Employer’s egregious conduct in the course of a dismissal attracts both moral damages and human rights damages

The Court of Appeal for Ontario has recently issued a decision that should serve as a stark reminder to employers to treat employees respectfully and in good faith throughout the termination process. Where an employer’s behaviour dips below a threshold level of decency during the course of a termination, the employer may find itself exposed to “moral damages.” This was the case in Doyle v Zochem, in which the Court of Appeal for Ontario awarded $60,000 to a former employee for moral damages, in addition to wrongful dismissal damages, human rights damages, and legal costs.

According to the Supreme Court of Canada, moral damages are available whenever an employer engages in conduct that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.” Importantly, the time frame for the impugned conduct is not limited to the moment of dismissal – conduct both before and after the termination may be considered in an award for moral damages, so long as it is “a component of the manner of dismissal”.

In Doyle v Zochem, both the trial judge and a unanimous Court of Appeal agreed that the employer’s conduct clearly warranted moral damages. Among other things, Zochem’s inappropriate pre- and post- termination conduct included:

  • instructing other employees to “dig up dirt” on Ms. Doyle;
  • pressuring her to sign a release without advice from counsel; and
  • taking Doyle’s car keys from her purse and moving her car without even asking her permission on the day of her termination.
  • failing to respond appropriately to the plaintiff’s sexual harassment complaints and instead responding in a way that the Court of Appeal described as “insensitive to the point of verging on cruel”.
  • .

Indeed, as the Court noted, the trial judge found that Doyle’s gender and sexual harassment complaint were likely the most significant reasons for why she was terminated.

Admittedly, the egregious behaviour of the employer made this an easy case to justify moral damages. In fact, even the employer did not dispute the propriety of moral damages on appeal, instead requesting that the quantum be reduced to $20,000.

Of note, the Court of Appeal rejected Zochem’s submission that awarding both moral damages that took into consideration sexual harassment and Human Rights Code damages for infringing Doyle’s right to freedom from harassment was double recovery.  As the Court explained, moral damages are awarded as a result of the manner of dismissal, where the employer engages in conduct during the course of dismissal that is unfair or is in bad faith that caused mental distress.  By contrast, Human Rights Code damages are remedial, not punitive in nature. They provide compensate for the intrinsic value of the infringement of rights under the Code; in Ms. Doyle’s case, the right to be free from sexual harassment in the workplace.

As the Court of Appeal stated, “Where, as here, the awards in question vindicate different interests in law, there will be no overlap in the damages awarded although the same conduct is considered.”

New workplace harassment obligations in Ontario

In a new webinar, lawyers from the firm discuss the new requirements for Ontario employers to prevent sexual violence and harassment in the workplace after amendments to Bill 132 came into effect on September 8, 2016. The new requirements revise the definition of “workplace harassment”, impose new requirements for workplace harassment prevention programs and establish new requirements for conducting internal investigations. The Ontario Ministry of Labour has also prepared a recent Code of Practice that will be highly informative for employers needing to comply with these new requirements.

This audio webinar examines:

  • The new requirements;
  • Best practices in implementation of a workplace harassment policy and program;
  • How to conduct an appropriate investigation into a complaint of harassment; and
  • Strategies for providing information and instruction to workers in compliance with the law.

To listen to the webinar, please click here.

Ontario’s Labour and Employment Laws May Be Changing:  Waiting for the Changing Workplaces Review Final Report

Over the past month there has been a lot of press and speculation about the status of the changing Workplaces Review and, in particular, when we can expect the final report of the special advisors, former union-side labour lawyer C. Michael Mitchell and former Ontario Superior Court judge and management-side labour lawyer John C. Murray.

The special advisors’ Interim Report, released by the Ontario Ministry of Labour in July 2016, identifies approximately 50 issues affecting Ontario workplaces and over 225 options for reforming the Labour Relations Act, 1995 (LRA) and the Employment Standards Act, 2000 (ESA) to better protect vulnerable workers and those in precarious work situations, while supporting business is our changing economy.  Some of the options considered in the Interim Report, if enacted, could cause seismic changes for Ontario employers.  For example, the special advisors noted that they heard a lot from stakeholders about scheduling hours of work.  To that end, the options in the Interim Report include requiring employers to post work schedules at least two weeks in advance; get workers’ consent before adding hours or shifts after the initial schedule is posted;  pay employees more for last-minute changes to their work schedules; and offer existing hours of work to part-time employees before hiring new employees.  Other options for change of significant concern to employers include eliminating the managerial exemption and adding a “just cause” provision to the ESA, and overhauling the certification process in the LRA.

Following the release of the Interim Report, the Ministry invited stakeholders to make further submissions by mid-October.  However, since that deadline passed the Ministry has been fairly quiet about the status of the Review and when we might expect the release of the special advisors’ final report and recommendations.  The Ministry’s Changing Workplaces Review webpage simply states that the special advisors “are now preparing a final report and recommendations”. Speaking at a Greater Niagara Chamber of Commerce event earlier this month, Minister of Labour Kevin Flynn said he expects to see the final report this spring.

Dishonesty in Hiring Process Constitutes Cause for Dismissal

A recent decision of the Ontario Superior Court of Justice has confirmed that, in certain scenarios, an employee’s dishonesty in the hiring process will constitute cause for dismissal.

The defendant employer, Canada’s leading nuclear energy agency, is required to comply with government rules respecting site access security clearance.  As such, candidates for employment are required to complete a security questionnaire, which requests, among other things, a complete employment history for the five years prior.  The plaintiff, in completing the questionnaire, omitted a short-term position which he had held for only a number of weeks.  When asked by the employer to confirm his employment status during the period of time in question, the plaintiff maintained that he had been unemployed.  The plaintiff was ultimately granted security clearance. After approximately 6 months the plaintiff’s employment was terminated.

The plaintiff’s claim for wrongful termination was dismissed by way of summary judgment.  The Court stated that, while dishonesty does not automatically give rise to cause, where the dishonesty “goes to the core of the employment relationship”, just cause for dismissal will be established.  The Court reasoned that the defendant in this case is not a regular employer and it conducts security checks for reasons that go well beyond the usual assessment of suitability based on past performance.  Here, the requirement for thorough security checks is “tied to the security of the nation”.  In light of this context, the plaintiff’s omission amounted to dishonesty that went to the core of the employment relationship and was irreconcilable with sustained employment.

Written with the assistance of Erika Anschuetz, articling student. 

Employment and Labour Law – 2016 Year in Review

Our Employment & Labour  – 2016 Year in Review publication is a summary of common law and civil law cases and monthly developments from 2016, it also compiles a number of important cases and others to watch for in 2017, all of which could potentially have an impact on the management of your human resources. Read about the new laws, regulations and 15 major cases that will have an impact on your company now and into the future. This year’s review covers both the common law and Civil Code and is indexed by month, region, and subject matter facilitate navigation and research for easy access to cases that are the most relevant to the reader’s focus and interests.

 

Financial Sector – Conduct and Regulatory References

On 7 March 2017, one year after the implementation of the Senior Managers and Certification Regime (SM&CR) which was introduced to improve accountability in the financial services sector, two further requirements have come into effect: The regulatory reference requirements; and the rolling out of the Conduct Rules to a wider range of employees.

Regulatory references

The new rules on regulatory references will apply to certain large financial services firms (mainly UK banks, building societies and insurers).  The premise is that where a firm is proposing to hire a candidate for certain senior management roles a reference must be sought from all the candidate’s employers over the preceding six-year period.  This would apply even if the employee has worked outside the UK or for an unauthorised firm, in which case the hiring firm must make reasonable efforts to obtain a reference.

Under the new regime, a firm who receives a request for a reference must respond within six weeks using a mandatory template. The template requires that any information relating to the fact that the applicant was not a fit and proper person or details of any breach of the individual conduct rules is included.  The reference need only disclose matters where a firm has concluded these points – and this would not cover matters where disciplinary issues have come to light but a firm has not yet reached a conclusion or where the individual has resigned prior to the completion of the investigation or disciplinary process.  This will also affect the terms of any settlement agreement as employers are prohibited from entering into an agreement with the employee about the information in the regulatory reference.

Employers who are regulated will also have a duty to update regulatory references within six years of the employee leaving the business where they become aware of information which would have affected the original drafting.

The purpose of the regulatory references is to make it harder for senior staff with poor conduct records to be “recycled” between firms. It remains to be seen whether the new rules will have the desired effect of weeding out all those with poor conduct records and how employers in this sector will deal with the additional regulatory burden.

Conduct rules

The Conduct Rules are an important component of the regime to increase the accountability of senior individuals. The rules are intended to provide a framework against which the regulators in the UK (the Prudential Regulatory Authority and the Financial Conduct Authority) can judge an individual’s actions as part of the general supervision of a firm.

From 7 March 2016, the new Conduct Rules replaced the Statements of Principle and Code of Practice for Approved Persons (APER) for senior individuals. From 7 March 2017, the Conduct Rules will also apply to certain individuals in relevant firms who were not previously covered by APER. The rules will now apply directly to nearly all staff within the relevant firm.  Only those staff  who are considered  ancillary staff (i.e. whose role is not specific to the financial services business of the firm, for example catering staff) will not be covered.  One reason behind the extension of the Conduct Rules to such a wide population of individuals was so that a common understanding of what is acceptable and unacceptable behaviours at all levels of a firm could be achieved and therefore culture change could be effected.

The rules are split into first tier, which comprises of individual conduct rules that the regulators consider relevant across all roles in which individuals are subject to the conduct rules, and second tier which apply to senior managers.

Firms must also ensure that all staff who are subject to the rules are aware of them and how they apply to their jobs. This includes delivering suitable training to provide a broad understanding of all of the rules and a deeper understanding of the practical application of the specific rules which are relevant to the employee’s individual work.

From 7 March employers will need to have in place policies and procedures relating to the conduct rules to cover a much wider section of the workforce.

An Employer’s Limited Access to Medical Documentation for Accommodation Requests

In a policy statement released early last month, the Ontario Human Rights Commission (the “Commission”) clarified its position on the scope of medical documentation that employees need to provide when making disability-related accommodation requests to their employers. The policy statement supplements the existing Policy on Ableism and Discrimination Based on Disability, and reminds employers that under the Ontario Human Rights Code (the “Code”), they have a legal duty to accommodate to the point of undue hardship. It is important to remember that although the policies issued by the Commission are not law, they can have a persuasive effect on courts. In fact, these policies are given great deference by the courts and are often quoted in their decisions.

This policy statement serves as a reminder to all employers that in order to support an accommodation request, employees will generally be expected to produce medical documentation that includes:

  • confirmation that the employee has a disability;
  • the limitations or needs associated with the disability;
  • whether the employee can perform the essential duties or requirements of the job, with or without accommodation;
  • the type of accommodation that may be needed to allow the employee to fulfil the essential duties or requirements of their employment; and
  • regular updates about when the employee expects to return to work, if on leave.

In its policy statement, the Commission noted that there have been situations where employers have requested personal medical information that goes beyond what is required to support an accommodation request. The Commission confirmed that overbroad requests for private medical information, such as diagnostic information, undermine the dignity and privacy of people with disabilities. The information requested by an employer must be the least intrusive of the employee’s privacy, while still providing enough information to make an informed decision about the accommodation. Generally, employers do not have a right to know their employee’s confidential medical information, for example the cause of the disability, diagnosis, symptoms or treatment, unless this information clearly relates to the accommodation being sought.

Written with the assistance of Kristina Bezprozvannykh, articling student.

Consultation is the key to employment equity

This article was written by Mlungisi Khambule, an Associate Designate at Norton Rose Fulbright South Africa

The duty to consult appears throughout labour law.  It is also an important pillar to achieving employment equity in South Africa.  With the wave of department of labour inspections for employment equity compliance persisting, it is important to understand how a designated employer* can satisfy the consultation requirement and to understand exactly where it fits in as far as employment equity is concerned.

Section 16 of the Employment Equity Act, 1998 stipulates that a designated employer “must take reasonable steps to consult and attempt to reach such agreement on the matters referred to in section 17 of the Act”.  Section 17 refers to consultation with employees conducting work profile analysis discussed below, and the preparation and implementation of the employment equity plan and the annual reports referred to in section 21.  Designated employers cannot attend to these requirements without having taken “reasonable steps” to consult and to “attempt to reach agreement” with their employees.

Who must be consulted?

A designated employer must consult with trade union representatives. If there is no trade union in the workforce, they must consult with their employees or their elected representatives.  An employment equity committee must be formed.  This committee must be representative of all members from the workforce, across all occupational levels and must include members from the designated groups.  Designated groups are citizens who are black people, women and people with disabilities.  Employees who are not from the designated groups must also be part of the committee.  Therefore it is imperative that this consultative body remains diverse and inclusive.  Ensure that all employment equity meetings proceed with a clear agenda and that signed minutes are taken for every meeting held.

Consultation on conducting an analysis

The analysis consists of the employer’s workforce profile and depicts the level of underrepresentation of members from designated groups within the workforce. A designated employer must also collect data, scrutinise their policies, practices, procedures, and their work environment to identify employment barriers which adversely affect people from designated groups.  The analysis must be conducted jointly and designated employers must be willing to disclose relevant information and give reasons and explanations to any questions that their employees may have.  The parties consulting must ensure that they understand what their desired outcomes are and must attend to each issue in question collaboratively including the setting of goals.

Consultation on preparation and implementation of the employment equity plan

The employment equity plan is the document which holds a designated employer’s employment equity strategy. It is a crucial document. Failing to have one can result in a minimum fine of R1.5 million or 2% of a designated employer’s annual turnover. This document contains objectives, goals, targets, timeframes, affirmative action measures, procedures and identified barriers to employment equity, within the workplace. When consulting on this document, a designated employer could prepare a skeletal document which could be augmented and amended as the employment equity committee sees fit, or to collaboratively provide input and ideas on each required section of the plan.  It is important that the parties must attempt to reach agreement on all the relevant aspects contained in the plan.  Consultation should also not end at the preparation of the plan, but must continue to meet with the employment equity committee to examine its progress and how it is implemented.

Consultation on Reports

Every year, a designated employer must submit a report to the Director-General. This reporting is done through the completion of the EEA2 and EEA4 documents.  These documents contain information on income and income disparities across all designated groups, numerical figures on the representation of designated groups, data on the recruitment, promotion, termination and as well as goals and targets on increasing the representation of designated groups.

The Act requires “reasonable steps” be taken to consult and an “attempt to reach agreement”.  The reasonable steps taken by the designated employer to consult and their attempt to reach agreement, becomes the area of scrutiny during Director-General reviews and inspections.  The best practice in ensuring proper consultation is to hold frequent employment equity meetings, ensure that that detailed minutes are kept and to approach the process in a collaborative fashion, considering every view and noting every concern so as to take proper action in ensuring that employment equity is achieved in the workplace.

*A designated employer is a person who employs 50 or more employees, alternatively employs fewer than 50 employees but has a total annual turnover that is equal to or above the applicable annual turnover of a small business in terms of the Schedule 4 of the Act”. A designated employer is also a municipality, an organ of state, or an employer bound by a collective agreement which appoints the respective employer as a designated employer, in terms of the Act.  Should your business satisfy any of the aforementioned descriptions, you must ensure compliance with the Act and must come to grips with the requirement for consultation with the respective statutory duties.

Changes to the Working Conditions Act – expected to come into force 1 July 2017

Proposed changes to the current Working Conditions Act (Arbeidsomstandighedenwet) (the Act) are expected to have a direct impact on all companies in the Netherlands. The changes will mainly impact on the current relationship with the occupational health & safety service provider (Arbodienstverlener); existing policies in relation to sickness prevention; and conditions that apply to the services of the company doctor. The employer will also have to attribute a clearer role to the prevention officer (preventiemedewerker) and the works council or employee representative body (ERB) (if any) will have a right to consent to such appointment.

Although there will be a transition period of one year after the implementation date for companies to become fully compliant, it is important to review the changes below as a change to existing policies and procedures is unavoidable.

Most important changes to the Act

Clearer role of the prevention officer

At present, an obligation exists to appoint at least one prevention officer within a company. The officer is responsible for

– the creation and running of the risk inventory and evaluation (RI&E);

– providing information and education;

– recording and investigating accidents;

– advising the works council/ERB; and

– answering questions on health and safety from employees within the organization.

The proposed changes to the Act attribute a clearer role to the prevention officer. The employer will be required to enter into an agreement with the prevention officer in relation to his duties and the performance of his role, and the company doctor must support the prevention officer in the execution of his role and vice versa.

Right of consent for the works council or ERB

The works council or ERB (if any) has the right to consent to the decisions of the employer that relate to the appointment of a prevention officer; his role within the organization and the envisaged cooperation with the company doctor/occupational health & safety service provider; and the appointment of other company doctors/other occupational health & safety service providers who can provide a second opinion. The new Act refers to applicability of Article 27 paragraphs 3-6 of the Dutch Works Councils Act, which means that any of the aforementioned proposed decisions can in principle not be implemented by the employer if such consent is not obtained.

Additional rights and obligations of the company doctor

The amended Act will also introduce additional rights in relation to the roles of the company doctor.

  • All employees will have the right to visit a company doctor during office hours without the employer’s prior approval. Such a right also exists even if the employee is not on sick leave or if no health issues are present. These visits are confidential and the employer will not be notified.
  • The employer will have to provide the company doctor with full access to the workplace. The idea is that this will increase the ability of the company doctor to advise on sickness prevention from a company broad perspective.
  • The company doctor will in principle have to grant employees the right to a second opinion.
  • The company doctor can be penalised if he fails to allow the employee a second opinion and he does not have a complaints procedure in place; he does not collaborate with the prevention officer and/or the works council; or he fails to give his advice in relation to the testing of the RI&E to the works council or ERB.
  • The company doctor will be granted the right to consult with the works council or ERB (if any). This will mean that the company doctor can be involved in establishing the health & safety policy.
  • The company doctor will be obliged to report occupational diseases to the Netherlands Centre for Occupational Diseases (Nederlands Centrum voor Beroepsziekten).

Health & Safety framework agreement

Minimum requirements will apply to the framework agreement with the occupational health & safety service provider, including the requirements for prevention of occupational diseases and long-term absence; the rights and obligations of the company doctor and how these can be safeguarded; and the rights of employees in relation to health & safety, including reference to the second opinion and the complaints procure.

Action required

After the implementation date, companies will have a year to amend the existing arrangement with their occupational health & safety service provider and their internal regulations. The existing agreement with the occupational health & safety service provider and internal policies in relation to inter alia health & safety, absenteeism, sustainable employability etc. should be reviewed and then modified to the requirements of the new Act. We expect a pro-active approach from occupational health & safety providers in this respect.

Changes to current policies are essential as the Inspectorate of Social Affairs and Employment (Inspectorate SZW) will have greater scope to impose penalties on employers, occupational health service providers and company doctors in cases of non-compliance with the new regulations.

Conclusion

All Dutch companies are affected by the above changes and should take action to become compliant. Please feel free to contact Maartje Govaert or Thomas Timmermans for any advice or further questions in respect of the above.

Singapore Government-linked Company Faces Criticism for its Termination of Employees

Last month, 54 employees of a Singapore Government-linked company, Surbana Jurong, were terminated from employment. A local newspaper, Today, reported that the Group Chief Executive of Surbana had sent a firm-wide email explaining the firm’s decision to terminate these employees and labelling them as poor performers who could not be allowed to drag down the rest of the organization.

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