Cha-Ching: The High Cost of Failing to Remedy Workplace Discrimination

by Bennett Jones LLP

Last week, Gretchen Carlson, the Fox News anchor, sued Fox News chairman Roger Ailes, accusing him of harassment and sexism. Though Ailes denies the allegations, the trial will be closely followed, both because of the personalities involved and the highly-charged allegations. Closer to home, Raj Shoan, the former Ontario commissioner for the Canadian Radio-Television and Telecommunications Commission, filed a lawsuit alleging racism and harassment at the CRTC.

How are harassment or discrimination allegations treated by Ontario courts? In two recent decisions, the Court of Appeal for Ontario sheds light on how employers and employees can expect harassment or discrimination allegations to pan out.

In Strudwick v Applied Consumer & Clinical Evaluations Inc., Applied Consumer fired Vicky Strudwick for insubordination and misconduct after a “stunt” at a company event. In fact, for the last seven months of her employment, Applied Consumer’s employees had staged a campaign of discrimination and harassment against Strudwick, who is deaf, to force her to quit. She was called “stupid” and a “fool”. Her supervisor and the general manager refused even the most basic accommodations (for example, Strudwick offered to pay for a visual fire alarm—Applied Consumer refused). After she was fired, Applied Consumer refused to pay her any outstanding pay or benefits.

Strudwick sued. Applied Consumer didn’t defend the case at first, but then tried to delay the eventual trial. Ultimately, the trial judge awarded Strudwick $114,000 in damages (representing 24 months pay in lieu of notice). The Court of Appeal overturned this decision, awarding Strudwick over $240,000 in damages (it seems clear from the decision that the Court would have gone higher but was limited by Strudwick’s own claim). The court also awarded several other categories of damages, which were substantial:

  • $40,000 for violating Strudwick’s right to be free from discrimination in the workplace under the Human Rights Code;
  • $35,294 for the intentional infliction of mental suffering, which includes compensation for cognitive therapy and to address Strudwick’s pain and suffering;
  • $70,000 in aggravated damages for the way Strudwick was fired;
  • $55,000 in punitive damages because the compensatory damages awarded simply could not respond to Applied Consumer’s conduct.

Hamilton-Wentworth District School Board v Fair also dealt with discrimination allegations. There, Sharon Fair developed an anxiety disorder after working for the Hamilton-Wentworth District School Board for 13 years. After an 18-month leave, Fair sought to return to work. Though she was ready and able, the Board never considered her for various full-time job openings. Eventually, in July 2004, the Board fired her. For almost eight years, the case worked its way through the human rights system. Finally, in February 2012, the Human Rights Tribunal of Ontario found that the Board had discriminated against Fair. Over a year later, the Tribunal ordered the Board to reinstate Fair to a suitably equivalent position and pay her back wages from June 2003 (over $400,000). On appeal, the Divisional Court and the Court of Appeal upheld the Tribunal’s finding that Fair was not accommodated and upheld the damages awards.

The lessons from these two cases are simple:

  • employers must not only prevent workplace harassment and accommodate employees with disabilities but take active steps to stop ongoing harassment once they learn of such harassment;
  • if an employee is harassed or discriminated, they aren’t only entitled to wrongful dismissal damages;
  • under the Human Right Code, employers can be ordered to reinstate employees and pay them back wages, no matter how long the employee has been away from work and regardless of the cause of the delay;
  • Ontario courts can order a myriad of other damages to remedy the pain and suffering caused by the workplace harassment or the employer’s poor conduct during dismissal.

Both of these cases turn on very specific facts. But, in both cases, the employer’s failure to deal with the issues in a timely manner was one cause of both cases spiraling out of control, and causing serious damages for the employees.

Ontario employers are also reminded of the upcoming changes to the Occupational Health and Safety Act, which will come into force in September 2016, providing additional protections against sexual harassment in the workplace.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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