Human Rights Remedies & Employment Contracts - The Law of Workplace Sexual Harassment in Canada
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Human Rights Remedies & Employment Contracts

Human Rights Remedies & Employment Contracts

Lost Income Claim & Severance Clause

An employment agreement which sets out a sum to be paid, or notice provided in the event of a termination, will be of no consequence in a lost income assessment in a human rights context. Given the “but-for“ analysis, the basis of the lost income remedy, such a termination provision in the contract will not be an issue in defining the lost income claim.1 In one case this position not even argued by the employer.

Fixed Term Contract

Absent unusual circumstances, a fixed term contract will be have the opposite impact. It will be effective to define the likely loss of income claim. If the contract has, for example, two months left in the original term, the employer’s liability will be reduced to this time period.

It may still be open for the employee to argue that the company’s apparent practice of renewing all such similar contracts, if so, could lead to this same presumption in favour of the applicant.

Absent such a practice, or other affirmative evidence proving the likelihood of the relationship continuing despite the contract, the claim will be defined by this term in the contract.

The existence of similar contractual terms was found to be a factor in assessing the income loss in the one Alberta decision.2 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.

Challenging the Contract

Oddly enough, present human rights case law denies either party to challenge the validity of the employment contract, based on the often made submission that the agreement is in conflict with the Employment Standards Act. A fixed term contract in Ontario for a time period of 12 months or more must be compliant with the ESA.3 

One human rights claim was met by a defence that the employee had signed a release. The employee proposed to rebut this plea by arguing that the release document was not enforceable as the compensation offered had failed to satisfy the statutory minimum requirement.

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. 4 The decision hence stated that in order to give the tribunal jurisdiction that the applicant would need to prove that the release itself was motivated by an independent 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.

This argument makes no sense.

The Origin?

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.5 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.

Supremes Speak on Similar Issue

The Supreme Court of Canada 6 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”.

Charter Violation But No Interpretative Power?

Further, it makes no sense that the Tribunal has the power to conclude that the Employment Standards Act is contrary to the Charter of Rights and Freedoms in a direct attack on the issue of the post 65 denial of benefits and refuse to interpret the same statute in a collateral attack.7

More is to come, without doubt, hopefully.






  1. Morgan v Herman Miller (Debane)
  2. Alberta Human Rights Tribunal in Cowling v The Queen
  3. Regulation 288/01 under the Employment Standards Act (“ESA”) requires notice to be paid for fixed term employees if the term of the contract is greater than 12 months or if the term of the contract has been extended by 90 or more days beyond the original end date.
  4. Walkinshaw v Complex Services (Slotnick); The employee’s request for reconsideration was dismissed without reference to the merits of the initial decision
  5. Powers of Tribunal

    39.The Tribunal has the jurisdiction to exercise the powers conferred on it by or under this Act and to determine all questions of fact or law that arise in any application before it. 2006, c. 30, s. 5.

  6. in its 2006 decision of Tranchemontagne v Ontario (Director, Disability Support Program)
  7. Talos v Grand Erie District School Board

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