How to limit employer liability when dismissing employees

     In my close to 20 years in litigating wrongful dismissal and human rights cases on behalf of employees I have come to the the conclusion that many of these cases could be avoided or resolved for a fraction of the post-litigation cost.  Litigation, like dismissal for cause, should be viewed by human resources professionals as a last resort.  In the ever increasingly competitive business world litigation is an inefficient manner of resolving  the vast majority of these disputes.  Here are a few points to keep in mind:

- Do not allege cause unless you have received sound legal advice;           

-  Do not assert acts amounting to crimes or breach of a human

rights statute unless you have conducted a fair and thorough
investigation in which the employee has had a meaningful
opportunity to participate;

- If litigation has commenced, do not hesitate to put in a reasonable
Rule 49 Offer to Settle promptly.  Pin-point the range of reasonable
notice and offer something a little over the lower end of the range.

Coaching Error on Time-out Led to Leaf's Failure

     The time-out is one of the most powerful tactical tools in a coach's arsenal in hockey.  The time-out provides both players and coaches on the team calling it an opportunity to step back from the immediate moment of the game and to draw their attention to where they are and what they wish to accomplish.  To draw from physics it effectively breaks the momentum in the play bringing it to a period of rest allowing for both physical and mental rejuvenation. For the opposing team the time-out means that the momentum which they had is lost and they must start again and attempt to recapture the momentum which they left off at.  From a psychological point of view - the time-out - has the ability to provide the team calling it with a fresh start and renewed focus.

     When a team is up 4-1 in the third period of game 7 of a best of 7 series and the other team starts to dominate the play the most sensible and effective strategy is to stop the play by way of a time-out.  This for some reason did not happen in the Leaf's game 7 game against Boston.  Instead Boston kept dominating and with each goal they scored their opponents became more anxious, more vulnerable and less confident.  The more the Bruins came on without any interruption in the play to communicate a positive message to the overwhelmed Maple Leafs the less they believed in themselves.  Once fear overcame the Maple Leafs it was all over.  The job of a coach or mentor is to remove impediments such as fear and anxiety from their players.  The coach is a motivator and the task of motivating does not end simply because your team is up 4 - 1 late in the third period.  

"Some of your best friends are gay and you don't even know it !"

     In the wake of the tremendous outpouring of admiration and support for NBA star Jason Collins on his coming out of the so called closet, I thought I would share with the readership my own personal experience with the concept of the closet, ignorance and homophobia.

The Closet:

     I was not always a tolerant and gay-friendly person.  I - like most individuals raised in a West-Indian and Catholic household was indoctrinated with a sense of morality which made homosexuals and homosexuality worthy of scorn, ridicule and isolation.  In my little world and by my simple mind homosexuality was a matter of choice.  They chose to be homosexuals so they opened themselves for scorn and ridicule.   In this climate fathers disowned sons.  Sons disowned fathers.  Mothers disowned their children. Brothers disowned sisters and vice versa.  Homosexuals - while we knew they existed - were forced into segregation and hiding.  The fear of losing family, friends and employment was so strong and compelling that homosexuals had to live "double lives" or "in the closet" as the concept has come to be phrased.

Ignorance:

     I came to learn firsthand the power of the closet and that ignorance is at the heart of homophobia.  Two of my closest friends Paul and Mary (not their real names) enjoyed a friendship with me which started during our days as students.  Peter and Mary were a couple and myself and anyone I was romantically involved with at the time would frequently socialized together.  I considered Paul and Mary to be among my closest friends.  I assumed that like myself they were heterosexual and that like myself they held homophobic views.  Accordingly, from time to time I uttered the odd homophobic slurs in their presence - "flamer", "fag", "batty-man" etc.  One day Mary looked me straight in the eye and said, "Ernest some of your best friends are gay and you don't even know it."  Those words and the stern and serious look in Mary's eyes when she uttered them were branded in my consciousness for eternity. This was the start of my awakening and enlightenment.

      Unknowing to me Paul and Mary and their relationship was a product of the closet.   Each of them had a public persona as "straight" and their private persona.  To their parents, family, friends and employers they felt compelled to wear the mask of "straightness" and to park their homosexuality far in the closet.  The consequences of being "outed" were so potentially devastating to their lives on virtually all fronts. Indeed, if their parents and family and friends were like me their election to stay in the closet makes perfect sense.

     In reflecting back on my experience with Paul and Mary I feel both shame and pride.  I feel shame in knowing that I uttered homophobic slurs and denigrated others out of ignorance.  As book-smart as I was I never took the time to analyze the issue for myself - electing instead to blindly follow what was the conventional wisdom.  On the other hand I feel pride in knowing that this experience has profoundly opened my mind and my heart and has made me a much better person.  I truly hope that in sharing my experience it may cause others in the community to re-evaluate their views on this issue.

     

Ontario's Fixation on Finality Unfairly Hurting Employees

     Once upon a time a dismissed employee who was not provided pay in lieu of notice had a right to file a complaint with the Employment Standards Branch of the Ontario Ministry of Labour and later bring a civil action for wrongful dismissal. In the human rights area a unionized employee whose rights under the Human Rights Code were violated by the employer or bargaining agent could find refuge at the Ontario Human Rights Commission.  Those rights or avenues for redress have been abolished. 

     It all started with a judgement by the Court of Appeal for Ontario - Rasanen  v.  Rosemount Instruments Limited (1993) (Ont.C.A.)  In Rasenen (supra) the employer was restructuring its operation and offered Mr. Rasenen two alternatives - a relocation to Calgary at the same status and pay or stay in Toronto in a lower status job with potentially higher pay - as the second job involved some commissions.  Mr. Rasenen rejected both options and resigned claiming constructive dismissal.  He then filed a claim for termination pay with the Ministry of Labour.  That claim ultimately went to a hearing where the Adjudicator ruled against him finding that he was not entitled to termination or severance pay because he resigned. 

     The majority in Rasenen (supra)  - Madame Justice Abella and Associate Chief Justice Morden, as he was then, ruled to dismiss the plaintiff, Mr. Rasanen's case, on the basis of issue estoppel.  Mr. Justice Carthy, who also dismissed the appeal, determined that issue estoppel did not apply in the circumstances but found that in the circumstances of the case the plaintiff was not contructively dismissed.  Mr. Justice Carthy's ruling and analysis rejecting the application of issue estoppel mirrors the fairness concerns expressed by the Supreme Court of Canada in Penner  v.  Niagara Region Police Service. 

     The Rasenen ruling put a clear chill in employees to make use of the remedial legislation which their elected officials had passed to provide them with basic terms and conditions of employment.  Fewer and fewer employees looked to the Ministry of Labour and elected to sue for wrongful dismissal.  Surprisingly, the Supreme Court of Canada makes note of this phenomenon in Penner  v.  Niagara Region Police Service.

The Codification of Issue Estoppel:

Employment Standards Act

     As if Rasanen was not bad enough the Ontario Government went on to amend the Employment Standards Act and the Human Rights Code to incorporate issue estoppel-type provisions.  The Employment Standards Act actually prohibits employees who bring a claim for termination pay etc. under the Act to bring a civil action seeking a remedy for the same dismissal.(see s.97(2))  In addition, the Act expressly provides that once an employee brings a claim under the Act they can only withdraw same within two weeks of the filing of the complaint. (see s.97(4))

Human Rights Code

     The amendments to the Human Rights Code incorporating issue estoppel-type provisions appear to be motivated by a desire for finality in legal proceedings.  Whether intentional or otherwise they appear to be depriving a significant group of workers their rights in both the collective bargaining forum and their stututory rights under the Human Rights Code.  Collective agreements are between a bargaining agent/union and an employer.  Accordingly, when a union and an employer make a "sweet-heart deal" to "resolve all of an employees grievances" they do not typically need the workers consent.  The worker, whose grievance has not been dealt with, then tries to bring a human rights complaint and is confronted by the following statutory provision:

"s.45.1 - The Tribunal may, in whole or in part, dismiss with an appllication in accordance with its Rules, if in its opinion, another proceeding has appropriately dealt with in the substance of the application."

     The legal effect of this statutory provision for workers covered by collective agreements is to render what ever individual rights they may have under the Human Rights Code purely illusory.  They have rights on paper but not in reality.  Our lawmakers have made the employer and the unions the gatekeepers of those rights.  They are at liberty to dispense them as they see fit.  Put another way - a worker with a human rights-type grievance has no rights that an employer or a union must respect and good luck taking the issue to the Divisional Court.  I invite readers to review the decisions of the HRTO involving unionized workers and their human rights complaints and any judicial review applications on this subject at our Divisional Court. The consistency of the dismissal of these complaints is troubling to say the least.





    



     

            

Issue Estoppel, Judicial Discretion and Access to Justice

    In this two part post I wish to shed some light on what appears to me to be a growing trend - the application of the doctrine of issue estoppel and judicial discretion which has the effect of denying individuals access to our courts.  In the first post I will look at the Supreme Court of Canada's recent decision in Penner   v.  Niagara Region Police Service with a view to illustrating the ideological ridgidity which more often than not renders the rights of the majority of Ontarians illusory when it comes to asserting their rights against police defendants.  In the second post I will illustrate how the Ontario Legislature has implemented issue-estoppel-type statutory enactments to the Employment Standards Act and the Human Rights Code which have the effect of denying a significant quantity of workers access to our courts.

     In Penner   v.  Niagara Region Police Service et al the Supreme Court of Canada recently ruled that the Ontario Court of Appeal erred in law in exercising its discretion when it upheld the dismissal of Mr. Penner's action on the basis of issue estoppel arising from the dismissal of his misconduct complaint under the Police Services Act.  The Court of Appeal applied the recognized test from Danyluk   v.  Ainesworth Technologies [2001] 2 S.C.R. 462; Minott   v.  O'Shanter (1999) 42 O.R. (3d) 321 (Ont.C.A.) and determined that the Police Services Act misconduct hearing and the action involved - 1.  the same question (parties agreed that the subject decision was final) and 3. same parties and found that the lower court had properly exercised its discretion in dismissing the action based on issue estoppel.  The Court of Appeal found that the motions judge erred in law in failing to consider the question of why it was not appropropriate to not apply issue estoppel in the case and went on to deal with this issue.

     The Court of Appeal - in applying a narrow and simplistic analysis as distinct from the broad and purpose-driven analysis employed by the Supreme Court of Canada - effectively denied Mr. Penner access to a remedy in the courts.  The key difference in the approach employed by the two levels of courts lies in the level of scrutiny they each subjected the Danyluk (supra) requirements to.  Unlike the Court of Appeal, the Supreme Court of Canada took the additional step and considered the nature and purpose of each legislative scheme along with the reasonable expectations of the parties.  In applying this approach the Supreme Court of Canada found that the Court of Appeal erred in the exercise of its discretion in appplying issue estoppel to the facts of this case on two grounds.  The first is found in the following quote from the Court of Appeal judgment on the issue of Mr. Penner's financial stake in the discipline proceeding:

Financial stake in the
Disciplinary Hearing:

     "This is an important consideration weighing against applying issue estoppel, but its
strength is diminished by the potential indirect benefit to Mr. Penner from the disciplinary proceedings.  If,  for example, the hearing officer had found that the two police officers did not have reasonable and probable grounds to arrest Mr. Penner or used excessive force on him, those findings would likely have estopped the officers from asserting otherwise in Mr. Penner's civil action.  In other words, issue estoppel works both ways." 

     The Supreme Court found that this analysis was flawed since the the Police Services Act requires misconduct to be "proved on clear and convincing evidence" while Mr. Penner's civil case must be proved on the lower balance of probabilities standard.  Accordingly, it did not follow that an acquittal under the higher standard could not lead to a finding of liability on the lower civil standard in Mr. Penner's civil action.

Role of the Chief of Police:

     Surprisingly, the Supreme Court went on to identify an additional ground which was not before the Court of Appeal in support of not applying the doctrine of issue estoppel in this case.  The Court noted that under the public complaints process of the PSA at the relevant time the Chief of Police appointed the investigator, the prosecutor and the hearing officer.  The Court reasoned that there was an inherent unfairness in employing the adverse decision from a discipline hearing held in these circumstances to absolve the Chief of Police and others from civil liability.  This is what the majority said on this point:

     [66] "Applying issue estoppel against the complainant here had the effect of permitting the Chief of Police to become the judge of his own case, with the result that his designate's decision had the effect of exonerating the Chief and his police service from civil liability.  In our view, applying issue estoppel here is a serious afront to basic principles of fairness."

Commentary:

     Justice must always be dispensed with a fair and even hand.  Anything less is not justice at all.  The exercise of judicial discretion like justice must always be exercised with a fair and even hand.  Depriving an individual access to our courts who seeks redress against the police for civil and constitutional wrongs allegedly committed against that individual simply because an inferior tribunal with a very different statutory function, purpose and level of proof dismissed his complaint is just plain wrong - fairness must always trump finality.  I believe this is precisely what the late Mr. Justice Bora Laskin meant when he said that "law without compassion is void."

    

Employer Checklist for Avoiding Punitive Damages

     It used to be that punitive damage awards in employment related cases was something that only happened in the U.S.  However, decisions such as Pate and MacNeil from the Court of Appeal for Ontario established that employers must be mindfull of the potential for such claims.  Here is a simple checklist of things to avoid.

1.     Avoid reporting criminal conduct to the police based on speculation or bad faith;

       Many employers are of the mistaken belief that simply reporting a crime to the police will not lead to potential civil liability.  This is not entirely correct.  An employer can be found to have initiated criminal proceedings even thought they did did swear the information charging the employee with a crime.  The question as to whether the employer can be found to have "initiated criminal proceedings" as that term is used in the malicious prosecution jurisprudence depends on whether the crime is of the type where the facts can be said to be pecuiliarly within the knowlede of the party seeking police assistance.  Courts have concluded that employers did not "initiate criminal proceedings" by mere reporting in cases involving complicated frauds requiring complex investigation in order to acertain the facts (Mahon   v.  Rahn [2000] 4 All E.R. 42).   

2.     Avoid asserting cause based on sexual or other forms of harassment in the absence of a fair and thorough investigation supporting the allegation - especially where your own polices call for such;

3.     Obtain legal advice touching on the strenght of the allegations of cause and the potential costs associated with an action from the employee prior to dismissal.  Where the allegations of cause involve criminal conduct you will want to consult with a lawyer with knowledge of criminal and tort law.
 

Most Serious Mistake Dismissed Employees Make

     The importance of getting legal advice following the termination of one's employment and prior to signing-off on a settlement can not be stressed enough.  All too often dismissed employees end up being bound by post-termination settlements which they often wish they had never pursued.  All too often it is too late to correct their error.  Sometimes this failure on the part of employees stems from their fear of the cost associated with getting legal advice.  In an effort to tackle this fear I thought it helpful to set out in plain language my fees for such consultation along with the service I provide for it.  I hope it is helpful.

Fee:

     $1,000 plus HST = $1,130 - payable at the visit.  In my experience it is common practice for bigger employers to indemnify employees for this cost.

Service provided:

Work history:

      I probe the client's work history in order to ascertain the reason for the termination of employment.  The reason is not always the reason stated by the employer.  If cause is
alleged I seek to ascertain in a preliminary way the strength of this cause.  Anyone can
assert cause but cause for dismissal requires cogent proof from the employer.  Have
there been warnings, performance appraisals, etc.  Does the company have an Employee
Handbook or similar document which sets out company policies on termination and
discipline ?  Was this policy followed ?  Does the nature of the cause alleged raise issues
of impairing your future employment opportunities?

Employment Standards Act:

     I probe compliance with the Employment Standards Act - termination pay, vacation pay and overtime pay.

Human Rights Codes:

     I also probe the possibility of the dismissal being motivated by a prohibited ground of discrimination - such as race, sex or age.

Jurisdiction:

     For employees covered by the Canada Labour Code - Part III - I inform them of the Unjust Dismissal provisions of that legislation.  It provides employees with a right similar to unionized workers in that they can be reinstated following a hearing before a Canada Labour Code Adjudicator.

Employment Insurance:

     Employees whose employment is terminated on account of "misconduct" are typically denied coverage.  I explain the process to employees in terms of what to expect and how to protect their right to benefits by communicating their version of the facts to the E.I. agent.  The agent is obligated to hear both sides of the dispute.  It is critical that the employee provides their side to the agent. If your claim is denied you have a right to an appeal hearing before a Board of Referees and be represented by a lawyer. I have often represented clients in these proceedings.

Disability Insurance etc.:

     For employees suffering with illness or disability at the time of the dismissal issues of coverage and medical treatment become paramount concerns.  I probe the cause of the disability and illness and provide advice on protecting what ever rights the employee may have.      


CONTACT INFO:

      I am available for consultation and would be pleased to assist you.  Here is my contact info:

Ernest J. Guiste, Trial & Appeal Lawyer, 2 County Court Blvd., Suite 494, Brampton, ON, L6W 3W8
Tel. (416) 364-8908