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Key employment law cases in 2019

Wednesday, January 22, 2020 @ 12:02 PM | By Inna Koldorf

Inna Koldorf %>
Inna Koldorf
With 2019 firmly behind us, we have reviewed the top cases of 2019 and narrowed our selection to five cases. In the first part of this two-part series, we discussed constructive dismissal in Morningstar v. Hospitality Fallsview Holdings Inc. 2019 ONWSIAT 2324 and the definition of dependent contractors in Thurston v. Ontario (Children’s Lawyer) 2019 ONCA 640. What follows are the remaining three cases.

3. Tort of harassment  

The Ontario Court of Appeal confirmed in 2019 that there is no freestanding tort of harassment. In Merrifield v. Canada (Attorney General) 2019 ONCA 205, the employee plaintiff alleged that he was subjected to harassment and bullying at work, which damaged his career and caused him severe emotional distress. He filed a claim for damages for mental distress as a result of the harassing and bullying behaviour that he experienced.

The trial judge found that a tort of harassment exists in Ontario and awarded the employee a total of $141,000 in damages. On appeal, the Ontario Court of Appeal confirmed that a tort of harassment does not exist in Ontario, nor is there a need for such a tort to be created. The court held that there is a variety of existing legal remedies which address harassing conduct, most notably the tort of intentional infliction of mental suffering, which the employee could be compensated under. 

The court did not foreclose the possibility of such a tort being created at some point in the future. After all, where a need existed in the past, Ontario courts have not shied away from creating new legal remedies. The court gave as an example the decision of Jones v. Tsige 2012 ONCA 32, where the new tort of intrusion upon seclusion was created. However, the court noted that Tsige was an exceptional case, where the facts cried out for the creation of a novel remedy, as the court put it. Only in those exceptional circumstances will courts consider the creation of a new tort. 

4. Counterclaims, intimidation tactics  

In Ruston v. Keddco MFG. (2011) Ltd. 2019 ONCA 125 the company terminated its president’s employment for cause after 11 years of service, alleging that he committed fraud. The company did not provide any specifics of its allegation. When the employee advised at the termination meeting that he will be retaining a lawyer, the company advised him that it will counterclaim against him and thereby raise his costs of the litigation.

The employee filed a wrongful dismissal claim. True to its word, the employer filed a counterclaim, alleging cause and seeking damages of $1.7 million for unjust enrichment, breach of fiduciary duty and fraud, as well as $50,000 in punitive damages.

The trial judge concluded that the allegations of fraud were not proven. She further concluded that the employer’s counterclaim was an intimidation tactic and amounted to a breach of the employer’s obligation of good faith and fair dealing in the manner of the employee’s dismissal. The employer’s counterclaim was dismissed, and the employer was ordered to pay to the employee damages in lieu of reasonable notice based on a 19-month notice period, punitive damages in the amount of $100,000 and moral damages in the amount of $25,000.  

On appeal, the Ontario Court of Appeal upheld the trial judge’s decision in its entirety. The court noted that the judge’s findings that the counterclaim amounted to an intimidation tactic were supported by the facts and that the punitive damages award was therefore justified. The court further found that the evidentiary record provided support for the judge’s findings that the threat of counterclaim at the termination meeting amounted to an intimidation tactic that deserved an award of moral damages.

The Court of Appeal sent a clear message that using counterclaims as negotiating tools by employers will not be tolerated and will cost employers dearly if the counterclaim is otherwise unjustified.

5. Arbitration clauses 

In a proposed class action brought on behalf of Uber drivers, a driver sought a declaration that he is an employee of Uber and is therefore entitled to the benefits of the Employment Standards Act, 2000 (the ESA). Uber brought a motion to stay the class action on the grounds that the Uber Services Agreement under which drivers work, requires that disputes arising out of the Services Agreement be arbitrated at an arbitration proceeding in the Netherlands, at a cost to the driver bringing the proceeding of US$14,500.

While the motions judge granted Uber’s motion, on appeal the Ontario Court of Appeal reversed the motion judge’s decision. It concluded that the arbitration clause breached the ESA by taking away from Uber drivers the benefit of the investigative process under the ESA, thereby attempting to contract out of the ESA. In addition, the court found the arbitration clause to be unconscionable. It effectively required Uber drivers to incur a significant cost to deal with the  most basic of disputes, it took advantage of the significant inequality in bargaining power between a driver and Uber, and it was generally drafted to take advantage of vulnerable drivers.

Uber appealed the Ontario Court of Appeal’s decision to the Supreme Court of Canada. The appeal was heard in November 2019 but a decision has not yet been released.  

This is part two of a two-part series. Part one: Top employment law cases of 2019.

Inna Koldorf is a partner in Miller Thomson LLP’s labour and employment law group, where she advises employers on labour, employment and human rights issues.  

Photo credit / pe-art ISTOCKPHOTO.COM

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