The establishment of a prima facie case is one which requires credible evidence to prove the case, and hence a respondent faced with such a prima facie case at the end of the claimant’s case must call evidence to avoid an adverse finding117. “Once there is evidence to support a prima facie case, the respondent faces the tactical choice: explain or risk losing”118.

Once this test of a prima facie case is made, the burden of proof then shifts to the respondent to provide a reasonable explanation for the behaviour, one which shows that there was some other reasonable credible explanation for its conduct.

If the respondent provides such an explanation, the complainant then has the ultimate burden of showing that the alleged offensive discriminatory behaviour is more probable from the evidence than the defence offered. It is in this sense that the burden which shifts is one of evidence119,not onus120.The ultimate issue is whether an inference of discrimination is more probable from the evidence than the actual explanations offered by the respondent121.

Proof by Inference

In discrimination cases generally, the case is proven by inference from circumstantial evidence. Relatively “little affirmative evidence” is required in such cases for the inference to be allowed122. The standard of proof requires “only that the inference be more probable than not”123 124124. This is so as in human rights cases, there is very rarely direct evidence proving a human rights violation125. It is the task of the tribunal to view all of the circumstances to determine if there exists “subtle scent of discrimination”126.

It has been long recognized that a victim of sexual harassment may be compromised and hence an immediate complaint may always not be forthcoming. This need not be a bar to a finding of liability127. Due to the inherent power imbalance, an employee may well not raise immediate objections128. This reflects the victim’s economic dependent vulnerability129. As is the case with all evidence, the decision maker must assess credibility and determine if the offered explanation for a delayed complaint or no complaint makes sense. In one example, the Tribunal did not believe the professed reason for delay as the complainant had proven herself quite able to assert herself over other employment concerns130.

An Influential Factor – No Intent Required

Generally, in a human rights complaint, the offensive conduct need not be malicious and further need only be a factor propelling the conduct in question. It need not be the sole cause.

The decision maker need not look for a motivator for the alleged offensive action. It is not an exercise in determining whether the alleged adverse treatment took place because of a code violation but rather was influenced by a code violation.

As was noted by the Divisional Court131, this line of questioning132 reflects a “common myth” that the quest is one to determine whether the employer was intent to terminate based on a code protected value.

As was the case with the need to prove but a prima facie case and proof by reasonable inference through circumstantial evidence, the origin of this principle came from an interpretation of labour relations issues, in this instance, whether the termination of a person was due to union membership133.

Intent for Reprisal

However, in certain cases intent of the wrongdoer is relevant. Such is the case in a termination allegation or a reprisal claim based on an allegation of sexual harassment. In this context, the applicant must show that the human rights factor was influential and not the sole or primary reason134. This concept has been well established135. It has also been applied in Ontario when the plaintiff has sued civilly to seek a human rights remedy136.

Similarly, as noted above, there is no need to establish the intent to discriminate137.

No Need for Corroborative Evidence

It is well-founded that while corroborative evidence is certainly helpful, it is not a pre-condition to prove an allegation of sexual harassment138.

These human rights interpretative rules do not generally have a dramatic impact in a sexual harassment allegation.139 The applicant in real life must prove the offensive action on a balance of probabilities.

Similar Fact Evidence

There is always an inherent danger in the admission of similar fact evidence as the alleged offender may be proven guilty of a disposition as opposed to actual evidence on the immediate issue140.

The issue becomes more complicated as often the accusers may have collaborated with one another in advance, an issue which must be weighed by the decision maker in either admitting the evidence or determining its ultimate weight141.

The test is described in the usual words debating the admission of questioned evidence, namely the “probative value” as opposed to the “prejudicial impact”142. One issue in determining the former is whether there is sufficient similarity between the proposed evidence and the immediate allegations. Such evidence ought not to be admitted if it only establishes a propensity143.

In applying this test, the Tribunal will look to the proximity in place and time, the extent of the similar details, the number of occurrences, the circumstances of the similar acts and the presence of any uniquely identifying events144. The evidence must be cogent and have a demonstrable nexus to the issues145 and “striking similar”146. The reason for its admission is often to determine credibility issues as the facts of sexual harassment have often arisen in the absence of witnesses147.

Evidence of otherwise good character is typically not allowed as not probative148. Many cases involve conflicting recounts of the facts involving two competing parties, with no independent witnesses supporting either view. In this event, credibility becomes an extremely important issue.

No Need for Three Step Process

There had been some debate as to whether a human rights tribunal or a civil trial was obliged to apply what has referred to as the “three step process” as is required in a charge of criminal sexual assault149. This principle required the trial judge to direct the jury that there are more than two options to consider in determining whether a criminal case has been proven. It is not quite as simple as the jury must believe the accuser or the accused.

The jury must also consider the possibility that it could disbelieve the accused, but nonetheless determine that the evidence of the complainant did not prove the charge.

It has since been determined that this test was not mandatory to a civil case150. Often in a civil or a human rights case, the finding of credibility by the trier of fact “may well be conclusive”151, particularly where the plaintiff’s assertions are denied by the defendant.

This does not deny, however, the possibility that in some cases it is not quite as simple as the decider choosing between two conflicting genres of evidence152. Generally where the evidence is mutually exclusive on the critical mass, there will be no need to consider the third alternative153. In essence the three part test may be occasionally helpful154, but not always so. As long as the trier of fact applies the correct burden and standard of proof, the absence of this test will not be fatal.

Credibility Assessment

In making credibility assessments, the decider often will rely upon the test as set out in Faryna v. Chorny155. The passage below is frequently cited, no doubt to ensure that the reader and any appellate review body will be satisfied that the correct principles have been applied156:

The credibility of interested witnesses, particularly in cases of conflict of evidence cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of the witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize is reasonable in that place and in those conditions…

This passage emphasizes the necessity for an objective assessment to be made as to whether or not the witness’ evidence “makes sense”. While this is certainly true, an important factor going into the assessment of credibility is the demeanour of the witnesses while giving evidence. In addition, the manner of speech of the witnesses is often telling in terms of their credibility, as noted by the following assessment of the demeanour of the witness:

In this case, I found that the applicant gave her evidence in a straightforward and direct manner, despite the fact that she was understandably quite nervous. She was able to describe with considerable certainty and precision the various incidents of harassment and discrimination that she alleged took place. Her evidence was not seriously disturbed on cross-examination. I do not believe that she exaggerated her evidence in any material way. Overall, I found her to be a credible witness.

In many sexual harassment cases, it would be unlikely to expect witnesses beyond the immediate parties. However, where potential witnesses do exist and are not called, particularly where many witnesses deny the allegations made by the complainant, certainly an adverse inference may be made157.

Results of a Criminal Case

Occasionally the respondent has been found guilty or pleaded guilty to a criminal charge which has formed the same subject matter of the human rights complaint. The usual example is a charge of sexual assault. Technically speaking, the finding of a criminal trial judge does not meet all the indicia of issue estoppel158 or res judicata as the parties are not the same and arguably the issues may be different as well. Notwithstanding such argument, such factual determinations have been deemed to be the evidence before the tribunal159, based on the submission that there must be consideration given to factors such as “judicial economy, consistency, finality and the integrity of the administration of justice”160.

There may be situations in which it would be inappropriate to admit such findings as evidence, as in a context in which the first proceeding was suggested to be tainted by improper conduct such as fraud or where new evidence, previously unavailable may question the original finding and other fairness issues have arisen161.

Other explanations may allow for the denial of the issue estoppel such as the accused may have faced minor consequences in the first charge and was not inclined to mount a full defence or made a plea for that reason162. The respondent must show such affirmative evidence to explain why his evidence or agreed statement of fact in the first proceeding should not be used against him in the human rights process163.

Browne v Dunn

The rule in Browne v Dunn requires the cross-examiner to put to the complainant’s witness an anticipated contradictory statement to allow the witness the opportunity to affirm, deny or otherwise qualify her evidence on this issue.

For example, where the witness in chief, as part of the complainant’s case, testifies that Mr. Smith spoke to her aggressively and insisted she accompany him on a company trip to New York, and the respondent expected a defence witness to testify that the complainant told him a completely contrary story and in fact she was quite eagerly and voluntarily enchanted to travel with her boss, this contrary statement must be put to the witness in cross-examination.

As stated by the Court of Appeal164, the rule in Browne v Dunn is a rule of fairness:

The rule in Browne v. Dunn is a rule of fairness: if counsel is going to challenge the credibility of a witness by calling contradictory evidence, the witness must be given an opportunity to address the contradictory evidence. It may be that counsel is not required to put every contradictory detail to a witness. However, the two matters in issue were hardly mere details.

Frequently the ruling on a Browne v Dunn challenge is to allow the question and then consider the weight to be given to the response165. Alternatively, the Tribunal may allow the defence evidence where the rule has been violated and allow the complainant to give reply evidence on the issue166.


An Overview

There are four essential forms of direct relief available to the complainant, which may be awarded167, which are common to all Canadian jurisdictions. Certain jurisdictions also allow for punitive damages and costs.

The first is the award of compensatory damages for “injury to dignity, feelings and self-respect”168 which may flow from the breach of a substantive statutory right. This may also arise due to the existence of a “poisoned work environment” and/or perhaps a failure to investigate a complaint169, and/or further due to a general reprisal claim. These latter two remedies may be made successfully even where the substantive claim may not enjoy success.

The second is a claim for lost income where there has been such a loss suffered due to the offensive conduct, such as a direct termination which has been influenced by a protected human rights value or due to a poisoned work environment170. This may also follow where a person has been terminated due to retaliatory conduct in a general reprisal claim.

The third remedy is reinstatement.

The fourth form of order is non-monetary relief which may be made against the employer which is designed to remedy the wrong-doing on a principled basis, which is described as public interest remedy171. Also a common statutory remedy is to allow the tribunal the right to order that the offensive behaviour cease.

A finding of an Ontario Human Rights Code violation in employment will give rise to other consequences if the employer is engaged in business dealings with the Ontario government. Such a finding will allow the government to assert any such contract is in breach172.

Certain Canadian jurisdictions do allow for an award of punitive damages.

The Charter in Quebec allows for an award of punitive damages where the conduct is reckless, that is, a standard less than intentional. In one case the sum of $5,000 was ordered to each of four complaints in a case based on race.173

Manitoba allows for punitive damages where the questioned conduct shows malice or recklessness up to $5,000 and $25,000 against an individual or corporation respectively.

The Yukon also provides the same remedy of a punitive award without a stated cap where the questioned conduct was found to be malicious.

N.W.T. allows for punitive damages up to a cap of $10,000174. Nunavut has no set maximum but its statute allows for such incremental damages where the conduct again shows malice or reckless behaviour.

Saskatchewan allows for an incremental award where the behaviour fits the pattern of a conduct meriting a punitive award by behaving “wilfully and recklessly” yet places a cap on the total award of compensatory and punitive damages at $20,000175.

The Canadian Human Rights Act does not use the precise vocabulary of “punitive damages” but the Act allows for an increased damage award of “special compensation” up to a further sum of $20,000 when the conduct in question is wilful and malicious.

One would expect that awards of punitive damages would be more frequent in sexual harassment cases where the conduct is clearly intentional, abusive, for personal gratification and to the obvious personal detriment of the victim and often a misuse of economic power over a vulnerable person176. The general view of the remaining jurisdictions is that there should be no punitive element in awards in human rights cases. It is entirely questionable as why this should be, particularly so given the unique category in which sexual harassment cases fall.

Legal costs are generally not awarded to the successful complainant nor against the unsuccessful one. It is to be recalled that most jurisdictions are not “user initiated” and generally the complaint is brought by the relevant human rights commission.

Quebec’s Charter does allow for a costs award in favour of the Commission. Newfoundland’s statute allows for “costs as appropriate”. Yukon also allows for a costs award. Nunavut’s statute provides authority for such an award where the claim has been “knowingly false”, or if the investigation has been unduly hampered by the conduct of either party. This presumably does not require a liability finding on the substantive complaint. B.C.’s act provides for a costs award where there has been “improper conduct”.

Awards for Emotional Harm– Generally – Human Rights

Early decisions spoke to the concept that there should be a presumption of making an award of special and general damages177. This theme has continued. The violation of a human right should be deserving of an independent damage claim.178 The “loss of the right to be free from discrimination and the experience of victimization” is compensable in itself,179 as “the intrinsic value of the infringement or rights under the Code”.180

A recent decision of the Federal Court of Appeal spoke to this issue. The decision is significant as it set aside the reasons of the Public Services Labour Relations and Employment Board as unreasonable, which is unusual, given the deference normally given to such a specialized tribunal.

At the initial hearing, the employer, Canada Border Services, agreed that the applicant had been sexually harassed and assaulted by her co-worker. Two grievances had been filed. The Board dismissed one, and on the second, it found that the employer had failed to provide a harassment free workplace but declined to make any damage award. It did so, notwithstanding that it had found that the actions of the co-worker were “reprehensible”, “a vulgar prank” and that the applicant had been demeaned.

Although not directly stated in the Board’s reasons, the Court of Appeal found that the rationale of the Board for refusing compensatory damages was that the conduct of the co-worker was not the sole cause of the applicant’s medical condition. This argument had not been advanced by the employer and it, in fact, had admitted that the applicant had suffered harm from the questioned conduct.

This decision of the Board was found to have been unreasonable and was set aside.

There are three important points which come from this decision of the Court of Appeal.

Firstly, the Board’s finding that the injuries suffered by the victim were not due solely to the conduct of the wrongdoer, and hence not compensable, was an error of law.

Secondly, it found that the purpose of the award of non-pecuniary damages includes a remedy to “vindicate a claimant’s dignity and personal autonomy and to recognize the humiliating and degrading nature of discriminatory practices”. The decision of the Board in denying compensation where such conduct enhances a pre-existing condition or “contributes to harm caused by another source” was hence contrary to the purpose of the remedy and unreasonable.

Thirdly, the Court of Appeal returned to the acceptance of the arbitral jurisprudence that once pain and suffering caused by a discriminatory practice is established, damages should follow. This is an important point and one accepted by all human rights tribunals.

The case was remitted back to a second Board for the damage assessment.

The factors to be reviewed in setting the damage award when the damage was not presumptively set were the “humiliation; hurt feelings: the loss of self-respect; dignity and confidence by the complainant; the experience of victimization; and the seriousness of the offensive treatment”.181

The same principle was used by a civil court assessing damages under the Ontario Code by civil action, noting that the sole evidence to support such a claim was the plaintiff’s deposed evidence that she was “shocked, dismayed and angered” by the conduct and also in the words of the trial judge “she referred vaguely to ‘the loss of dignity and loss of feelings of self-worth’”.182 The damage claim was based on the wording of the Code allowed for “compensation for the loss of the right to be free from discrimination and the experience of victimization”.183

Of some note to this issue is the recent Supreme Court of Canada decision which concluded that there was no mandatory requirement to prove a recognized psychiatric injury. The instant case was a claim in negligence for damages for mental suffering due to a car accident. The Supreme Court reversed the Quebec Court of Appeal and concluded professional medical evidence, while useful, was not a mandatory step to prove the damage claim:

To be clear, however: while relevant expert evidence will often be helpful in determining whether the claimant has proven a mental injury, it is not required as a matter of law. Where a psychiatric diagnosis is unavailable, it remains open to a trier of fact to find on other evidence adduced by the claimant that he or she has proven on a balance of probabilities the occurrence of mental injury. And, of course, it also remains open to the defendant, in rebutting a claim, to call expert evidence establishing that the accident cannot have caused any mental injury, or at least any mental injury known to psychiatry. While, for the reasons I have given, the lack of a diagnosis cannot on its own be dispositive, it is something that the trier of fact can choose to weigh against evidence supporting the existence of a mental injury.

The principles to be applied in setting the damage award for injured feelings and loss of dignity and self-respect were seen generally as follows184:

1. the objective seriousness of the conduct;
2. and the effect on the particular applicant who experienced discrimination:185

It was noted that dismissal from employment is generally regarded as more serious than an isolated comment. Similarly, the more prolonged, hurtful, and serious harassing comments are, the greater the injury to dignity, feelings and self-respect.

Damages will be generally at the higher end of the range when the applicant has experienced significant consequential emotional issues.186

Those issues relevant to this latter issue were expanded as summarized below in the review of sexual harassment damage awards.187

There are several further principles which have emerged as guide posts for the determination of fair damage awards for emotional harm and injured feelings. The purpose of such an award to restore the victim to her former position and yet to avoid over paying in the process. The award should not be high as to be “windfall compensation”188. This being said, the award must be significant enough to avoid “minimizing the impact of the wrongdoing”189. The award must also be intended to prevent future discrimination and “act both a deterrent and an educational tool”190 191.

None of the above words, however,is particularly helpful in determining the range of expected awards in real dollar terms. The sums awarded are reviewed below to provide some realistic expectations. While it may be true that the principle of stare decisis is not applicable to administrative decisions, in the real world the awards tend to follow an apparent pattern192 and indeed such is the synthesis of the cases, although there is a noticeable difference in the expected range from jurisdiction to jurisdiction.

There is also a significant distinction between the sums typically awarded in common law tort cases and similar awards made in human rights cases.

This very issue was the subject of debate in the initial review193 of the Alberta tribunal’s decision with respect to an award of $25,000, in that this sum was beyond the then expected range. The court upon a first review of the tribunal decision expressed the view that tort cases “could provide guidance on the quantum of damages” to be awarded in the human rights venue194. The Court of Appeal declined the invitation to comment upon the use of such tort awards for psychological harm. It did observe that sums awarded195 were “on the low end” of what it would have considered proper in a civil context.

The award is similar to the tort concept but the reality is that the sums awarded have been, for the most part, dramatically lower that the awards made in a civil case. One might ask why should this be so? There is no logical reason for such disparity. There is also a significant difference in the awards of future income loss. Tribunals do not award such amounts are set by the civil courts.

The damage summary above the index reviews tribunal and civil awards.

Ontario’s Human Rights Code prior to June 30, 2008

Ontario’s present Code became law as of June 30, 2008. It is important to understand the issues in the historic interpretation of the prior Code in the use of such precedent damage awards under the former Code in the modern context as it may be confusing to reference certain of such past authorities today.

The former code, unlike the modern version, contained a provision was described an award for “mental anguish” due to wilful or reckless conduct and set a cap for such an award at $10,000. Many early decisions misconstrued this provision as setting a maximum sum for any award of compensatory damages196.

This issue was ultimately resolved as late as February of 2001197 when it was determined that this statute allowed for awards of general damages without a ceiling in addition to the “mental anguish” $10,000 cap as set out in the statute198.

For these reasons, readers of cases under the former Ontario Code should be alive to the historical issues as noted above. Only cases which clearly embrace the authority of the Board to order general damages over and above the $10,000 mental anguish award should be used in the modern context.

Secondly, to receive an award of “mental anguish”, it must be recalled that the complainant was formerly required to prove conduct which met the test of “wilful or reckless199”. Such awards were made only where “there was a relatively high degree of mental pain and distress”200 201 These awards were made frequently in sexual harassment cases.202

Setting the Award for Compensatory Damages – Sexual Harassment

The general test for the assessment of general damages involves an assessment of the following factors203:

1. the humiliation experienced by the complainant;

2. the hurt feelings experienced by the complainant;

3. a complainant’s loss of self-respect;

4. a complainant’s loss of dignity, self-esteem and confidence;

5. the experience of victimization;

6. the vulnerability of the complainant; and

7. the seriousness, frequency and duration of the offensive treatment.

It has been generally accepted that the awards made in sexual harassment cases should be higher than usual compensatory awards due to the likelihood of more severe personal consequences and the inherent vulnerability of the victim204. The unstated reason may be that the conduct is clearly intentional, for personal gratification, and often in an abusive relationship with an inherent power imbalance. It is unlike the usual human rights violation.

The factors which have been determined to be influential in shaping the sum to be awarded for emotional harm in a sexual harassment case have been stated to be as follows205:

1. the nature of the harassment, that is, was it simply verbal or was it physical as well;

2. the degree of aggressiveness and physical contact in the harassment;

3. the ongoing nature, that is, the time period of the harassment;

4. its frequency;

5. the age of the victim;

6. the vulnerability of the victim; and

7. the psychological impact of the harassment upon the victim.

The amount should not be set so low as to be a “licence fee”206.

It has been noted that the manner in which the employer has responded to the claim should be a factor in determining the quantum of the sum to be awarded as compensation. In addition the existence of a harassment policy and its enforcement207 will also be considered in this context208.

The financial status of the respondent has no relevance to the award209, that is, the difficulty the respondent may have to pay the award.

There is usually no punitive component to the award210.

The tribunal will consider all relevant factors. The fact that the incident may be an isolated occasion and was pre-meditated and no medical evidence was led, may all be factors in reducing the size of the award211.

Certainly medical evidence will be preferred and will likely allow for a more generous damage assessment, but it is not mandatory to prove the degree of emotional trauma suffered by the applicant212.

This was also the view of the Supreme Court of Canada in the 2017 decision of Saadati v Moorhead in a tort claim asserting damages for a psychiatric illness, in which no medical evidence was called at trial.

In Ontario, the modern damage awards for sexual harassment tend to cluster in the range of $20,000 to $25,000. The broad spectrum has been noted to be from $12,000 to $50,000213, the award being affected by the factors as discussed above and also whether there was a reprisal, which may or may not be considered as an independent award214. The award has also been influenced by whether the victim suffered a loss of employment, notwithstanding that this may lead to a discrete claim.

An award of $12,000215 was made due to verbal and modest physical touching216.

A general damage award of $16,000217 was influenced by the flawed investigation and the finding of reprisal for an incident which was serious, but isolated.

The sum of $17,500 was awarded to a probationary sales representative218, certainly in a position of a power imbalance219.

The sum of $18,000220 was awarded to a person employed as a commission sales representative. Her boss had asked her what kind of underwear she wore, told her when she crossed her arms he could not see her chest, referred to her cotton candy soda pop drink as “cotton panties’, offered to take her to a hotel for her birthday, asked her to sit on his lap, said he wanted to jump her, asked her for oral sex, and to sleep with him.

An award of $25,000221 was made reflective of a two year pattern of sexual harassment by a manager to a person in a subordinate position, aged 29. It was accepted that the complainant had immediately objected to the behaviour222.

Similarly such an award of $25,000223 was made in favour of an 18 year old co-op student who had finished her first year of college. She was terminated as an act of reprisal due to complaints of sexual harassment224.

The same award of $25,000225, which was however inclusive of a $10,000 mental anguish sum226, to a 24 year old single parent who had been harassed while in the middle of a custody fight227.

This sum was also awarded against a respondent who also had slapped the complainant’s bottom, put his hands under sweater and touched the lower part of her breasts, pinched her bottom, attended at her apartment and pushed her onto her bed, tried to grab her inner thigh and came to her home without invitation. He also pleaded guilty to a charge of criminal harassment228.

This same award was given to a student in a law clerk program, who was sexually harassed by being caressed on her lower back, called “hairy”, asked her if her thong was comfortable and was told that it looked good, was spanked on her buttocks229.

An award of $35,000 was made, in which the respondent made frequent references to the complainant’s past sexual relationships, questioned her about her sexual relationship with her husband, amongst other offensive behaviours230. She had been racially and sexually harassed231.The prior General Manager testified that she was instructed to find a pretext to terminate the complainant because of her complaints, a course which she refused to follow.

An award of $40,000232 was made in a context in which the offensive conduct was found to be “persistent, unrelenting” and one act of sexual aggression which resulted in a criminal charge233.

The same award of $40,000234 was made in a situation in which the personal respondent told the complainant that he wanted to date her, and asked her out several times, always being declined. Following her pregnancy, during which he paid no attention to the complainant, and after her return to work, he wrote her letters advising that he loved her, and that he wanted to be with her, even though he was married. In the letters he said he wanted to have sex with her. He left her a note stating that if she did not sleep with him, he would force her to do so.

He also began to touch her in a sexual way, touching her legs, breasts and buttocks. He frequently tried to enter the bathroom with her. On one occasion, he pushed the bathroom door open and touched her breasts and tried to insert his fingers into her vagina.

On more than one occasion, he masturbated and called the applicant to come and see him. He called her demeaning names and assigned her work which was belittling, such as washing dishes and peeling vegetables, which was not required of other servers.

She sought medical help and was given anti-depressants. She suffered from migraines, loss of sleep, and lack of energy. The personal respondent was charged with criminal assault.

The sum of $45,000235 was ordered in favour of a woman who was subjected to a single severe incident of harassment. The male forced the applicant to touch his genitalia and ejaculated on her. He also touched her breast and tried to pull her pants down.

An award of $75,000 was made to a young woman employed as an unpaid student intern.

The complainant, who was but 15 years of age at the time of the offensive conduct, was working in her first employment at a tattoo parlour. The owner and “controlling mind” of the business, even more tragically, was a personal friend of the victim’s parents as was his spouse. This personal respondent had in fact borrowed money from the victim’s parents to open the business.

The parties had agreed that the Tribunal may make reference to the transcript of the criminal proceeding against the personal respondent, to which a guilty plea had been tendered. The judge in the criminal case summarized the most dramatic aspects of the  offensive conduct as follows:

On August 27, 2014, both “G.M. and [personal respondent] were at the tattoo shop. They were alone after other staff members left for the evening. Sexual discussions and activity occurred. “G.M.” produced nude photographs of herself. [Personal respondent] touched her buttocks and minimally, (for two seconds), inserted his finger in her vagina. He showed her his penis and invited her to touch it. She did so to appease him. He touched and put his mouth to her breasts. She said it lasted about five minutes. She testified she resisted the sexual activity telling him that he had a wife who was close to her mother. She also related he offered her money and a free tattoo for sex.

A total award of $50,000236 was made to a male applicant which was apportioned as a total of $10,000 against two respondents individually, $25,000237 against the employer, and $15,000 for reprisal.

The then highest award of  $150,000238 was made in favour of one complainant and $50,000 to a second in a particularly unattractive fact situation.

Both complainants were migrant workers from Mexico in Canada on temporary work permits and threatened with termination and hence deportation, failing each one’s willingness to comply with the owner’s demand for sexual favours. The tribunal found the conduct to be unprecedented239. The second victim, 22 years old, was required to leave Canada and return to Mexico.

The highest compensatory award to date of $200,000 was made to a woman who had suffered ongoing sexual abuse for 29 years. She  resided in an apartment also owned by a related company. She was the sole supporter of a disabled son.

She was required to submit to various forms of sexual demands, including sexual intercourse, over a period of 18 years. Following her report of this conduct to the police, she faced eviction. The criminal charges were dismissed. The award was made against the owner of the business personally and against the company.

British Columbia

Until 2001, the highest award for sexual harassment was $10,000240. In 2011, the sum of $12,500 was ordered due to harassment241 which was found to be demeaning, provocative and aggressive, yet without any physical component.

$15,000 was ordered in a case involving verbal sexual harassment, including requests for sex242 and inappropriate touching.

The awards have risen since 2001243 and generally have generally followed a similar range as in Ontario244. A young Filipino mother who was hired as a housekeeper and required to perform sexual acts “at the whim” of her employer was awarded $50,000245. The highest award made to date has been $75,000246, but this was not a sexual harassment case. This decision was set aside upon judicial review but later reinstated by the Court of Appeal. The latter noted that the tribunal should not be bound by what had been considered as a historic “range” of damage awards and that is was not “patently unreasonable” for the tribunal to award a sum in excess of the prior maximum, given proper consideration of the evidence before it.

An award of $25,000247 was made when the applicant was sexually assaulted by the owner of the company in a hotel room where the work crew was stationed out of town248.

Fact situations like those above cry out for a punitive award.

The low end of the scale is likely in the range of $3,000 to $4,000. In a situation where the conduct was limited to offensive language, yet insensitive and demeaning and persistent, made to a vulnerable young woman in need of employment, without physical contact, with modest psychological impact, the sum of $4,000 was set as proper compensation249.

An award of $5,000 was made in a context of verbal offensive conduct, without affirmative evidence, medical or otherwise of the impact upon her, a disparity in age between the victim and the offender, yet causing the termination of the complainant’s employment, in part, due to her refusals250.


An award of $5,000251 was made to the complainant, living at a job site in northwestern Alberta, who had exited the shower and noticed a male camp maintenance worker watching her. A few days later, the same man was standing beside her bed when she awoke.

A similar award of $4,500 was made to a woman who was subjected to abusive behaviour of shoulder rubbing, being blown a kiss and retaliatory conduct of a dismissal letter and false accusations contained within it252.

Until the decision of the Alberta tribunal awarding $25,000253, the rough maximum was $10,000. The Alberta Court of Appeal noted in this case that prior generally damage awards “have been low, arguably nominal”. This was not a case of sexual harassment but it does set the bell weather for the future of such awards.254


As difficult as it may be to believe, the legislators of Saskatchewan have placed a limit on the sum which may be awarded for compensatory damages for a sexual harassment case, in fact any human rights violation, as $20,000255. This includes any award for punitive damages. A person subjected to the most brutal forms of sexual abuse in a workplace environment will see such a maximum recovery256.

At one time, the legislated cap was $10,000257. It is not surprising that the awards are modest. In the era of the $10,000 maximum, a 19 year old complainant, subjected to verbal and physical harassment, suffering from lost sleep, which affected her academic pursuits resulting in the postponement of her exams recovered $6,000258.

A 19 year old woman259, economically vulnerable, subjected to persistent physical and verbal harassment, suffering from severe injury to self-esteem and hurt feelings was awarded $2,400, “given the aggressive harassment”.

A woman suffering from a “serious physiological impairment” who reported “reported sleep disturbances, shaking, crying and nightmares” was given compensation of $2,500260.

A complainant who was the subject of one aggressive act of a physical nature, at age 21 or 22, highly physically and economically vulnerable, and subjected to verbal abuse on the same day, showing impact on her self-esteem, without “significant physiological impact” was awarded $2,000261.


An award of $15,000 for general damages and $5,000 for punitive damages262 was made in favour of a woman who was subject to physical contact by the owner of the business which caused severe emotional harm, including “anxiety, depression, flashbacks and panic attacks which continued for several years.”

The panel noted the Ontario law which suggested a range of $12,000 to $50,000 and stated that awards in other provinces have been higher than that of Manitoba. Nothing was done to correct that. The facts in this case were said to support an award in the high end of the range263.

Prior awards reflected the panel`s comments. They had indeed been low. The highest previous award was $7,750264 based on abusive comments and conduct towards a young woman by a customer which the company tolerated. The sum of $5,250 had been awarded due to inappropriate sexual jokes and verbal solicitations265.


An award of $5,000 was made to a woman whose manager confided to her repeatedly about his personal life, encouraged her to leave her spouse, made unwelcome comments of her physical appearance and tried to create situations where physical contact with her would be possible all over a period of years266.

A similar award of $7,000267 was made to a woman who was the subject of sexually harassing attitudes, behaviours, insults and reprisals over many months.

As noted, one Quebec decision did allow for $5,000 as a punitive damage award due to the company’s adverse treatment of its workers268. One would expect a severe sexual harassment claim would give rise to a similar award.

Nova Scotia

The awards in Nova Scotia are low. In a decision of 2007, the range of expected awards was from $1,000 to $5,000269. Such an award of $3,500 was made for conduct which was both verbal and physical270 One reason for this may be that medical evidence was not routinely offered, or at least this was suggested by the Nova Scotia Board of Inquiry271. In the same case the Board ordered $3,000 in general damages and $7,000 for reprisal and a further $3,000 for reprisal against the employer due to the actions of its Board.

New Brunswick

The sum of $15,000272, an inordinately high sum in this jurisdiction, to the male complainant who was subjected to severe harassment by a male colleague273. This is likely to be set as the high end of the expected range.

An award reflective of modest touching and verbal abuse was made of $2,000. The Board noted that the employer had acted promptly to deal with the allegation274.

Prince Edward Island

An award of $50,000275 was made by the PEI Human Rights Commission in a complaint which was based on gender discrimination and sexual harassment. The complainant had lost her livelihood as her licence to practice her profession was withheld. The events of adverse treatment took place over an extended time period and her reputation was also damaged by the conduct in question276. This is certainly an award at the high end of the scale277.


An award of $5,000 was made due to explicit and ongoing sexual harassment278.

The awards allowed also are very much on the low edge. A woman was subjected to “not physically aggressive” conduct over a two week period was found to be at the “most mild end of the spectrum” and awarded $5,000279, this sum being awarded upon court review. The tribunal had found liability and ordered no compensation.

North West Territories

It is difficult to read the words of a 2008 decision and believe that the accuracy of the statement that damage awards in human rights cases have been traditionally capped in the range of $2,000 to $3,000280. The tribunal, however, in the case awarded $15,000281 to a young apprentice mechanic in a vulnerable position, harassed by her supervisors, subjected to a physical assault, crude sexual remarks, pornography and threats of physical harm. Punitive damages were also awarded of $2,500 and $5,000 against the personal respondents.


There is a legislated cap on the sum to be awarded for compensatory damages of $20,000282.

As noted above, the federal act does have a provision which allows for an additional damage award for what is, in substance, punitive damages. The vocabulary used is “special compensation” for conduct which is wilful or reckless. Sexual harassment is routinely considered as such conduct. There is, however, the same legislated cap on the sum to be awarded of $20,000.

The amendments allowing such two awards came into effect in June of 1998. All awards prior to this date must be read with this qualifier at hand.283.

As recently as 2009, the Canadian Human Rights Tribunal offered the view that awards in the range of $12,000 to $15,000 are reserved for “the most egregious discriminatory acts”284.

Certainly where the questioned conduct is unwelcome or reasonably to be interpreted as such, this special award is appropriate. An award of such special sum of $2,500 was made in addition to compensatory damages of $5,000 in the context of a single issue, albeit with a physical altercation of a “brief duration”285 Additional damages were also awarded for retaliatory conduct in the sum of $2,000 plus a further $500 as “special compensation”.

Each of three complainants were awarded $10,000 as “special compensation” given the vulgar and offensive remarks and propositions made by the personal respondent286.

An award of $12,000 of compensatory and $15,000 of “special compensation”287 was made in a context of severe and repeated contact, inside and outside the workplace, causing fear for the complainant’s well-being and unwanted physical contact on one occasion.

A 2004 award allowed the complainant the sum of $2,500 and $2,500 for “special compensation” in a situation in which the respondent was found naked on her bed touching her in sexual manner. This was the quantum of the relief sought by the complainant.288

Awards of $16,000 and an additional sum of $18,000 as “special compensation”289 was ordered in a situation where the personal respondent was sexually obsessed with the complainant over a two year period, was humiliated resulting in anxiety and depression causing the need for an emotional distress leave. This conduct caused the victim to leave the town in which she lived and start a new life elsewhere.


The word “reprisal” can lead to confusion as there are two types of such retaliatory conduct often described as “reprisal”. The first is such actions taken by the employer in response to the filing or threatened filing of any human rights complaint. To make the analysis clear, this is referenced as “general reprisal”.

The second is conduct of the employer or an individual against a person who has not acceded to demands for sexual favours. This conduct is generally defined as a form of sexual harassment which for this purpose, it will be referenced as “sexual reprisal”290.

All Canadian jurisdictions prohibit sanctions being taken against an individual who has commenced a human rights proceeding. The statutory wording varies from province to province and territory to territory but the intent is the same, to allow every person the ability to enforce his or her rights under this act. Certain jurisdictions provide for wider protection which is given to any person who assist the complainant in the bringing of the case with or without testifying.

There will be issues, however, as to how this remedy is enforced. The most significant question is whether the general reprisal remedy is a stand-alone claim which is independent of success in the substantive complaint291.

It is generally conceded that to prove general reprisal, intent must be shown. The intent to reprise may be inferred from the facts292 and is a matter of credibility293. To constitute reprisal, it is sufficient if the conduct is “at least in part” due to the complaint or threatened complaint294.

To show general reprisal, the complainant must show a link between the alleged retaliatory conduct and the threat of or the filing of the complaint, which is normally proven by inference as direct evidence is invariably non-existent. The second aspect of the test is to show that the offensive conduct is, at least in part, an intentional response to the complaint295.

There has been some issue as to how liability for such reprisal should be established. Certainly this will follow where the intent of the employer has been proven, as above.

One line of thought is that the issue of reprisal should be viewed from the perspective of the complainant. Would it suffice that the conduct of the employer may be reasonably interpreted as retaliatory to allow for such a remedy, as was the decision of the Canadian Human Rights Tribunal296? This was also the decision of the Ontario Board297, as has been accepted by the B.C. tribunal298, finding that the perspective of the complainant should be the test, not the intent of the employer. This will particularly be the case where there is an ongoing employment relationship. For this reason, complaints of reprisal must be “dealt with speedily, efficiently, thoroughly and seriously299

It does appear unusual that a statutory violation of retaliatory conduct, seemingly an intentional act, would be determined by the views of the employee.

The Board’s decision in Entrop was ultimately heard by the Ontario Court of Appeal. This court did not debate the test for reprisal on the issue above. It is clear from the Court of Appeal decision, however, that it viewed the findings of the Board as referring to conduct which was intentional.300 Notwithstanding the line of cases referenced in B.C., it would appear logical that for there to be a finding of reprisal, it is the intent of the employer that should be proven, not what a reasonably minded employee would believe to be so.301 302 303 304 This does appear to the law in most jurisdictions today.

It is not necessary for the complaint actually to be filed. It is sufficient that there was a threat to do so305. The sole exception to this principle is the law in B.C., which has mandated that there be an actual complaint filed. Oddly enough, the threat to do so will not suffice306. This seems in need of revision.

To succeed on a general reprisal claim, the substantive claim which has been threatened or actually brought, need not succeed307. The applicant cannot threaten or bring a claim which she knows lacks merit. She must, however, hold a genuine belief in its merits308.

A reprisal claim may also lead to a lost income award309, again independently of the merits of the substantive complaint.

The employer may, however, institute its own civil claim alleging that the human rights action is defamatory. This is not reprisal310; however, the civil action is protected by absolute privilege311. This applies not only to actual litigation but also the threat of it312.

This being said, the commencement of a legal action for defamation against the complainant, which was served upon her at the civil rights hearing at a break during cross-examination was found to be conduct, in addition to other actions, of reprisal.313

The commencement of a small claims court action and a threat of criminal proceedings for theft was also found to be reprisal314. In neither of these above cases was absolute privilege argued315.

Sometimes the award made for general damages stands alone316. Often it is included as a factor in the assessment of general damages317.

Just as with the lost income claim where termination resulted from reprised conduct, so can other damages which followed from such offensive conduct, such as a lost salary increment318.

The sum of $500 for reprisal plus $5,000 for “special compensation” was awarded due to the description of the complainant, seen however as a resilient person, as a “vile acidic” Jew319. Given the “limited impact”, the retaliatory conduct had on the complainant, in a separate case, the sum of $2,000 was ordered as general damages plus $500 for “special compensation”320.

An award for reprisal damages of $15,000 was made in the context of a finding of a poisoned work environment, which was linked to the termination decision as a reprisal. In this instance there could have been, but was not a lost wage claim as the applicant had found alternate employment321.

In this case, compensatory awards were made totaling $50,000. No income loss was allowed as the applicant had found other employment. The submission was made that due to the emotional turmoil suffered by him, he was unable to achieve expected sales numbers and an income loss was made on this basis. It was not allowed as the compensatory damages were said to address such a claim.

The awards made included $15,000 for reprisal, $25,000 due to the poisoned work environment. Awards were also made personally against two employees in the sums of $8,000 and $2,000 each for sexual harassment.

Sexual reprisal, that is the refusal to accede to sexual solicitations, following which negative repercussions ensue, is a substantively different offence. As noted above, in Ontario such an offence does not attract employer liability322. A further significant difference between the two offences is that with respect to the general reprisal provision, there is no need to prove the merits of the case which is threatened. A legitimate belief will suffice.

The general trend of “sexual reprisal” is to define such conduct to be within the rubric of sexual harassment323.The employer will then defend in the normal course which will include the “due diligence” defence as may be allowed in the relevant jurisdiction.324.

Poisoned Work Environment – The Failure to Prevent Harassment

A poisoned work environment is one which essentially is allowed by the employer to evolve by taking no affirmative steps to ensure the workplace is compliant with the code obligations. There generally is no specific statutory provision which states words to this effect.325.

An employer may be liable for such an offence by failing to prevent harassment or respond to it326. This is discussed in detail momentarily. The law is not quite as certain on this subject as this statement suggests.

A poisoned work environment will arise when management is aware or should be aware or an adverse workplace but allows this condition to be tolerated. Management itself need not be active participants in the wrongdoing. Allowing it to exist is enough327 328

The factors to be considered include a consideration of all the relevant circumstances, including the seriousness of the conduct, their significance, their effect on the workplace, the role of the person making them, the effect on the applicant, and the reaction of the respondent to any concerns raised.

Even though the company may respond properly to a complaint, it still has an obligation to ensure that it takes affirmative steps to ensure a proper work environment. The failure to do so may lead to the creation of this poisoned work environment.329 In one instance, the tribunal determined that the employer had been aware of sexual comments in the workplace and should have hence undertaken a broader investigation or taken stronger measures to create a safe workplace.330

The same conclusion was reached when the employer failed to allow a work environment which was free from discrimination due to the complainant’s sexual orientation. It concluded that negative and discriminatory attitudes towards gays and lesbians were permitted by the employer to exist. The complaint was not addressed by management, which contrasted to the serious investigation it did conduct with respect to complaints against the applicant. It also found that the employer did not have in place a proper process or training program to educate and fight against discrimination against gays and lesbians331.

The employer has an affirmative duty to take the initiative to cause workplace to be human rights compliant. It cannot offer as its defence that the complainant was a participant, for example, in the same offensive language332.

To this submission, the tribunal must look to the question of whether it was the accepted environment which caused this behaviour333. It remains the overall objective and mandate of the employer to cause the cessation of workplace vexatious comments or conduct334.

In one case335, the employer had failed to investigate and accommodate an employee undergoing gender transition and insisted on treating the applicant as a man, when this did not reflect her sex and gender identity. This, in turn, exposed the applicant to workplace harassment and loss of dignity. It had reason to take the initiative to investigate and take remedial action, which it failed to do and also terminated her employment.

The remedy for a finding of a poisoned work environment may include not only a compensatory sum for injured feelings but also a claim for lost income where the employee has asserted such working terms and conditions were abusive to the extent that he or she could not continue in with the employment relationship.

Where there has been a finding of a poisoned work environment, the decision made by the employer to terminate must be examined in the context of that finding to determine whether the termination was tainted by this circumstance.

In the Smith case referenced above, an independent award was made for the poisoned work environment of $25,000.336

An award was made of $22,000 plus eight months’ lost wages in a case dealing with multiple code violations, one of which was a poisoned work environment. Others include a termination which was directly stated as due to gender.337

Where there has been a finding of a poisoned work environment followed by a termination of the complainant, the tribunal must look at all surrounding circumstances to determine if the protected human rights ground was a factor338 in the termination.339 340

Duty of the Employer to Investigate

The investigation of a sexual harassment complaint, and indeed any human rights complaint, is, of course, is a prudent course of conduct for many business and humane considerations, legal issues aside.

When the complaint is first considered by the employer, the company usually has no firm conclusion as to whether the issue will be pursued by civil tort or contract action, a human rights complaint or by a civil action incorporating human rights relief.341

The remedies available to the plaintiff for failing to provide a proper investigation in cases alleging serious conduct may be severe. Recent civil cases have been generous in the awards of aggravated and punitive damages.342 Generally the decision to conduct a proper and fair investigation will be a defence to such incremental claims, when the termination of the relationship has been effected in good faith, even though a cause defence has not succeeded.

A prompt and unbiased investigation will hence be in order for multiple reasons, not simply because the human rights process mandates it.

The interpretation of the employer’s obligation under the Ontario Code, upon becoming aware of an alleged violation, is to conduct a reasonable investigation. There is no specific statutory provision mandating such steps. The Code has been interpreted to create this obligation to ensure that the rights created by it are meaningful. An additional reason to mandate such a process is to cause the immediate cessation of any offensive behaviour.343 Such a duty makes perfect sense.

There is some dispute in the law in Ontario as to whether the failure to do is independently actionable, regardless of the need to prove a Code violation, as is discussed momentarily344.

This duty to investigate was addressed in 2005 by the Tribunal (Garfield) in Laskowska v Marineland of Canada:

It would make the protection under subsection 5(1) to be a discrimination-free work environment a hollow one if an employer could sit idly when a complaint of discrimination was made and not have to investigate it. If that were so, how could it determine if a discriminatory act occurred or a poisoned work environment existed? The duty to investigate is a ‘means’ by which the employer ensures that it is achieving the Code-mandated ‘ends’ of operating in a discrimination-free environment and providing its employees with a safe work environment.

This case has become the hallmark for the establishment of this obligation.

This duty arises once the complainant has made known the allegations of a Code violation. It is not a condition precedent that there be a complaint filed.345 The test to show a prudent and fair investigation has been defined to be one not limited to the conduct following the company’s awareness of the complaint, but also prior to it and also the reactive steps taken to resolve the complaint. It is hence important for the company to put in place policies and procedures to ensure that its employees are aware of the protections afforded by the workplace and the commitments that the company has made to investigate such concerns.

These considerations were examined and set out as follows:346

1. Had the company taken proper steps to put in place a human rights policy and establish a complaint mechanism;

2. Had it given its management proper training to implement it;

3. Were employees made aware of such a policy;

4. Once the complaint was known, did the company treat it seriously, deal with it promptly and sensitively;

5. Did the employer reasonably investigate the complaint;

6. Did the company resolve the complaint fairly, provide a reasonable resolution, provide a proper work environment consistent with the Code and communicate its findings to the worker.

These principles are a summary of what has been referred to as the “Wall” test.347

The overall question to be answered is did the employer, given all the circumstances, act reasonably. In the application of this test, the overall obligation of the employer is not to have acted based on a standard of perfection, but to have acted fairly.

Needless to say, it is essential to the investigative process that the employer shows neutrality and lack of bias to both sides of the dispute.348 This is a proposition which needs no authority. The investigator must have no inherent prejudice or pre-judgment as to the issue. However, there must be some modicum of reasonableness injected into this process.

In one instance the Tribunal made certain comments with respect to the identity of the investigator selected by the employer, stating that this person should possess human rights experience and that there be an objective view of neutrality in the process. To that issue, there must be agreement. All these factors suggest an external investigator would be most suitable choice, as was indeed recommended by the Tribunal in this instance such as outside counsel or an independent investigator.349

However, in the same case the Tribunal went so far as to suggest that there be both a female and male investigator in the case of an allegation of sexual harassment. This goes to an unnecessary extreme. It also expressed the view that in the event of a complaint based on a specific race or religion, the investigator be a person from a similar background to allow for “insight into the meaning of events and comments”. This also goes far beyond a rational purpose and may, if anything, cause an inherent bias, at least an appearance of one.

The Tribunal did find the investigation in Murchie to be severely lacking. The reasons for this conclusion will be instructive of how to plan for and complete a proper investigation in day to day practice. As noted above, it is a three step process, including (1) preventative steps in place such as an effective policy and a complaint mechanism which has been properly communicated to the workforce, followed by (2) a prompt and fair investigation which has resulted in (3) a fair resolution which has been well communicated and any necessary remedial steps taken. It is not simply step 2.

A summary of the failings of the employer in this instance were as follows:

1. The sexual harassment policy was not followed;

2. The complaint mechanism was not functional;

3. It was improper that the offender was told of the result before the complainant and that he had been allowed to return to work before the complainant;

4. The investigators had no human rights training;

5. Each of them were friends of the complainant;

6. One of the investigators was removed in the course of the investigation;

7. The complainant was resented by management for bringing the complaint.

The need for proper training before conducting such an investigation was also noted in Chuvalo v Toronto Police Services (Overend). A flawed investigation was similarly found in this case, one particular aspect being that the investigator was performing his first workplace investigation and had received no training for this purpose.

This again makes perfect sense and reflects concerns which may be readily addressed and corrected.

In Nelson v Lakehead the employer was also found to be in violation of its obligation to investigate the complaint fairly. Liability was found on this ground, notwithstanding that the substantive complaint of age discrimination was dismissed. The employer’s response to the complaint was determined to be dismissive as it failed to demonstrate that it took reasonable steps to investigate the complaint. Such other deficiencies in the investigative manner included:

1. The Dean used an informal inquiry process;

2. The Dean failed to discuss the issue with the complainant;

3. He failed to follow the school’s human rights policy;

One would expect that the person in charge of the investigation would follow and adhere to the very policy which governed such a circumstance. This case provided a graphic illustration of how not to handle such an investigation.

The HRTO considered in the above case of Chuvalo v Toronto Police Services (Overend) the quality of the investigation performed with respect to the internal human rights complaint of sexual harassment.

The Tribunal was troubled by the standard employed by the investigator that the complaint required independent corroboration, an improper mandate, likely due to his apparent lack of training, referenced above. In addition other factors which pointed to the investigation as flawed included a finding that he had ignored certain probative evidence which was before him.

Apart from liability on the substantive complaint, an award of $8,000 was made for the failure to investigate the complaint fairly.

The Supreme Court of Canada also noted in its 1987 decision of Robichaud v Canada, in obiter, that an employer which responds quickly to a complaint by developing a scheme to remedy and address recurrence of a human rights violation will not be liable to the same extent as one which fails to address such issues.

A parallel conclusion was reached in Payotte v Alarm Guard Services. No investigation was undertaken to determine the validity of the complaint. The failure of the employer to respond to the complaint was found to have exacerbated and compounded the employee’s right to be free form harassment, in this case due to sex and sexual solicitation. An independent award was made for this breach of the duty to investigate of $5,000. As noted elsewhere in the decision, this also adversely affected the credibility of the company’s defence.

This will be an important issue in a failure to investigate claim, namely, that the very failure to take immediate action has contributed to the fate of the victim as the harassment, as in this instance, has persisted.

The Tribunal in Harriott v National Money Mart, made a similar finding of a failure to properly investigate the complaint of Ms. Harriott. As noted, one reason to put into place an immediate investigation is to minimize the harm suffered by the victim. In this case, once again, due the failure of the company to act promptly, the sexual harassment continued unabated. In this instance, further failings in the investigation were found due to the delay in the process and further that the company failed to keep the complainant apprised of the status of the investigation.

A total award was made of $30,000 inclusive of the damages attributed to the failure to investigate of $7,500.

As noted in several of the cases referenced above, there may be liability found upon the employer, even though a substantive violation of the Code has not been proven.350

In Frolov v Mosregion, the male complainant asserted a female was sexually harassing him. The employer did not act upon becoming aware of the complaint, arguing that it was unaware that men could experience sexual harassment. This issue went to the need to impose an objective test as to the standard reasonably expected of the employer. The fact this employer was not aware of its potential liability was of no moment to the issue at hand. Its ignorance of the need to act could not make a viable defence.351 Liability was accordingly found for the independent failure to conduct an investigation.

The employer’s response to the complaint was “stop complaining”, “be a reasonable man”, “you should be pleased that she pays attention to you”. This conduct was found to be in violation of subsection 5(1) of the Code due to the failure to investigate and constituted discrimination on the basis of gender. The failure to conduct a proper investigation was found to have affected the applicant’s personal well-being. The total award for both violations was $7,500.

Unlike other sections of the Ontario Code which do not make the employer vicariously responsible for the conduct of its employees, such as sexual harassment complaints, the responsibility for a failure to investigate a complaint rests upon the employer.

The case of Sears v. Honda Canada Mfg 352 involved a complaint to the Ontario Human Rights Tribunal by an employee of Honda Canada, who suffered from several vision related issues.

He alleged that Honda failed to properly accommodate him, and that he had been the victim of harassment, which harassment had not been appropriately addressed. Specifically, he alleged that a co-worker was harassing him on the basis of disability, referring to him as a “blind dog” and by poking him in the ribs. He asserted that Honda had failed to fully investigate his complaint.

In this case the Tribunal once again confirmed that there is a duty upon an employer to investigate and that a failure to do so can result in liability even where the allegations are ultimately found not to be substantiated. In assessing whether or not Honda met its duty to investigate, the Tribunal applied the certain criteria in determining whether or not Honda had “reasonably and adequately” responded to an alleged incident of discrimination, which in essence was the Wall test as stated above.

The Tibunal ultimately found that Honda had not met its obligation to investigate, and by doing so caused Mr. Sear’s continued stress and showed lack of respect for Mr. Sear’s dignity, feelings and self-respect. As a result, the Tribunal awarded damages for intangible losses of $35,000 to Mr. Sears. This is the most significant such loss for a Code violation to date.

The basis of the liability finding was as follows:

…I find that the corporate respondent did not have an adequate anti-discrimination/harassment policy, and a proper complaint mechanism; that is, one that adequately addressed common circumstances that might arise in cases of discrimination. The corporate respondent adduced its policies in evidence, but there is no evidence that adequate training was given to management and employees. I find that Mr. Moulding’s investigation of the applicant’s first complaint was inadequate, and did not meet the “reasonableness” standard. It is uncontested that the second complaint was not investigated, and there was no follow-up.

The above case aside, the range of damage awards for a finding of failure to investigate has tended to be modest, in the range of $5,000 to $7,500.353 The applicant should be mindful of the need to introduce evidence to show the impact which a failure to investigate had upon him emotionally and any other adverse consequences.

To this end the evidence led in the Honda case above is instructive. The applicant introduced medical evidence as to the impact the workplace conditions had upon him, his need for anti-depressant and anti-anxiety medication and the need for psychiatric counseling. The determination of this award was reflective of this evidence:

On a review of all the evidence, I conclude that the applicant suffered humiliation, hurt feelings, anxiety and loss of self-respect. The corporate respondent’s failure to adequately investigate his complaints obviously led to a lack of confidence and was not compatible with respect for the applicant’s dignity as a human being. While it is difficult to judge how much of the applicant’s humiliation, loss of self-respect and anxiety can be attributed to the corporate respondent’s failure to adequately address his complaints of discrimination, this failure clearly exacerbated his distress.
In the circumstances of this Application, which include a lengthy period of failure to accommodate and medical evidence of related depression and anxiety for which the applicant required treatment, I conclude that an appropriate order for compensation for intangible loss is $35,000.

There are no cases awarding lost income or reinstatement but there is no reason to exclude such claims in the proper context, such as that of a woman who has continued to experience harassment due to the failure of the company to investigate and elects to cease her employment.

A failure to make a proper response was found in Sutton v Jarvis Ryan, but no financial compensation was ordered. The award appeared to be influenced by a finding of no liability on the substantive complaints, a conclusion which is contrary to the reasoning of prior and subsequent decisions, set out above, yet supported by the case which follows.

The recent decision of the HRTO in Scaduto v Insurance Search Bureau (Scott) came to the stated conclusion that there was no independent relief available due to a failure to investigate, given a failure to find liability. The Sutton decision was not cited.

The case arose in the context of a post-termination investigation as the decision maker was unaware that the complainant was homosexual at the time of termination.

The Tribunal looked at this issue from a different perspective. The failure to investigate, it reasoned, may contravene the Code when this conduct causes or contributes to discrimination. There may indeed follow a Code violation but not due solely to the fact that the investigation was inadequate. The actionable aspect must show a Code violation which was caused or exacerbated by the failure to investigate, it concluded. Accordingly there must be an underpinning of a substantive breach of the Code.

The authority for this proposition was found in the Divisional Court decision of Walton Enterprizes v Lombardi. There was no preliminary finding of liability for a failure to investigate in that instance.

The issue of whether there was an independent actionable obligation to conduct an investigation was not put squarely before the court. It arose obliquely, not directly.

The main issue in Lombardi was the evidentiary connection, if any, between the complainant’s depression and a physical altercation in which he was involved. It was in this context that the appellate decision considered the duty to investigate, not in the context of the review of such a finding. The Court did not affirmatively conclude that there could be no award made for a finding of failure to investigate, independent of a finding of liability on the substantive issue. The issue was not put squarely before it.

The Divisional Court did state, nonetheless, that there was no basis for a finding of a duty to investigate, absent a liability finding in the substantive complaint. At first level the adjudicator found a duty of the employer to investigate a possible connection between Lombardi’s depression and the harassment and fight.

In any event, the adjudicator failed to show the basis for finding a duty to investigate before dismissal absent first finding a prima facie case of discrimination arising from the dismissal.

This principle has been followed since the release of this decision.354

Even given this apparent new direction in the law, this does not diminish the need for a prompt and reasonable investigation. It remains a mainstay of the human rights process.

Other jurisdictions do not allow for such an independent award, although the need to conduct a proper investigation of the complaint is still evident and may lead to other consequences.

The Nova Scotia Board of Inquiry in Cromwell v Leon’s clearly concluded that the employer had an obligation to make an appropriate investigation and failed to do so. It, however, did not make an independent damage award due to this finding.

There are no cases offering an independent award for failure to investigate a complaint in other jurisdictions.

British Columbia

B.C. requires an employer to make meaningful investigation of an apparent human rights violation. In Bertrend v Golder Associates, the employer’s decision to terminate the probationary employment of the complainant was found to be a Code violation because it failed to take steps to investigate her behaviour which reflected an emotional issue and also had committed to do by its harassment policy. The tribunal concluded:

Ms. Bertrend’s depression does not insulate her from termination. However, once she disclosed her depression and raised an allegation of discriminatory conduct in the context of an employment offer, Golder had a responsibility to investigate Ms. Bertrend’s complaint. It had communicated that commitment to its employees under its harassment policy.

In addition, in British Columbia an immediate and effective investigation taken by the employer, followed by appropriate remedial steps may result in the dismissal of the complaint. This approach is designed to reward employers for acting decisively.

A good example of this conduct is the case of McLuckie v London Drugs. The complainant had alleged that a representative of the company made inappropriate comments about her sexual preference, made other alleged comments which she considered sexual and also inappropriately touched her.

The company investigated the complaint and ordered that the alleged offender be assigned into a different department to avoid direct contact. This action was found to be fair and the complaint was dismissed.

The Tribunal stated the reasons for dismissing the case for these reasons:

1. Where the employer has addressed the alleged unfair conduct, it may not further the purposes of the Code to continue;355

2. Such may result in a duplication of resources;356

3. The parties should be encouraged to show compliance with Code issues without the necessity of appearing before the Tribunal;

4. A settlement or other unilateral affirmative action to resolve the offensive behaviour will cause a hearing to be unnecessary.

Such reasoning makes perfect logic. It also emphasizes the impact of a fair and effective investigation. The employer is rewarded by acting fairly and quickly and in effect, implementing the Wall test. Such actions will very much assist all parties reach a prompt and effective resolution and avoid unnecessary proceedings.

Other Jurisdictions

In certain jurisdictions, such as B.C. and Nunavut, the statute allows for a cost order to deter improper conduct. Nunavut allows such an order to be made against a party which attempts to impede the investigatory process, which is also independent of the success of the party on the main issue.

Nunavut’s statute provides authority for such an award where the claim has been “knowingly false”, or if the investigation has been unduly hampered by the conduct of either party. This presumably does not require a liability finding on the substantive complaint. B.C.’s Act provides for a costs award where there has been “improper conduct”.

Arbitral Jurisprudence

There is little doubt that arbitrators have the same authority to make awards of aggravated and/or punitive damages under a grievance procedure through a collective agreement. That being said, the general view of arbitral caselaw is that the granting of a reinstatement remedy “goes a long way to assuage any mental distress suffered by a grievor and reinstatement should be the primary redress for a discharged employee”. This suggests a higher standard for an award of aggravated damages, although generally speaking, this is not evident from the decided cases. The recent decision of Children’s Hospital of Eastern Ontario v The Ontario Federation of Health Care Workers LIUNA Local 1100 provides a good review.

Investigation May Allow for Vicarious Liability Defence

Ontario’s Code has a provision which deems the employer liable for the acts of its employees which may attract liability under the Code. This subsection, 46.3(1), does not, however, apply to complaints of sexual harassment.

Other jurisdictions, however, have allowed by statute for vicarious liability to hold the employer responsible, but have permitted a defence when the employer has shown due diligence, amongst other tests, in its investigation of the complaint.

Manitoba has enacted legislation which defines the concept of employer liability for the acts of its employees. Provided that the conduct was in the course of employment, the employer is deemed responsible.

However, the employer may show a defence by proving: (1) it did not consent to the conduct, (2) took all reasonable steps to prevent it, and (3) then took all reasonable steps to minimize or avoid the effect of the offensive actions.357 This is not limited to sexual harassment but rather applies to all Code violations.

The substance of this provision is repeated in the legislation of the Yukon.

Essentially, the federal legislation now allows for a “due diligence” defence to be raised against the assertion of vicarious liability for all claims made under the Canadian Human Rights Act, not just sexual harassment claims, as allowed by subsections 65(1) and (2).

New Brunswick has similar legislation358 with respect to a complaint of sexual harassment, which deems the actions of the employee to be those of the employer, but then allows the employer a defence of showing it used due diligence to prevent such conduct.

This defence is not available where the questioned conduct is that of an officer or director of the employer, which basically incorporates the “organic theory” of employer liability described below.

The employer must show that: (1) it did not consent to the questionable conduct, (2) it used all due diligence to prevent event; and (3) did all it could to minimize or avoid the adverse consequences.

This statutory provisions allowing for a full or partial defence to the employer to the vicarious liability assertion allow for a defence to be shown, in essence, in line with the Wall test, namely that it took proper preparatory steps by a written policy, followed it, investigated the complaint and took steps to resolve it.

An additional merit of an investigation may lay in the usefulness of the investigator’s report, as was seen in the recent HRTO decision of Newton v Toronto (Hart). The complaint was one of a sexually poisoned work force, which was, for the most part, upheld by the internal investigator. In this circumstance, the Tribunal proceeded directly to remedy.

This was an unusual case as the respondent admitted the accuracy of the findings of the investigator, which, although not unique, may be asterisked as one not to be expected in every instance. In this context the Tribunal simply chose to rely upon the investigative factual conclusions and proceeded to argument as to legal consequences of these findings.

Had such an admission not been made, the report could not be used to support factual findings in controversy.

This issue is viewed presently as a human rights complaint. It need not be so limited. The failure to investigate, particularly in the context of a person suffering serious physical or emotion abuse could readily cause an allegation of constructive dismissal359, both to support a lost income claim and aggravated damages. This may require consideration to be given as the correct forum in which to proceed, whether such be this process or a civil court. There are advantages and disadvantages to each. A review of recent common law decisions will show that aggravated damages and punitive damages have been leaps and bounds outside of the range anticipated in human rights cases. There, of course, can be no punitive damages awarded in the Ontario human rights process. In jurisdictions in which the human rights remedy allows for punitive damages, the sums awarded are capped or tend to be modest. In addition, there are no legal costs awarded, nor is there exposure to costs in this remedy.

The human rights process, however, allows for reinstatement and the potential of dramatic lost income awards360.

Whichever process may be pursued may be of less interest to the employer. The significant point to be made is that liability may be enormous and the need to do an effective investigation must be of paramount concern to the company to limit its exposure to such lawsuits, provide comfort to the employee who has complained and to his peers who are aware of the controversy.

Statutory mandate to investigate

The Occupational Health and Safety Act in Ontario361 makes it mandatory for the employer to maintain and implement a policy to ensure its workforce remains free from threats of workplace violence and harassment.The Act makes the investigation of such complaints compulsory. In addition, the policy developed by the company must state how the complaint is to be reported and in what manner the complaint is to be investigated.

The policy must include steps and procedures to permit employees to report workplace harassment. It must also explain the process in place by which the employer will investigate and deal with complaints.

Harassment is defined broadly and will include sexual harassment. The actual words used define workplace harassment as “engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome”.

The law applies to all provincially regulated employers in the province. Where the number of employees is six or greater, the policies must be in writing and posted in the business premises.

If there was any doubt as to the necessity of the employer to create a sexual harassment policy, this legislation will quickly remove it. A complainant under the Human Rights Code may well argue that the failure to develop and implement such a policy will give rise to a section 5 violation in itself.

B.C. has a similar requirement under its “Workplace Conduct” Rules362 which mandates the report and investigation of “improper activity or behaviour”.363

The statute of the N.W.T. contains a similar requirement as that of Ontario to develop and anti-harassment policy and to investigate all complaints made under it.364

Saskatchewan has also in place such a similar legislative mandate365 dealing with harassment and workplace violence.

The Canada Labour Code366 contains a similar provision dealing with workplace violence.

P.E.I. mandates that each company issue a policy statement with respect to sexual harassment, in consultation with its employees, in essence describing the obligation to allow for a workplace free of such conduct and the avenue for redress. The legislation does not specifically mandate an investigation but that is the clear direction of the statute.367

Such is also the case with the Canada Labour Code, section 247.1.

A draft policy is attached which is compliant with all mandates set out above.

Public Interest Remedies

The purpose of such a remedy is designed to remedy any future wrongdoing and educate those persons involved, with the objective of eliminating the offensive behavior. Such an award should be intended to ensure the objectives of the code are met and to ensure future compliance368.The imposition of such a remedy is more likely where the offender has been seen not to take the apparent transgressions seriously369. Often an order is made requiring the posting of informative information setting out the mandate of human rights legislation or training to be undertaken by the company for its staff and management370.

Legal Costs

The law is emphatically clear that for an administrative tribunal to award costs, the statute must employer it to do so.371 372
Quebec’s Charter allows for a costs award in favour of the Commission. Newfoundland’s statute allows for “costs as appropriate. B.C.’s act provides for a costs award where there has been “improper conduct”.

Yukon allows a costs order to be made as a general remedy provision if the complaint is upheld.

It also permits a costs award against the applicant where the complaint is found to be frivolous, as does the N.W.T. and Manitoba. Nunavut’s statute provides authority for such an award where the claim has been frivolous or “knowingly false”, or if the investigation has been unduly hampered by the conduct of either party.

Saskatchewan denies either party costs in any case taken to the Queen’s Bench at either level unless the review application is determined to be frivolous.

The Yukon is the only jurisdiction which allows the tribunal to make a damage award in favour of the respondent to compensate for damages to reputation against the complainant, should it be found that the complaint was frivolous or based on false information.

Pre-judgment Interest

PJI is generally allowed on compensatory damages.373 374. It has occasionally been set to run from the date of the filing of the application.375 It would appear that the correct approach is to start the interest clock on the date on which the cause of action arose.376

It is routinely awarded on lost wage claims from the date on which the payment was due.377 To simplify the arithmetic, it may be adjusted from the mid-point.378

Appeals from Human Rights Tribunals

There are two issues to be considered with respect to any appeal or review of a human rights complaint. In most Canadian jurisdictions, the human rights process commences by the applicant making a complaint with the relevant commission, which then investigates and determines whether the case is one which should be referred to a hearing. Should the complaint then be dismissed, certain statutes then allow the complainant some form of review of this decision.379

Where no such statutory right of review is allowed, given that this is a statutory decision, there will be a right of judicial review in any event.

Where the case has proceeded to hearing, Canada, Ontario, B.C. and Manitoba allow for judicial review applications, which is a difficult task to accomplish when such a review has been made from a specialized tribunal. New Brunswick and P.E.I. allow for no review at all, which will mean a judicial review may be made. Nova Scotia allows for an appeal on only a question of law, Newfoundland on a question of law but also on a question of fact or mixed fact and law with leave. Alberta, Saskatchewan, Nunavut, N.W.T and the Yukon allow for an appeal without limitations. Quebec provides for an appeal to the Court of Appeal with leave of an appellate justice.

Reinstatement and Instatement

Reinstatement is obviously a very powerful remedy. Apart from the order itself, the request for the order will more readily support a lost income claim to the date of hearing and also, arguably, may be used to buttress a plea for a prospective income loss beyond the date of hearing when the reinstatement order has been denied.


The analysis which follows will show that reinstatement was considered “the prime remedy” for many years in Ontario. In recent years, the frequency of such orders has, for unknown reasons, become less evident. In the current context, the mantra has been cited to describe this remedy as one which has been “rarely requested or ordered”380, a description which is submitted is an unflattering and inaccurate assessment of this relief.

The recent decision of which allowed for such a remedy381, now confirmed by the Ontario Court of Appeal, may prove to be the bell weather.382

There can be doubt that the tribunal is empowered to order reinstatement383. It is a remedy which was considered appropriate by Wilson J. in her dissent in age discrimination case384 385.

There are a host of early cases awarding reinstatement in the early days of the interpretation of the prior human rights statutes386. Indeed, reinstatement was once stated to be the “primary remedy”387.

The initial order388 granted by the Board of Inquiry389 in December of 1996, is instructive of the issues to be considered by the decision maker in such a circumstance.

The Board noted that arbitral jurisprudence had determined that “so long as the employment relationship appears to be viable, reinstatement orders will issue” and further observed that the remedial powers found in the Code were similar to those given to labour arbitrators. In ordering reinstatement, the Board saw this remedy as the means by which the remedy of restitution may be attained:

It is also open to a board of inquiry to issue guidelines to accompany an order of reinstatement that will assist the parties in effecting a successful reconciliation. This appears to be precisely the sort of case which would benefit from this flexibility of approach. The evidence in this case suggests that an order for reinstatement may not result in a seamless re-entry into the automotive plant for Mr. Naraine. To attempt to maximize the prospects for success, movement is required from both sides to this dispute390.

The modern administrative decisions are bereft of any acknowledgement of the jurisprudence set out above. The cited decisions have not been referenced, either in support of, opposed to, accepted, rejected or distinguished in the recent analyses pondering the award of reinstatement.

The words of then Professor Cummings391 which described as the order of reinstatement as the “prime remedy” have somehow, for unknown reasons, fallen to wayside. That which was first set out so fundamentally as the default remedy, admittedly strong words, has been recently characterized as “rarely requested or ordered”, words which, it is submitted, are not fairly descriptive of the remedy, even in the current context.

Although this remedy has certainly not been considered recently as the “primary” remedy, it has nonetheless be granted on numerous occasions since 2000.

An unusual limited instatement order to a position of a more junior responsibility was made to counter the apparent damage the applicant had suffered to his reputation. In this instance it had been found that the termination of employment had not been caused by a code violation392. It was determined that the ability of the complainant to find alternate employment in his vocation had been adversely effected by his treatment while employed by the respondent.

Reinstatement has been found to be the correct method of restoring the status quo393 in many cases394, reflecting the principles as set by the Court of Appeal. It is a firm precept of human rights legislation that the objective of the remedy is “to put the applicant in the position that he or she would have been in had the discrimination not taken place”395 396.

There may be qualifiers to the reinstatement remedy, such as “where viable”397, or that even where so possible, reinstatement is “sometimes”398 the only remedy which may allow for the establishment of this “make whole” principle.

In arbitral cases, reinstatement is generally considered the default remedy to counter a termination unless there are legitimate concerns that “the employment relationship is no longer viable”399.

The size of the company’s workforce has, one occasion, been ignored400 and on occasions referenced as an issue in favour of reinstatement401, and in one case the brief employment history was seen as uninfluential.

A contrary view has been expressed, suggesting that reinstatement should be confined to an environment of a large unionized employer402, or that the worker was unskilled403, or that such a remedy is not appropriate in human rights cases where liability is based on an influential factor as opposed to the sole factor404.

It is difficult to imagine a remedy which is shaped by the reasoning by which liability was determined, apart from a concept which parallels contributory negligence.

This being stated, it is noted that similar reasoning was used, coupled with other reasons, in denying reinstatement405.

The argument against reinstatement would be more logically supported if the extraneous factors may have been proven to have militated against a continuation of the employment relationship. For example, if the complainant was terminated due to a physical disability, yet also exhibited legitimate performance issues, then it is conceivable a submission could be made that the application of the but-for test would have concluded that the relationship was otherwise doomed to fail, as opposed to the theory that if the Code was but a proximate cause, therefore, the remedy should not follow as a determined rule.

Notwithstanding all of the above, the decision of Fair v Hamilton-Wentworth District School Board406, (Joachim), released on March 14, 2013 ordered reinstatement. The Tribunal had found that the employer had treated the applicant unfairly due to a disability by failing to accommodate her disability-related needs from April 2003 and then by terminating her employment on July 9, 2004.

The Tribunal also made reference to the remedy of reinstatement in an arbitral context to the effect that reinstatement is the default remedy in this context.

It was also noted that there was no personal animosity between the parties and that the employer was a large entity with a sophisticated management structure. All factors considered, there was no prejudice caused by the reinstatement request.

The argument advanced by the employer that reinstatement would be unfair due to the passing of 8.5 years from termination to the date of the remedy was not successful. The delay was determined not to be to any failing of the applicant.

There may be some issue taken to the human rights tribunal relying upon arbitral authority as a means to support the reinstatement order. There is nothing noteworthy about this as many fundamental concepts in human rights principles have found their origin in arbitral decisions. This includes the need to establish but a prima facie case and the concept of liability be shown by a cause, not the sole cause. Similarly the process of evidence by reasonable inference found its initial reasoning from arbitral jurisprudence.

This case has now been upheld by the Court of Appeal.

One might expect that the employer would raise a submission that the employment relationship may be one which is difficult to resurrect as a consequence of a hearing involving evidence and issues which are likely to be emotionally charged and arguably destructive of inherent good will required for a continued life between the parties.

The views of the Federal Court, discussed below, may be an apt rebuttal consideration for such an argument. It was concluded in that instance that this submission must be tempered by the fact that it was the wrongful conduct of the employer which led to the need for the litigation407.

Many of the early decisions deal with the issue of the impact of a reinstatement order upon innocent third parties.

In a unionized work environment, there will exist rights of the party effected pursuant to the terms of the collective agreement and hence the impact of such an order upon such a person will be cushioned by the protective terms of the agreement.

Professor Cumming made note of such provisions in Rand v Sealy referenced above, when he ordered that the complainant be reinstated. A similar reference was made by the same decision maker in Singh v Security and Investigation noting that no present employee would be adversely effected by the order that an offer of employment be extended.

The impact of the reinstatement remedy on innocent third parties has also been viewed as a critical factor in declining reinstatement408.

Other Canadian Jurisdictions

Reinstatement is a common concept in other Canadian jurisdictions. The wording of the legislation varies but it typically provides authority to the human rights tribunal to take such action to remedy the wrong doing or alternatively specifically empowers reinstatement.

The interpretation of this provision allows the Tribunal to consider in its discretion whether reinstatement is viable in the context of the facts before it.

It is not a default remedy as may expected in arbitral jurisprudence, apart from two cases under the federal court referenced below which spoke of the “duty” to attempt to reinstate, a decision which has not been referenced as authority for this concept subsequently.

The comparison is also offered to put the Ontario remedy in some degree of perspective. Reinstatement is viewed as a discretionary remedy and has been ordered when considered appropriate with due regard to all factors in play in the remaining common law jurisdictions.

The complainant appears to have the onus although this is not specifically defined in the case law, although given that remedy is discretionary, this is a fair presumption. The cases are all very much fact driven, but typically the decision maker seeks to determine if the remedy is viable by assessing if the work environment has fallen into an unworkable circumstance by the degree of angst between
the parties. Also there usually there follows an examination of the relative prejudice caused to either party by such an order.

Apart from the factual underpinning, the really only contentious issue is whether there should be some consideration given to why any apparent animosity between the parties has come to exist.

One case does speak to this issue where such ill will is caused by the litigation, in that it is the conduct of the wrongdoer which brought about the adversity and hence should be of no moment to the requested relief. This will be particularly so in a case involving allegations of sexual harassment. This does make logical sense. It would appear unfair to deny such a remedy when the source of a personality conflict emanated from the very wrongdoing which the remedy seeks to redress.

Reinstatement is not considered an unusual remedy under the Canadian Human Rights Act. Many decisions have routinely ordered this relief as the means by which the complainant has been restored to the former position.409 In one decision410, a case of sexual harassment, the panel noted that reinstatement was unworkable due to apparent bitterness between the parties, at least in the position sought, a conclusion which did not deny the complainant from reinstatement yet to an alternate position. The applicant successfully reviewed this decision411. She was reinstated. The Federal court noted that it was employee who was the innocent party and hence could not be held accountable for the “bitterness” and the “recipe for disaster” noted by the panel.

The tribunal has also spoke to the “duty”412 to attempt to restore complainant to “the position she would have been in, but for”, in a complaint based on race and colour.

The passing of time seems to be of no moment. An order of reinstatement has been made 13 years after the termination413. In the same case, the applicant was instated to a higher level position that that which he held previously414, based on his argument should would have unfolded in the natural progression. The issue of the inconsequential effect of the passing of time is not a universal truth. In one case it was determining that the lengthy passing of time would place the applicant in a position superior to current employees then laid off.415

This position is in conflict with the basic objective of restoration of the status quo. The decision should reflect that which would have followed. Had the complainant likely been laid off in any event of the wrongdoing, then the remedy should reflect this.

In B.C, generally the test of reinstatement is one to determine if the relationship is one which remains viable416.

In Alberta, the remedy certainly is also not reflexive417, but as in the case of British Columbia cases, has been exercised as a matter of contextual discretion. The factors considered will include the degree of any ill will from one party to the other, whether the relationship remained viable even through the litigation process, the degree of prejudice to be caused by the requested order and in this case, the apparent benefit to the complainant, given that she remained unemployed418.

One case weighed the significance of the impact of such an order upon the applicant’s life419.

Saskatchewan again applies the same principles420 and in so doing, also considered the application of the “but-for” test421. In a case involving a disability of cerebral palsy. The tribunal determined that were it not for the adverse treatment, the employee would have completed his casual employee status and have been transferred to permanent status, as was ordered.

A New Brunswick panel applied the same test as whether the relationship was viable the absence of any chasm between the parties on a personal level422, which presumably would have been a factor in assessing the propriety of reinstatement.423

The Tribunal noted in that the “usual remedy” is to allow reinstatement when a violation of the statute has been found424.

The general view again is that the remedy must be viable. The evidence of the complainant to the effect that he doubted reinstatement would be a positive experience for him was considered a negative factor to deny the award425.

One factor in allowing reinstatement in an age discrimination case was that the complainants were all over the age of 65 and otherwise would have suffered economic hardship in finding employment426.

An order of reinstatement can be made even where the applicant does not return to active employment427. This can have tremendous significance as noted below.

The remedy under the Canada Labour Code has been interpreted on a similar basis, namely that while the intent is to apply a “make whole” philosophy, reinstatement is a discretionary remedy.428 In this instance the first level decision maker had denied reinstatement due to the dishonesty of the complainant in not reporting post-termination income during the period she had asserted that she was disabled and unable to work, which was first revealed in her cross-examination during the hearing.

This decision reversed on this issue on first instance in review by the Federal Court. The Federal Court of Appeal set aside the decision of the motions judge and ordered that the decision of the adjudicator stand. The remedy of reinstatement was one which within the discretion of the adjudicator. The issue of trust was fundamental to the existence of a continued employment relationship.

Reinstatement to Inactive Employment

Few cases consider the proposition that one possibly contemplated event may be the continuation of the employment relationship without active day to day employment. There may be a reason why the employee cannot take on active employment, such as a present disability suffered by a woman who has been harassed.

Many pension plans allow for pension credits to the employee while on disability, and also other employment medical and similar benefits. It may also be important for seniority purposes or vacation entitlements which may be based on length of service. Another reason is the need for “employment” for a later recurrent disability.

This may raise also the issue of a reinstatement remedy without the necessity of active employment, but rather simply to order that the employment relationship remains intact for purposes of such benefits. A foundation in the form of an employer policy document or a pension plan with such terms would likely be required to support such an argument.

In one human rights case, the complainant, due to a vision disability, was unable to work and had been absent from active employment from April 2007 until his eventual dismissal in September of 2011. It was accepted that his medical impairment was permanent and he would be unlikely to return to active work. He continued to receive LTD benefits.429

The employer also continued to provide MSP and extended health care premiums. The employer alleged that it offered to maintain his employment status until his 65th birthdate to maintain his group disability benefits, if the complainant paid the premiums, an offer which was declined and on which the evidence was disputed.

The complainant argued that it was not a BFOR that he report for active employment.

The claim was based on two arguments, the first being based on the threat of the termination of the MSP and health premiums, which was later rescinded and secondly, based on the termination of his employment.

The first argument was not effective, as the employer had withdrawn its threat and had continued the benefits.

As to the second submission, an issue arose as to whether continued active employment was a pre-condition to the entitlement to continued disability payments. The determination of the argument was delayed pending the response from the employer to this issue, one which ultimately had shown that continued active employment was not such a prerequisite to continued disability benefits. The motion was successful and the claim was dismissed.

It is clear, however, that the tribunal was prepared to consider argument on the issue of reinstatement to non-active employment if this was factually required to allow for disability coverage.

The tribunal did, however, to the point at issue, note that certain disability plans require employment status and observed arbitral authority for the conclusion that active employment, in such a circumstance, would not be required for reinstatement.

One such arbitral decision as referenced in the human rights case430 stood for this very proposition, namely, that reinstatement to inactive employment is a proper remedy and that active employment is not a pre-condition to such relief.

In a second human rights case,431 the employer had closed its mill operation in Squamish with no likely possibility of re-opening it. It was not initially providing employment or compensation, including health and welfare benefits to any of the Squamish crew at the date of termination. For this reason, it was argued that MacRae was treated in the same manner as his colleagues.

The applicant had been terminated for non-culpable absenteeism due to a serious medical issue eleven days before an agreement was reached with the union that allowed employees on lay-off entitlement to a substantial severance payment.

It was determined, by the tribunal, however, that where a plant shutdown was in the offing, that the ability to perform work was not a BFOR and that the complainant’s employment was terminated to prevent him from receiving severance pay and was hence a violation of the Code.

The Tribunal concluded that such a decision to terminate had the direct impact of causing the loss of such a right of severance pay and hence was a basis to show an “extraneous motive” which thus may establish a prohibited adverse discriminatory intent.

If such a decision was motivated by an intent to deprive disabled persons a severance payment that was available to all other employees, such would lead to a finding of discrimination.

The British Columbia Court of Appeal432 in the concurring reasons of Mr. Justice Groberman specifically stated that he was not endorsing the decision in MacRae. The reasons of the Chief Justice did not speak to this issue.

Groberman J.A. did agree that it was arguable in this situation of a shutdown, that the employee need not have the capacity to work. This issue remained undecided, was the stated view.

Such an order was made in the decision of the Yukon Human Rights Board of Adjudication433 which found liability against the respondent due to its adverse treatment of the applicant who suffered from a debilitating liver disease. An order of reinstatement was made even when the applicant was unable to return to active employment.

A recent arbitral decision434 provides an excellent review of arbitral case law on this subject.

On the facts of this case, the employer terminated 29 employees, all of whom were on LTD benefits which resulted in five individual rights grievances and a policy grievance.

All employees were given notice as required by the ESA and paid the statutory severance sums. Apart from LTD benefits, which were not adversely effected, all other benefits terminated at the end of the ESA notice period.

One argument put forward by the union was that the interpretation of the collective agreement allowed for continuation of benefits during the period of the disability and hence the termination denied such benefits such as group life, accidental death and dismemberment and the prescription drug plan. Reinstatement should hence follow to allow for the continuation of such benefits became the submission.

The essential issue to be determined was whether the collective agreement contemplated the continuation of benefits beyond the basic LTD and hence precluded the company from termination due to innocent absenteeism.

To this end, arbitrator Marcotte examined many precedent cases which were factually driven and dependent on the interpretation made of the particular collective agreement in each instance.

One such decision435 concluded that the existence of a disability plan under a collective agreement may limit the right of the employer to terminate a disabled employee, where the consequence of such action would be the loss of long-term disability or other benefits.

Returning to the decision of Arbitrator Marcotte, he concluded that the terms of the the collective agreement may limit the right of the employer to terminate for innocent absenteeism.

The distinction was noted between benefits which arise directly from the illness or injury and those which are tied simply to employment. To argue that termination is not allowed due to a loss of benefits, such claim for benefits must be related to the former.

Arbitrator Marcotte summarized the arbitral jurisprudence as allowing for termination of the disabled employee provided that that the termination of employment does not interfere with the employee’s continued entitlement to LTD benefits or other benefits as allowed by the agreement, such as extended health care or dental plans.

Essentially, this involves a review of the collective agreement to determine if additional benefits were intended to be provided to the disabled employee during the period of LTD eligibility, which, in this instance, were found to be lacking and hence the termination decision was upheld.

The Ontario Superior Court in the 2007 decision of Mr. Justice Perell of Dragone v Riva Plumbing considered the motion made by the plaintiff for declaratory relief that the employment relationship remained intact to allow the plaintiff to claim coverage under medical, drug and dental insurance plans.

A dispute had arisen between the parties as to whether the employment relationship had ended due to the plaintiff`s resignation and hence the case is not demonstrative of a declaration to reinstate the plaintiff back to employment following a direct termination.

On this issue, the court found that the evidence demonstrated that there was no evidence of a clear and unequivocal intention to resign communicated by the plaintiff.

The plaintiff was not in active employment and in receipt of long term disability benefits when the application was made 14 months after her last active day of employment.

A declaration that the plaintiff remained employed was granted, in addition to an order that the employer continue to maintain medical, dental and drug insurance plans.

The Court also stated, albeit obiter, and without a definitive conclusion, that once the employer was made aware of the plaintiff`s medical disability of metastasized breast cancer, which preceded the evidentiary dispute surrounding her alleged resignation, any attempt made by it to amend the benefits coverage would have arguably been contrary to the Human Rights Code.

There is much logic in this view. There is every likelihood that a civil court would grant a similar order at the very least for the period of reasonable notice and where the evidence will support a connection of such benefits to long term disability insurance, for the period of disability.


A claim for “special damages” or lost income may arise in many ways. It may come from a direct termination or due to a “poisoned work environment” or as a component of a general reprisal claim. In the latter case there is no necessity to prove that the substantive claim succeed on its merits.436

Many past cases have linked the length of the complainant’s employment history to the quantum of the lost income claim. This principle is incorrect. The purpose of the human rights remedy is to make-whole, that is, to restore the complainant to their position as it “would have been had the discriminatory [conduct] not occurred437. As the remedy is restitutional in nature, the length of employment and the “quality” of the position held are irrelevant factors in the assessment of the income loss.438 439

Wrongful dismissal concepts are foreign to the determination of this income loss440. The concept of foreseeability, as that term is used in a wrongful dismissal context, is not a relevant consideration when assessing income loss.441 That is, the question of how long it may take for the applicant to have found other employment is not the question to be asked. This is contrary to the basic principle of “restitutio in integrum”.442 In some cases it may be possible to assess the damage loss to the date of hearing and perhaps even beyond that date.443

Foreseeability is limited to the issue of what type of compensation might be awarded, such as compensatory damages or loss of income. Once the loss of income is shown as foreseeable, the extent of such a claim is not governed by foreseeability.444 445

There may be limits placed on the sum of lost income awarded. These restrictions are based on the need to show a causal link between the income loss and the human rights violation and secondly, the inherent discretion of the tribunal.446 This discretion must be exercised on a “principled basis”. The common example given is mitigation.447

The first test then to establish the causal link is the application of the “but-for” test. The issue may develop that there may be multiple causes, as noted. There could be a need to amend this test from “but-for” to “material contribution” to the risk. This has not been done, however, to date.448

The Walsh case illustrates the application of this causal connection to find the damage claim. It was determined that the income loss449 was caused by the conduct of the employer until 2000 at which other forces intervened to lead to the conclusion that the causal link was no longer present.

The very same situation had arisen in an Ontario case450 in which the applicant had been terminated due to a medical disability in October of 2001. His physician found him medically able to return to employment in February of 2002. A lost income claim had been sought to August 2002. The claim for lost income was allowed to June of 2002. The tribunal found that beyond that date, other factors had intervened to cause the income loss for which the employer could not be held responsible.

It was not apparent from the decision in the Walsh case if there was disability insurance coverage in place at the time the medical disability arose.

If not, it was arguable that the employer was responsible for the loss of the disability coverage for the entirety of the period of the medical disability.451 One such foreseeable event have been an application for disability benefits, then the claim should follow against the employer for the full extent of such loss.

The common law looks to that which is reasonably foreseeable in the notice period, whereas the tribunal uses the “but-for” analysis to determine the loss. In the case of the claim for disability benefits, the two approaches are in harmony. The applications of the differing logics produce the same result452. The difference between the two lies in the eligible time for the claim to arise. The common law will use a notice period. The human rights case does not. The latter will use the time to the date of the hearing and arguably beyond.

Where reinstatement is not requested, the tribunal must assess what the complainant would have earned if the discrimination had not occurred.453

Many past cases have deviated from the rules set by the Court of Appeal and set the lost income based on wrongful dismissal factors.454 454. These decisions do not follow the make whole philosophy. They are not good law

The modern view of the income loss is based on the claim made from the date of the event giving rise to the loss to the date of the hearing. The income loss will follow once the causal connection has been established. The continuum of the claim may then be subject to mitigation issues and other arguments.456

From the above principles comes the basic test. Were it not for the unfair dismissal457 what would otherwise have happened to the complainant’s employment? Were there any intervening causes independent of the code violation which had contributed to the income loss for which the employer ought not to be accountable?

The cases using the principled discretion analysis use as a presumption that once the “but-for” causal link has been met, the claim for lost income will continue until such time as an extraneous factor has intervened to cause its cessation. The employer must then introduce evidence to demonstrate that even given liability, the income loss would have ceased at some point in time following the creation of the cause of action.

The latter may include submissions such as that the applicant’s employment was doomed to be ended for extraneous reasons due to economic issues or a similar plea intended to illustrate that the “make whole” argument may not be as generous as claimed. Such was the successful argument that the income claim must cease when the business had closed.458 Similarly an existing contract may show a firm end date of the employment relationship which must mark the end of the income loss.

One might expect that the applicant would then argue for additional compensation for expected common law and or statutory sums.459

Equally, the employer may argue that the employee had failed in a duty to mitigate which should influence the lost income award.

An example of the application of the “but-for” analysis, discounted by risk, is a case in which an income loss was awarded for a 30 month period. The time period claimed was 5.5 years to the date of the hearing. The discount to the lost income claim was based on “the contingencies” that the applicant would not have been able to work for this entire time period due to medical issues460. A similar view was taken by the in determining the appropriate income loss for a case which took five and a half years to reach hearing. The claim was based on physical and mental issues.

The decision noted the “make whole” concept but declined to make any finding of fault on either party as to delay or even to assess whether it was systemic in awarding an income loss of 30 months.

A similar application of this but-for concept showed that had the applicant not been unfairly terminated, he would have been laid off in any event due to workplace redundancies and the claim was accordingly reduced.461

The same view was taken in a case in which adverse treatment due to age was found but the tribunal reduced the award due to its acceptance of the employer argument that the applicant’s employment was in genuine jeopardy and he would have been terminated in any event.462

An RCMP cadet who was terminated unfairly during the training period was awarded an income loss from January 2000 to the date of hearing in April of 2008, subject to a total 8% discount to represent the risk of the applicant not graduating and also usual attrition rates.463 A finding of a failure to mitigate was found which reduced the award by the average industrial wage. The lost income award was increased to reflect a likely promotion to corporal after 7 years464. At the second hearing to re-visit the income loss, no further loss was awarded beyond the 2 year and 12 week period. (“grace period”)

In this case the decision of the first tribunal that the applicant465 that there was a failure to mitigate was fatal to the continued income loss. The tribunal then looked for evidence to determine if it was the conduct of the employer that had a caused permanent damage to the ability of the complainant to work466 and found to the contrary. For this reason, the income loss claim was set only to the end of the grace period.

In a fact situation in which the applicant was denied the right to complete medical testing, the tribunal found liability. The tribunal did agree that there was some uncertainty as to whether the applicant would have completed the testing process and remained employed, the respondent should bear such risk. The full claim was allowed as was reinstatement.467

Issues such as the employer’s solvency and similar factors may be considered to limit the likelihood of the continuum of the income loss.468

A further example469 of the exercise of such discretion was found in the context of an applicant, found to have been adversely treated due to the failure of the employer to accommodate his disability in 2007 and to allow a return to work. No reinstatement was sought. There was no evidence of mitigation offered. The applicant sought lost wages from the default date to the date of submissions on remedy in November of 2011, notwithstanding his retirement one year earlier. The Tribunal noted the extremes within which an order for lost wages may be made from (1) no lost wages due to the likelihood of a termination for non-discriminatory reasons to (2) a claim for lost income to the date of the hearing or beyond it.470 A three year award to the date of retirement was made, given the uncertainties of a successful return to work, influenced by that fact that the applicant had been medically unable to work for three years prior.471

It would be expected that, apart from mitigation issues472, or otherwise an application of “principled discretion”, an order of reinstatement would be accompanied by an award for lost income to the date of reinstatement, subject to the limiting arguments as noted above which negatively impacted the award.473 Such was the case for a lost income award for an 8.5 year period from the date of dismissal to the date of hearing.474 Similar awards have been made for a wage differential for approximately 8 years475 and 9 years.476 An award of salary arrears was also made of roughly 9 years not only to the applicant but also his spouse who had also been treated unfairly.477 An award of 2 years and 3 months lost income due to a medical discrimination complaint.478 A potential lost income loss was set in one case at 10 years.479

It is not contested that a human rights tribunal has the authority to make an award for a future income loss beyond the date of the hearing480, even in the absence of a reinstatement request.481 Such a prospective income loss of 15 months was made in an age discrimination case.482

One decision noted that an issue with respect to the assessment of a future loss is that there is no control over the mitigation factor483 and for that reason it would only be made in “exceptional circumstances”. This is bad law. It is true that the assessment of a future loss is not mathematical. The difficulties inherent in the assessment of the claim should not, however, lead to a denial of the application of the concept. Such damage claims are common place in tort actions. The difficulty in assessing the likelihood of mitigated income should not be a barrier.

Other decisions have prudently considered the impact of other employment post-hearing and ruled accordingly.484 485
A further option is to simply assess the likelihood of future alternate income and apply a discount to the sum sought as the full prospective loss.486 487

These decisions demonstrate how a future income loss may be assessed. The remedy should not be ignored because of the possibility of such future income off-sets.488 The CHRT ordered that the first available position of a bridge patroller be awarded to the complainant in its decision of November 2001. The commencement date of the lost income award was May 31, 1997.

The award stated that failing such an offer of alternate employment, the total lost income was to be set at a 10 year period. The contingent prospective loss was hence set for a time period of six years and seven months. There was no issue addressed such as mitigation from other third party employment.

There is authority in an arbitral context to allow for a prospective income claim where reinstatement is not allowed, as noted immediately below.489 490

In an arbitration case in which the normal reflexive remedy of reinstatement was not allowed, the arbitrator instead allowed a future income loss of roughly two years to age 55491, less any sums earned by the grievor in this period. As noted by the Divisional Court which upheld the award on this issue, the arbitrator correctly considered mitigation and other future contingencies.

Common law cases founded in tort claims for what are essentially sexual harassment claims, albeit using the tort theory, often allow for a prospective income loss, as discussed elsewhere. In circumstances where the applicant has been deprived of the opportunity to be hired, the Tribunal will conduct a review to determine if there was a reasonable possibility that the applicant would have been hired, save the adverse conduct and if so, it will then proceed to assess the degree of such probability.

In such a context, the decision maker will make an assessment of the “reasonable possibility” that the applicant would have been hired. This is a concept which is similar to how the prospective loss should be determined.492

Both of the above decisions noted that there were two alternative approaches to this issue. One test was whether there was a “serious possibility” which must be established. The contrary view was to require that the applicant show that he would have been hired on a balance of probabilities.493 494

The issue of the correct test to be applied in the event of a denial of an opportunity, in this case a promotion was determined to be the lesser standard of a “serious possibility of success”, to which contingency risk factors were then applied495 This standard was doubted by the Federal Court as correct, but the issue was not argued before it.496

This issue arose again in a case in which a candidate for the RCMP had been adversely treated in a cadet training program due to religion and ethnic origin. The “serious possibility” standard was applied to determine that he would have passed the training.497 One would expect that an employment contract which set out sums to be paid or notice provided in the event of a termination would be of no consequence in a lost income assessment in a human rights context. Given the “but-for“ analysis, presumably the employment relationship would have continued and the termination provision in the contract would not be an issue498. In one case this position not even argued by the employer.499

The contract likely could be argued to support an argument of the inherent fragility of the employment relationship to buttress a submission that the make whole remedy should be limited due to subsequent events such as redundancy or other frailties, which the contract implicitly anticipated.

The decision did touch on the issue of the fragility of the relationship and suggested that the contract term was reflective of this and hence the lost income was not definitive.500 The existence of the contractual relationship between the parties was found to be a factor in assessing the income loss in the one Alberta decision.501 The applicant had been employed pursuant to a series of four fixed term contracts. There were occasional gaps in the continuum during which she continued to perform her regular duties. Approximately one year prior to the expiry of the last of these agreements, she was advised that there would be no further renewal, a decision which prompted her successful human rights application, based on age.

In assessing the lost income claim for the period of five years to the date of the award, the tribunal agreed that the existence of the contractual relationship was a factor to be considered in the damage assessment and reflected the inherent fragility of the employment relationship to discount the award by thirty percent.

The suggestion has been made above, that in a fact situation where the employer argues that the “but-for” lost income claim should be reduced due to a planned closing or other event which would have inevitably brought about the permanent end of the working relationship, the employee should then receive fair additional sums for what would have been the statutory payment or the common law entitlement.

The difficulty with respect to this plea is that the tribunal has traditionally taken the position that it has no jurisdiction to award the statutory severance sum, absent direct discriminatory conduct which led to its denial.502

The significance of the statutory claim would be emphatic where the employee found alternate employment quickly as the statutory sum is not reduced by mitigated income.

All this places the complainant in a difficult circumstance in the hypothetical situation as described above. There can be no complaint with the relevant ministry of labour as there has been no termination. The employer’s argument that had the relationship been continued but-for the wrongdoing, and that there would have followed a termination as a redundancy or closing, must be seen to be connected to the initial discriminatory wrongdoing for the statutory sum to be ordered, given the state of the law. Clearly the statutory claim comes as a direct loss attributable to the adverse conduct and should be compensated. The path to recovery is an awkward one and is need of rebuilding.

A similar case arose from a human rights claim which was defended by a release argument. The applicant rebutted the release argument by the submission that the release failed to satisfy the statutory minimum and was thus enforceable.

The tribunal’s response to this submission was that it lacked jurisdiction to interpret this statute and hence it was obliged to uphold the release and dismiss the complaint.503

The decision hence stated that in order to give the tribunal jurisdiction that the applicant would need to prove that the release was motivated by a human rights violation. It is bizarre that the tribunal cannot interpret the employment standards legislation even for a collateral purpose and not one intending to award financial compensation under this statute.

Should this be the law, the applicant would need to file a human rights complaint in a timely manner and then sue in the civil court for declaratory relief that the release is unenforceable, all of which seems to be a waste of legal energy to both sides, apart from an unnecessary use of judicial time.

The position that the tribunal has no jurisdiction to award the sums due under the provisions under the relevant employment standards act, absent a human rights violation and a rational causal connection does not make sense.

The ratio has not been expressed in the above cases but presumably the origin of the argument is that the tribunal is a creature of statute and derives its power from the statute.504 The conclusion that the tribunal has no power to interpret the Employment Standards Act or for that matter, any other provincial or federal statute in the course of exercising its legitimate jurisdiction lacks logic.

The same view is taken by the tribunal with respect to the common law remedy. The tribunal takes the general view that it is unable to apply such relief.505

In the example of the employer arguing that the “but-for” submission would mean that the applicant would have been terminated for economic redundancy after, for instance month four, it should then follow that the damage claim would include not only four months but also the statutory and common law claims that would have been allowed. Otherwise, the company has a direct incentive to terminate all staff for human rights remedies and agree to apply the but-for analysis.

The Supreme Court of Canada506 had before it an issue as to whether the Social Benefits Tribunal had the jurisdiction to determine whether a provision of the operative statute, the Ontario Disability Support Program Act which denied benefits to those persons suffering from addiction, was in violation of the Human Rights Code.

The Tribunal itself had found it lacked jurisdiction, a decision affirmed by the Divisional Court. The Court of Appeal reversed in finding that the SBT did have such power, yet also concluded that the issue was better resolved by the Human Rights process.

The Supreme Court allowed the appeal, being in agreement with the substantive decision of the Court of Appeal, but concluded that its decision should stand and further that there was no reason to defer to the Human Rights Tribunal.

More to the issue at hand, however, the Supreme Court stated that tribunals created by statute which are given the power to make decisions of law are enabled hence to look beyond the governing legislation by which they are created to “apply the whole law to a matter properly before them”.

The majority decision did note that one factor in its decision was that the Human Rights Code was not confined in its interpretation to the Human Rights Tribunal under the Code.

This factor but supplemented the general principle that tribunals created by statute are not confined to the interpretation of only the enabling legislation:

The laudatory goals of the Code are not well served by reading in limitations to its application. It is settled law that statutory tribunals empowered to decide questions of law are presumed to have the power to look beyond their enabling statutes in order to apply the whole law to a matter properly in front of them. By applying this principle to the present appeal, it becomes clear that the SBT had the jurisdiction to consider the Code in determining whether the appellants were eligible for support pursuant to the ODSPA. At that point, the SBT had the responsibility of applying the Code in order to render a decision that reflected the whole law of the province.

Indeed, such is a presumption as stated by the Court:

The presumption that a tribunal can go beyond its enabling statute — unlike the presumption that a tribunal can pronounce on constitutional validity — exists because it is undesirable for a tribunal to limit itself to some of the law while shutting its eyes to the rest of the law. The law is not so easily compartmentalized that all relevant sources on a given issue can be found in the provisions of a tribunal’s enabling statute. Accordingly, to limit the tribunal’s ability to consider the whole law is to increase the probability that a tribunal will come to a misinformed conclusion. In turn, misinformed conclusions lead to inefficient appeals or, more unfortunately, the denial of justice.

This presumption, as noted in the decision, may be one which is contradicted by the enabling legislation:

Yet the power to decide questions of law will not always imply the power to apply legal principles beyond the tribunal’s enabling legislation. As noted above, statutory creatures are necessarily limited by the boundaries placed upon them by the legislature. Subject to its own constitutional constraints, a legislature may restrict the jurisdiction of its tribunals however it sees fit.

In the instance of the Human Rights Code that there are no such apparent restrictions and that the Tribunal should not be limited to interpreting solely its enabling legislation and indeed should apply “the whole law”.

It is for these reasons, that in the offered hypothetical, the complainant should receive payment of the statutory and common law sums, without duplication.


A brief summary of the apparent present status of the common law is that a plaintiff is allowed to sue for lost income in a wrongful dismissal claim and maintain long term disability benefits without offset where the plaintiff has contributed directly or indirectly to the full cost of the premiums for such insurance.507

The origin of the possibility of such double recovery stems from the Supreme Court of Canada decision508 which stated that there was an obligation at common law that an employer must pay common law notice compensation to an employee who suffers from a medical disability, absent frustration.

The question of the analysis of this issue to human rights cases is a point which is most worthy of debate. In the application of the “but-for” test, the employer may well submit that the sole sum to be paid, but-for the termination, would have been the disability insurance payments, which would appear to be a logical submission. This argument has not been raised in any tribunal decisions to date. If this argument is accepted, there can be no double recovery.

Take for example, an employee who was suffering emotionally from harassment, could not work and was about to apply for disability benefits when she was terminated. Had the termination not followed – what would have otherwise happened? She would have remained off work and collected disability benefits. Why should her recovery exceed this sum?

A similar, but not the same, context arose due to adverse treatment of the applicant who suffered from a debilitating liver disease. An order of reinstatement was made even when the applicant was unable to return to active employment.No order was made of lost income as it was determined that there was no income loss due to the applicant’s receipt of employment insurance benefits (presumably of the disability genre) and long term disability insurance payments.509

The decision does not reflect that the submission of double recovery was made before it and hence it would be an exaggeration to suggest that this decision may enable the argument.

A comparable, but also not identical issue, arose in a case510 in which the applicant had proven that he had been treated adversely due to the failure to accommodate a medical disability.

On the issue of the lost wage claim, the employee asserted that while he had received WSIB benefits, such should not be offset from the lost income claim as they were “locked-in”.

The Tribunal decided, in the application of the “but-for test”, that had the employer provided proper accommodation and allowed the employee to return to work, his worker’s compensation benefit would have ended. Hence the denial of the WSIB offset would have bettered his circumstance and accordingly this sum reduced the lost income claim.

The plea of “but-for” to deny double recovery, as noted above, may also lead to a stream of disability income which continues for the entirety of the period of the disability as in Prince v Eaton, a common law wrongful dismissal case, as discussed elsewhere.

To the converse of the plea, where the employer is without disability insurance plans, the recovery would be zero.

The exception to this submission is where it is the employer’s conduct which caused the disability in which instance a damage award should follow, regardless of the existence of disability insurance. It is in this fact situation where arguments of double recovery may arise511.

An example of such a double recovery award at common law is based on the argument of consideration for the benefits, as consideration had not been proven in Sylvester. This reasoning is similar to the personal injury cases which allow the plaintiff to sue for full wage loss, even though disability payments were made by a third party insurer.512

This principle was applied, without argument to the contrary, in human rights decisions.513

The analysis misses the point, as has been discussed above. The application of the “but-for” would show only a disability claim, or not, and nothing more.

It makes no sense to apply Sylvester to the “but-for” analysis. But-for the termination, the affected employee would have been entitled to disability benefits and nothing else, full stop, all factors being affirmative as to proof of medical entitlement and coverage.

As noted, the down side to the employer is that the loss may be identified as a claim for LTD and related benefits such a medical and health insurance covers and pension accruals for the entirety of the disability period, one which is not related to the date of hearing. The employer would be prudent to keep disability covers in place as the termination of disability insurance will shift the liability unto itself. This could be a significant liability.

Equally, the converse argument is that absent short and long term disability covers, the employee’s recovery for relief may be lie solely in the short term solace offered by the Employment Insurance Act.


As a general rule, it would appear that the complainant remains under an obligation to take reasonable steps to seek out comparable employment, as is the case in common law wrongful dismissal actions. There are some inroads suggested in this principle as discussed below which reflect the considerable discretion given to the tribunal and that the human rights process is not required to march lock step with common law principles514. The onus of proof will be upon the employer.515

The common law has defined the onus on the employer as twofold. The employer must show a breach of the obligation and secondly, must then introduce affirmative evidence to show that had the employee taken reasonable steps to seek employment, success likely would have followed.516 This has been the general direction of the human rights panel.517

This being said, the path has not been straightforward. The issue of “principled discretion” and the interpretation of the B.C. statute allowed the tribunal to order “all, or a part” of the lost wages518 without regard to Red Deer and Evans.519

In human rights cases, different considerations in assessing the mitigation obligation may apply.520

For example, a tribunal should take into consideration the after-effects of exposure to a poisoned work environment in looking at the duty to mitigate.521 Should this plea be made, appropriate supportive medical evidence should be provided522. This onus is upon the applicant, that is, to explain why there has been a failure to mitigate by proper evidence.523

Medical evidence may be preferred, but not required, as noted by the Supreme Court of Canada in Saadati v Moorhead.

How far down the field this analysis pushes the ball is highly debatable. At the end of the day, it would appear there has been no dramatic revision to the traditional view that mitigation is the order of the day.

A fair synthesis may be that the Tribunal will look to mitigation as the usual requirement but has considerable latitude in its discretion 524 as to whether this obligation has been fulfilled and is not bound by traditional common law concepts.525

Where there has been a finding of a failure to mitigate, the Tribunal may assess what a fair time period to find other employment would have been and use this conclusion for the assessment of the income loss.526

Occasionally arguments may arise by which the employer may assert that the applicant had an obligation to return to work based on an offer made of comparable employment following dismissal or an alleged dismissal.

Many have said that the leading case on the mitigation obligation in an employment context is the 2008 Supreme Court of Canada decision in Evans v Teamsters Local 180. In reality it added only one new wrinkle. The fundamental principles of mitigation were in place years before this decision and repeated once again.

It did deal with the new concept of considering the obligation of a dismissed employee to return to work at the request of the employer following a termination. This was really the only new principle.

The Court determined that in certain circumstances, it will be necessary for the dismissed employee to return to work. This being said, it remains the employer’s onus to show a failure to mitigate in this circumstance.

The analysis is contextual and multi-factored. The critical issue is that the employee not be obliged to mitigate by working in “an atmosphere of hostility, embarrassment or humiliation”, a standard which is to be reviewed objectively. This being stated, the non-tangible elements including “work atmosphere, stigma and loss of dignity” in addition to the tangible elements are to be included in the evaluation.

This issue has been reviewed in two important human rights cases to date.

In one case527 in which the applicant had been subjected to sexual harassment and gender violations, the employer, a school board had agreed to re-employ the applicant on terms which the complainant found unacceptable. The applicant was penalized for her refusal to be re-employed, a decision which was reversed on first review.528

Upon further review by the Court of Appeal, this court determined that the Tribunal was not mandated to apply the common law concept of mitigation in assessing the income loss and allowed the tribunal decision to stand.

The Court of Appeal concluded that the Tribunal’s decision, whether or not it chose to apply Evans or not, was a discretionary one and could not be challenged on judicial review. In addition the appellate court found that the chambers judge applied the wrong test of correctness and should have used the test of reasonableness and afforded the Tribunal deference.

Long before the Evans decision, the human rights Board of Inquiry came to the same conclusion. A maintenance mechanic, who had refused to work on the Sabbath, was ordered to be reinstated. The employer had offered to him alternative employment as a “springer” or “packer” following the dispute. The “springer” position was seen to be overly physically demanding, but the “packer” position was a job Rand, the applicant, could have performed but chose not to, as it was a Grade 5 level position, compared to that of the mechanic which was a Grade 17 and paid 42% less than the more senior position. The packer position however was accompanied by production bonuses which may have allowed Rand an income which was approximate to his prior income level or even exceeded it, as was found.

The Board found that Rand could have worked in this position without waiving his right under the Code to seek the remedy in question. The Board concluded that Rand ought to have accepted this position until the hearing took place or until such time that he found other employment. The claim for lost income was denied.529

Generally reasonably incurred mitigation expenses530 will be awarded. Additional travel expenses for new employment,531 and also moving expenses.532

The issue of workers compensation legislation and its impact on the human rights process is contentious. It is certainly arguable that a person who suffers emotional trauma due to an event of sexual harassment is within the protections offered by the provincial legislation and hence entitled to benefits provide by the Act where the employer is covered by this legislation.

This issue is discussed in detail in the Civil Remedies section.


Constructive Dismissal

The basic precept of a constructive dismissal case is there must be a fundamental or substantial change to the employment relationship533.

As more acutely stated by the Supreme Court of Canada in Potter, the test is as follows:

  1. There must be an express or implied term of the contract which has been breached; or
  2. In assessing the cumulative effect of the past acts of the employer, it must be shown that the employer has shown by its conduct that it no longer intended to be bound by the contract.

This second aspect of the test must allow a reasonable person to conclude that the employer has shown such an intent. The employee must show a “course of conduct pursued by the employer” which shows such an intent on a cumulative basis. The employee need not only point to an actual specific change in compensation or work assignments and such similar specific examples.

It has followed from this premise that an employer which fails to provide a work place which is free from harassment may be subject to an assertion that such conduct has violated this implied term.534 The employer must “see that the work atmosphere is conducive to the well-being of its employees”535. This is not a startling revelation of law. It is expected. Offensive conduct displayed by management may indeed allow for a successful constructive dismissal plea.536 The test should be an objective one which should not be lightly applied. It is essentially one of reasonableness, or more acutely “unreasonableness”. Continued employment must be made “intolerable”.537

The refusal to investigate complaints made by the employee as set out in the sexual harassment policy and the degree of harassment suffered have been found to meet this test.538 The gravity and duration of the adverse conduct will be important factors.

Given legislative inroads to establish and investigate complaints of workplace harassment and sexual harassment, this remedy is firmly entrenched.

It should not be surprising that conduct which is found to be sexually harassing may lead to a complaint of constructive dismissal in reliance upon the principles expressed in the above cases.

Much like the scale of misconduct which has been used to assess the seriousness of the sexual harassment in a human rights case or just cause defence, it is anticipated that not every action which may be defined as sexual harassment will give rise to a constructive dismissal finding.

While the fundamental issues may be well-established, the real issues of controversy will be the extent or the degree of the conduct which may be considered significant enough to be a dismissal in law.

There is no need to rely upon a policy to require the employer to investigate a complaint of sexual harassment or any other form of human rights violation. It is mandated.

In a case of peer to peer harassment, it is expected that the victim would be required to raise the issues to the employer requesting it to investigate the complaint in the modern context, requiring the employer to have a harassment policy in place. Given the wisdom of such a policy539, it would appear logical to expect a victimized employee to use the terms of it to cause an internal complaint before asserting a claim540, certainly for a constructive dismissal allegation in which case the consequences are dramatic.

A court will examine the facts of each case to determine if the harassment has reached the level of significance to allow for a constructive dismissal plea. In one such case, the degree of sexual abuse was seen not to allow for such a remedy unto itself, but did reach this grade when seen in the context of other abusive behaviours.541

The abusive conduct must be “serious” and absent exceptional circumstances, not be an isolated event.542 There must be a hostile or intolerable work environment shown by repetitive actions.This case illustrates the emphatic differences between the evidence required to support a civil plea and that required in the administrative human rights process of showing a “poisoned work environment”. The human rights process is more flexible of the two remedies. The civil claim of constructive dismissal requires a sufficient degree of wrongdoing to support a termination plea. The human rights remedy of a poisoned work environment can, but need not, lead to a claim of termination of employment.

The ability of the complainant to prove the case will be dramatically easier in a complaint made under the human rights statute in which evidence by inferential deduction is allowed due to the acknowledgement that direct evidence of discriminatory conduct is rare.

Further the Court of Appeal’s statement looking to the intent of the employer is relevant is at odds with human rights jurisprudence which does not require a finding of intent to find discriminatory conduct.

In addition, under the code, the complainant must prove only that the offensive conduct is an influence and not the sole cause of the adverse conduct.The decision as to which forum should be used must pay heed to these factors.

It may be possible to argue that the conduct of the employer was such that it was in violation of the standards are required by the relevant human rights statute as a relevant consideration to support the constructive dismissal plea.543 The referenced case arose from a motion to dismiss on a point of law. This may be a standard a court may consider but it would do so based on the usual common law standards of proof.

In an unusual set of facts, the Ontario Superior Court found in favour of the plaintiff’s constructive dismissal plea in Colistro v Tbaytel et al. The employer had hired a prior employee who previously had been dismissed from its employ, in part, due to a complaint of sexual harassment brought by the plaintiff against this same person. This claim succeeded even though the employer had offered to transfer the plaintiff to an alternate physical location, however, one in which incidental contact between the two would likely follow. The Court of Appeal upheld this finding. Aggravated damages were awarded at trial and upheld on appeal of $100,000.

Civil Action for Damages

Limitation Periods

In most jurisdictions the limitation period for commencing a civil action in tort is two years. Recent amendments to Ontario’s Limitations Act544, however, deny any limitation period for;

1. A claim based on sexual assault.
2. If the claim is based on any other misconduct of a sexual nature, if any the following conditions are met:
a. The abuser was in a position of trust or authority;
b. The victim was financially, emotionally, physically or otherwise dependent on the other person.
3. A claim based on assault if at the time of the assault, if the victim and the abuser:
a. Were in an intimate relationship;
b. The victim was financially, emotionally, physically or otherwise dependent on the other person.

British Columbia has also amended its Limitation Act by s. 3(4)(l) limitation period to eliminate any time periods to sue for actions based on sexual assault. Alberta (Bill 2) has introduced similar legislation. Nova Scotia has amended its statute to the same effect, as has Manitoba and Saskatchewan.

For the most part, the common law damage awards are considerably more generous. As may considered appropriate, punitive damages may also be awarded. These decisions are reviewed subsequently.

PART B1 Sue for Human Rights Remedy – Ontario only

As noted above, such a civil action to seek a human rights remedy is permissible with an accompanying claim, expected to be, but not limited to, a wrongful dismissal claim where the employer is provincially regulated.

The early decided cases did not involve sexual harassment claims545. The awards made reflected the sums traditionally expected in human rights cases. There has been an acceptance of the human rights test to find liability, namely that the human rights issue need only be influential.546

A trial decision allowed an award of $25,000 of damages recovered for a Code violation of sexual harassment.547 The issue on appeal focused on the additional award made of $60,000 for moral damages, which was upheld by the Court of Appeal as a separate source of relief. The award of human rights damages was seen as one serving a distinct purpose although the “same conduct may ground separate awards”. Human rights awards are designed, the court noted, to compensate for the loss of “the right to be free from discrimination and the experience of victimization”.

Medical evidence has not been required to support the damage claim.548 See also to the same effect the Supreme Court of Canada in Saadati v Moorhead.

It is possible to sue civilly and also maintain a human rights complaint under the Code provided that there is no pleading made in the civil action for an alleged infringement of a right under the Code.

There is no impediment to pursuing both remedies contemporaneously where the underlying facts are the same. The issue is whether the civil claim seeks a code remedy. If it does not, the two proceedings may be sustained.549

The author of the claim should take care to avoid any reference to the Code to ensure the two forms of relief may proceed without impediment.

PART B2 Moral or Aggravated Damages

A civil action for aggravated or moral damages will lie where the employer has shown, in the manner of dismissal, conduct, which is “unfair, or in bad faith, for example, untruthful, misleading or duly insensitive”.550 Aggravated damages must be proven and be a consequence of the unfair dismissal due to conduct which is in bad faith.551

Aggravated damages are compensatory in nature and must be considered in the context of the breach of the employment contract. They are recoverable if such damages were contemplated by the parties at the time they formed the contract. Aggravated damages arise from the manner of dismissal and arise out of the conduct of the employer in the course of termination. They must be grounded in proof of actual damages resulting from the unfair or bad faith conduct in the manner of dismissal.552

Prior cases awarded increased notice, as was then the law for conduct which was sexually harassing.553

It is, however, not possible to sue civilly for a human rights violation. The claim must be based on a differently constituted assertion of bad faith.

There are also very real remedies available to a person who has been terminated due to a sexual harassment allegation554 which has not been proven and/or effected without a proper investigative basis.

PART B3 The Traditional Torts

There is no civil action for sexual harassment.555 The plaintiff must use the traditional tort claims to sue. The common tort claims which have been used include assault, battery, intentional infliction of emotional harm, negligence,556 and the claim in equity of breach of fiduciary duty. There has been some debate in the case law as to whether there is a tort claim for the negligence arising within an employment context.

The law has developed in this manner as the courts have determined that the sole avenue for redress for a sexual harassment complaint and indeed any human rights complaint is the operative human rights statute.557 Why this remains the law is entirely the subject of debate, particularly when certain legislatures have placed monetary limits on the sum which can be recovered.558 This inequity is heightened when it is recalled that most human rights venues do not allow for punitive damages.

For this reason, innovative counsel have used these traditional tort claims. As much as one may argue that the tort remedies remain open for new developments, this cannot be done to plead a direct action of sexual harassment in the face of two Supreme Court decisions to the contrary.

To show the tort of assault the plaintiff must show an intentional overt act, whether physical or verbal by which to a reasonable person would cause fear or emotional upset and does cause actual harm.559 560

To prove the tort of the intentional infliction of mental suffering the plaintiff must show (1) flagrant and outrageous conduct, (2) by which the wrongdoer has intended to cause harm or the consequences must be known by the offender to be substantially certain to follow 561 and (3) and has caused a visible and proven illness.562 It has been successfully used in what was clearly a case of sexual abuse and a poisoned work environment.563

This requirement of a proven mental illness may be debatable in view of the recent decision of the Supreme Court of Canada in dealing with an alleged cognitive impairment due to a car accident. The Court held that there was no need to prove a diagnosed mental impairment by medical evidence and that direct lay evidence may prove the claim.

Battery has also been used when there has been a physical assault.564 Battery is “the intentional infliction of an unlawful force on another person”. It is actionable without proof of damage. The consequential liability is not limited to that which is foreseeable.565 For these reasons, it is often the tort of choice when the fact pattern will support the claim.566

The objectives of a damage assessment in a battery claim are to “provide solace to the victim, to vindicate the victim’s physical autonomy and dignity, and through an award of aggravated damages, account for the humiliating and degrading nature of the defendant’s conduct.567

In Ontario, there should be a plea to support a claim under the Victims’ Bill of Rights Act, which makes a person convicted of certain prescribed offences, of which sexual assault is one, liable to every victim of such crime. The victim is presumed to have suffered emotional distress.

A further advantage of the choice of an intentional tort is that the “cap” on damages for compensatory awards does not apply to intentional torts of a quasi-criminal nature, such as sexual assault.568

The issue of employer liability for negligence raises different considerations. On a first review of this issue, one would expect that the liability of the employer in negligence for failing to provide a safe employment environment should not be an earth shattering conclusion.569

The Ontario Court of Appeal clearly defined, albeit in the context of the defence of a wrongful dismissal claim, the duty of the employer in this context. The manager has a duty to protect the employer from the possibility of civil suits arising out of sexual harassment, and a duty as the agent of the employer to protect the employees from sexual harassment.570

This is not, however, as facile a proposition, as the above reference would suggest. The analysis of the application of the duty of care to an employer for damages for a workplace sexual wrongdoing will require a review of the test as set out by the Supreme Court.571

The first issue is whether the common law has recognized such a duty of care for such a category of cases. If this is not established, the issue then will become whether there has been established a “novel” duty of care. To date, there has been no establishment of such a duty of care as a given presumption.

The accepted test for the latter “novel” duty572 is that:

1. There is a proper proximity between the parties that it “would not be unjust or unfair to impose such a duty of care”;

2. The damages asserted are reasonably foreseeable as a consequence of the breach of this duty;

3. There is no policy reason to deny or qualify such a duty.

The existence of such a duty of care was considered by the Ontario Court of Appeal in a case alleging physical and other abuse in the workplace, which was not sexual.573 The court found the first two steps of the “novel” approach were met, but the case failed on the policy considerations, due to the finding that such a tort notion of “good faith and fair dealing” in dismissing an employee would be a radical departure from the common law.574

The Court of Appeal hence rejected such a tort duty on the basis that the suggested duty to “shield an employee during the entire course of his or her employment from acts in the workplace that might cause mental suffering strikes me as far more expansive that a duty to act fairly and in good faith during just the termination process”. Such a proposed duty, as the court noted, “would require employers to shield employees from the acts of the other employees that might cause mental suffering”.575

There are some inroads, however, developing to counter this principle.

This principle was followed in one Ontario case which held has held there is no such tort as the negligent infliction of mental distress576, as the trial judge found that the law was limited to good faith issues arising at the time of termination.

One subsequent case did allow the pleading of such a claim to stand when challenged on a dismissal motion a decision which was reversed on appeal when the court held that “there was no such tort”.577

It may well have been a pleading issue as the Divisional Court stated that “There is a tort of negligent infliction of psychiatric damage578: But the plaintiff has not pleaded mental distress to herself that amounts to a recognized psychiatric illness”. The distinction appeared to rest in the need to plead a diagnosed illness as opposed to a general assertion of mental distress. The tort of intentional inflectional of mental distress requires a “provable illness” which is likely the reason for this distinction.

The basis, however, of a tort action in negligence against the employer was clearly denied in the two appellate decisions referenced above.

In each case there was no reference to the successful claim made in the British Columbia Supreme Court based on the negligent infliction of mental suffering. In this case the manager was sued for this claim and the employer held vicariously responsible. The action was based on verbally abusive conduct.579

The Supreme Court of Canada in its November 2014 decision in Bhasin v Hrynew spoke to the issue of “honest performance” throughout the entirety of the relationship and that this duty of good faith is no longer limited to the “moment of termination”, as it arguably once was so confined580.

The Nova Scotia Court of Appeal in the November 2015 decision of Industrial Alliance v Brine also provided an interesting application of Bhasin principles in a case involving the interpretation of the good faith requirement of a disability insurer.

One of the issues in dispute between the parties was the conduct of the insurer in providing rehabilitation services and then reversing its decision. The policy did not mandate the provision of such services, but the company did provide such in view of the young age of the insured and the possibility that he may never work again.

Thirty months after the services had been provided, the insurer elected to terminate them, following receipt of its IME. The trial judge was critical of the manner of this decision being made, which was contrary to the view of its IME.

The issue presented on appeal was hence how could the insurer be determined to have acted in bad faith upon terminating a benefit which it was not contractually obliged to provide?

The Court of Appeal referenced the Supreme Court of Canada decision in Bhasin to determine that it was not necessary to find a specific contractual term which had been violated, but rather the court could look to the “independent implied contractual obligations”:

Bhasin’s broad organizing principle and its outgrowth duties do not just tack an extra sanction onto the breach of an explicit contractual term. Neither are the duties of honest dealing in Bhasin, or good faith in the insurance context, just executive summaries of the contract’s written terms. They are independent implied contractual obligations that derive from the existence of the contract. Whether National Life breached its duty of good faith is not predicated on the condition precedent that National Life breached an explicit provision of the Policy.

This is clearly a liberal reading of the Bhasin theme. The reluctance of the Court to rely specifically on the contractual term and instead consider the relationship in its broadest concept is reflective of a generous interpretation of the obligations of the contracting parties to one another.581

The same liberal view may well apply to the determination of the issue of this developing tort and indeed the application of the Bhasin theme to the entirety of the employment relationship. The duty of good faith may readily allow a civil action for unfair conduct which is sexual harassment.

A recent decision of the Ontario Superior Court also reviewed the same “novel” analysis582 based on a claim made by female employees of a subordinate company in Guatemala who suffered sexual abuse. After noting that the first two steps of the analysis were met by the pleadings, as is the test, the court then considered the policy issue, to which issue the court concluded that there were “competing” policy issues which were sufficient to allow the case to proceed to trial.

It is to be noted that the policy arguments may be unique to the facts of the case, namely, a Canadian mining company sued by persons alleging serious harm by security personnel at its foreign location, apparent steps being taken by the Canadian federal government to encourage a high standard of “corporate social responsibility” and the need to marshal the international activities of western companies in Third World countries.

One would expect a possible claim could be made in contract or negligence where the employer was in default of its obligation to have in place a harassment policy to prevent and investigate workplace sexual harassment where such a policy is required by statute.583 These statutory duties may well allow for the policy considerations to be found in favour of the tort duty, particularly when read in conjunction with the Bhasin duty.

A claim in negligence has been made successfully against a manager due to a sexual assault made by a resident in a care facility against a youth worker.584 The employer was found to be vicariously responsible. The decision, however, offers no analysis of the issue of vicarious liability.

A claim in negligence was successfully made against a bar manager accused of sexually assaulting an employee. The employer was found to be vicariously liable.585

Liability has been found for sexual misconduct by breach of fiduciary duty, in effect a misuse of power. A breach of fiduciary duty is a claim founded in equity.586 It is not a tort action.587

The Supreme Court of British Columbia in its 2012 decision of Mr. Justice Burnyeat of I.J. v J.A.M. et al made an allegation, amongst others, that two of the defendants who were directors of the corporation were negligent in failing to intervene and in such respect, ”allowed” the alleged harassment to occur.

The plaintiff was employed as Chief Information Office of the company from April 2005 to April 2009 and asserted in the action that she was sexually harassed and assaulted by the President and CEO of the company. She appeared on her own behalf in the proceeding. The issue that led to the decision was the defence motion to dismiss the action on a summary judgment motion.

The decision is instructive as it reviews the theory of by-stander liability, which in this case was not applied to assist the plaintiff’s defence of the motion.588

The Ontario Superior Court recognized, for the first time, the tort of harassment in  Merrifield v A-G Canada. This case was of a short shelf life. It was set aside by the Ontario Court of Appeal in March of 2019.

The test set by the trial court in this recent decision for conduct which may allow an employee to sue his or her employer was as follows;

  1. The conduct in question is “outrageous” which was defined to be “grossly offensive”;
  2. The conduct was intentional or done with reckless disregard;
  3. The employee suffered extreme or serious emotional distress;
  4. The questioned conduct was the proximate or actual cause of the emotional angst.

This test is not quite the same as the tort of  “the intentional infliction of mental distress”, which requires an almost, but not quite, identical test.

The significant difference was that the conduct to support this new claim must be “outrageous and flagrant”, which would appear to be a battle in semantics. If the conduct is “outrageous” and intentional or done with reckless disregard, one would expect it to be also “outrageous and flagrant”. This claim also requires proof of a medical illness as opposed to “extreme or serious emotional distress”, again a fine line without an evident substantive distinction.

This is now of academic value only.

Compensatory Damage Awards

The Supreme Court of Canada589 agreed with the trial judge in his analysis of the factors relevant to a claim for sexual assault, set as follows:

(a) the circumstances of the victim at the time of the events, including factors such as age and vulnerability;

(b) the circumstances of the assaults including their number, frequency and how violent, invasive and degrading they were;

(c) the circumstances of the defendant, including age and whether he or she was in a position of trust; and,

(d) the consequences for the victim of the wrongful behaviour including ongoing psychological injuries.

The accepted general approach is to identify the salient features of the case at bar and proceed to look to similar cases and to then identify the accepted range. This should require no authority.590

The “cap” on damages for compensatory awards does not apply to intentional torts of a quasi-criminal nature, such as sexual assault.591 Aggravated damages generally should not be awarded separately in assessing damages for a sexual assault due to the inherent difficulty in separating emotional harm and physical harm. Aggravating circumstances may include an assessment of whether the relationship was one of trust, the duration of the abuse, the number of assaults, the age of the victim, the degree of violent behaviour, the physical pain and mental suffering and the absence of any remorse.592

An award of $150,000593 was made in favour of a woman who was employed as a youth care worker at a mental health agency who was attacked and sexually assaulted by a resident in the facility.594 A similar of $125,000595 was made to a woman who suffered from post-traumatic stress disorder.596 597.

$300,000 was awarded in598 a case in which the evidence showed that the plaintiff suffered from depression, anxiety, fatigue, lost sexual desire and was suicidal due to the conduct in question. Experts from both sides confirmed that the plaintiff suffered from post- traumatic stress disorder and major depressive disorder.

Other awards included the sum of $100,000 for a sexual assault,599 $60,000, a sum inclusive of aggravated damages and which reflected a discount of 15% for a pre-existing condition due to nine separate sexual assaults.600 and also an amount of $5,000601 for assault.

Damages of the intentional infliction have been awarded in the sums of $5,000602, and $125,000 for the negligent infliction of mental harm.603

The damage awards have increased significantly in recent years.

The damage claim for lost income in a tort case is based on the same premise as a human rights claim, namely to put the plaintiff back to the position he would have been in, absent the tort.604 Sums have been awarded of $88,000605, $135,000606 $188,000607, $225,000.608

Damages for the loss of future earnings have been assessed at $600,000,609 $20,000610, $300,000611, $500,000612 and $75,000.613

Aggravated damages or moral damages, as a component of general damages, have been awarded in the sums of $25,000614 and $50,000615 and $60,000.616

Occasionally future health care costs617 have been allowed.

In one Ontario Court of Appeal decision, substantial indemnity costs of the appeal were awarded as the court determined that the very appeal itself was “a continuation of its oppressive conduct”.618

The Victims Bill of Rights Act of Ontario makes a person convicted of certain prescribed offences, of which sexual assault is one, liable to every victim of such crime. The victim is presumed to have suffered emotional distress. The sentence of the wrongdoer is not be considered in the assessment of the damage award, apart from punitive damages.619

As mentioned above, given the presence of a deliberate sexual assault or other intentionally offensive conduct, it is remarkable that there is not a higher frequency of punitive damage awards when these facts are proven.

Typically punitive damages have been rarely awarded in employment cases, and until very recently, when they were made, tended to be fairly modest, in the range of and $10,000,620 and $25,000.621

Two recent decisions, one in Ontario and the second in British Columbia have changed the landscape dramatically. Both cases involved unusual fact situations, which is the norm for an award of punitive damages. Neither case involved allegations of sexual harassment, but nonetheless the ratio may be insightful, particularly in the Ontario case in which the Court of Appeal required the trial judge to re-address the issue of the quantum of the sum to be ordered, as the initial award was considered overly modest.

In Pate v Galway the plaintiff was fired due to allegations of fraud. Criminal charges were also laid on which the plaintiff was acquitted.The end result, after two trials, two hearings in the Court of Appeal and one dismissed leave application, was an award of punitive damages of $450,000622, aggravated damages of $75,000, an incremental Wallace award of four months and the award of criminal trial costs of $7,500. A voluntary payment of 12 months’ severance was extended prior to the first trial.

The awards of punitive and aggravated damages were due to the failure of the internal investigator appointed by the employer to present the full extent of his findings to the police which led to the unsuccessful criminal charges.

In a second case, a jury awarded an electrical supervisor employed for 34 years a notice award of 2 years, plus a punitive damage award of $536,000, resulting in a total judgment of $800,000.623

All this being said, the Supreme Court of British Columbia in its 2011 decision624 declined to order punitive damages, after a finding of nine sexual assaults, reasoning that the civil award of $60,000 and a past income loss of $22,500 and the publication of the reasons of the court was sufficient punishment, given the presumed lack of financial resources.

Can There Be a WCA Defence to Civil Actions for Unfair Conduct ?

The argument advanced in circumstances in which the employee is covered by workers’ compensation entitlement for a workplace injury is that the sole avenue of redress is this statutory scheme and hence there can be no civil action.

For such a result to follow, there are two building blocks required. The first is that intentional conduct such as sexually harassing behaviour is covered by the relevant act. The second is that the pertinent statute allows for compensation for emotional distress.

As to the first issue, all statutes define “accident” to mean an event well beyond its normal meaning to include intentional conduct.625

The second test which provides for emotional distress claims as allowable workers’ compensation entitlements raises a more difficult issue in certain jurisdictions.

Alberta’s workers’ compensation statute does provide for such a claim based on emotional distress.This resulted in the dismissal of an action brought for mental anguish based on allegations that the plaintiff had been bullied by his co-workers.626

It mattered not whether the claim was brought in tort or contract.

The above decision was appealed and upheld. The action was dismissed.627

A similar decision was made in a recent Ontario case. The employee had commenced a civil action claiming that she had been bullied and harassed in her employment as a supervisor of hospitality services. She had also claimed that this conduct was a constructive dismissal. She claimed moral, punitive and wrongful dismissal damages.

This was met by a motion by the employer before the Workplace Safety and Insurance Appeals Tribunal to dismiss the civil action. The claim was dismissed, including the constructive dismissal component. The above Alberta decision was not referenced in the reasons.

The decision noted that the significant issue to be reviewed is the nature of the injury in contest. It matters not that the remedies under the statute are different from those sought in the civil claim. As noted, there was a claim made for punitive damages and for wrongful dismissal, neither of which would be allowed under the statute.

The second aspect of this principle is controversial as many other jurisdictions do not allow workers’ compensation claims based on emotional distress or limit the context in which such a claim may be made.

For example, Ontario’s statute, until its recent amendment, allowed claims for psychological stress only where there has been an acute reaction to a sudden and unexpected traumatic event628. This prior statutory provision was successfully challenged as a Charter violation in Workplace Safety and Insurance Appeals Tribunal (2157/09).

The statute’s provision which limits entitlement to benefits due to mental distress was been declared contrary to the equality section of the Charter of Rights and Freedoms and hence unconstitutional. The worker’s appeal accordingly was allowed.

Presumably for this reason, Ontario’s Workplace Safety and Insurance Act was amended effective January 1, 2018 to allow for claims based on emotional suffering as follows:

13(4) Mental stress

(4) Subject to subsection (5), a worker is entitled to benefits under the insurance plan for chronic or traumatic mental stress arising out of and in the course of the worker’s employment. 2017, c. 8, Sched. 33, s. 1.

Personal injury

(4.1) The worker is entitled to benefits under the insurance plan as if the mental stress were a personal injury by accident. 2017, c. 34, Sched. 45, s. 1.

Same, exception

(5) A worker is not entitled to benefits for mental stress caused by decisions or actions of the worker’s employer relating to the worker’s employment, including a decision to change the work to be performed or the working conditions, to discipline the worker or to terminate the employment. 2017, c. 8, Sched. 33, s. 1.

Challenges to the existing legislation and similarly worded statutes in other jurisdictions have met with success.

The statute in Nova Scotia prevented claims based on chronic pain was determined to be contrary to the Charter of Rights and Freedoms.629

A similar successful argument was made with respect to the B.C. statute630 which contained wording similar to that of earlier Ontario law which limited the right of the claimant for benefits due to mental distress due to severe reaction to a sudden unexpected event. B.C. passed amending legislation effective July 1, 2012631 to allow for workers compensation claims due to a mental disorder which arises due to a reaction to traumatic events in the employment relationship or caused by bullying or harassment at work.

This decision, apart from allowing for immediate claims for compensation benefits based on work-related emotional distress claims, also will have tremendous impact on employment law civil claims in which damages for emotional distress is claimed directly.

Decisions allowing for tort claims arising from workplace incidents,632 and indeed the moral or aggravated damage claims arising from a breach of implied the duty of good faith633, will be not be allowed where the employee is covered by this legislation.

Impact of WCA on Human Rights Cases

There remains a further possible argument that the workers’ compensation statutes may deprive the relevant human rights commission of jurisdiction to award a damage claim for such a violation, given appropriate coverage.

This being said, human rights remedies are not likely precluded where workers’ compensation is in place. It is, important, however, to review the arguments.

Section 31 of the Ontario statute states as follows: (highlighting added)

(1) A party to an action or an insurer from whom statutory accident benefits are claimed under section 268 of the Insurance Act may apply to the Appeals Tribunal to determine,

(a) whether, because of this Act, the right to commence an action is taken away;

(b) whether the amount that a person may be liable to pay in an action is limited by this Act; or

(c) whether the plaintiff is entitled to claim benefits under the insurance plan.

The sole case dealing with this issue is a WSIA Appeals Tribunal decision which interpreted its statute to define “action” to be only a civil claim and not a human rights complaint. There are no contrary decisions. It remains to be seen what the law will be when an “action” is indeed commenced to enforce a human rights remedy, as Ontario law permits. The reality is that the amendments to the legislation were not well thought out and that further revisions are required.

There is some risk that the above workers’ compensation decisions will have a serious negative impact on the jurisdiction of the human rights body to award compensatory damages and lost income sums where the claim arises from workplace misconduct.

Generally speaking, human rights legislation is considered quasi-constitutional and as such, supersedes any conflicting statute, unless specifically stated to the contrary in the human rights enabling legislation.634

Apart from the quasi-constitutional status argument, the human rights process does deal with broader issues from a public interest perspective and includes other forms of non-monetary relief, including reinstatement, which is not available by a workers’ compensation claim.

This would lead to the presumption of some comfort that the human rights regime was safe from erosion of its powers due to the workers’ compensation remedy. This may, however, not be a correct conclusion.

An action was commenced in Quebec by civil action seeking a remedy allowed by the Quebec Charter of Human Rights and Freedoms for exemplary damages based on a sexual assault. The plaintiff had also received compensation under the Quebec workers’ compensation statute for an “employment injury”.

The claim was denied635 due to the application for workers’ compensation benefits, notwithstanding the quasi-constitutional status of the Charter remedy. The court did note that an arbitrator under a collective agreement would have been similarly prevented from making a damage award, but not “other remedial measures such as reinstatement or reassignment”.

This conclusion, if applied to a human rights statute, would allow the tribunal to still offer comparable specific remedies or public interest awards.

It is difficult to contemplate that the human rights remedy may be dramatically undone for those employed in an industrial work environment or otherwise covered by worker’s compensation legislation by a judicial or other reworking of workers’ compensation remedies, but clearly the argument remains, given the Supreme Court decision above.636

The success of this argument would mean that give the relevance of a workers’ compensation scheme the tribunal would be deprived of significant jurisdiction, undoubtedly a significant conclusion.637

Should this be so, the victim employee who has not brought a workers’ compensation claim on a timely basis may well find herself without a remedy.638

Suing the Personal Offender When WCA Relevant

Presuming that the workers’ compensation statute allows for an emotional distress claim, it is clear that employee tort claims, negligent or otherwise, cannot be made against the employer in a civil court and hence must be the subject of an application for workers’ compensation benefits. This is so for claims for physical and emotional distress.

The entirety of the civil claim may not, however, be lost, as in certain situations, the victim may be able to sue the alleged offender personally, contemporaneously with a claim for benefits under the statute.

The test to be applied is whether the personal offender is acting in an employment related capacity with respect to the alleged offensive actions as contained in the statement of claim. Two factors will then be important. The first is whether the conduct is work related and the second was that the employer had not condoned or accepted a lesser standard of conduct.639

The test of what conduct may be “work related” is far different from the broad views taken by the human rights tribunals and indeed by the civil courts. In the case in question, the allegation made in the action was that the defendant had, without her consent, manipulated her neck while she was sitting in the company boardroom and in so doing, had caused her serious personal harm. There was no allegation of sexual impropriety nor did the plaintiff allege that the conduct which caused her harm was intentional. This conduct was found to be “not reasonably incidental” to the role of the defendant as an executive officer. In this particular case, he had been advised not to engage in such activities previously. The action was allowed to proceed.

The summary of the law, given a workplace tort and workers’ compensation coverage in place, is:

1. There will be no civil action against the employer for physical and/or emotional harm;

2. There can be a civil claim against a personal wrongdoer where such action may be found to be outside the normal course of employment and not condoned.

3. There is an argument that the human rights tribunal has no jurisdiction to award damages for any kind of compensatory damages and for lost and future income sums.

4. There may be a claim allowed alleging that the offensive behaviour constituted a constructive termination. ( given the dichotomy in the Manitoba and Ontario decisions)

Vicarious Liability

In a common law civil action, the plaintiff will typically seek to make the employer responsible for the conduct of its employee.

There are two arguments possible. The first is the organic theory of liability in the context in which the offensive actions have been taken by the “directing mind” of the corporation. Such a circumstance puts liability on both the individuals and the company.

The second argument is the plea of vicarious liability. Such a finding strict liability, without the need to prove negligence on the part of the employer. A finding of liability against the employee will then attach such liability upon the employer without fault on its part for the wrongdoing.640

Interestingly, the Nova Scotia Court of Appeal641 found that a claim which is founded only on a breach of fiduciary duty, with no accompanying tort claim, will not support a claim for the vicarious liability of the employer. This is so as this obligation is a personal one and is not delegable. There may be liability as a co-fiduciary but this is a distinctive plea.

The most frequent relationship which creates vicarious liability is that of employee and employer.642

It does not, however, follow that once such a relationship is established, that liability will follow. Conduct which is only coincidentally linked to the business of the employer and the duties of the employee cannot justify the imposition of vicarious liability. The conduct in these cases is independent of the employment situation and further the employer was not in a position to prevent this behaviour. The conduct must be closely and materially related to the risk introduced or enhanced by the employer for vicarious liability to be imposed.643

For example, should a man assault his wife’s lover, a co-worker, in an employee’s lounge, the employer should not be seen as accountable. Equally, a security guard who decided to commit arson for his own amusement would not give rise to strict liability.

Conduct which is only coincidentally linked to the business of the employer and the duties of the employee cannot justify the imposition of vicarious liability. The conduct in these cases is independent of the employment situation and further the employer was not in a position to prevent this behaviour. The conduct must be closely and materially related to the risk introduced or enhanced by the employer for vicarious liability to be imposed.

The basic premise of the cases finding strict liability is that the conduct of the employee falls within the ambit of the risk created by the business, or enhanced by it. The policy arises where the wrong is so connected with the employment that it can be said that the employer has introduced the risk itself.

Hence where the risk is closely associated with the wrongful conduct, the employer should bear the risk and internalize the full cost of operation, including such liability. But where the wrongful act does not have a meaningful connection to the business, liability should not flow. The “mere opportunity” to commit a tort does not suffice. The business and employment must not only provide “the locale or the bare opportunity for the employee to commit his or her wrong, it must materially enhance the risk, in the sense of significantly contributing to it, before it is fair to hold the employer vicariously liable.”644

In determining the application of vicarious liability on a policy basis, courts should be guided by the following principles, where precedent cases are inconclusive645, to determine liability in cases of unauthorized intentional wrong.

1. The question of liability should be openly confronted and not disguised under the rubric of “scope of employment” and “mode of conduct”;

2. The basic issue is whether the maligned conduct is sufficiently related to the authorized conduct. There should be a significant connection between the creation or enhancement of a risk and the resultant wrong that so accrues, even where this is unrelated to the employer’s objectives.

To assess the sufficiency of the connection between the employer’s creation or enhancement of the risk, and the conduct in question, the following factors should be considered, in determining liability for intentional conduct:

1. the opportunity that the business gave the employee to abuse his power;

2. the extent to which the wrongful conduct may have furthered the employer’s aims;

3. the extent to which the acts in question were related to friction, confrontation or intimacy inherent in the business;

4. the extent of power conferred on the employee in relation to the victim;

5. the vulnerability of potential victims to the wrongful exercise of the employee’s power.

In an Alberta civil action for sexual harassment, the factors considered were that (1) the personal defendant was her boss and consistently one of the only other persons in the office, (2) he was her direct boss, (3) she was led to believe that he was the only person in charge, (4) the two were often alone and (4) there was no corporate policy on sexual harassment. These factors, as noted by the CourtofAppeal, materially enhanced the risk of tortious actions.646

An exception was taken to this decision by a B.C. decision647 firstly noting that the above case did not fully apply the first step by asking the question of “whether there are any precedents which unambiguously determine whether vicarious liability should apply in the circumstances”.

More significantly, the court did not refer to other decisions where courts have looked carefully at the policy considerations which are significant in the second step of the analysis.

In the application of the connection between the creation of the risk and the wrong, “incidental connections to the employment enterprise, like time and place (without more), will not suffice”.

The court found against the imposition of vicarious liability as (1) the opportunity given to the personal defendant to abuse his power was not significant, (2) the assignment of work was done openly, (3) there was ample opportunity for employees to raise issues about work or work assignments to senior management, (4) the wrongdoing did not further the employer’s aims, (5) there was no friction, confrontation or intimacy inherent in the business, (6) there was nothing in the business of residential plumbing service which created situations of intimacy between employees, (7) the power given to the wrongdoer was supervisory with respect to the plaintiff, but limited and such power was not one which could be readily abused.

The very fact of supervision of one employee of another, the court stated, should not give rise to vicarious liability.648

From a broad policy overview, a contrary finding, the court stated, would create economic hardship to the business community.

The Ontario Court of Appeal recently considered the above tests in a case involving a taxi cab driver who had committed a sexual assault in the course of his job responsibilities.649 The Court noted that the application of the above test becomes more difficult in the case of an authorized intentional wrongdoing such as sexual assault.

The trial judge had found in favour of the employer but had not specifically set out his analysis of the five factors above. The Court of Appeal did so, based on the evidentiary record.

First Factor Opportunity – Opportunity for Abuse

The Court saw this issue as “not negligible” as intoxicated passengers, as in this case, must be trusting of the driver. The cab driver has a form of power and has the ability to create chances for abusive conduct. The Court saw, however, the opportunity for misconduct as “not as intimately connected to his functions”,not comparable to the child caregiver in Bazley and closer to the groundskeeper in Jacobi.

Second and Third Factors – Does Wrongdoing Extend the Employer’s Business; Extent to which the Business Purpose related to friction, confrontation or intimacy inherent in the business;

The assault did not promote the employer’s business purpose and was “not related to friction, confrontation or intimacy inherent in the employer’s aims”. The Court found that the fact that the employer did not require or permit physical contact between the driver and the passenger “in any intimate body zones” was influential. In fact the company’s written directions were to avoid physical contact and dating requests.

Fourth Factor – Extent of Power Conferred on the Employee in Relation to the Victim;

To this issue, the Court noted that the employer delegated no power on the driver with respect to the plaintiff. It did not know that it as sending its driver to pick up a lone, intoxicated woman. The Court stated:

The relationship between the driver and the appellant was that of adult driver and adult fee-paying passenger. Arguably, what power the driver had, he arrogated to himself through his own decisions.

Fifth Factor Vulnerability

Clearly a lone drunk woman was vulnerable. However, as the Court stated, while this is an important factor, the power of the driver is not predicated on his employment. In any event, vulnerability does not per se provide the “strong link”:

Moreover, as Binnie J. wrote for the majority in Jacobi, “vulnerability does not itself provide the ‘strong link’ between the enterprise and the sexual assault that imposition of no-fault liability would require” (para. 86).

The strong connection required for the finding of vicarious liability failed. Further from a policy prospective, the Court was not moved by the need to find “deep pockets”:

Further, the appellant has not demonstrated, in this case, that imposition of vicarious liability would further the broader policy rationales of fair compensation and deterrence used to justify it.

Leave to appeal was declined by the Supreme Court of Canada.


The Ontario Court of Appeal imposed a new duty of management to ensure that the workplace was free from racist or sexist slurs or other objectionable conduct.650 The trial judgment was reversed, in part, due to the failure to consider the duty of the supervisor who not only took no steps to eliminate such conduct, but, indeed, participated in it.

In a second decision released contemporaneously,651 the court again found cause for dismissal in a case brought by a manager due to his sexual conduct towards a subordinate, again overturning a successful trial award. The Court of Appeal determined that this was not a proper case to consider a warning, even though the defendant employer had no sexual harassment policy.The Court also noted that the trial judge should have paid heed to the impact of the offensive conduct on the victim in determining the proper response of the employer.

Effectively the Court of Appeal in these two decision was cognizant of the workplace issues that women and indeed men have confronted in sexual harassment issues. It struck a new chord and marked a new era.

The Court of Appeal made a similar conclusion in a 2001 decision, also overturning a trial decision, in part because the trial judge did not pay heed to the nature of the plaintiff’s senior position and management responsibilities.652

The Court of Appeal was more than direct in the reflecting upon the need that judicial decisions reflect a new societal standard of workplace conduct:

It is my conclusion that the trial judge demonstrates in his reasons a complete lack of appreciation of the modern concept of equality of the sexes. He uses such expressions as “she gave as good as she got” and “it takes two to tango,” both catch phrases from another era.

These are considered watershed cases. Decisions which pre-date these cases should be read with caution as they may not be considered to be reliable.653

One recent arbitral decision spoke strongly of the employer’s need to provide a safe work environment, particularly with reference to the recent amendments to the Occupational Health and Safety Act and it is submitted, although in an arbitral context, is reflective of a more strict approach to conduct of sexual harassment in a modern work environment.654

A recent decision of the Alberta Court of Appeal follows a similar pattern of rejecting past authorities as valid in the context of an arbitral decision. The grievance initiated from the dismissal of a worker due to allegations of a sexual assault in the workplace. The female co-worker had alleged that the grievor had “grabbed and squeezed her breast without her consent”, an assertion which was proven at the hearing. The arbitrator set aside the termination decision, ordered a nine month period of unpaid leave and ordered reinstatement.

This decision was judicially reviewed,which upheld the arbitrator’s decision as being within the range of reasonable outcomes.

This decision was, in turn, appealed to the Court of Appeal which set aside the arbitrator’s decision. This is an important result as it is rare for an appellate court to interfere with the results of a specialized tribunal such as a labour arbitrator, given the deference given to such decisions.

The fact that the victim had proved a sexual assault, which had been unfairly characterized by the arbitrator as “lower end sexual harassment”. Such a finding of physical action “constitutes a form of sexual assault and is among the most serious form of workplace misconduct”. Indeed, sexual assault must be considered sexual harassment “in its most serious form”.

Notably, in addressing the issue of the reasonableness of the award, the Court noted the change in social context and differing current social values to stress that reliance upon past arbitral decisions would not be reliable in today’s workplace expectations and indeed, may be grounds to find the decision as unreasonable, as was done in this instance:

 [49]           Arbitral awards inevitably cite extensive arbitral jurisprudence. Following arbitral precedent may fortify the reasonableness of an arbitrator’s award. Conversely, failure to follow precedent does not necessarily make the award unreasonable. However, social context informs the application of arbitral precedent. Arbitrators must consider whether time and changing social values reveal precedents to be based on faulty assumptions about acceptable sexual conduct in the workplace.

[50]           For example, the arbitrator referred to the 1992 decision International Minerals. There, the grievor put his hand between the complainant’s legs and touched her genital area in a very deliberate fashion. The arbitrator reversed the employer’s dismissal of the grievor. The arbitrator also considered the 1993 case of Western Grocers that involved numerous instances of the grievor making sexually suggestive, if not appalling, comments towards the complainant as well as other offensive gestures and behaviours. The arbitrator substituted a short suspension for the grievor’s dismissal.  

[51]           These are but two examples of arbitral precedent that are incongruent with modern society’s view of acceptable conduct in the workplace. Reliance on such precedents may well make the award unreasonable.

Other Examples of Stale Dated Decisions

Quite likely a case in which the court found that the plaintiff had “backed a female colleague against a wall and moved his hand down the side of her body from her shoulder to her waist”655 was not cause for dismissal would take a different turn today. The court reasoned that dismissal was not justified as the victim did not have a physical sense of danger and was not dependent on the plaintiff for her employment. The fact that it was nonetheless a criminal offence and clearly a violation of the Human Rights Code apparently was of no moment. The trial judge also found that the employer effectively was otherwise motivated to terminate as it “was ready to take up the fortuitous opportunity which presented itself”. It is difficult to believe that this result, decided in 1995, would follow today.

This concept of a trend to view sexual harassment as being viewed more seriously in more recent years was one echoed in a recent decision656, noting that modern jurisprudence shows “evidence of a trend toward a decreasing tolerance for sexual harassment.

The accepted method of determining just cause for dismissal in an allegation of sexual harassment involves an application of the accepted principles of contextual proportionality.657

The Graded Scale

As not every finding of sexual harassment will lead to a finding of just cause, a distinct set of qualifiers has been developed, which are in substance the same theory as above, adapted to a sexual harassment case.658

When this review is completed, the court will then “grade” the severity of the offensive behavior to determine if the questioned conduct has reached a level sufficient to merit termination without cause. As most common law dismissal cases present an all-or-nothing proposition, that typically is the sole issue presented for determination.

Conduct which is found to be sexual harassment must be viewed in the same purposive process.659 To justify termination, the conduct must be “so serious it violated or undermined the obligations or faith inherent in the employment relationship”.

There will then be a scale of severity from the “innocuous joke with a sexual context” through to “sexual violence.”

The steps in the analysis then are:

1. Determine the nature and extent of the misconduct;

2. Consider the employee within the employment relationship: the employee’s age, employment history, seniority, role and responsibilities, the employer’s business or activity, relevant employer policies or practices, the employee’s position within the organisation, and the degree of trust reposed in the employee.

3. Decide if the misconduct is reconcilable with sustaining the employment relationship by considering the proven (dishonest) acts, within the employment context, to determine if the misconduct is sufficiently serious that it would give rise to a breakdown in the employment relationship.

In reviewing the third component of this test, the court noted that McKinley660 “set out three measures: (1) whether the dishonesty violated an essential term of the employment contract; (2) whether it breached the faith inherent to the work relationship; or (3) whether it was fundamentally inconsistent with the employee’s obligation to the employer.”

The Ontario court added the following factors in the context of showing cause for termination in pleading conduct which is sexual harassment case:661

(i) the nature and degree of the conduct;

(ii) whether the offending employee was told the impugned conduct was unwelcome or offensive;

(iii) continuation of the unwelcome or offensive behaviour after being advised that it was unwelcome;

(iv) the nature of the employment relationship between the offending employee and victim, particularly if the offending employee was in a position of authority over the victim;

(v) the nature of the employment relationship between the offending employee and employer, including their length of service and position, and whether there were implied or express terms of the employment contract which gave rise to additional obligations on the employer’s part, such as warnings or the opportunity to respond;

(vi) whether any warnings had been given that the misconduct was inappropriate and that dismissal was a possible consequence of further similar misconduct;

(vii) the existence of a formal and known sexual harassment policy that was enforced by the employer; and

(viii) condonation of the behaviour by the employer.

One would also expect that the impact of the offensive behaviour upon the victim, viewed objectively, should be considered.662

The determination of where on the scale of gravity the proven offence may lie, will then, logically enough, impact the court as to whether termination, typically the only reason why the case is in court, was the correct level of discipline.

It was noted that a single event may be sufficient to lead to termination.663

There have been situations where sexual harassment has been found, yet also determined not to be of termination grade.664 In one case the manager’s attempts to endear himself to the employee were rebuffed, as a consequence of which he took certain retaliatory action. The trial judge found these factual conclusions put the case in the mid-range of the gravity spectrum of a sexual harassment defence and further found that these facts required a warning to the plaintiff, notwithstanding prior admonitions and a policy in place which spoke against such actions as forbidden. The manager had also attended a sexual harassment training course at company expense.

This reasoning seems stale-dated in a modern context.665 The dissent noted below appears forceful and logical.666

Often dissents which are powerful take on such an emphatic view in later years that proves the logic of the reasoning. Ironically the authority often quoted as dicta for the test for just cause, as set out below, itself is a dissent:

If an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer’s business, or if he has been guilty of wilful disobedience to the employer’s orders in a matter of substance, the law recognizes the employer’s right summarily to dismiss the delinquent employee.667

Time will inevitably be the test.

The Workplace Policy

The court in Alberta668 found that the employer had the obligation to prove that its internet usage policy and the anti-harassment policy were enforceable, an onus which it met as such were “reasonable, unambiguous, well published, consistently enforced and that the plaintiff knew or ought to have known of their content, including the consequences of their breach”.

The trial judgment in Simpson v CAC spoke of the role of the policy to educate the work force as to what conduct is not acceptable.

Many jurisdictions now mandate these workplace policies. This is so, for example, in Ontario by virtue of recent amendments to The Occupational Health & Safety Act, effective September of 2016, as discussed in Chapter 5.18.

Regardless of whether they are compulsory or voluntary, such policies are excellent business tools to educate and enforce a safe work environment.

Need for a Warning?

The need for a warning typically in common law cases has been seen as necessary to clarify exactly the level of conduct which is expected by the employer.

This could arise in many ways, but generally the main theme that emerges is that fairness requires some advance notice of the need to improve upon the questioned conduct where the conduct is culpable or non-culpable.

One example is where the apparent conduct has been permitted to exist when all parties would agree, that absent such acquiescence, it ought not to be tolerated or is contrary to some published policy document.

Hence, the standard of conduct exhibited by an employee or a group has fallen below the expected norm. It would be considered unfair for a company to hence precipitously assert the higher norm as grounds for termination.

This makes some degree of sense as it would be inherently unfair to take action based on the passively acquiesced lower level of performance. It is, in this sense, akin to an estoppel. The argument would proceed – well, you let me by your conduct believe that it was acceptable to relate sexually offensive jokes, or as the case may be. On these facts or similarly themed, the employer should issue a statement warning all concerned that the expected standard is indeed to be enforced.

Such a warning would not be required to be given to the senior manager who has been charged with the enforcement of the policy or the need to provide a safe work place.

Other examples may involve non-culpable performance issues where the employer should be required to let the employee know that his apparent inability to do the job may result in discipline or other sanctions.

In certain situations of culpable conduct, it is a universal truth that specific actions are wrong and require no warning. Theft is an obvious example. Even situations where others or senior management participate, such conduct requires no road map.669

Whether an employer is obliged to provide an employee with a clear and unequivocal warning and opportunity to improve depends on the circumstances and the quality of the misconduct: “the greater the wrong, the less likely it is that an employer will be required to first put the employee on notice that such misconduct is not acceptable to the employer”.670

Where might sexual harassment fit within this dimension?

One might expect that level one harassment, such as sexual jokes, bantering, non-physical teasing may fit into the “this is apparently acceptable behaviour” context and require admonition with or without a policy in place where the policy is seemingly disregarded and it is not the manager who is accused of the wrongdoing or permitting the wrongdoing.671 672

The opposite end of the spectrum of unwanted touching, promises of employment gains in a trade for sexual favours and the like surely require no warning or policy document. It is a given, a universal truth, that such conduct is fundamentally wrong and termination will follow. A warning would serve no rational purpose.673

The mid-range cases remain doubtful. Given a modern context, one would expect a more severe attitude to promote a safe workplace and that the court would react harshly to such offenders and disregard the need for a warning.

Many cases have that where a warning was required, the policy document satisfied this requirement.674 These cases did not have arguments raised that the policy document was not uniformly enforced.

The court in the 2013 decision of Clarke v Syncrude came to the same conclusion that not only a warning was not required, but also that one event could give rise to termination for cause.675

The “Consensual” Workplace Romance as Just Cause

An early Ontario decision found that a consensual relationship between an employee and his subordinate was not grounds for dismissal. The plaintiff had maintained such a relationship with two women consecutively, the second of which came after the employer’s warning to desist from such conduct.676 The trial decision looked to the extent of prejudice caused by the relationship which it found to be insignificant The Court of Appeal accepted the liability finding in “the special circumstances of this case”.677 More significantly, the trial court stated that the company was without the ability to order the plaintiff not to have an intimate relationship with his subordinates.

This does not reflect the current state of the law. Such was the view of a more recent review of this case in 2011,678 referring to it as “from another era”. Even with such judicial admonition, it still has been referenced in recent decisions.

The issue of whether a workplace sexual relationship was consensual was also reviewed in a 1999 decision of Swinton J.679 An action was brought against the employer in negligence for failing to have a sexual harassment policy in place and against the personal defendant for sexual assault and battery.

The test of consent used was a two-step process, the first such step being an analysis of whether there is a relationship of inequality between the parties which would be expected in a “power dependency” context. The second step was the “proof of exploitation”.680

It was found in this case that the relationship was consensual. Even though there was an apparent inequality of bargaining power, this would not necessarily lead to the absence of consent. The court looked to the need to show duress, unconscionability or exploitation which was not present and in fact that the relationship was “not unwelcome” for a significant period.

This decision is not reconcilable with that of the Court of Appeal which followed 2 years later681 based on a plea of just cause to defend a wrongful dismissal claim. The evidence in this case involved six different allegations, most of which were defended as consensual.

The appellate decision also states that the question to be answered was whether the conduct was “nevertheless unwelcome”, even though consented to.

The distinction between conduct to which is consent given and yet is unwelcome will no doubt be a difficult one. Presuming momentarily that it is consent which sets the defining moment, how can it be that something to which consent is given, yet is “unwelcome” that rules the day? Does this mean that the consent was not truly voluntary, given a power imbalance? This is likely the interpretation, but it does ask the question of why this was not stated directly?

The appellate court stated that the responsibilities of a person as a manager require him or her to be mindful of the adverse consequences of his conduct as it may impact other employees and the workplace.

It is clear that the court was addressing the consensual romance as one which should be not allowed, given the potential impact on the specific employee and the workplace at large.

Also the court noted that the questioned conduct came from a senior person, and then determined the standard to be expected of such a person, much like the Huang682 case. Furthermore, appellate court noted that the trial judge failed to address the fact that Mr. Simpson was the supervisor of all of the staff. It was an error for the trial judge to ignore the supervisory role of the respondent and to treat him as one of the employees.683

The Court of Appeal continued to note that the conduct of such a senior person, whether such conduct appeared to him as consensual or not, was to be regarded as a violating his duty to the employer. This statement sets the standard expected of management in the modern context.684

Just as importantly, while the Court of Appeal did find that the offensive conduct did create prejudice to the workplace, it also stated that the failure of the plaintiff, in this case the most senior person in the organization, to ensure a safe workplace, did, in itself, justify termination for cause. It was not necessary to prove prejudice.

These are two important general principles from Simpson. The first is that a romantic relationship between a person in authority and a subordinate should not be permitted. The second is that where the issue of consent arises, the test is not whether consent was actually given or implicitly done so by conduct, but rather whether it was “welcomed”.

The same conclusion had been reached in an earlier 1998 Court of Appeal decision685, similarly a defence to a wrongful dismissal action brought by a senior person in the security department as the plaintiff had been a participant in activities he was obliged to terminate.

A case following Simpson considered whether it was possible for a management person to have a “consensual” relationship with a subordinate. In this immediate case, the plaintiff manager had been reprimanded for a prior similarly consensual relationship. Just cause for dismissal was readily found.686 The court did speak to the general question of whether such a relationship may lead to dismissal to which the answer was an “unequivocal sometimes”.687

The present status of the common law is that given a power imbalance, a senior manager should not be permitted to engage in a consensual, even a “welcomed” relationship, with a subordinate. There need be no uncertainty.

Some inroads to this as a general proposition were found in a fact situation in which the policy document of the employer appeared to support the existence of such a relationship,688 based on the document which contemplated one spouse reporting to another.

The case revolved around the search for such a constitutional document which prohibited this conduct and in its absence, the need for proof of prejudice. It should be noted in this instance the plaintiff had recommended his intimate acquaintance be promoted, a decision which was not reversed following his termination. The court noted that the plaintiff did not conceal the relationship.689

A further case considered facts690 in which the plaintiff had a consensual relationship with a junior employee who initially did not report to him. She was later transferred to his department, a decision influenced by his recommendation.

During this relationship, the employer introduced a policy which did not forbid a consensual workplace romance, but rather mandated its disclosure by the more senior person. The manager denied the relationship to management on several occasions when confirmation or denial of the rumours in the workplace were put to him. He then admitted the relationship, was suspended and instructed to remain away from the business premises pending the company’s deliberations, a directive which he violated twice. Just cause was found.

The court found that the plaintiff’s violation of the company’s policy book and his dishonesty to senior management was grounds for dismissal. One would expect that the breach of the policy itself, apart from the plaintiff’s deceptive tactics and his failure to follow the instruction to stay away from the workplace, would have been enough to justify dismissal.

A further case arose under the Canada Labour Code.691 The applicant was a bank manager who had been investigated for stalking a female employee. He initially denied and then admitted an intimate relationship with his then subordinate employee. The relationship was “consensual”. He had also disclosed to her certain information from a prior unrelated performance issue.

On first level he was reinstated, notwithstanding findings made of (1) breach of confidentiality, (2) misleading the Bank initially of his relationship with the employee, (3) and that his relationship put the Bank at “real risk” in the local community due to the potential of adverse publicity.

This cannot be the correct law, following Simpson.

This decision was reviewed judicially by Rennie J.who on first instance, set aside the adjudicative decision. Rennie J. found, amongst other failings, that the first decision failed to give weight to the status of the complainant as a manager and that it was his duty to show good judgment and leadership.

Upon further review to the Federal Court of Appeal, on the issue of whether a power imbalance and resulting apparently consensual affair, the FCA did deal with the issue of “true consent” and whether the relationship was “welcome”. The Court concluded that this issue was not, however, the reason for termination.

The Appellate court noted:

This was not the basis on which BMO dismissed Mr Payne, and it has not challenged the Adjudicator’s finding that Mr Payne had not breached its anti-harassment policy.

The court appeared to fixate on the reason for termination as an alleged breach of the anti-harassment policy which required active favouritism.692

In neither the adjudicative decision nor that of the FCA is there any reference to the principle that, given a management grade position and a “consensual” relationship with a vulnerable subordinate,two arguments should follow.693

The first is that the very existence of this conduct should be cause for discipline and secondly that there is a distinction between consensual and welcomed conduct.

The court did disagree with the remedy of reinstatement and returned the case to the adjudicative level for a new hearing on that issue.694

A similar issue arose also in the defence of a wrongful dismissal case in which the employer argued cause based on two consensual relationships.695

Absent a relationship of a power imbalance, the court looked to proof of actual prejudice due to the existence of the relationship. The first relationship, which was for roughly 3 years, was an employee of a large company in Regina, which was not a client of the defendant accounting firm, although she was a personal client. She was also active in the local Chamber of Commerce, as was the plaintiff and one of the principals of the firm. This relationship had ended between one to two years by the time the plaintiff had been terminated. No prejudice could be found. Of some note, however, is that the court did not apply the test of the risk of potential prejudice and looked only to the presence of actual harm.

As to the second relationship, the plaintiff, a part owner of the defendant business, also had a “consensual” relationship with a lower level staff member. It was found that he lied three times to his co-owners in denying this relationship. It was also found that she was “vulnerable”.

As to the issue of whether a consensual relationship was, in itself, grounds for termination, in this context, the trial judge apparently conducted a review of common law authorities and found no law on the subject of whether a sexual relationship, given a power imbalance, can be cause for dismissal. The analysis missed the definitive authority of Simpson, although it did refer ironically refer to Dooley.

Based on a review of these authorities, the court concluded the existence of a truly consensual sexual relationship between a manager and a subordinate is not sufficient, on its own, to justify a dismissal with cause, but it is a factor that can form part of the grounds for dismissal.

With respect, the decision is wrong. It is also obiter as just cause was found for other reasons.696

Consensual Relationship – Peers

There is no case law on this subject. Absent an employment term requiring disclosure or a ban on such relationships, one would expect that a workplace romance, between peers, where there is no conduct which may be considered offensive, cannot lead to any form of discipline. This presumes that there is no form of prejudice which the employer may assert.

This view is similar to the circumstances referenced above. In that case, the relationship with a client of the employer was consensual. There was no employment relationship and hence the court determined prejudice must be proven.697

The following is a view of the historical development and practice suggestions:

1. The employer would be wise to enact a contractual term dealing with inter-office romance. Management to subordinate should be forbidden. At the very least, it should mandate disclosure.

2. Whether this policy prohibits such peer to peer relationships on its face is a judgment call.698

3. Likely, the wise strategy is to mandate the disclosure of the existence, or proposed existence, of such a peer to peer relationship and to allow the company discretion as to what steps should then follow. A structure which would lead to the avoidance of a reporting relationship or similar barriers may be then implemented.

4. Absent such a policy, case law initially determined that a preliminary issue was whether a relationship in which there is a power imbalance is truly consensual. This question may still arise in certain situations but the test has been dramatically lowered to “unwelcome”, notwithstanding implicit or actual consent.699

5. The analysis of what is a consensual relationship was at one time held to be a two-step process, examining whether there is a power imbalance and proof of exploitation.700

6. The second component of this test is, in this writer’s view, should not be required in the modern context, given a position of a power imbalance.701

7. The Court of Appeal has clearly stated that there should not be allowed be a consensual relationship between management and subordinates.702

8. As to the need to prove actual prejudice or risk of same, this should be limited to a fact situation of a peer to peer relationship.

9. If for whatever reason the law in Simpson is not been applied, then the test will be whether the conduct was welcome and if not, the degree of prejudice, real or potential.703

All of the above must be viewed in the contextual analysis of McKinley704 to determine if termination is the appropriate level of discipline. This also presumes that the relationship between the relevant parties is not one of a common law marriage or actual marriage. Such a finding would then involve a potential human rights violation. The employer must then satisfy the three fold test of Meiorin to show a BFOQ.705


The Mandate to Investigate

The need to conduct a proper and effective investigation of sexual harassment allegations is important for two reasons, over and above the mandate to do so as part of the statutory obligation under the human rights statute and any other relevant statutory obligation.

The first issue is that the failure to take immediate investigative steps may allow the abuser to continue the harassment and cause further harm to the victim.

The second is that an allegation of just cause for termination of the offender is a serious allegation which imposes upon the employer a duty to investigate before taking disciplinary steps.

The historical general view had been that the employer has no obligation to conduct such an investigation.706

This issue was also addressed in the debate as to the need for a fair process prior to termination707 and concluded that those advocating for an investigation and fair process must be in contradiction to the concept that the employer need not state the reason for dismissal.

This law is no longer accurate, given serious allegations, both as to the need to investigate and to be open and truthful as to the reason for termination.708

The failure to conduct an investigation in circumstances calling out for this, such as a termination for serious misconduct such as sexual harassment, will expose the employer to significant liability over and above traditional severance claims.709

The obligation to investigate such allegations of sexual harassment are, in any event, mandated now by statute in many jurisdictions.710

Such an obligation was mandated for a person accused of stealing cash deposits,711 financial irregularities of a licensed financial advisor,712 financial irregularities of a licensed financial advisor,713 and criminal wrongdoing. 714

The Supreme Court of Canada decision of Bhasin v Hrynew, by which it demanded a good faith obligation between contracting parties to a commercial agreement suggests that this new duty demands that the employer must be honest with respect to the reason for termination, even if the employer has stated the termination is not for cause.

This is the death knell for the proposition that the employer need not state the reason for termination, in a context where the true reason is the suspicion of serious wrongdoing of the employee. In this circumstance, the employer cannot simply state the termination is “without cause” or even “with cause”, without conducting an investigation and obtaining the employee’s version of the events.

Furthermore, it is apparent that a severance term or other provision in a written contract cannot exclude such a duty of good faith.715

In Bhasin, the defendant in fact followed the terms of the contract between the parties by providing the agreed upon notice not to renew the agreement. The Supreme Court nonetheless found an actionable breach of the duty of good faith as the defendant had misled the plaintiff as to its motivation for ending the agreement, which was intended to allow the plaintiff’s competitor access to the plaintiff’s agents and book of business.

The cases which have gone to hearing have shown a general theme of significant damage awards against the employer when the investigative technique used has been unfair.

The cases are very much fact driven as the failure of the investigation and extent of the personal damages suffered will drive the incremental awards of aggravated and punitive damages and indeed other tort claims, such as the intentional infliction of mental suffering.716

Sexual harassment cases take on a different dimension as the victimized plaintiff may also assert that the failure to conduct a speedy and effective investigation led to a continuum of the damages.

The City of Calgary case also involved a successful plea for past and future lost income, apart from a “general damage” award. The case was unusual as the parties had agreed that all forms of potential relief, human rights, arbitral and common law would be determined collectively by the arbitrator. The finding was made that the failure to investigate promptly added to the plaintiff’s emotional turmoil, which ultimately prevented the complainant from permanently returning to work.

All of the above background is important as the award, apart from $125,000 for what was, in essence, aggravated damages, also allowed for additional sums of lost past income of $125,000, a future income loss of $500,000 and a future pension loss of $65,000.717

This is reflective of the same motivator for prompt steps to investigate a complaint particularly of this nature, in which the conduct may be a continuum.718

In this case the need to investigate came from a unique layer of forces mandating just that. This included not only human rights requirements, but also the collective agreement and health and safety legislation and the City’s Respectful Workplace Policy.

The Board found that rather than put into place these safeguards, there was no compliance whatsoever and that “the Griever was treated as a problem to be managed, as opposed to a victim to be supported”.

The very failure to implement these policies and start an effective investigation “contributed significantly to the ultimate state in which the Griever finds herself”.

This context takes the failure to investigate to a new level of significance. It is not purely a matter of a flawed investigation coming to the incorrect or biased result. Now, the failure to investigate itself has exacerbated the very damage the process was intended to stop.

The failings of the process did include the following for further reference of what not to do:

1. The alleged abuser was left in charge of the work site;

2. The alleged victim was left in an unsafe environment when evidence had been presented of the wrongdoing, which was discounted;

3. When the complainant complained about steps to safeguard her personal safety, she was threatened with discipline for being disrespectful;

4. Given strong evidence to the contrary, the employer maintained a position of defending the grievance;

All this being so, the right to prove the case to date has been undeterred by the failure of the company to investigate or to investigate fairly.719

It may be an exaggeration to state that the magnitude of the total award of $800,000 stemmed solely from the failure to investigate promptly and fairly, but is certainly clear that this failure added very much to the damage claim as it was a step which could have readily led to a abatement of the offensive behaviour. As noted, this failure to investigate is distinctive as this became the very cause of heightened distress and suffering.

Each case, however, does pivot on a common lever, namely that the allegations of misconduct are of a grave nature, a flawed investigation has followed and serious harm has been suffered by the innocent party.

Significant sums have been awarded for punitive damages such as $450,000720, $100,000721,$50,000722 720, $100,000721,$50,000723

Handsome sums have been awarded for aggravated damages such as $200,000724, $125,000725, $85,000726 $75,000727, $50,000728, $30,000729, and $20,000730

The cases are anecdotal in their factual context, which, of course, differ from case to case. The manner in which each investigation floundered may add to the knowledge base of what standards may be expected.

The 2011 Alberta Court of Appeal decision of Elgert v Home Hardware provided a further example of the adverse consequences which may be suffered by a company for failing to conduct a fair and proper investigation.

Daniel Elgert was wrongly accused of sexually harassing two female employees. Following his termination, he sued for wrongful dismissal, aggravated and punitive damages against the employer and further for damages for defamation against the personal defendants who had made the allegations of sexual harassment against him.

At trial, the plaintiff succeeded in his claim against the employer and was awarded two years lost income as the dismissal claim, $200,000 for aggravated damages and $300,000 in punitive damages, a decision which underwent a considerable re-write on appeal. The aggravated damage award was then set aside and the punitive damage award was reduced to $75,000, which nonetheless remains a significant sum.

More importantly, the appellate court agreed in principle that a claim for aggravated and punitive damages were each possible, had the evidence supported the emotional anguish, given the unfairness of the investigative process.

An investigation was conducted by the senior human resources person, Kirck, a long-time acquaintance of the senior Bernier. Kirck had not conducted such a prior investigation in his 26 years of employment with Home Hardware.

The award of 2 years as a notice claim was upheld.

On the issue of the aggravated damage award, the Court of Appeal found that there was no case to submit to the jury as no evidence had been led of the degree of emotional suffering undergone by the plaintiff.

The Court of Appeal, however, acknowledged that the legal basis existed for such an award of aggravated damages based on Honda where the manner of dismissal was inherently unfair, in the context where the “manner of dismissal” was “untruthful, misleading or unduly insensitive”731

The Court of Appeal agreed that there was at trial, a factual underpinning of unfairness demonstrated to allow for the potential of an award of aggravated damages and also of punitive damages. The Court was very critical of the manner of the investigation and saw such conduct as theoretically supportive of incremental damage awards, both of aggravated and punitive damages.

The Court of Appeal decision appears to be based on the proposition that the question posed to the plaintiff at trial dealt with the question he was asked at trial as to the impact of the “termination” as opposed to the consequences to him of the “manner of termination”, which draws an uniquely unnecessarily fine distinction in the evidence.

While Home Hardware may have avoided a significant damage claim on the aggravated damage award, the moral of the story is apparent. There is an imperative need to conduct a fair and unbiased investigation.

As to the punitive damage award, the Court of Appeal reduced the sum awarded to $75,000, led by the principle that the message was well delivered by this lower sum.

The most significant aspect of this decision was that it recognized that the flawed investigative process was part of the, “manner of dismissal” to allow an award of aggravated damages to fit within the words of the Supreme Court in Keays v Honda.732 733 734

The Supreme Court of Canada in its November 2014 decision in Bhasin referenced above also spoke to the issue of “honest performance” throughout the entirety of the relationship and that this duty of good faith is no longer limited to the “moment of termination”, as it arguably once was so confined735.

Topolniksi J. also considered this argument in Foerderer v Nova Chemicals, and concluded that the employer may nonetheless succeed in such a defence even when the investigation was inadequate.

This conclusion was also reached by Master Prowse in the Alberta Queen’s Bench decision of Watkins v Willow Park Golf. The issue came before the court on a motion for summary judgment brought by the plaintiff following his termination for alleged sexual harassment. No investigation had been done. The company’s action were premised on the position that the complainant’s allegations were valid. The court denied the plaintiff’s summary motion on the basis that the law still allows the employer to prove its case, even absent a preliminary investigation.

In the 2009 B.C. Supreme Court decision of van Woerkens v Marriott Hotels of Canada of Pearlman J., also considered this issue. The court concluded that the fact the company had not followed its stated policy document as to the investigative process was not an impediment to the successful proof of its plea of just cause. In this instance the plaintiff had been led to expect that he would have the opportunity to discuss the complaint and his rebuttal to it with the company before its final decision. This did not occur. He was terminated for cause nonetheless. His action was dismissed.

In this instance, nonetheless, the court found that there was just cause for dismissal due to the deceit of the plaintiff in the investigative process, and his conduct which was found to be sexual harassment of a co-worker.

Yet lurking in the background is the influence to be given to the refrain of Bhasin in this context. Might the obligation to investigate, contractual, statutory or implied be subject to the “duty of honest performance, which requires the parties to be honest with each other in relation to the performance of their contractual obligations”. The full extent of this duty has yet to unfold.

In Bhasin itself, Cromwell J. spoke to this issue, noting that there is no compendium of situations and relationships which may attract good faith obligations, stating “the application of the organizing principle of good faith to particular situations should be developed where the existing law is found to be wanting”.

A court may well deny the employer’s right to assert cause in such a context, impose costs penalties or deny costs in a proper situation.

Defamation Claim against the Accuser

An action for defamation may follow against the makers of the allegations. In such a case, the accusers will be shielded by the defence of qualified privilege, which can only be defeated by the plaintiff proving that the allegations have been made with malice.736 737

Dr. Rubin was the former Director of the Veterinary Teaching Hospital at the University of Saskatchewan who successfully sued the union representatives who had represented the interests of Ms. Bowman.

Ms. Bowman had won her initial grievance based on sexual harassment by which she was reinstated. Dr. Rubin had been supportive of her in this process and was not accused of wrongdoing.

Due to certain issues on her return to work, a second grievance was filed which became the subject of the action brought by Dr. Rubin and the defence of qualified privilege. It was in this grievance that the incorrect assertion was made that Dr. Rubin had been found responsible for the harassment of Ms. Bowman due to which it then in the grievance stated that it sought his termination.

The Court of Appeal found that on this issue, the union had exceeded its mandate and gone738 beyond that which was necessary to fulfill its duty and for this reason, the defence of qualified privilege was denied.739


Patient-Physician Clinical Notes

The most well-known forms of privilege are “legal advice privilege” and “litigation privilege”740. The grounds of privilege are not firmly closed however741.

In 1991 a decision of the Supreme Court of Canada742, considered the issue of whether privilege may attach to communications between a parishioner and both a pastor and a lay counsellor of a fundamentalist Christian church.The case is important in setting out the distinctions between a privilege which is defined as a class or blanket privilege and the second category of privilege which is determined on a case-by-case.

In the latter instance, a court will apply the four components of the Wigmore test which are as follows:

i. The communications must originate in a confidence that it will not be disclosed;

ii. The elements of confidentiality must be essential to the full and satisfactory maintenance of the relation between the parties;

iii. The relation must be one which in the opinion of the community ought to be sedulously fostered; and

iv. The injury which would inure to the relationship by the disclosure of the communications must be greater than the benefit thereby gained for the correct disposal of the litigation.

A class privilege or blanket privilege or prima facie privilege or common law privilege, the court stated, allowed a prima facie presumption of inadmissibility, once the relationship has been shown to fit into the class. It is the onus of the party seeking that the evidence be admitted as an exception to the general rule.

In applying the Wigmore test, the policy reasons for excluding otherwise relevant evidence be weighed in each instance, this being the fourth and often the most difficult branch of the test to meet.

The common law rejection of patient-physician privilege has been revised by a liberal use of the Wigmore test743.These cases showed respective applications of the case-by-case analysis and hence did not create, in either instance, a new class privilege.

When a potential for privilege has been found by the successful application of the first three criteria, the court will then struggle to find a fair balancing of the competing interests on the fourth aspect of the test.

The court will look to affirmative evidence to show that there is likely, and rationally so, expected to be a serious psychological or other harm suffered by the plaintiff in the event of disclosure of the contested material.

Where the fourth branch is satisfied, a court will often order production of the contested material on terms designed to protect the inherent privacy interests and allow for the relevant facts to be put before the decision maker.

If the plaintiff can show the contested information in the disputed materials can be proven independently without the disputed materials being produced, this will improve the likelihood of the materials being fully protected from production.

This conclusion, is, however, unusual. The pattern of the case law is to allow the production of the notes, if relevant, and then to attach terms designed to protect the confidentiality of their contents. This is also so for diary or journal entries which are not covered by a blanket privilege.

The historical common law view has been that there is no privilege in information passing from a patient to his medical care provider.744

The Supreme Court of Canada745 considered the issue of disclosure of medical records of the communications between a psychiatrist and the victim of a sexual assault by a prior treating psychiatrist and concluded that the relationship between the plaintiff and her psychiatrist746 met the traditional fourfold test.The court also noted that as a policy issue, the common law must be updated to reflect Charter values of privacy and equality before the law.

Once a privilege has been established, it must be found that the benefit of protecting the privilege outweighs the interest of production, this being the fourth branch of the test:747

These criteria, applied to the case at bar, demonstrate a compelling interest in protecting the communications at issue from disclosure. More, however, is required to establish privilege. For privilege to exist, it must be shown that the benefit that inures from privilege, however great it may seem, in fact outweighs the interest in the correct disposal of the litigation.

The balancing of the conflicting interests, the court determined, will in most cases, result in an order which qualifies the production of documents, reflecting a “partial privilege”.

The court essentially concluded that a relationship between a patient and psychiatrist could lead to a privileged relationship, given the above tests, after which the parties may debate the need to produce individual documents, reflective of the competing interests.

The need for the examination of each document may not be required, when affidavit evidence describing the general nature of the information may suffice.

The Ontario Court of Appeal reviewed the impact of this decision748 in a case in which the plaintiff and her two children commenced a civil action against the defendant following his conviction for sexual assault. The defendant sought production of the plaintiff’s psychiatric records, which was refused at first instance on the grounds of privilege. In this instance, there was not the required evidence of the promise of, or the need for confidentiality, to uphold the claim for privilege, in that the requested records related to the pre-assault medical history.

A similar order was sought in case involving a plaintiff who sought psychiatric treatment as a patient of the defendant in 1976. The two parties established a 16 year sexual relationship which began when the plaintiff was patient and continued when she was an employee and later a tenant of the defendant, ending about a year after she ceased being an employee or tenant, which was two and a half years after the patient relationship had ceased.

The defendant sought counselling from a psychiatrist with respect to the end of this relationship and the allegations made in the claim in this proceeding. The plaintiff sought production of these clinical notes, arguing that a confidential report may contain some observation or finding which may assist her in the case.

The court noted that this request differed from the usual production motion. Nonetheless the same considerations of determining relevance and privilege should be applied, as the court concluded. The notes were examined and found to be irrelevant to the issues.749

Conditions are often attached to the production of the disputed medical records. In one arbitral case, the union was allowed to redact communications alleged to be privileged, but allowed the employer to be advised why any deleted materials were refused and that any dispute would be determined by him.

The arbitrator had ordered pre-hearing disclosure of medical records, including psychological records, in a case involving a disputed short and long term disability benefits, subject to strict conditions on the use of such records. The conditions attached were that (1) only employer counsel and its medical experts may view all the records; (2) any person viewing such records must keep them confidential; (3) the documents may be used only for the hearing; (4) only one copy could be made and (5) the medical documents must be destroyed at the end of the hearing.The order also allowed either party to re-apply to him in the event that the order prove to be unworkable. The employer appealed.

The Court of Appeal noted that the standard of review was correctness.The Court of Appeal agreed that the making of the Ryan order was not limited to facts which paralleled those of Ryan and agreed that the documents in question were subject to a privilege. That finding, however, as the court stated, would not end the analysis, as the court must also consider the terms which will protect the privilege as much as possible, yet interfere with the employer’s right to defend as modestly as possible.

The Court agreed that the order in question could not survive the appellate challenge as it was not “outside the scope of acceptability”.750

The Supreme Court751 considered in 2005 an issue involved the right of the defendant to access a psychiatric record kept by a physician. The action was brought by the plaintiff against the manufacturer of a metal prosthesis and her physicians, one of whom used the device to perform a reduction on her fractured femur.

The initial court had ordered production of the psychiatric record, on which the Court of Appeal reversed. The Supreme Court restored the initial order. The court recalled that all parties and counsel are deemed to undertake not to use the information which has been received for purposes external to the litigation.

The Court also noted the options available to the judge to ensure a fair disposition of the matter in dispute and protect the contested material. These include requiring the objector to file an affidavit explaining the basis for the objection and list and describe the documents in controversy. This would allow the judge to review the evidence privately. The judge could also order the documents be produced subject to conditions of confidentiality or order counsel not to disclose documents to third parties or to the immediate parties in the litigation.

In practice, the common law courts typically will attach privacy terms to materials which are clearly relevant to the issues in dispute.752 The plaintiff had suffered injuries in a car accident and sought damages not only for the physical injuries but also for emotional and psychiatric injuries. The complicating issue was that the plaintiff had sought treatment prior to the accident due to sexual abuse by a close relative when she was an infant of five years.

The defence sought production of the medical records of the psychiatrist and, needless to say, argued that the damages claimed in the action were not the fault of the driver but rather due to the prior childhood abuse.

The court ordered the records be produced on certain terms, noting that “I have not been provided with any medical evidence that this will in fact result in any significant physical or mental harm to A.Y.”, which led to the balancing process on the fourth test. The court noted an absence of any evidence of harm which the plaintiff would suffer due to the production of the documents which were ordered with similar conditions attached.

A similar issue was brought to the New Brunswick Court of Appeal753 again involving the fourth test. The motions judge, the court ruled, erred in basing his analysis on what the plaintiff and her counsellor perceived as the likely consequences flowing from the production of the notes of the counsellor.

The motion judge, the Court of Appeal ruled, must assess the reasonableness of the fears, in the full light of the implied undertaking rule and the impact of privacy protections which are typically provided as conditions to the order allowing for production.

The protective order must “ensure the highest degree of confidentiality and the least damage to the protected relationship, while guarding against the injustice of cloaking the truth”, as the Court of Appeal noted was stated in Ryan.The Court of Appeal set aside the order of the motions judge and ordered production on comparable terms.

This issue was again raised on this occasion to protect the identity of third parties whom the plaintiff referenced in her discussions with her physician. The redactions were allowed and performed by the judge hearing the motion.754

Personal Journals

This issue is raised in the context in which there is absence of litigation privilege or solicitor client privilege in the notes.

In action asserting sexual abuse by her physician, the plaintiff sought privilege on the contents of her personal journal which she had kept on the advice of her counsellor. The fourth branch of the test failed and the notes were ordered to be produced.755

Similar journals were ordered to be produced with redactions.756

Such journals were refused when it was determined that there was other evidence available to lead to the same end and that the journal was not “critical to the truth-finding process”. Ironically, such other evidence included clinical notes of the family GP and the psychiatrist, both of whom prepared histories and reports.757

Just as in the case with privilege asserted in the medical file, the person seeking the privilege in this instance must lead evidence to show the damage that he or she will suffer should the order be made.758


Canada Revenue Agency has recognized that payments made as compensation for a human rights violation will be a non-taxable payment.759

CRA recognizes that a termination payment may consist of several components, one of which may be taxable as a normal retiring allowance and others which may be considered non-taxable.

The examples given in the Bulletin of non-taxable payments include human rights violations and defamation claims, but the list will also include other tort claims such as negligent misrepresentation, aggravated or moral damages in the context of abusive conduct in a wrongful dismissal claim, or in a claim for LTD damages in which claims are asserted for aggravated damages, mental distress damages and also punitive damages. It will be a question of fact in each instance.

It is acknowledged that a termination of employment may give rise to multiple forms of claims.760 Personal injuries which were sustained before or after the loss of employment will be non-taxable receipts. The wording “before or after” may be significant as the language appears deliberately to omit injuries sustained at the time of termination. The pleading should be careful to make such a distinction. This would appear to relate to personal injuries which are distinct those suffered due to a human rights violation.

The critical aspect is to distinguish the claims for “personal injuries” as distinct from the severance claim itself.761 In cases where there may be an issue of termination of employment and a sexual harassment claim, care should be taken in the pleading to set out sums for aggravated and/or mental distress and punitive damages as distinct from the termination itself. The same will follow for the minutes of settlement.

Human rights violations are treated separately, presumably because such claims often arise from the very fact of termination and hence are not distinguishable in time.762

Most statutes contain no maximum damage sum. Civil actions for wrongful dismissal may also contain a damage claim for human rights violations. Lawyers negotiating a fair compromise will thus look to awards of damages awarded by the Human Rights Tribunal and by trial judges, for a fair background of reasonable expectation. Regard should also be made to the sums paid in comparable civil actions for aggravated and mental distress damages as a barometer of what may be considered a fair and reasonable allocation of the settlement sum to non-taxable consequences, particularly where the claim for past disability sums would be taxable.

Counsel will be expected to set out clearly in settlement documentation the sum that has been attributed to non-taxable components and be prepared to rationalize the allocation, if called upon to do so.

The onus rests upon the taxpayer to show that the settlement of the non-taxable sum was a “claim as existing apart from the loss of employment” as was the issue.763

In a further case, the minutes did not allocate a specific sum to the alleged human rights violation, but the Federal Court nonetheless accepted that a bona fide claim was asserted and made an apportionment on its own initiative, splitting the respective positions.764

In yet another case, the appellant taxpayer had failed in his request for all allocation of the settlement funds paid to him were attributable to a claim for harassment made against the employer. The settlement sum did not contain any allocation of the sum paid which was approximately $150,000.

The Federal Court of Appeal concluded that the taxpayer had an obligation to produce “some evidence” to identify that the settlement did include non-taxable components.765

On the facts in this case, the Court found such evidence in the form of the severance policy manual of the employer to determine the expected normal entitlement and concluded the balance should be allocated to the non-taxable harassment damages.

In a similar fact situation, the taxpayer had received a payment of $160,000, again without a specific stated allocation. It was asserted that this payment had included a payment to his tort claim of negligent misrepresentation and other tort claims. The Federal Court examined the facts in detail and concluded, that notwithstanding the fact that there was no specific agreed allocation, the sum of $115,000 should be allocated to the tort claims and hence were non-taxable.766

Not all claims recoverable under human rights legislation will be considered non-taxable. Lost income claims based on pay equity violations have been held to be taxable.767 Similarly, it would be expected that claims for lost income and not emotional distress in a human rights claim would be considered taxable. It is to be noted that the IT Bulletin above speaks of an award of “general damages”. Care should be taken to distinguish a specific lost income award and other damage claims arising from a human rights claim.

Awards made for the loss of future earnings are considered as non-taxable earnings, as was found by the Supreme Court of Canada in R. v Jennings.

Legal costs incurred are agreed by CRA to be eligible deductions from the taxable sum received.768 However, where costs are incurred in an unsuccessful claim, no deduction is allowed.769

Legal fees incurred and paid in the year of receipt of a taxable claim will be deductible.770

Mediation of Sexual Harassment Cases

Many thanks are extended to Barry Fisher, Toronto Mediator & Arbitrator, for his contributions for this chapter.

Mediation as a Settlement Vehicle

Many years ago, when mediation was suggested as a mandatory step in the process of civil litigation, many civil litigation counsel, bemoaned the need for yet another process which would no doubt, add to their client’s costs and set up yet another delay in what was already a seemingly endless array of motions, productions, discovery, undertakings which were required to get their client’s case before a real decision maker.

This being said, mediation actually has proven to be amazingly successful in resolving cases. Fisher’s study, in fact, showed that 80%of employment cases settled at mediation. Of the remaining 20% that did not settle at the mediation, 95% of those cases settled at some later point.

Mediation offers an opportunity of early third party review, which can often lead to settlement when invested costs are comparatively low.

This is particularly so for sexual harassment cases, which have complexities far beyond those of a “normal” wrongful dismissal case. Issues such as the employer’s liability, most often in serious dispute and the frequently contrary and passionate positions of the alleged victim and the suspected offender attach to these cases an air of vivid distinctiveness.

The Interested Parties

Sexual harassment cases, as noted, present distinct dynamics at variance from the typical termination case. This is true due to several factors, some of which are legal and others which are practical. This remains so, no matter whether the case is brought by a civil action with a human rights claim included, or by a straight civil tort action.

In human rights cases in Ontario, there is a deeming provision which makes the employer responsible for human rights violations in the workplace. Sexual harassment claims are exempted from this deeming provision. That being said, there are exceptions in human rights law which may make the employer responsible, such as a reprisal claim and a poisoned work environment.

In civil cases, the employer can held liable strictly for the offensive conduct of its employee based on the principle of vicarious liability. This, however, is a difficult case to make out.

In addition, the alleged offender is usually sued personally in the human rights complaint and/or the civil action.

For these reasons, the interested parties are often (1) the plaintiff, generally the alleged victim, (2) the personal defendant, typically a co-employee, the alleged offender and (3) the employer. The plaintiff may or may not be still employed. Similarly the personal defendant may also remain employed. The personal defendant may be counterclaiming against the alleged victim for defamation or be cross claiming against the employer for contribution or indemnity or even third partying another employee of the company.

Alternatively, the plaintiff may be the alleged offender, the person terminated by the employer. This person often sues the employer and the alleged victim, often still an employee, a person sued for the purposes of discovery.

For these reasons, there will frequently be at least three sets of legal counsel. The overlapping issues between these parties can be complex. For example, in the first example in which the plaintiff is the victim, the personal defendant may well be supportive of the vicarious liability claim as this will likely remove, on a practical basis, not on a legal one, financial responsibility upon him or her.

In the same context, the employer often has no knowledge of who is right or wrong as often the case is based on competing allegations of fact, without corroboration. It will need the factual support of the personal defendant, the very same party which is trying to shift legal responsibility to it.

The point of these varying dynamics is that the respective interests present unusually complex interplays between the parties.

An Overview

In the modern litigation context, lawyers should reflexively consider, when starting a lawsuit, not only how to plead a case at trial, but more importantly, how to prepare the best possible case for settlement at mediation.

The case should be prepared carefully to plead the tort basis of a sexual harassment case, usually as intentional infliction of mental distress or battery or assault or all possible claims. In Ontario cases, It will likely also plead a breach of the Human Rights Code and add the necessary companion claim.

The purpose of the mediation and hence that of the mediator is facilitate resolution of the dispute between the parties to the litigation.

As is the case with any settlement, an early resolution of the controversy will save future legal costs and provide a certain result. The inherent risk of litigation and the adverse consequences of losing a case are eliminated. Peace of mind is an important by-product of a settlement. Most litigants do not like litigation and are eager to settle.

In addition, a negotiated compromise allows for terms of settlement which a judge in court cannot provide. Such items, as a letter of reference or an agreed payment of damages in the best format for tax consequences and the requirement to repay employment insurance benefits are good examples of the benefits of an agreed resolution which may not be available before a judge in court.

Mediation at an early stage provides a significant advantage of identifying the vulnerability of the case when the invested legal energy and costs are relatively modest.

If there is a weakness in the case, it will likely be apparent at the mediation, which will prompt a frank discussion between lawyer and client, which will be assisted by the views of the mediator.

Mediation also is an excellent opportunity for the clients to speak about what really concerns them. Their comments or opinions may not be “legally relevant” in a courtroom, but nonetheless, may give the mediator greater insight into how to get a deal.

Sometimes the biggest challenge facing the mediator is how to actually close the deal. An experienced mediator has a number of tools that he or she can draw upon to close that last 10% difference in respective positions. This is when a deep understanding of the psychological aspects of the negotiation process and of the parties can assist in getting the ball into the end zone.

Mandatory Mediation in Ontario

Mediation is mandatory for employment disputes in the City of Toronto, City of Ottawa, and County of Essex (Windsor).

The procedure for mandatory mediation in these jurisdictions is governed by Rule 24.1 of the Rules of Civil Procedure.

Rule 24.1.03 requires that the mediation be held within 180 days of the “first Defence”, save a court order to the contrary.

The “First Defence” is defined to be a Notice of Intent to Defend, a motion in response to the Claim, other than a motion to challenge the court’s jurisdiction or the Statement of Defence.

The judge’s consideration to grant an extension will involve a debate on the complexity of the matter, whether either party intends to move for summary judgment and whether the mediation is more likely to succeed if the 180 day period is to be extended.

Failure to hold the mediation within the 180 time limit has no real consequence unless one of the parties complain as Rule 24.1.09(3)(b) provides that an extension consent in writing to the postponement.

Forming a Settlement Position

Drafting the Claim

As noted above, the settlement objective from the plaintiff’s perspective should be developed when the case is started by the drafting of the claim. The planning must begin then and implemented at mediation.

Claims made for damages for loss of dignity and injured feelings whether under the Human Rights Code and similarly tort damages are not taxable. Neither claim will lead to EI repayment. The exemption for EI repayment in a tort claim requires that the case be supported by medical evidence. Claims for future income claims are also not taxable, whereas a plea for past lost income will be taxable. Knowledge of these issues will all assist in the allocation of settlement dollars at mediation.

A tort claim in battery in often the best plea as the damages are strict as damages for emotional distress re presumed. A plea should also be made, where there is a criminal conviction, in Ontario, under the Victims’ Bill of Rights, in the case of a sexual assault or an attempted one, which again presumes emotional distress damages.

The damage claim for lost income will generally include an income claim from the date of termination forward to the date of settlement or hearing and a prospective claim forward, presuming reinstatement is not pursued. Reinstatement should, however, be included in the case.

Exaggerated claims should be avoided. The opposing party will read the pleadings and will enraged by factually untrue and outrageous allegations.

A claim for reinstatement should also be considered, again when there is real and substantive factual support for a human rights breach. The settlement of the reinstatement claim by payment of allocated dollars to this remedy may lead to a reduction of EI repayment sums.

Punitive, Aggravated and Mental Distress or Moral Damage Awards

There are many issues which must be considered when advancing such claims for damages for emotional suffering in a tort claim or a human rights allegation. Keep in mind that punitive damages are generally not recoverable in a human rights case, although such a claim can be made in a tort case.

Counsel should be careful that the damage claims are realistic and hence within the damage range of the case being asserted. Emotions are usually intense in claims of this nature.

There is no reason to inflame them. Should the pleading take a particular position for the strategy of settlement, then it will be wise to advise the opponent just that off the record.

There are many cases finding that medical evidence is not mandatory to support a human rights damage claim for injured feelings. A similar Supreme Court decision came to the same conclusion in a tort claim. Nonetheless, as an injured victimized plaintiff, a comprehensive medical report will do much to persuade the defence counsel that the claim is a serious one and is intended to be pursued.

Tax Free Damage Claims

CRA Interpretation BulletinIT-337R4(consolidated) sets out the position of the CRA towards these matters as follows:

Types of Receipts


9. Generally, compensation received by an individual from the individual’s employer or former employer on account of damages may be employment income, are tiring allowance, non-taxable damages, or a combination there of. Such a determination is a question of fact, which requires a review of all relevant facts and documentation of each particular case.

10. Special damages, such as those received for lost (unearned) wages or employee benefits, a re-taxable as employment income if the employee retains his or her employment or is reinstated.

11. The definition of are tiring allowance includes an amount received in respect of a loss of office or employment of a taxpayer, whether or not received as, on account or in lieu of payment of, damages or pursuant to an order or judgment of a competent tribunal. As discussed in 5, the words “in-respect of” denote a connection between the loss of employment and the subsequent receipt. Accordingly, where an individual receives compensation on account of damages as a result of a loss of employment, the amount received will be taxed as a retiring allowance. This applies to both special damages, as well as general damages received for loss of self-respect, humiliation, mental anguish, hurt feelings, etc.

12. Where personal injuries have been sustained before or after the loss of employment (for example, in situations of harassment during employment, or defamation after dismissal),the general damages received in respect of these injuries maybe viewed as unrelated to the loss of employment and therefore non-taxable .In order to claim that damages received upon loss of employment are for personal injuries unrelated to the loss of employment ,it must be clearly demonstrated that the damages relate to events or actions separate from the loss of employment. In making such a determination, the amount of severance that the employee would reasonably be entitled to will be taken into consideration.

Similarly, general damages relating to human rights violation scan be considered unrelated to a loss of employment, despite the fact that the loss of employment is often a direct result of a human rights violations complaint. If a human rights tribunal awards a taxpayer an amount for general damages, the amount is normally not required to be included in income. When a loss of employment involves a human rights violation and is settled out of court, a reasonable amount in respect of general damages can be excluded from income. The determination of what is reasonable is influenced by the maximum amount that can be awarded under the applicable human rights legislation and the evidence presented in the case. Any excess will be taxed as a retiring allowance.

In other words, for a damage claim to be classified as tax free, it must exist independently of the dismissal. Thus anything that flows from the dismissal, such as punitive and aggravated damages, compensation for failing to reinstate, are taxable, as, but for the dismissal, the damages would not have occurred.

Thus, in Honda or moral damages claims, the Court has to find that there was a duty of good faith in the manner of the dismissal which was breached. Therefore, from a CRA perspective, these damages are in respect of the dismissal and therefore constitute are tiring allowance, that is, they are taxable.

The key, therefore, is to find a cause of action unrelated to the dismissal. This could include:

1. Pre-dismissal harassment, either human rights based or generalized;
2. Defamation;
3. Intentional or negligent infliction of mental suffering, if the stated goal is not to get the plaintiff to quit;
4. Harassment under Bill 168 (Occupational Health and Safety Act) or pursuant to a harassment policy;
5. Assault;
6. Intentional interference in contractual relations;
7. Inducing breach of contract, as is in this case the defendant is not the employer.
8. A claim for damages for the breach of the duty of honest performance of a contract, as set out in the recent Supreme Court of Canada case of Bhasin v Hrynew;

In most settlements, there will be a covenant that the employee is ultimately responsible for any tax assessments. Plaintiff’s counsel, should be careful in offering an opinion as the taxable consequence of such payment, as it is likely the unhappy client who is audited by the CRA will seek redress from legal counsel, barring this qualifier.

EI Issues

The Employment Insurance Act provides that if a person received EI, and later received a termination settlement, there is an obligation to repay EI.

For example if the person received EI for 6months and subsequently received a settlement that compensated for 6months income all the EI would have to be repaid.

There is a statutory duty upon the employer to deduct the EI sum payable, which can sometimes result in a delay of payment of all settlement funds, pending a clearance letter being received from HRSDC.

In summary, EI will not treat as earnings, that part of the settlement that is fairly shown to be any of the following:

1. Legal Fees;
2. Mental distress or pain and suffering if accompanied by evidence of medical care;
3. Reimbursement of job search, relocation or retraining expenses;
4. Damages for loss of dignity, self-worth and reputation;
5. A sum paid in exchange for a waiver of an existing right to reinstatement of employment.

Hence any sums paid for damages for injured feelings in a human rights case or damages for mental distress, note, when accompanied by medical evidence, will not create an EI repayment obligation.

Mediation Process

Opening Statements

The traditional model contemplates an opening statement from the mediator, followed by an opening by each counsel. This may appear to be a good idea on paper.

The parties are compelled to conduct mediation in the manner the mediator desires. Often in sexual harassment cases, there will be no need for a lengthy introductory session. The parties will be well acquainted with the issues in the case by the time it reaches mediation. There is no need to inflame the opposing party.

In reality, most employment law mediators prefer to proceed immediately to caucus. The reasons are many. Most clients, especially plaintiffs, fear the joint session, as they do not want to be face to face with their opponents. Lawyers tend to pontificate and tend to ramble on as if they were opening a trial. They may showboat in front of their client. Even if the opposing lawyer has some concrete criticism of the opponent’s case, it is typically disregarded. When clients speak, lawyers feel the need to be defensive in limiting what the client may say, which is not conducive to a meaningful settlement discussion.

For these reasons, many mediators move immediately to caucus, where the real work is always done. For this reason, mediations are now shorter and more effective than in the early days.

Separate Caucus

Whether or not you have a joint caucus, you are going to be spending most or all of the mediation in a separate caucus. In one room is the plaintiff, her lawyer and whoever else is on their team. In another room is the personal defendant’s team and its lawyer and often, in yet another room, the employer’s equivalent. The mediator will then conduct shuttle diplomacy between these parties.

Minutes of Settlement

Clients pay lawyers to get a deal. The deal is the ultimate work product that the client is paying for. Therefore, to leave a mediation without a fully executed and documented Minutes of Settlement is a kin to producing nothing, other than a potential lawsuit about whether there actually was a deal and what was the deal.

Most litigation involving mediations and mediators involve the issue of not properly documenting the deal. This should be avoided at all cost.

A mediation often feels like an emotional roller coaster. After the deal is struck, there is usually a mutual feeling of relief but a sudden tiredness sets in. Now, at the worst possible time, we are forced to become what most litigators hate the most: a solicitor.

Checklist on the Drafting of the Minutes

Of course, what is really important is the contents of the Minutes of Settlement. Here is a handy list of factors to be considered in the minutes.

Signatories to the Minutes

All parties who have obligations under the agreement should be parties to the Minutes of Settlement, even if they are not parties to the litigation. Therefore if the parent corporation of the defendant employer is obligated to do something, such as provide stock options, it should be a signatory to the deal.

The Settlement Sum- Set out Taxable and Non

The minutes should specify which items are taxable and which are not. Counsel should set out the agreed to tax treatment and the fact that no T4 will be issued for a mounts not required by law to have tax with held at source.

Employment Insurance Repayment

As mentioned already, to deal with the EI issue, the agreement should either recognize no liability as the plaintiff did not receive EIor deal with the obligation to repay. A settlement based on a payment of general damages for pain and suffering, or in human rights vocabulary, “damages for humiliation or injured feelings” will not lead to an EI repayment. However, a payment of a past income loss concurrent with the EI payment, will create the converse.

It can take months to get a clearance letter from HRDC, and there is no reason to hold up the whole payment because of this delay. Persons on EI can go to their EI webpage and get a printout of all the EI that they have received to date. As the repayment to EI could never exceed the amount of EI actually received, if the employer hold backs the necessary amount to repay EI, then the bulk of the settlement funds can be dispersed immediately and the balance dealt with once the EI letter is received.

Note that any time there is a nob ligation to pay, a payment date should be agreed to. More disputes arise about settlements that do not specify pay dates than for any other reason.What is reasonable for a starving plaintiff is not the same as what is reasonable for a defendant who routinely drags out payments of all of its receivables.

Confidentiality Clause

It is best to deal with the issue of confidentiality right in the Minutes of Settlement because if it is left to the not yet agreed to Release, there could be an inadvertent breach in the time frame between the signing of the Minutes of Settlement and the Release. Moreover, clients actually read the Minutes of Settlement, but perhaps not the same attention is paid to the release.

If you want a confidentiality clause, then deal with the following issues:

1. Is it one way or does it cover all parties?
2. Who can the parties tell, which is typically the spouse, legal and financial advisors or as required by law?
3. Does it cover the only the terms of the deal or other matters as well?
4. Is there a defined consequence for a breach?

Here is a common clause:

The Plaintiff agrees to keep the terms of this settlement strictly confidential, save and except to his spouse, his legal and financial advisors or as required by law. The parties acknowledge that this is a fundamental term of this agreement and that absent this clause the defendant would not entered into these Minutes of Settlement.

A Covenant as to Fact

If you are relying on a specific assertion of fact made by the other party in coming to an agreement to settle, which you would not have agreed to if that statement was not true, you may want to include a warranty to that effect, which means if you subsequently determine that the other side lied about this fact, you could seek to set aside the settlement. Here are some examples:

The plaintiff here by warrants that the allegations as set out in paragraphs 7 to 12 of the statement of claim are made in he has neither received nor earned but has not yet received, any income from either employment or self-employment, directly or indirectly, from the date of his dismissal to the date of this agreement.

No Representation

If on the other hand, you want to insure that the deal could not be set aside based on the accusation that someone in the course of mediation was somewhat less than forthright, then the following clause is useful:

Each party confirms that they have relied solely on their own sources of information in arriving at their decision to settle this matter on the terms set out and therefore have not relied upon any statement or representation made by the other party in coming to their decision to settle this matter on the terms set out in this agreement.

End the Proceeding

The action must be disposed of by way of an order or the filing of Notice of Discontinuance. Specify who will take out the order. Here are two common clauses:

The Plaintiff shall file a Notice of Discontinuance after the settlement monies have been paid in full.

The Defendant shall takeout a consent order dismissing the action without costs after the settlement monies have been paid in full.

Mediator Fees

Don’t forget the mediator fees. Either you share them or one party pays all. Here are some clauses:

Each party shall pay one half of the mediators’ fees.

The Defendant shall pay all of the mediator’s fees.

Reference Letter

If part of the deal is to provide a letter of reference then try to agree on its terms at the mediation, failing which use words like “a positive letter of reference”. Also agree on who the author of the letter will be.

There is usually a clause saying that “all oral references will be consistent with the letter”. However, remember that the employer cannot control what comments every single employee may make. Therefore the corporate undertaking to abide by the reference letter is usually limited to the author of the letter or the HR department.

In other words, if the plaintiff gives as a reference someone at the defendant other than the author of the letter, then they are stuck with what that person actually says.

This issue can be dealt with as follows:

The Defendant shall provide the Plaintiff with a reference letter in the format ached. The plain tiff agrees to refer all reference requests only to Mr. Brian Jones, Director of Human Resources or his designee. Mr. Jones, or his designee, undertakes that all oral references will be answered in a matter consistent with the enclosed letter of reference. This undertaking does not apply to any other employee of the Defendant, past or present, who may be asked by the Plaint if for a potential employer to give a reference.

The Release

All deals need releases, either as a separate document attached to the Minutes or included in the Minutes themselves. Here are two examples, one where the Release is available, and the other when it needs to be drafted. It is always prefer able to agree on the form of Release at the mediation itself.

If there are special clauses to be included, you must reference them or you run the risk that a judge determines that they are not part of a normal release.

If the defendant has filed a counterclaim or could have a claim against the plaintiff, then the release should be mutual. However where the defendant would normally not make any claim, as is often the case in a regular notice claim, then only the plaintiff releases the defendant. To insist on a mutual release will cause the defendant to think that the plaintiff committed some sort of fraud or theft which the defendant has not yet discovered.

The plaintiff agrees to sign the attached Release.

The Plaintiff agrees to sign a Release in a form acceptable to both counsel. The release shall contain both a confidentiality clause as well as a tax indemnity clause. Defense counsel shall prepare the first draft.

Arbitration Process and Procedure

Why Arbitration

Until very recently it was as summed that the only way in which a party to a civil dispute, like a wrongful dismissal action, could have his or her dispute adjudicated upon was either before a judge or jury in a trial. However, there is another way in which the parties can proceed, which is by agreeing to arbitration. This process is as binding upon the parties as a court judgment.

One great advantage presented by arbitration is that the parties are able to litigate their differences without fear of the public revelation of the allegations between the parties. This is of particular significance where one or all parties are public figures or the allegations are unsavoury.

The process is kept confidential. There will be no decision released to the public media. On that issue, the parties should agree to use a non-identifying title of proceedings and other contents if there is a judicial review application.

A further plus is the ability of the parties to agree on the decision maker. There is no need to worry that the judge selected in the normal court process must be educated to the nuances of law. You will know the general disposition of the arbitrator and that he or she is well versed in the legal issues in dispute.

There is also a fixed starting date given and presuming that counsel estimate the number of days correctly, this can be a huge advantage to the parties and witnesses, particularly those persons who require to travel and are not connected to the parties in the litigation.

There may, if the parties desire, no appeal possible. The theory of the process is that the issue is intended to be finally decided. Yes, there is a judicial review theoretically possible but such a process is rarely successful, given the stringent test for a successful JR.

Although there are costs incurred in an arbitration that are not found in a civil action, namely the cost of the arbitrator and the room rental, the overall costs should be less or at least no more than a trial as the arbitration process tends to be more efficient and less paper intensive as a trial. Thus although disbursements may be higher, legal fees should be less.

The Arbitration Agreement

Once the parties have decided to proceed by way of arbitration, rather than litigation, it is necessary to prepare a written Arbitration Agreement.This is applicable whether the arbitration procedure was agreed upon at the beginning of the dispute or where the parties commenced traditional litigation and decided at some stage in that process to switch to the arbitration model.

The purpose behind the Arbitration Agreement is to set forth the ground rules under which the arbitration will be held. It is important to understand that the arbitration process is an extremely flexible one and to a very large degree can be whatever the parties want it to be.The statutory framework for the Arbitration Agreement is The Arbitrations Act,1991,S.O.1991,C.17.

The Arbitrations Act sets a number of “default” provisions with respect tot he terms and procedures of the arbitration; however, the parties can contract out of almost all of those provisions and create their own process.

As many civil litigation counsel probably are not familiar with arbitrations in the first place, likely the most comfortable format is the Arbitration Agreement that was modeled after the process they knew best,that is the litigation process as set out in the Rules of Civil Procedure.

The Model Arbitration Agreement is therefore founded on the Rules of Civil Procedure, but allows the parties to pick and choose which parts of the Rules apply and to create new procedures where the situation warrants.

For instance,the parties could choose to have discoveries just like in a lawsuit, dispense completely with discoveries or have limited discoveries. The choices provided in The Model Arbitration Agreement are only intended to inspire the desired alternatives. The options listed in this paper are not intended to be exhaustive, but rather are simply put forth as examples.


Each jurisdiction in Canada provides for compensation by statute to be paid for a victim of crime.

The Ontario statute is a typical example. A victim of a sexual assault may apply to the Criminal Injuries Compensation Board for financial recovery. There is no requirement for a criminal conviction, or that criminal charges have been laid, to succeed in the application. A criminal act must still be proven. The maximum sum allowed per applicant is $25,000. The application should be made within two years from the date of the event.771 It is possible to apply for a time extension.

By an amendment to this statute to take effect in September of 2016, there will be no time limit for this application where a crime of sexual violence occurred within a relationship of intimacy or dependency.

The application is intended for those persons who have not received compensation from the wrongdoer. It may be appropriate where there has been a human rights hearing, showing criminal conduct, where the award cannot be enforced due to the financial insolvency of the person found accountable.

The Board will consider, in assessing the quantum of the compensation for pain and suffering, factors such as the nature of the crime, whether there was a breach of trust, the age and vulnerability of the victim, the degree of violence exhibited, the gravity of any injuries suffered, the recovery period, the possibility of a continuing disability and the impact of the events on the victim’s life. In addition, there is compensation available for out-of-pocket medical expenses and travel expenses to receive same. A loss of income claim may be allowed up to $1,000 a month.772

Nova Scotia sets a cap of $30,000 and a lost income claim of $1,000 a month. It also allows for counseling services within certain limits.

Alberta sets the sum for a victim of sexual assault suffering from severe emotional issues as $40,000. New Brunswick has a maximum of $10,000, P.E.I. $15,000 and B.C $50,000.

If a sum is subsequently received by civil or other action, the payment must be reimbursed. Normally the statute provides for a subrogated right in favour of the Province. For example, Manitoba requires that the victim take action against the wrongdoer and the Province may do so in the victim’s name should she fail to do so. Should the victim take such action, any settlement must be approved by the Province.

In addition, it is generally possible to apply for interim relief in the event of financial need.

Quebec’s statute requires the victim to elect to sue or seek compensation from the fund. Should legal action be taken, which is less than the fund eligibility, a claim for the discrepancy may then be made.

Appendix 1 Statutes Defining Sexual Harassment:

Canada Labour Code s. 247.1

Canadian Human Rights Act does not define sexual harassment

New Brunswick Human Rights Code s. 10

Nova Scotia Human Rights Act s. 3(o)

P.E.I. Employment Standards Act s. 24

Quebec Charter of Human Rights and Freedoms s. 10

Ontario Human Rights Code does not define sexual harassment

Ontario’s Occupational Health and Safety Act defines “workplace sexual harassment” as of September 2016

Manitoba Human Rights Code s. 19(2)

Newfoundland & Labrador Human Rights Act s. 18

Saskatchewan Employment Act s. 3.1(1) l

Yukon Human Rights Act s. 14(1)

Nunavut Human Rights Act, s. 6-7

NWT Human Rights Act s. 14

B.C. Human Rights Code, s.13

Appendix 2 Summary of the General Reprisal Provisions in Human Rights Statutes

The purpose of the reprisal remedy is to allow complainants to be able to enforce their rights without the fear of repercussion.848

The Ontario Code also has a general related provision entitled “infringement” which prevents an employer from doing anything which may infringe a right under the Code.

As noted, there must be an actual complaint filed to engage the reprisal provisions of the B.C. Code.

The Alberta legislation allows for a reprisal claim in response to an actual complaint or an attemptedcomplaint. Such a reprisal claim can be made on a behalf of a person who had given evidence in a hearing, or otherwise participated in a hearing, or has made disclosure in a proceeding under the statute or has in any way assisted a person in the making of a complaint.

This wording is typical of many other Canadian human rights statutes.

Section 45 of the Saskatchewan Code forbids a reprisal due to the filing or threatened filing of a complaint, due to disclosure of evidence, testifying or likely testifying or participation in any other way in a proceeding under the Act.

Manitoba also has a very broad reprisal provision which covers the same grounds as that of Saskatchewan. In addition, it provides protection to any person who has complied with a Code obligation or has refused to contravene the Code.

For example, a manager who has refused to terminate an employee based on gender, and in turn is terminated for this reason, would have a remedy under the Manitoba statute.

The Quebec Charter of Human Rights and Freedoms has a very broad protective provision which prohibits unlawful interference with any Charter right. If the action in question is intentional, punitive damages may be awarded, otherwise the offended party may claim “compensation for the moral or material prejudice”.

Nova Scotia’s reprisal provision provides protection to a person who has threatened a complaint or filed a complaint. It also allows a remedy for adverse treatment afforded to a person who has given evidence or assistance given in the proceeding.

New Brunswick’s statute is similar. It prohibits adverse treatment due to the making of a complaint, giving evidence, or assisting in any way the initiation of the complaint.

The legislation of Newfoundland and Labrador is to the same effect. It prohibits reprisal due to the making of a complaint, the giving of evidence or helping in respect of the initiation or furtherance of a complaint.

Similar to the above is that of Prince Edward Island which prevents adverse treatment due to the making of a complaint, giving evidence or assisting with respect to the initiation of the case.

The federal statute allows for a reprisal remedy on behalf of a person who has filed a complaint or for the alleged victim where there has been retaliation or threatened retaliation.

The Human Rights Act of the Yukon is simple, effective and to the point. It prohibits retaliatory action or a threat of same against any person who has done or proposes to do anything permitted by the Act.

The North West Territories statute forbids reprisal against a person who has made or has threatened to make a complaint, or given evidence or otherwise participated in a proceeding or has intended to so.

The Act of Nunavut allows for a remedy in favour of any person who has been treated adversely due to notifying the Tribunal of a complaint or attempting to do so, given evidence or indicated an intent to do so, or otherwise participated or assisted in a hearing under the Act.