Notional Termination in Human Rights Remedy

Notional Termination in Human Rights Remedy

Suppose this fact situation:

1. A long-term employee asserts that they have been terminated due to a clear violation of the Human Rights Code;
2. A human rights complaint is filed.
3. Liability is proven or admitted.
4. There is clear evidence to support the employer’s argument that it had planned to close the business or relevant operating division within 3 months.

So what is the claim for lost income under the Code?

Not much. It will likely be limited to the 3 month period as the employer will be able to successfully argue that “but-for” the breach, the employee would have only been employed for the 3 month period.¹

In one comparable case, the employer successfully argued that the employee was, in any event, doomed to be terminated due to performance issues.²

Issues such as the employer’s solvency and similar factors may similarly be considered to limit the likelihood of the continuum of the income loss.³

Notional Termination

Can the employee not argue, that but for the unfair conduct, they would have continued to be employed until the close of business and then would have received their statutory sum and/or common law entitlements?

For reasons which follow, the HRTO has not awarded these incremental sums for a “notional termination” on which the employer relies to minimize the lost income claim.⁴

In this fact situation, the remedy to be followed, at least for the lost earnings claim, would be to assert a constructive termination⁵ and claim the ESA and common law remedies and discard human rights relief.

Failing this action, the employee’s position will be in peril. Under the administrative process, there will be no claim for the statutory and common law claims.

Human Rights – No claim for ESA and Common Law in Notional Termination

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.⁶

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 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.

Cannot Interpret the ESA for Collateral Effect?

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.⁷

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.

Bizarre Law

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.⁸The 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 relief⁹.

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 at month three, it should then follow that the damage claim would include not only three 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.

SCC Suggests Otherwise

The Supreme Court of Canada¹⁰ 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.

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.

The complainant in Ontario has the comfort of being able to sue civilly to claim human rights relief provided that it is accompanied by a civil action. On these facts, the plaintiff should be careful to plead a civil constructive dismissal to allow for recovery of lost income. The question will then become which claim should be pleaded in the alternative. It is presumably not possible to seek compensatory damages under the Code and a lost income claim by the ESA and common law.

 

1. Hughes v 1308581 Ontario Ltd. (business closed); Canadian Human Rights Tribunal decision in Milano v Triple K (Mactavish)
2. Ontario Tribunal in Clennon v Toronto East General (Hart); An unsuccessful reconsideration motion followed. In the final remedy hearing, the Tribunal did find that the applicant would have been terminated one year following and awarded the same severance offer as had originally been offered at the time of termination.
3. Kooner-Rilcof v BNA Smart Payment B.C. HRT; Hughes v 1308581 Ontario Ltd. (business closed) , Milano v Triple K (staff reductions) Schulz v Lethbridge (medical ability to return to work)  See also Morris v. British Columbia Railway Co. (2003), 46 C.H.R.R. D/162, 2003 BCHRT 14.
4. The sole case to the contrary is the Clennon decision, in which there was evidence of the original termination offer.
5. Presuming, of course, that the violation is sufficiently severe to constitute a constructive termination. Not all human rights violations will reach this threshold.
6. Puleio v Moneris (Muir); Pilon v City of Cornwall (Muir); Walkinshaw v Complex Services (Slotnick)
7. Walkinshaw v Complex Services (Slotnick); The employee’s request for reconsideration was dismissed without reference to the merits of the initial decision.
8. 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.
9. Fair v Hamilton–Wentworth District School Board, (Joachim), in this instance obiter, which was not considered by the Divisional Court and Court of Appeal.
10. in its 2006 decision of Tranchemontagne v Ontario (Director, Disability Support Program)