Honda at the Supremes – A New Tort of Discrimination?

Written by on March 12, 2008 in Published Articles

Published in CELT (Canadian Employment Law Today Issue No. 505 – March 12, 2008

PDF Version

On February 20, 2008 the Supreme Court of Canada heard the appeal in the matter of Kevin Keyes v. Honda Canada Inc. The appeal raised issues with respect to the relationship between human rights protections and the common law, in particular whether the Courts can apply common law principles to provide the same protections available through human rights legislation. Currently, what prevents Courts from hearing human rights complaints is the 1981 Supreme Court of Canada decision of Seneca College of Applied Arts and Technology v. Bhadauria (“Seneca College”), which held that the legislature intended to exclude resort to the Courts in favour of an administrative regime to achieve its human rights objectives which statutory scheme foreclosed first resort to the Courts to enforce a claim for a breach of human rights. When amendments to the Ontario Human Rights Code (“Code”) in Bill 107 become effective on June 28, 2008, Courts may be able to entertain claims for breach of the Code when they are connected to another claim that must be advanced through the Courts, for example wrongful dismissal. If, however, there is no other claim to advance to the Court then the only recourse is through the administrative regime of the Human Rights Commission.

Keays has sought to refine the manner in which the Courts approach human rights violations in an employment law context. To do so he wishes the decision of Seneca College to be revisited to recognize a tort of discrimination and harassment. This would be accomplished by incorporating human rights codes into employment contracts and by recognizing a duty on employers to prevent the creation of a poisoned work environment. As such Courts would have concurrent jurisdiction to ensure that employees have direct access to a remedy with no loss of procedural safeguards or expertise, and the Courts would have direct means to remedy discrimination by awarding damages separate from existing awards of damages for wrongful dismissal, bad faith, mental distress and punitive damages.

Honda objects to a common law action for a breach of the Code – a breach of statutory duty – based on the greater expertise of tribunals, the need to avoid a multiplicity of proceedings, and to also avoid creating a two-tier system to enforce human rights violations where Courts are utilized only by the wealthy for greater damage awards.

At the appeal, Keays argued that Justice McIssac accurately accounted for all compensatory awards when he awarded punitive damages based on Honda’s independent actionable wrong of discrimination and harassment. As compensatory awards were not sufficient to punish Honda for their misconduct, given they did not adequately achieve the objective of retribution, deterrence and denunciation, punitive damages were awarded in a sum to reflect a rational connection between the quantum awarded and Honda’s egregious misconduct.

The lower courts found that Keays, who was disabled by Chronic Fatigue Syndrome, was wrongfully terminated to evade Honda’s duty to accommodate him under human rights law. They further found that the decision to terminate Keays was “planned and deliberate” and “made in retaliation for his retainer of counsel to advocate for his human rights”. Prior to termination, Honda asked Keays to attend a medical assessment after receiving medical notes from Keays’ physician which they were not satisfied with. Keays asked Honda to clarify the purpose of the medical assessment, which Honda refused to do, and instead terminated Keays because of his refusal to meet with the doctor who was to perform the medical assessment. Justice McIssac found Honda’s actions in failing to clarify the purpose of the medical assessment to be unreasonable, in bad faith, and were a “prelude to terminating” Keays’ employment. The lower courts unanimously found that Honda wrongfully dismissed Keays and “committed a litany of acts of discrimination and harassment” in relation to Keays’ request for accommodation although being aware of their duty. Keays found out about his termination from a co-worker who telephoned him at home and informed him that his termination was announced to the department. Justice McIssac awarded 15 months notice, a 9 month Wallace extension to the notice period for Honda’s egregious bad faith and hardball manner of dismissal, punitive damages of $500,000 (which amount was subsequently reduced to $100,000 by the Court of Appeal) and costs of $610,000.

Now the decision rests with the Supreme Court of Canada as to what they will do with the punitive damages award, and what, if any, common law changes will be made to allow access to the Courts for human rights violations in an employment law context.

Author: Ronald S. Minken, B.A.(Hon.), LL.B. is a senior lawyer at Minken & Associates P.C., an employment law boutique located in Markham, Ontario.

Comments are closed.