This issue may arise in a context in which the employer argues that the claim for lost income should be limited due to a pending closing of the business or similar argument that termination of employment was soon destined for any other reason. This may arise in the course of an employment law mediation.

For example:

1. A long-term employee asserts that they have been adversely treated due to a clear violation of the a protected human right;
2. A human rights complaint is filed.
3. Liability is proven or admitted.
4. There is clear evidence to support the employer’s argument that it had planned to close the business or relevant operating division within 3 months following the termination.

So what is the claim for lost income ?

Not much. It will likely be limited to the 3 month period as the employer will be able to successfully argue that “but-for” the breach, the employee would have only been employed for the 3 month period. ¹

In one comparable case, the employer successfully argued that the employee was, in any event, doomed to be terminated due to performance issues. ²

Issues such as the employer’s solvency and similar factors may similarly be considered to limit the likelihood of the continuum of the income loss. ³

Notional Termination

Can the employee then not argue, that but for the unfair conduct, they would have continued to be employed until the close of business and then would have received their statutory sum and/or common law entitlements?

For reasons which follow, the human rights tribunals have not awarded these incremental sums for a “notional termination” on which the employer relies to minimize the lost income claim. ⁴

In this fact situation, the remedy to be followed, at least for the lost earnings claim, would be to assert a constructive or direct termination ⁵and claim the ESA and common law remedies by civil and/or administrative proceedings and discard human rights relief.

Failing this action, the employee’s position will be in peril. Under the human rights administrative process, there will be no claim for the statutory and common law claims.

No claim for Statutory Sums and Common Law in Notional Termination

The human rights tribunal has traditionally taken the position that it has no jurisdiction to award the statutory severance sum, absent direct discriminatory conduct which led to its denial. ⁶

The significance of the statutory claim would be emphatic where the employee found alternate employment quickly as the statutory sum is not reduced by mitigated income.

All this places the complainant in a difficult circumstance in the hypothetical situation as described above. There can be no complaint with the Ministry of Labour as there has been no termination. The employer’s argument that had the relationship been continued but-for the wrongdoing, and that there would have followed a termination as a redundancy or closing, must be seen to be connected to the initial discriminatory wrongdoing for the statutory sum to be ordered, given the state of the law. Clearly the statutory claim comes as a direct loss attributable to the adverse conduct and should be compensated. The path to recovery is an awkward one and is need of rebuilding.

The same view is taken by the tribunal with respect to the common law remedy. The tribunal takes the general view that it is unable to apply such relief. ⁷

In the example of the employer arguing that the “but-for” submission would mean that the applicant would have been terminated for economic redundancy after, for instance at month three, it should then follow that the damage claim would include not only three months but also the statutory and common law claims that would have been allowed. Otherwise, the company has a direct incentive to terminate all staff for human rights remedies and agree to apply the but-for analysis.

SCC Suggests Otherwise

The decision of the Supreme Court of Canada ⁸ is noted elsewhere.

In these reasons, the Supreme Court noted that tribunals created by statute which are given the power to make decisions of law are enabled hence to look beyond the governing legislation by which they are created to “apply the whole law to a matter properly before them”.

Indeed, such is a presumption as stated by the Court:

The presumption that a tribunal can go beyond its enabling statute — unlike the presumption that a tribunal can pronounce on constitutional validity — exists because it is undesirable for a tribunal to limit itself to some of the law while shutting its eyes to the rest of the law. The law is not so easily compartmentalized that all relevant sources on a given issue can be found in the provisions of a tribunal’s enabling statute. Accordingly, to limit the tribunal’s ability to consider the whole law is to increase the probability that a tribunal will come to a misinformed conclusion. In turn, misinformed conclusions lead to inefficient appeals or, more unfortunately, the denial of justice.

This presumption, as noted in the decision, may be one which is contradicted by the enabling legislation:

Yet the power to decide questions of law will not always imply the power to apply legal principles beyond the tribunal’s enabling legislation. As noted above, statutory creatures are necessarily limited by the boundaries placed upon them by the legislature. Subject to its own constitutional constraints, a legislature may restrict the jurisdiction of its tribunals however it sees fit.

In the instance of the Human Rights Code that there are no such apparent restrictions and that the Tribunal should not be limited to interpreting solely its enabling legislation and indeed should apply “the whole law”.

It is for these reasons, that in the offered hypothetical, the complainant should receive payment of the statutory and common law sums, without duplication.

The complainant in Ontario has the comfort of being able to sue civilly to claim human rights relief provided that it is accompanied by a civil action. On these facts, the plaintiff should be careful to plead a civil constructive dismissal to allow for recovery of lost income. The question will then become which claim should be pleaded in the alternative. It is presumably not possible to seek compensatory damages under the Code and a lost income claim by the ESA and common law.

 

 

 

1. Hughes v 1308581 Ontario Ltd. (business closed); Canadian Human Rights Tribunal decision in Milano v Triple K (Mactavish)
2. Ontario Tribunal in Clennon v Toronto East General (Hart); An unsuccessful reconsideration motion followed. In the final remedy hearing, the Tribunal did find that the applicant would have been terminated one year following and awarded the same severance offer as had originally been offered at the time of termination.
3. Kooner-Rilcof v BNA Smart Payment B.C. HRT; Hughes v 1308581 Ontario Ltd. (business closed) , Milano v Triple K (staff reductions) Schulz v Lethbridge (medical ability to return to work)  See also Morris v. British Columbia Railway Co. (2003), 46 C.H.R.R. D/162, 2003 BCHRT 14.
4. The sole case to the contrary is the Clennon decision, which provided distinctive evidence of the original termination offer.
5. Presuming, of course, that the violation is sufficiently severe to constitute a constructive termination. Not all human rights violations will reach this threshold.
6. Puleio v Moneris (Muir); Pilon v City of Cornwall (Muir); Walkinshaw v Complex Services (Slotnick)
7. Fair v Hamilton–Wentworth District School Board, (Joachim), in this instance obiter. This refers to the Tribunal decision. The case proceeded to Divisional Court and the Court of Appeal without reference to this issue.
8. in its 2006 decision of Tranchemontagne v Ontario (Director, Disability Support Program)