Labour & Employment. Law. Labour & Employment Law. News Summer 2005 EDITOR S MESSAGE. Jennifer M. Fantini. Tel:

Transcription

1 Labour & Employment Law News Summer 2005 Borden Ladner Gervais LLP Lawyers Patent & Trade-mark Agents Labour & Employment Law IN EVERY ISSUE 2 Ask a Labour & Employment Lawyer FEATURES 3 Keays v. Honda Canada Inc.; Landmark Punitive Damages Case Sends Strong Warning to Employers Susan Sorensen 9 Apportioning Responsibility: Fullowka v. Royal Oak Ventures Inc. Peter Eastwood 15 The Release of Human Rights Claims in Alberta Brian D. Portas 18 Must an Employer Accommodate an Employee s Family Obligations? Graham Clarke EDITOR S MESSAGE On behalf of the Labour & Employment Group, we hope you are enjoying a safe and happy summer. This edition of the newsletter features issues and cases at the forefront of the labour & employment law scene. Ask a Labour & Employment Lawyer focuses on employee discipline in the non-union sector. Our articles feature two high profile decisions in which Canadian courts have imposed liability upon employers: in Keays, for punitive damages; and in Fullowka for negligence in the context of a labour dispute. In addition, the effectiveness of Releases and the employer s duty to accommodate an employee s family obligations are addressed in this edition. I m sure you will agree that these articles cover timely and sometimes difficult issues you are likely to be faced with. If you have any suggestions for improvement or articles you would like featured in a future edition, please contact me directly. Jennifer M. Fantini Tel: Fax: jfantini@blgcanada.com C A L G A R Y M O N T R É A L O T T A W A T O R O N T O V A N C O U V E R W A T E R L O O R E G I O N

2 ASK A LABOUR & EMPLOYMENT LAWYER Can non-union employers implement lesser forms of discipline, short of dismissal? Many employers have adopted progressive discipline policies, akin to those seen in the union context which provide for increasingly serious forms of reprimand for repeated misconduct. The typical policy looks something like this oral warning, written warning, suspension, and then dismissal. And while employers are well advised to provide warnings where an employee s misconduct warrants it, it has been unclear whether an employer in the non-union setting is able to implement harsher forms of discipline, such as suspensions, without triggering a constructive dismissal. The Supreme Court of Canada specifically contemplated this issue in McKinley v. BC Tel. 1. Justice Iacobucci suggested that disciplinary measures short of dismissal may be appropriate when he commented that lesser sanctions for less serious types of conduct may be justified. For example, an employer may be justified in docking an employee s pay for any loss incurred by a minor misuse of company property. 2 Unfortunately, the McKinley decision merely opened the door for this type of discipline without clarifying when lesser forms of discipline will be appropriate, and what types of discipline will be acceptable. What about unpaid suspensions? Recently, Justice Echlin considered the propriety of suspensions without pay in the non-union setting, in Carscallen v. FRI Corp. 3 Christine Carscallen was suspended without pay after sending a series of allegedly insubordinate s to her supervisor. In reviewing the case law, the court confirmed that where an employer has just cause to dismiss an employee, it will be justified in suspending the employee without pay. Short of just cause, however, it has historically not been acceptable for an employer to suspend without pay as a means of disciplining an employee for misconduct. However, considering the McKinley decision, Justice Echlin concluded that the principle of proportionality required an effective balance between the severity of the employee s misconduct and the sanction imposed. 4 The court commented that if a right of suspension is contacted for it should be upheld as fair and reasonable, 1 (2001), 2 S.C.R Supra, paras 52 and [2005] O.J. No Supra, at para Labour & Employment Law News Summer 2005

3 only where a right of review (similar to the grievance process in the union context) exists. In the case of Ms. Carscallen, no express right to suspend existed and the court refused to find an implied term to suspend without pay in this case. Accordingly, Ms. Carscallen was found to have been constructively dismissed. Are paid suspensions less likely to result in constructive dismissal? with full pay and benefits, and for a relatively short duration. Moreover, where an express term of the employee s contract contemplates paid suspensions, such a suspension will not likely result in a constructive dismissal finding. This principle was confirmed by the court in the Carscallen decision. At the end of the day employers would be wise to have a clear policy permitting suspensions for disciplinary reasons. In such cases, and so long as the employer Past cases have shown that a court is more likely to find a paid suspension is justified and does not result in a fundamental breach of the contract. This is particularly likely where the suspension is ensures a suspension is appropriate in the circumstances of the case, pays the employee, and keeps the suspension short, it may be able to implement this form of discipline without attracting liability. KEAYS V. HONDA CANADA INC.; LANDMARK PUNITIVE DAMAGES CASE SENDS STRONG WARNING TO EMPLOYERS In a judgment released on March 17, 2005, 1 Justice McIsaac of the Ontario Superior Court of Justice made Canadian legal history by awarding $500,000 in punitive damages against an employer in a wrongful dismissal case. Until this judgement was released, similar punitive damage awards in Canada had not exceeded $175, In Ontario, the largest, previously reported, punitive damage award in an employment case was $50, The opening paragraph of the judgement clearly summarizes Justice McIsaac s view of the case: This wrongful dismissal action brings into sharp focus the 1 [2005] O.J. No Mustaji v. Tjin, [1996] B.C.J. No (C.A.). 3 Ribeiro v. Canadian Imperial Bank of Commerce, [1992] O.J. No (C.A.) See also Ilie v. Technologies Corp., [2003] O.J. No (Sup.Ct.Jus.) where a jury award of $60, in punitive damages was overturned. Labour & Employment Law News Summer

4 tension between the expectation of a computer-programmed workplace and the obligations of human rights legislation, in particular the requirement to accommodate employee disability to the point of undue hardship. For the reasons that follow, I have found on clear and convincing proof that the defendant sacrificed the latter in favour of the former and, in doing so, abused a decent and dedicated worker who has the misfortune to be afflicted with what the Centre for Disease Control ( CDC ) defines as the debilitating and complex disorder of Chronic Fatigue Syndrome The Facts The plaintiff, Kevin Keays, was a 14-year employee of the defendant employer, Honda Canada Inc. ( Honda ), originally hired in Mr. Keays worked at Honda s assembly plant in Alliston, Ontario, as a general labourer. Originally he worked directly on the production line. Later, he joined the Quality Engineering Department. Shortly after he commenced employment, Mr. Keays began to experience health problems which required him to be absent from work off and on. Accordingly, his performance evaluations over the years consistently reflected negative assessments in terms of his attendance at work. In 1996, his condition worsened. From October 1996 until December 1998, Mr.Keays was off work on long-term disability. In or about March of 1997, he was diagnosed as suffering from Chronic Fatigue Syndrome ( CFS ). Mr. Keays LTD benefits ceased on December A work capacity evaluation completed at that time indicated that he was capable of returning to work, at least on a modified basis. Under protest, Mr. Keays returned to work, but within a month of doing so, experienced further absences. By August 1999, these increased to approximately four absences per month. In January and February 2000, Mr. Keays absences totalled 14 days. Honda attempted to accommodate the plaintiff by taking him out of the regular attendance management program and placing him in what the employer called a phantom program. The phantom program required Mr. Keays to validate each absence from work with a doctor s note, but otherwise exempted him from any attendance-related progressive discipline so long as the absences were legitimate. Mr. Keays was not satisfied with this accommodation. He claimed that the necessity of producing a doctor s note for each absence prolonged his absences and generated further stress and frustration for 4 Labour & Employment Law News Summer 2005

5 him. Honda was also dissatisfied with the progress Mr. Keays was making. In particular, Honda noted that it was difficult to get any doctor to validate the necessity for Mr. Keays to absent himself from work as a result of CFS, since the doctor could only base his/her opinion on Mr.Keays selfreports of illness. Moreover, contrary to Mr. Keays attending physician s medical opinion, which estimated that Mr. Keays would likely require as much as four (4) absences per month, Mr. Keays was consistently absent 6-7 times per month. As a result of these concerns, in October 1999, Honda decided to get a second opinion regarding Mr. Keays condition from one of Honda s medical doctors and, later, from an occupational medical specialist. At the same time, Mr. Keays hired a lawyer to assist him in dealing with management. Mr. Keays was reluctant to meet with the specialist as he believed he was being setup for termination. In correspondence with Mr. Keays lawyer, Honda revealed that they needed him to meet with the specialist because they questioned the validity of Mr. Keays absences and wanted to confirm the necessity for on-going accommodation. When Mr. Keays continued to resist meeting with the specialist, he was fired for insubordination. This occurred on or about March 29, Following the termination, Mr. Keays developed post-traumatic stress disorder and began receiving a Canada Pension Plan disability pension. The Issues At trial, Justice McIsaac considered several issues. First, he looked at whether there was just cause for Mr. Keays dismissal, as alleged by Honda. Upon concluding that there was no just cause for the termination, the remaining issues dealt with damages and compensation, including an assessment of the appropriate period of notice, bad faith damages, damages for intentional infliction of mental suffering, damages for discrimination and harassment on the basis of a disability and the failure to provide appropriate accommodation, damages for lost disability benefits and punitive damages. The Decision 1. Just Cause Justice McIsaac held that in order to establish just cause for Mr. Keays dismissal, Honda needed to prove that the request to have Mr. Keays meet with the specialist was reasonable, and that there was no reasonable excuse for Mr. Keays to refuse that request. Assuming these were satisfied, Honda then needed to prove that in the context of this case, the dismissal was a proportionate response to Mr. Keays alleged insubordination. While Justice McIsaac was not at all convinced that the request to meet with the Labour & Employment Law News Summer

6 Justice McIsaac held that Honda s termination of Mr. Keays was a totally disproportional response to his alleged insubordination. specialist was reasonable, the focus of this part of the case was on the discussion respecting proportionality. Relying on the Supreme Court of Canada s judgement in Mckinely v. B.C. Tel 4, where the court affirmed that an employee s misconduct must be assessed in context before it can be concluded that termination is an appropriate response, Justice McIsaac held that Honda s termination of Mr. Keays was a totally disproportional response to his alleged insubordination for a number of reasons Mr. Keays had long service (14 years); the alleged insubordination did not involve any conduct displaying moral turpitude; the alleged insubordination was motivated by a legitimate concern that Mr. Keays legal rights under the Human Rights Code ( the Code ) were not being respected; the alleged insubordination was not accompanied by any act of insolence; Honda had alternative means of discipline available to it; and there was no evidence of a delay in production at the plant as a result of the refusal. refuse to follow Honda s requests respecting the meeting with the specialist:.i am satisfied that the Plaintiff had a significant reasonable basis to believe that Dr. Brennan would continue the refusal to recognize the legitimacy of his disability. I have no difficulty in accepting that the plaintiff has established a reasonable excuse for not attending on this newly-engaged expert in the absence of a written explanation of the purpose, methodology and parameters of his involvement 5 2. Notice Based upon the traditional factors (age, length of service, salary, position and availability of alternate employment) Justice McIsaac held that Mr. Keays was entitled to 15 months payment in lieu of notice. This was justified, in part, by Justice McIsaac s finding that Mr. Keays had spent his entire adult working life in the employ of Honda and that this specialized training in an auto production plant would not be readily portable to any other facility in the vicinity of Alliston. Accordingly, Justice McIsaac concluded that there was no just cause for Mr. Keays dismissal. In fact, to the contrary, he concluded that Mr. Keays had just cause to 3. Bad Faith Justice McIsaac was also of the view that Mr. Keays should be entitled to a further 9 4 [2001] 2 S.C.R Supra, fn. 1, at para 21 (QL). 6 Labour & Employment Law News Summer 2005

7 months notice for bad faith, for a total of 24 months pay in lieu of notice. The bad faith damages were justified in his view, because of the hardball approach taken by Honda in managing Mr. Keays absences and the accommodation of his disability. Justice McIsaac also relied upon medical evidence concerning Mr. Keays mental condition following (and apparently flowing from) the termination to justify this award. 4. Damages for Intentional Infliction of Mental Suffering Since Justice McIsaac awarded the plaintiff nine months of bad faith damages, he concluded that it was inappropriate to award additional damages on the basis of intentional infliction of mental suffering. 5. Damages for Discrimination/ Harassment Based upon a recent Ontario Court of Appeal judgement in Taylor v. the Bank of Nova Scotia, 6 which confirmed that breaches of the Code should only be addressed by the Human Rights Tribunal, Justice McIsaac held that the court was without jurisdiction to award damages based directly upon Honda s apparent failure to accommodate Mr. Keays. However, he did say that such breaches of the Code could be independent actionable wrongs supporting an award of punitive damages. 6. Lost Disability Benefits Mr. Keays also sought compensation from Honda for lost disability benefits that would have been available to him had he not been terminated. Because, this claim was not made until the closing submissions at the trial, Justice McIsaac held that these damages were not available to the plaintiff. 7. Punitive Damages As noted above, Justice McIsaac did award significant punitive damages to Mr. Keays. He held that punitive damages were available in this case because Honda was guilty of various breaches of the Code involving the harassment and discrimination of Mr. Keays on the basis of his disability. Accordingly, he agreed that these were independently actionable wrongs that could be compensated for independently of an award of reasonable notice. Justice McIsaac also held that an award of punitive damages was a rational and necessary response to Honda s outrageous mistreatment of their long-time employee. He relied, in part, upon the following findings to justify that conclusion: Honda attempted to intimidate Mr. Keays into meeting with the specialist for the purposes of gathering evidence to support a termination and thereby planned a deliberate corporate conspiracy against him; 6 [2005] O.J. No. 838 (Ont. C.A.). Labour & Employment Law News Summer

8 The Honda decision represents a giant leap away from this traditional line of thinking, and indicates an increasing willingness to hold employers accountable for a duty of fairness in the termination process. Honda s conduct and refusal to accept CFS as a legitimate disability persisted for over 5 years; Honda was aware of it statutory duty to accommodate Mr. Keays and was aware that his termination was a breach of that duty; Honda benefited from the misconduct because they rid themselves of what they viewed as a problem employee; Honda knew that Mr. Keays was dependent on remaining employed with them so that he could access LTD benefits. On this basis, Justice McIsaac concluded that Mr. Keays was entitled to $500, in punitive damages. No reasons were provided for how this figure was arrived at, however, Justice McIssac s contempt for Honda s apparent misconduct is evident throughout the decision. Conclusions The Honda decision is an important one for employers for several reasons. First, it represents a new willingness by the courts to award significant punitive damages in wrongful dismissal matters. Until this case, the general view was that such damages were available in employment cases but only in exceptional circumstances where the employer s treatment of the employee was particularly callous. In fact, the Supreme Court of Canada s most recent decision, commenting on punitive damage awards, Whiten v. Pilot Insurance Co., 7 held that punitive damages should only be awarded if they serve a rational purpose, i.e. where additional punishment of the employer is necessary because traditional compensatory damages (such as reasonable notice) are insufficient to achieve the necessary element of deterrence. Even where punitive damages have been awarded, courts before Honda generally kept these awards to a minimum, on the theory that the plaintiff was properly compensated for his/her damages through the award of an appropriate reasonable notice period. Accordingly, the Honda decision represents a giant leap away from this traditional line of thinking, and indicates an increasing willingness to hold employers accountable for a duty of fairness in the termination process. Second, the Honda case confirms and expands upon the contextual approach to just cause dismissal, first adopted in the McKinley award. In fact, Justice McIsaac s 3-part test to determine whether there was just cause for Mr. Keays dismissal appeared to borrow heavily from arbitral jurisprudence which generally requires employers to prove that dismissal for misconduct is a proportional and appropriate response in the circumstances of each particular case. In particular, Justice McIsaac s reliance on Mr. Keays 7 [2002] S.C.J. No Labour & Employment Law News Summer 2005

9 long service, and otherwise unblemished disciplinary record with Honda, indicated a willingness to consider traditional mitigating factors often discussed in arbitral caselaw. While we understand that Honda intends to appeal this ruling, Justice McIsaac s judgement should give employers some pause, particularly in handling troublesome STD and LTD absences. Susan Sorensen Tel: Fax: ssorensen@blgcanada.com APPORTIONING RESPONSIBILITY: FULLOWKA V. ROYAL OAK VENTURES INC. To what extent should employers and trade unions as well as others be responsible for the safety of workers during a labour dispute? In a much-anticipated recent decision by the Northwest Territories Supreme Court, Fullowka v. Royal Oak Ventures Inc., 1 the Court held that the actions or inactions of various parties contributed to the deaths of nine miners in the 1992 bombing of the Giant Mine in Yellowknife, NWT. Although the striking miner who actually set the bomb was convicted of second-degree murder in 1995, the Court in Fullowka determined that numerous other parties, including the employer, trade union, the security company hired by the employer during the strike, and the NWT government, were negligent because they did not do enough to prevent the bombing. These defendants were held liable for the more than $10 million in damages the Court awarded to the families of the dead miners. This decision is an important precedent in the areas of labour relations and occupational health and safety, and has significant ramifications for Canadian employers and trade unions, particularly as it interprets the duty of care of all parties with respect to the safety of employees during a labour conflict. BACKGROUND Royal Oak Ventures (the Company ) acquired the Giant Mine gold mine in The mine had a poor safety record and the highest number of lost time incidents for 1 (2004) n.w.t.s.c. 66. Labour & Employment Law News Summer

10 any mine in Canada. Royal Oak s CEO, Peggy Witte, publicly stated that she wanted to improve profits and productivity. She also introduced sweeping changes to ensure employee safety, including a zero tolerance policy on equipment damage, lateness and injury. These changes were not welcomed by many of the union executives, who encouraged workers to file grievances as a way of protesting these changes. In March 1992, the Company began negotiations with the Canadian Association of Smelter and Allied Workers ( CASAW ) after the collective agreement for the miners expired. A tentative agreement was reached; however, many union members, angered by the Company s attempts to consolidate operations, coerced and intimidated other workers to reject the agreement at the ratification vote. Weeks later, the union held a successful strike vote. The Company locked the workers out, and in an aggressive move to ensure profits during the strike, hired replacement workers to keep the mine running at full operations. At the time, CASAW was in negotiations with the Canadian Autoworkers Union ( CAW ) concerning a possible merger. Many of the CASAW and CAW leaders believed that the Company was trying to destroy the union, and saw the strike as a way of lobbying for anti-replacement worker legislation in other provinces. The strike began at midnight on May 22, The conflict escalated quickly, with vandalism, violence, and intrusions into the mines themselves. Within several days, the NWT government asked the RCMP to increase their strength in Yellowknife, as most officers in the community had been seconded to deal with the situation. Increasingly serious acts of violence took place. Several days after the strike began, striking workers threw rocks at busses and set fires on Company property, causing enormous damage and injuring several employees. As a result of these riots, the Company hired Pinkerton s of Canada, a security company with experience protecting replacement workers in strike situations, to guard the mine. The Company became aware that striking workers were gaining access to the underground, and received numerous bomb threats. Union leaders and members made increasingly violent threats, including threats of rape and murder, against replacement workers and their families. Although the NWT government s mining inspector expressed concern about the safety of the replacement workers working in the mines, the government did not intervene partly out of a concern that any action taken by the government would be seen as political interference in the strike. In June, strikers entered the property wearing protective hockey gear and pelted several buildings and people with rocks. As 10 Labour & Employment Law News Summer 2005

11 a result of the June riots, 40 striking workers were terminated. In July, a bomb was set on Company property. The RCMP became increasingly concerned that the strikers were gaining access to the explosives stored on site. Pinkerton s warned the Company that it had insufficient security personnel to adequately protect the replacement workers and property. By late summer, many striking workers had become frustrated and returned to work. On September 18, 1992, Roger Warren a striking miner who had been terminated as a result of the June riots gained access to the underground, transported explosives from an unlocked storage area, and set a bomb. It exploded at 8:45 am, killing nine men including six striking union members who had returned to work, and three replacement workers hired through another company. In 1995, Roger Warren was convicted of nine counts of second-degree murder and sentenced to life in prison. THE DECISION Legal action was commenced by the NWT Workers Compensation Board (the WCB ) on behalf of the families of the nine men killed in the blast. The plaintiffs claimed that each of the 13 named defendants had been negligent in causing or contributing to the wrongful death of the men. In his decision, Mr. Justice Arthur M. Lutz first reviewed the principles of negligence and foreseeability, in particular the defence of novus actus intervenius raised by many of the defendants that the harm was caused by the independent and intervening act of Warren s bombing. The judge stated that the intentional criminal acts of others may be considered foreseeable if these acts were very likely to happen. He held that Warren s bombing was foreseeable, on the basis that it was an elevation of other criminal acts committed by others, including property damage, sabotage, and infliction of unlawful acts on other engaged in the strike milieu. In the assessment of liability, he held that Warren should be held 26% liable for setting the blast. With respect to the negligence of the other defendants, the Court s findings can be summarized as follows: Royal Oak Mr. Justice Lutz stated that employers owe a duty of care to all those who enter their workplace. He further noted that employers who create or control a risk for their own benefit have a higher duty to those who are potentially affected by the risk. As the Company had taken an unreasonable bargaining position and brought in replacement workers to continue production during the strike, it had a higher standard of care to its workers. Mr. Justice Lutz stated that employers owe a duty of care to all those who enter their workplace. He further noted that employers who create or control a risk for their own benefit have a higher duty to those who are potentially affected by the risk. Labour & Employment Law News Summer

12 The Court determined that the Company s negligence arose out of the following conduct: (1) It had used replacement workers to maintain its operations but had not adequately warned these workers of the risks to their safety and security, and it had failed to respond to Pinkerton s recommendations for further security measures; (2) Although the Company had implemented some safety requirements, it had failed to strictly enforce applicable health and safety legislation, and in particular, the provisions of the Mining Safety Act concerning access to mine shafts; and (3) The Company had refused to negotiate in good faith as required under section 50 of the Canada Labour Code, and had further inflamed the labour dispute by using replacement workers. CAW National Although CAW was not the official bargaining agent for the striking workers at the time, it was found to have beneficially absorbed CASAW through the subsequent merger. The Court held that the union was negligent by: (1) Failing to negotiate during the strike and bargaining in bad faith (as was subsequently found by the Canada Labour Relations Board and Supreme Court of Canada); (2) Encouraging, promoting and condoning violent and criminal acts by its members by paying legal fees for lawyers representing individual members and fines out of union funds, and by refusing to discipline members who had committed these acts; and (3) Failing to control its membership by providing incompetent and ineffective leadership during the strike. As a result of these actions, the Court found that the Company should be held 23% liable. The CAW was therefore held responsible for 22% of the liability. Pinkerton s The Court held that Pinkerton s had failed to guard the mine site entrances to prevent 12 Labour & Employment Law News Summer 2005

13 striking miners from accessing the underground mine shafts. It was also negligent in using inexperienced guards, reassuring replacement workers of their safety despite known risks, and failing to keep proper security logs and records. The Court found that Pinkerton s should be held 15% liable. ANALYSIS The Court s decision in Fullowka demonstrates that violence during a labour dispute must be considered as any other health and safety risk in the workplace, and must be prevented. As stated by Mr. Justice Lutz: NWT government The Court noted that health and safety legislation imposes duties on both employers and government, and that the government must make the necessary investigations and inquiries to ensure that employers are complying with safety provisions. As the NWT government was aware that the safety of the miners was in danger, but had not taken any preventative action, it was negligent in not enforcing the applicable legislation. The Court found that the government should be held 9% liable. Others The Court refused to find several of the individually-named defendants liable, including Peggy Witte, William Sheridan, the Company s general counsel, and Buzz Hargrove, the CAW president. However, a total of 5% liability was apportioned to three union members for their actions during the strike. It would be the height of naivety not to have foreseen, as the strike unfolded, with the progression of inflammatory language, injury and death threats, infliction of personal injury, watching and besetting of homes of replacement workers, property damage and sabotage, and the pervasive view that someone was going to be killed, that a Warren act would happen. For employers, the following conclusions by the Court are important to note: 1. Employers and unions must take reasonable bargaining positions during labour disputes. The Court s findings that both the Company s and the union s bargaining positions were negligent in themselves is significant this suggests that hardball bargaining and using replacement workers in situations where violence could result may found a claim in negligence in the civil context, above and beyond labour relations issues. Labour & Employment Law News Summer

14 2. Employers must warn employees of all safety risks, including workplace violence and other hazards during a labour conflict. Employers must ensure that replacement workers and all employees working during a strike are adequately and accurately warned of all potential risks to their safety, and are properly protected against such risks. The Court found that the Company was negligent in providing false assurances of safety to its replacement workers despite knowing that their safety was at risk. 3. Health and safety obligations must be implemented and followed through. Employers must ensure that they are not merely paying lip service to health and safety obligations. As noted by the Court, the "depth of health and safety obligations must be understood and maintained at all times, even during a strike. Mr. Justice Lutz stated that the Company s failure to continue occupational health and safety committee meetings in the months before the bombing, and its failure to strictly enforce all applicable health and safety legislation, were blatant acts of negligence. 4. Employers must take all threats seriously. In his decision, Mr. Justice Lutz dismissed the unions arguments that their threats of violence were just strike talk. Employers should carefully monitor all comments and threats made by employees during a strike, and take these remarks seriously. Employees participating in violent or unlawful acts should be clearly disciplined. CONCLUSION The Fullowka decision is likely to be appealed by at least one of the defendants. However, this decision sends a clear message to employers and unions alike that all parties must share responsibility for any acts of violence that occur during a labour dispute. Employers must take all reasonable steps to protect workers from any known risks of violence or face being found negligent, and liable, for any harm that results. Peter Eastwood Tel: Fax: peastwood@blgcanada.com 14 Labour & Employment Law News Summer 2005

15 The Release of Human Rights Claims in Alberta An important condition of most severance offers is to require the employee to sign a release waiving the employee s right to take any action against the employer for further payments. When employees sign a standard release form in conjunction with a termination, employers may assume they are released from all claims arising from the employment relationship. This may not be the case, however, for claims asserted under human rights legislation such as allegations of discriminatory employment practices. Generally speaking, employees cannot contract out of the protection of human rights legislation as a matter of public policy. This position is justified given the fundamental principles and the purpose of human rights legislation across Canada. For example, the Alberta Human Rights, Citizenship and Multiculturalism Act recognizes that everyone in Alberta has the right to be treated with dignity and equality. Furthermore, it is a legislated right that every person in Alberta is protected from discrimination under certain prohibited grounds such as age, gender, race, and religious beliefs. On the other hand, fairness would seem to dictate that where an employer has obtained a waiver of the right to pursue claims from the employee, the employer ought to be able to rely on the enforceability of that release. It can be a frustrating situation for an employer who has made a substantial severance payment and gone to the effort to secure a release, only to find it is still vulnerable to a human rights complaint. A leading case in Alberta, Chow v. Mobil Oil Canada, 1 addressed whether the Alberta Human Rights Commission had jurisdiction to: (1) hear a complaint where a release had been executed; (2) determine whether the release was valid and enforceable; and (3) consider any other issue, if the release was valid and enforceable. The Alberta Court of Queen s Bench concluded that the Commission s jurisdiction ended if the release was found to be enforceable. In the Chow case, an engineering assistant with Mobil Oil was offered a severance package which required the execution of a release. After receiving legal advice regarding the terms of the severance package, Ms. Chow accepted the package and signed the release. She then filed a human rights complaint alleging discrimination based on incidents which arose while she was employed with Mobil Oil. Justice Rooke s opinion is summarized as follows: 1 [1999] A.J. No. 949 (Q.B.). Labour & Employment Law News Summer

16 Where there is a release, the validity of which is not reasonably in dispute or is conceded, I am of the opinion that the Director has the jurisdiction to dismiss the complaint for lack of merit. However, where the complainant reasonably objects to the validity of a purported release, I am of the opinion that only a Panel has the jurisdiction to determine the matter. In making its determination a Panel must consider the same factors which would be considered by a court of competent jurisdiction. 2 As a result of the Chow decision, the Alberta Human Rights Commission has established a different process for a human rights complaint when there is a severance agreement that includes a release. If there are reasonable questions about the validity of a signed release, the chief commissioner will appoint a panel to determine if the release is legally binding and enforceable before the human rights complaint process can take place. The employee must explain to the panel why they believe the release is not valid. Both the employer and the employee may provide written submissions or oral evidence at the panel hearing. If the panel finds that the release is valid, it must dismiss the complaint. If the panel finds the release is not valid, it will return the complaint to the director of the Commission and the complaint will proceed through the usual investigatory process. 3 The Alberta Human Rights Commission has consistently taken the following factors into account in its assessment of the validity of a release: 1. the actual language of the release itself as to what is included, explicitly and implicitly; 2. whether the release was unconscionable because of the unequal bargaining power between the parties or a substantially unfair settlement; 3. whether the release was signed under coercion or oppression as a result of undue influence exercised by the dominant party; 4. whether the employee had the opportunity to seek independent legal advice prior to signing the release; 5. whether the release was signed under duress or illegitimate pressure; 2 Ibid. at paragraph See Employment: Releases, severance agreements and human rights law, Information Sheet (Alberta Human Rights and Citizenship Commission: May 2004). 16 Labour & Employment Law News Summer 2005

17 6. knowledge of the party executing the release of their rights under human rights legislation and possibly the knowledge of the party receiving the release that a potential complaint under the act is contemplated; and 7. any other consideration, including lack of capacity, timing, mutual mistake, forgery or fraud. 4 in its release that specifically makes reference to the applicable human rights legislation and past acts of alleged discrimination. Not only will this assist the employer in arguing that the language of the release explicitly included these types of claims, it may also make it more difficult for the employee to argue that they were unaware of any potential rights under human rights legislation. A release is more likely to withstand scrutiny from the court or a human rights commission if the employer takes the same precautions it should take when entering into any agreement with an employee such as an employment agreement. In particular, the employer should give the employee ample time to review the document and, if they choose, obtain independent legal advice before signing it. An employer must also avoid making any sort of threats or representations that would lead to allegations of duress or undue influence. Given the case law in Alberta, it also seems prudent for an employer to include a clause Brian D. Portas Tel: Fax: bportas@blgcanada.com 4 See Chow, at para 104. Labour & Employment Law News Summer

18 MUST AN EMPLOYER ACCOMMODATE AN EMPLOYEE S FAMILY OBLIGATIONS? Before any duty to accommodate exists, an employee must first prove prima facie discrimination on a prohibited ground (age, sex, family status, etc). The burden of proof will then shift to the employer to demonstrate that it was unable to accommodate the employee without undue hardship. How are courts and tribunals applying these principles to an employee s family responsibilities? a) Family Status and an Employee s Family Obligations grievor s work day ended. For several reasons, none of which was ever impugned, the employer analyzed its requirements and changed the grievor s employment hours so that she was required to work from 11:30 a.m. to 6 p.m. The purpose of this change was to enable her to help the children who returned to the shelter after school. The change in hours affected the grievor s time at home with her son and her family responsibilities. Ultimately, the grievor took a stress leave and did not return to work. The union filed a grievance alleging that the change in hours discriminated against the grievor on the basis of family status. In Health Sciences Association of British Columbia v. Campbell River and North Island Transition Society 1, a youth support worker was employed to work between 8:30 a.m. and 3 p.m. at a shelter for women suffering marital abuse. Those hours allowed the grievor to return home in mid-afternoon to care for one of her four children who had severe behavioural problems. The shelter also offered counselling to resident children affected by family violence. Many of the children it served did not return from school until after the The arbitrator at first instance adopted what could be called the traditional view of family status : I conclude that these differing circumstances, many of which may result in individuals trying to balance work and child-care arrangements, are not the kind of circumstances that raise an issue of discrimination based on the prohibited ground of family status. Rather, the Legislature by deliberately employing the words family status, was 1 [2004] B.C.J. No. 922 (B.C.C.A.). 18 Labour & Employment Law News Summer 2005

19 concerned with discrimination based upon the very status of being a parent, or other family member. Thus family status in these circumstances deals with the status of parent and child, and not with the individual circumstances of a family s needs, such as those concerning childcare arrangements. I therefore conclude that all parents that (sic) experience difficult childcare arrangements, as a result of their employment, are not a class or category that section 13 of the Human Rights Code seeks to protect. 2 However, the arbitrator s decision was appealed by the union. The British Columbia Court of Appeal disagreed with the arbitrator s interpretation of family status, and held that in limited circumstances, family status can encompass important family responsibilities: In the usual case where there is no bad faith on the part of the employer and no governing provision in the applicable collective agreement or employment contract, it seems to me that a prima facie case of discrimination is made out when a change in a term or condition of employment imposed by an employer results in a serious interference with a substantial parental or other family duty or obligation of the employee. However, the court went on to conclude that a prima facie case would be difficult to establish in the vast majority of situations in which there is a conflict between the work requirement and a family obligation. As a result, the Court of Appeal found that the youth support worker s need to care for her child fell within the exceptional circumstances needed to find a prima facie case of discrimination. The Court of Appeal remitted the grievance back to the original arbitrator for a full evidentiary consideration of whether the shelter would be able to accommodate the grievor s family needs without experiencing undue hardship. b) Pregnancy and the Need to be Available to Complete a Fixed Term Job Posting In Re Calgary Health Authority and U.N.A., Local 115, 3 an arbitration board considered whether a pregnant employee was entitled to a fixed term position if she could only work half of the fixed 9-month term. The arbitration board focused on whether 2 Ibid, para 18 (C.A.). 3 (2001), 101 L.A.C. (4th) 385. Labour & Employment Law News Summer

20 availability for the entire term was a core component of the position being posted. The arbitration Board concluded that the availability requirement was a bona fide occupational requirement. The Board stated 4 : The rule is rationally connected to performance of the temporary position, since the only reason for the posting is to find a person who can perform the job for a relatively short fixed term. There is no issue of the employer s good faith in adopting the rule - it was clearly not to weed out pregnant women. In fact, pregnant but otherwise available women have received temporary positions in the facility. Finally, it is reasonably necessary to accomplish its purpose without accomplishing undue hardship. In determining whether the grievor could be accommodated without causing the employer undue hardship the Board concluded: In that regard, we are satisfied that the only accommodation possible is to adjust the qualification so that the grievor does not have to be available for the term - and to hire someone else to carry the position for the period that she is unavailable. We are further satisfied that this would constitute an undue hardship.... In this case, the only reason for the posting is to find someone to cover a temporary vacancy. It is an undue burden upon the employer to require them to place in the position someone who is not available for a significant portion of the term. The arbitration Board s decision was quashed on judicial review and then appealed to Alberta s Court of Appeal. In its, the Court of Appeal 5 agreed that the arbitration Board s decision could not stand. Being denied a term position due to unavailability caused by pregnancy raised a prima facie case of discrimination. Furthermore, the Court of Appeal found further that there was no evidence of undue hardship 6 : The Board found that the only accommodation possible was to adjust the qualifications so that the employee would not have to be available for the full term, requiring someone else to be hired for the balance of the term. The Board found that such an adjustment would result in 4 p United Nurses of Alberta, Local 115 v. Calgary Health Authority, [2004] A.J. No Supra, at para Labour & Employment Law News Summer 2005

21 undue hardship, although it did not require any evidence of such hardship to be adduced by the Hospital. The Court of Appeal criticized the arbitration board for failing to balance the employer s requirement of availability with the employee s right not to have availability requirements result in prohibited discrimination. The Court of Appeal also noted that a temporary employee (the grievor s status had she been awarded the position), had access to maternity benefits, including leave. The Court of Appeal was of the view that insisting that pregnant applicants for temporary positions commit to being available for the whole term of a position, would bring into question when maternity benefits would ever be payable by the Hospital to a temporary employee 8. The Court concluded that accommodating the greivor s maternity leave, in the absence of any evidence to the contrary, did not cause undue hardship to the Hospital. c) Family Status and the Right to Benefit from Work- Related Allowances when off on Family-Related Leave In Re Ontario Public Service Employees Union and Ontario Public Service Staff Union 9, the issue was whether a collective agreement which provided a car allowance to working employees, but not for those on parental leave, violated the Code on the ground of family status. Arbitrator Mitchnick noted that the car allowance did not distinguish between employees who had families and those who did not. Rather, the distinguishing factor was that those benefiting from parental leave did not meet the condition precedent of concurrently using their vehicle for both business and personal reasons. In comparable situations, such as for education leave, where the employee no longer used his/her vehicle for business reasons, the allowance was similarly interrupted. The denial of the car allowance therefore was not discriminatory. 8 Ibid, para (2001), 97 L.A.C. (4th) 279 (Mitchnick). Labour & Employment Law News Summer

22 d) Family Status and the Use of Paid Sick Leave for Family-Related Needs decision in Campbell River. The test might now be whether the change in hours resulted in a serious interference with a substantial parental duty or obligation. In Simcoe County District School Board v. OPSEU, Local , the grievor alleged a change in her hours coupled with her employer s refusal to grant four hours of sick leave each week so that she could take her special needs child to karate lessons discriminated on the basis of family status. Health care providers had recommended karate lessons as part of her son s therapy. Arbitrator Davie rejected the union s argument that the school board had discriminated on the basis of family status: The evidence does not indicate that the grievor was discriminated against because of her family status, or because she is a single parent of a child with neurological disorders. There is no allegation that the grievor is handicapped and needs to be accommodated. The Employer does not owe the grievor s son a duty to accommodate without undue hardship. d) Summary There are few cases to date applying the human rights concepts of family status and/or marital status to an employee s obligations at home. Given the recent Campbell River decision, legislation prohibiting discrimination in employment may start to be applied to family areas perhaps never contemplated by the legislators: that is, family status may be extended to encompass an employee s family obligations. Graham Clarke Tel: Fax: gclarke@blgcanada.com It is difficult to know whether the reasoning used to reject the family status issue in this case would change given the 10 (2002), 103 L.A.C. (4th) 309 (Davie). 22 Labour & Employment Law News Summer 2005

23 LABOUR & EMPLOYMENT LAW GROUP Calgary Toronto Robert D. Bourne Stefan J. Gruszka Isha Khan David T. Madsen Brian D. Portas Laurie M. Robson Frederick W.T. Somerville Montréal Don Alberga Thomas M. Davis Valérie Dufour Rosaire S. Houde François Longpré Katherine Poirier Jean-René Ranger André Royer Patrick Trent Philippe C. Vachon Ottawa Fay K. Brunning Noëlle Caloren Graham Clarke André A. Ducasse Matthew L.O. Certosimo Jennifer M. Fantini Michael P. Fitzgibbon Melany V. Franklin Michelle S. Henry Carole E.C. Hoglund Robert W. Kitchen William R. MacLarkey Jennifer E. Maurer Jeffrey P. Mitchell Brian D. Mulroney Genny Na Eric M. Roher Susan E. Sorensen Melanie A. Warner Robert W. Weir Vancouver Peter Eastwood Sara M.J. Gittens Shelley-Mae Mitchell Julie D. Nichols Gabriel M. Somjen Steve M. Winder This newsletter is prepared as a service for our clients and other persons dealing with labour and employment issues. It is not intended to be a complete statement of the law or an opinion on any subject. Although we endeavour to ensure its accuracy, no one should act upon it without a thorough examination of the law after the facts of a specific situation are considered. No part of this publication may be reproduced without prior written permission of Borden Ladner Gervais LLP. This newsletter has been sent to you courtesy of Borden Ladner Gervais LLP. We respect your privacy, and wish to point out that our privacy policy relative to newsletters may be found at If you have received this newsletter in error, or if you do not wish to receive further newsletters, you may ask to have your contact information removed from our mailing lists by phoning BLG-LAW1 or by ing subscriptions@blgcanada.com. Labour & Employment Law News Summer