PDF version (Originally published in Canadian Employment Law Today, March 12, 2008)
On Feb. 20, 2008, the Supreme Court of Canada heard the appeal in the landmark case of Keays v. Honda Canada Inc. The appeal raised issues with respect to the relationship between human rights protections and the common law, in particular whether 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, which held that the legislature intended to exclude the courts in favour of an administrative regime to achieve its human rights objectives through legislation precluding the use of courts as the primary forum for human rights complaints. When amendments to the Ontario Human Rights Code come into effect 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, such as wrongful dismissal. If, however, there is no other claim, the only recourse is through the administrative regime of the human rights commission.
Keays has sought to refine the manner in which courts approach human rights violations in an employment law context by revisiting Seneca College to recognize a tort of discrimination and harassment. This would be accomplished by incorporating human rights codes into employment contracts and recognizing a duty on employers to prevent the creation of a poisoned work environment. Courts would have concurrent jurisdiction to ensure 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 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 — arguing for the greater expertise of tribunals as well as the need to avoid a multiplicity of proceedings creating a two-tier system to enforce human rights violations where courts are utilized by the wealthy for greater damage awards.
At the appeal, Keays argued Justice John McIssac of the Ontario Superior Court of Justice 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 its misconduct, since they did not adequately achieve the objective of retribution, deterrence and denunciation, punitive damages were awarded to reflect a rational connection between the award and Honda’s egregious misconduct.
The lower courts found 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 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 his physician that didn’t satisfy it. Keays asked Honda to clarify the purpose of the assessment, which Honda refused to do and instead terminated him for 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 Honda wrongfully dismissed Keays and “committed a litany of acts of discrimination and harassment” in relation to his request for accommodation despite the fact it was aware of its duty. Justice McIssac awarded 15 months’ notice, a ninemonth Wallace extension for Honda’s egregious bad faith and hardball manner of dismissal, punitive damages of $500,000 (which 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 it 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.