Ontario Court of Appeal upholds decision to reinstate disabled employee with 10 years back pay: Will human rights litigation ever be the same again?

June 7, 2016 Doug MacLeod, MacLeod Law Firm Accessibility Standards, Employee Relations, HR Policies and Procedures, Human Resources, Human Rights, Integrated Accessibility Regulation, Notice, Damages and Settlements, Payroll, Penalties and Fines, Standard for Employment, Wages and Compensation

I predict a recent Ontario Court of Appeal (the “OCA”) decision will have a significant impact on human rights litigation. In particular, I suspect disabled employees will start asking employers to find or create alternative positions for them if they cannot perform their job duties because of a disability, and terminated employees will start asking adjudicators to reinstate them with full back pay.

Is an employer required to find or create an alternative position for a disabled employee?

In Hamilton-Wentworth District School Board and Sharon Fair the OCA stated that an adjudicator’s decision to reinstate an employee and order the employer to pay 10 years back pay was in keeping with an earlier Supreme Court of Canada decision. In the earlier case, the court articulated an employer’s duty, short of undue hardship, to arrange the employee’s workplace or duties to enable the employee to work, as follows:

Because of the individualized nature of the duty to accommodate and the variety of circumstances that may arise, rigid rules must be avoided. If a business can, without undue hardship, offer the employee a variable work schedule or lighten his or her duties – or even authorize staff transfers – to ensure that the employee can do his or her work, it must do so to accommodate the employee. [Emphasis added]

In the Hamilton-Wentworth case, the disabled employee could not perform the duties of her position but she could perform the duties of another position. An adjudicator with the Ontario Human Rights Tribunal (the “Tribunal”) found that there would have been no need for the School Board to create a surplus position, as the financial resources existed for one position, or to displace an incumbent employee, as another position was vacant.

The OCA also stated:

…to fulfil its duty to accommodate an employee’s disability, an employer may be required in an appropriate case to place a disabled employee into a position for which he or she is qualified but not necessarily the most qualified.”

Should a disabled employee be reinstated with full back pay?

One the one hand, the OCA stated that while rarely used in the human rights context, the remedy of reinstatement fell within the Tribunal’s remedial jurisdiction.

When refusing to overturn the adjudicator’s decision to order reinstatement, the OCA noted that Ms. Fair’s employment relationship with the School Board was not fractured and the passage of time had not materially affected her capabilities.

On the other hand, the OCA indicated that a comparison of an adjudicator’s jurisdiction under the Ontario Human Rights Code to an arbitrator’s jurisdiction in the labour relations context was not unreasonable or unusual and referred to an earlier Tribunal decision where an adjudicator, when examining the issue of reinstatement, noted:

While reinstatement orders are rarely requested or ordered in human rights cases, they are “normally” ordered in arbitral cases where a violation of a grievor’s rights has been found, unless there are “concerns that the employment relationship is no longer viable” A.U.P.E. v. Lethbridge Community College, [2004]….. The goal of human rights legislation, which is remedial in nature, is to put the applicant in the position that he or she would have been in had the discrimination not taken place. See Impact Interiors Inc. v. Ontario (Human Rights Commission) (1998)… Where viable, reinstatement is sometimes the only remedy that can give effect to this principle.

Does this represent a shift in how adjudicators exercise their remedial jurisdiction where reinstatement is no longer a rare remedy and becomes as common a remedy as in the arbitration world? If so, I think employee lawyers will start commencing more proceedings at the Tribunal as opposed to the courts all other things being equal. With the prospect of reinstatement and/or large back pay awards there will be more pressure on employers to settle at the Tribunal for larger settlements. Only time will tell.

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Doug MacLeod, MacLeod Law Firm

Employment and labour lawyer at MacLeod Law Firm

For the past 30 years, Doug MacLeod, founder of the MacLeod Law Firm, a Canadian labour and employment law firm, has been advising and representing employers in connection with employee terminations. If you have any questions, you can contact him at 416 317-9894 or at doug@macleodlawfirm.ca. Read more