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Talking damages: Put your money where your mouth is

damages“Put your money where your mouth is”, is an old expression suggesting that if something is truly important to you, then you will attach monetary consequences to it. Which is why it is interesting that in Canada, damages that are awarded to employees when employers breach their rights (particularly human rights) have historically been low, particularly when compared with our neighbours to the south.

Human rights damages

When it comes to human rights cases, awards for general damages are often less than $10,000, even though the $10,000 cap on general damages was removed almost a decade ago. When we work with individuals that have had their human rights breached, we warn them at the outset that even if they are successful in their claim, the amount they receive may be relatively nominal and inadequate to compensate them for what they have experienced. Furthermore, since most cases settle before a hearing, we warn them that is likely that they will receive even less unless they are willing to go the distance and take the matter to a hearing. Anecdotally, I have heard stories of Vice-Chairs at mediation telling complainants in discrimination cases that typically, the numbers that they look at when trying to reach settlement at mediation are in the $7-$8,000 range.

When human rights claims are brought in civil court, plaintiffs typically seek several types of damages, including

  • Damages for breach of the Human Rights Code
  • moral/bad faith damages (The Damages Formerly Known as Wallace)
  • Punitive damages
  • Aggravated damages, and
  • Damages for mental distress.

Moral damages

As many will recall, when the trial judgment came out in Keays v Honda Canada, it included an award of $500,000 for punitive damages. This was groundbreaking; it was extremely rare to see punitive damages awarded in an employment case, and even when they were, they were typically in the $25,000 and less range. There had never been one anywhere near half a million dollars. Of course, over time, this award was watered down, first by the Ontario Court of Appeal, which reduced it to $100,000, and then by the Supreme Court of Canada, which eliminated punitive damages from the award altogether.

Since that time, we have seen the numbers increasing. As I have written on several occasions, we do see more six-figure awards than we used to. The reality, however, is that for most discrimination and harassment cases, the awards are still relatively nominal.

$85,000 in human rights / moral damages

The recent decision in Doyle v. Zochem Inc. is somewhat of a good news/bad news story. The Plaintiff, who brought her claim in civil court (as one can do in Ontario where a human rights claim can be attached to a civil claim), had been subjected to harassment and then dismissed when she complained. As set out in the judgment, the perpetrator:

  • would stare at her breasts and purport to take a picture of them;
  • told her Philips [an independent contractor who had done work for the appellant and with whom Doyle had had a ‘romantic relationship’] had an “anaconda” in his pants and she should date him;
  • said the “girls”, referring to her breasts, looked “good”;
  • referred to their private parts as their “little friends”;
  • described “bunny ears”, meaning her feet up behind her ears (as a sexual position);
  • kept telling her she needed to get “laid”, or needed “a little pounding”, asking if she was “getting any”;
  • told her how another employee had “the best body”;
  • A particularly gross example of this “locker room talk” related to her request to have him make a forklift attachment. When she later saw him with something with a chain on it, which appeared to be what she had asked him to make, he told her in fact it was just a device that he was going to put her feet in to pull over her head so he could “get at her”. She said she felt like “a piece of meat”.

As the Court of Appeal further summarized:

[9]         At a July 14, 2011 production meeting, during which Doyle raised legitimate safety concerns, Rogers and another co-worker, who were aware that Doyle was to be terminated, felt free to ignore the safety issues she raised and demeaned and belittled her in front of the others. She left the meeting in tears. Doyle, unaware that Wrench was going to terminate her and that the termination letter was already in the making, turned to Wrench and made a complaint of sexual harassment. Wrench did a “cursory” investigation of the complaint and heard from Rogers, but did not give Doyle an opportunity to respond. Wrench knew that Doyle suffered from clinical depression for which she was being medicated.

[10]      Doyle was terminated without cause on July 19, 2011. The trial judge found that Doyle’s gender and her sexual harassment complaint were likely the most significant reasons for why she was terminated.

At trial, she was awarded $60,000.00 in moral damages and $25,000.00 in general damages pursuant to the Human Rights Code. The matter was appealed to the Court of Appeal and, in justifying the award of moral damages, the Court engaged in a detailed analysis of the Defendant’s conduct. I have excerpted some key aspects below:

[14]      The question of moral damages is a fact specific exercise. At the outset of the appeal and during oral argument, although arguing that the trial judge considered irrelevant factors, Zochem conceded that an award of moral damages could be grounded on certain factors relied upon by the trial judge, namely, that employees had been instructed by Wrench to “dig up dirt” on the performance of Doyle; that Doyle was told her job was not in jeopardy when, in fact, Wrench had already put the “wheels in motion” with respect to her termination; that an employee advised Wrench about Doyle’s medical condition in breach of her privacy; and that Doyle’s keys were taken from her purse and her car was brought around.

[16]      As found by the trial judge at para. 13, Wrench “mangled the termination process”. Among other things, Wrench recruited employees to “dig up dirt” to discredit Doyle in order to justify her termination and created performance reviews to bootstrap the pre-existing determination to terminate Doyle. Ultimately, cause was not pursued. The trial judge found that Wrench’s dealings with Doyle were “completely disingenuous”. Wrench assured Doyle that her job was not in jeopardy when in fact the decision to terminate had already been made and the termination letter was probably already in the making.

[17]      After the termination decision had already been made, as found by the trial judge, Wrench’s response to Doyle’s sexual harassment complaint was insensitive to the point of verging on cruel.

[18]      The termination was cold and brusque. Moreover, in spite of being told a few days earlier that her job was not in jeopardy, on July 19, Wrench took Doyle to the board office. On the way, Wrench said to Doyle, “We don’t need you here anymore, and wish you all the best on your further endeavours.” She then turned Doyle over to Cheryl Lang, a third-party Human Resources consultant, to do the actual termination. At some point during the meeting with Lang, Lang told Doyle that she was being irresponsible because Rogers’ reputation was on the line, the inference being that she should abandon her claim of sexual harassment against Rogers. The trial judge observed at para. 248:

This was like rubbing salt into a wound for Doyle. She was being asked to sign off any rights she may have had arising out of her years of harassment, and at the same time, if she chose to do so, add to her pain by doing something to reinstate the reputation of her harasser.

[19]      As the appellant acknowledges, when Doyle was terminated, her car was brought around without her permission. Her car keys had been taken from her purse in order to do so.

[20]      Although the letter of termination presented with a full release contained a sentence suggesting that Doyle seek legal advice before accepting the benefits offered, she was pressured to immediately sign the release without it. In addition, as stated by the trial judge at para. 249:

Numerous other relatively minor defects in the termination process were touched on by plaintiff’s counsel. The record of employment was not provided. The pension entitlement was at least a year late. ESA severance was referred to in the termination letter, but not provided until later. Although Doyle’s pay was usually simply deposited to her account, the deposit was cancelled, and Lang was instructed to get a signed release in exchange for the cheques, rather than simply having the money deposited in the account. When it was deposited, the ESA severance was missing for a couple of weeks. There was never any lucid explanation to Doyle about how her various financial claims were being calculated, and Zochem’s rationale for their calculations. Wrench was focused entirely on getting Doyle terminated, and getting a release from her, in order to fulfill Humphries expectation, just as she had done with Chesiuk. The defects in the termination process constituted a model of ineptitude.

[23]      As mentioned, the question of moral damages is a fact specific exercise. A significant distinguishing factor that was not present in McNevan, is that, in this case, there is evidence of untruthful, misleading or unduly insensitive conduct. In the context of this case, the trial judge found at para. 231 of his reasons that Wrench held out to Doyle a promise that she would be given a chance to “improve” and also told her that her job was not in jeopardy even though the decision to terminate her had already been made. In these circumstances, it was open to the trial judge to consider the appellant’s conduct in this regard.

[25]      Therefore, the trial judge’s consideration of Zochem’s misrepresentation, that Doyle’s job was secure and that she would be given a chance to improve, coupled with Zochem’s sudden termination of Doyle and the further representation that her services were no longer needed, were not improper considerations in the context of this case.

[26]      The appellant further submits that the trial judge’s consideration of the meeting on July 14, 2011 and the subsequent sexual harassment investigation were unrelated to the manner of termination, in part, because the decision to terminate Doyle had already been made. I would reject this submission. This court’s decision in Gismondi holds that it is not just conduct at the moment of termination that may be considered, but conduct that is a component of the manner of dismissal.

[27]      Given that the decision to dismiss had already been made, Wrench’s cursory investigation and attendant dismissal of Doyle’s complaint of sexual harassment are proper considerations respecting moral damages. The trigger for that complaint and investigation was the July 14 meeting. Furthermore, at para. 278 of his reasons, the trial judge accepted Doyle’s evidence that she became disabled and unable to perform the major duties of her job following the July 14, 2011 meeting. Thus the July 14, 2011 meeting also served as the trigger for Doyle’s short term disability claim which was wrongfully denied.

[28]      Despite a letter from Zochem’s own doctor that Doyle would qualify for short term disability benefits of six months, Wrench, acting as the self-appointed claims adjudicator for Zochem’s self-funded benefits, denied them.

On the one hand, the decision shows a willingness to award greater amounts than have been awarded in the past, as well as to award both moral and Human Rights damages where appropriate. Conversely, although the Courts clearly felt strongly about the inappropriate conduct of the employer, they still only awarded $85,000.

Increasing awards while addressing frivolous claim

As many have opined before, these awards are simply not enough to compensate victims or deter employers, who often see such awards as, simply, a cost of doing business. The tribunals and courts have not “put their [or the employers’] money where their mouth is”.

At the same time, the Human Rights Tribunal has another problem. Currently, it does not have the authority to award legal costs, even where a claim is entirely frivolous. Furthermore, there is no “gatekeeper” to eliminate unmeritorious claims.The Human Rights Commission used to have the power to dismiss claims that could not succeed, but when the $10,000 cap was removed, so was this mechanism. As a result, all claims proceed to the Tribunal. For that reason, savvy individuals sometimes file complaints knowing that it is quite likely that the employer will be willing to pay some “ransom money” rather than incur the cost of defending itself, even if they are ultimately successful.

If the Tribunal is going to increase the amounts that it is willing to award (as it should), then there should also be a mechanism in place to either screen out frivolous complaints, or at least ensure that people bringing such complaints are responsible for a portion of the responding party’s legal costs. Otherwise, they have nothing to lose, since they can file a Complaint without a lawyer (and therefore without legal costs), while forcing the Respondent to incur substantial costs in defending the matter.

There has been a lot of change in our human rights regime over the last few years, and all of the messaging suggests that discrimination and harassment will not be tolerated. However, we need to put our money where our mouth is, and ensure that the amounts awarded are appropriate to truly deter such conduct, while at the same time putting safeguards in place to prevent abuse of the system.

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Rudner Law, Employment / HR Law & Mediation

Employment Lawyers and Mediators at Rudner Law
Rudner Law specializes in Canadian employment law and Alternative Dispute Resolution. They provide clients with strategic advice regarding all aspects of the employment relationship, and represent them before courts, mediators and tribunals. Read more
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