Contracting Out of Human Rights Protections
It is clear that the parties cannot, by private agreement, waive or vary the terms which are offered as protected rights under human rights legislation. The Supreme Court of Canada in Renaud v Central Okanagan affirmed this proposition in these words:
On the other hand a provision such as the one in this case is neutral on its face but operates in a discriminatory fashion against the appellant. The provision is valid in its general application. What the human rights legislation requires is that the appellant be accommodated by exempting him from its provisions to the extent that it no longer discriminates against him on the basis of his religion. To suggest that the provision must be applied to include the appellant within its terms is to allow the employer and the union to contract out of the requirements of the Human Rights Act. This they cannot do. This does not mean that the collective agreement cannot contain a formula for the accommodation of the religious beliefs of employees. An employer who avails himself of such a general provision must, however, establish that it complies with the duty to accommodate. See Central Alberta Dairy Pool, at p. 528.
Impact of Severance Term on Human Rights Lost Income Remedy
The short answer to this question is that an employment agreement containing such a term has no relevance to the determination of the lost income claim under a human rights remedy.
Such a human rights lost income claim is based on the “make whole” principle which is intended to put the applicant make into the position, save the wrongdoing.
Make Whole Damage Claim
A good example of this concept is the decision of Piazza v Airport Taxicab 1, in which the Ontario Court of Appeal upheld the award of the Board of Inquiry (Zemans) award of 11 weeks’ lost income after 10 weeks of employment in the sum of $2,750. This sum represented the complainant’s period of unemployment subsequent to her termination.
The Divisional Court had reduced the damages for lost wages to $750.
In the Piazza decision, the Court of Appeal, in reversing the Divisional Court, applied the make whole concept and confirmed that under human rights legislation, the purpose of compensation is to restore the complainant to the prior position that they "would have been in had the discriminatory [conduct] not occurred".
Similarly, in 1998 in OHRC v Impact Interiors, again in a reversal of the Divisional Court decision, the Court of Appeal ruled the remedy under the Code is restitutional in nature and hence the length of employment and the “quality” of the position held, which presumably means the type of position, are both irrelevant factors in the assessment of the income loss:
The Divisional Court also erred in interfering with the quantum of damages awarded to Ms. Petersen for loss of wages. In particular, we disagree with the Divisional Court's statement that "there must … be some congruence between the compensation for loss of wages and the duration and quality of the complainant's employment". In Piazza v. Airport Taxicab .... this Court held that under human rights legislation the purpose of compensation is to put complainants in the position they "would have been in had the discriminatory [conduct] not occurred". A measure of monetary damages is what the complainants would have earned had the discrimination not taken place.
In Impact Interiors, the complainant, Cindy Petersen, had been employed for two days, at which time she quit due to the sexually harassing conduct of the employer. The Board of Inquiry (Anand) ordered a lost wage claim of $17,272, which represented the difference between what she would have earned in her former job and what she actually earned from her last date of active employment to the date of the hearing, a time period of 122 weeks.
The second complainant, Shirley Hom, was a student who had been employed for five days. She was awarded lost compensation from the date of last active employment on June 10 through to the date of her return to school on September 10, 1990.
As noted, the Divisional Court had improperly reduced the award in favour of Ms. Peterson to $7,500, based on the theory that there must be some relation between the award of lost wages and the length and quality of the complainant’s prior position.
Typical of what, it is submitted, is the acceptance of this approach in a modern context is the decision of the Tribunal in the July 2013 case of Chittle v 1056263 Ontario (Keene):
Pursuant to subsection 45.2 (1), above, an applicant who proves a breach of section 5 of the Code is entitled to compensation for wage loss arising out of the discriminatory act. Subsection 45.2 (1)1 of the Code directs the Tribunal to consider what loss arose “out of the infringement” of the Code when considering the proper amount of monetary compensation. In Airport Taxicab (Malton) Assn. v. Piazza, (1989), 10 C.H.R.R. D/6347 (Ont. C.A.), the Ontario Court of Appeal at para. 45017, stated that the “purpose of the compensation is to restore a complainant as far as is reasonably possible to the position that the complainant would have been in had the discriminatory act not occurred”. Decisions of this Tribunal and of its predecessor Boards of Inquiry have commonly considered loss arising from the date of the infringement of the Code to the date of the hearing, (although there has been some discussion of awards and one actual award for wage loss going beyond the date of the hearing; see discussion in McLean v. DY 4 Systems 2010 HRTO 1107 (CanLII), 2010 HRTO 1107, paras 90 and 91, McKee v. Hayes-Dana Inc. (1992), 17 C.H.R.R. D/79 (Ont. Bd.Inq.), and Pilon v. Cornwall (City) (No. 4) (2012), CHRR Doc. 12-0677, 2012 HRTO 177 (CanLII), 2012 HRTO 177 ). The amount is reduced to account for any employment income received during the period, and may be reduced for other reasons, such as evidence that the applicant’s employment would have been reduced or eliminated for reasons unrelated to a breach of the Code.
This same passage is repeated in Norrenda v Primary Response (Keene) released contemporaneously.
Human Rights Cases on Topic
One would expect that an employment contract which set out sums to be paid or notice provided in the event of a termination would be of no consequence in a lost income assessment in a human rights context. Given the "but-for" analysis, presumably the employment relationship would have continued and the termination provision in the contract would not be an issue.
The Tribunal decision of Morgan v Herman Miller (Debane) spoke obliquely to this issue. The decision noted that the applicant was paid his termination pay pursuant to his employment contract on termination. The decision continued to award Mr. Morgan fourteen months pay to the date of the hearing. The issue of the employment contract as a means of limiting the sum to be recovered was not argued by the employer.
The Board of Inquiry also considered this issue in a decision rendered in September of 1992 of Parks & MacIntryre v Christian Horizons No. 2, 16 CHRR D/171 (Mendes) in which the Board, referring to Gohm v Domtar and Torres v Royalty Kitchenware, stated that employment contracts were not relevant to the determination of the income loss:
However, the same jurisprudence indicates that employment contracts or ex post facto agreements cannot limit the amount of special damages available to successful complainants as counsel for the respondents argued they could.
Such was not the conclusion in the decision of the British Columbia Human Rights Tribunal in Kooner-Rilcof v BNA Smart Payment (Basina). Clearly the contract was offside the statutory requirement of minimum notice, an argument which was not made.
The contract likely could be argued to support an argument of the inherent fragility of the employment relationship to buttress a submission that the make whole remedy should be limited due to subsequent events such as redundancy, which the contract implicitly anticipated.
The decision did touch on the issue of the fragility of the relationship and suggested that the contract term was reflective of this and hence the lost income was not definitive.
The decision also, parenthetically, stated that “but-for” the pregnancy, the complainant may have resigned her employment, which must be an error in law.
[69] An employment contract does not place either party above the law, and especially not above a statute such as the Human Rights Code. However, in the exercise of discretion on a principled basis, the Complainant’s employment contract can be a factor in the measurement of her claim.
[70] The circumstances are that the Complainant was employed pursuant to an individual employment contract. The contract was the product of a negotiation between her and the Company, and which she accepted by taking employment with BNA. She was there described as an “at-will” employee. She could quit “at any time, with or without cause or advance notice”, and, BNA could dismiss her “at any time, with or without cause or advance notice.”
[71] The Complainant claims, were it not for the Respondent’s violation of the Code, that she would have worked four more months before commencing her maternity leave. However, in the context of her terms and conditions of employment, she was never assured of any measure of continued employment, and her claim for wage loss can be discounted in consideration of the Company’s overall efforts to cut costs.
[72] The Complainant was the Company’s key person in British Columbia, and she did not inform her employer of her pregnancy and her consequential upcoming maternity leave until September 15, 2010. Yet, two months earlier, on July 6, 2010, she informed a prospective employer that she was pregnant. While stating that things were going well at BNA, she advised the prospective employer that now would not be a good time to start a new career, but to “keep in touch”. But for her pregnancy, the Complainant may not have stayed with BNA.
[73] The Complainant was employed by BNA from June 2, 2009 to September 16, 2010. She was paid two weeks of salary in lieu of notice.
[74] There was no dispute over the Complainant’s calculations; i.e. $21,000.00 as amounting to four months gross salary, and $3,400.00 as amounting to four months of commission. Pursuant to s. 37(2)(d)(ii) of the Code, I will be ordering the Respondents to pay the Complainant two more weeks of salary and two weeks of commission; which, based on the above numbers, would respectively amount to $2,700.00 and $425.00. I will therefore order the Respondents to pay the Complainant $3,125.00. The Complainant’s claim for ten per cent of salary for medical/dental was not satisfactorily explained and I will make no order with respect to that.
Contract Reduces the Damage Claim
On the other hand, a contract which sets out a terminal date of employment will operate to limit the potential lost income claim to that date. This is reflective of the "but-for" approach to the income loss. 2
An argument may be also made that the existence of a fixed term agreement would be one which contemplated just that and hence the “make-whole” submission could do no better than that which the parties had agreed. The applicant would hence be entitled only to the sum remaining on the employment contract, absent any apparent likelihood of a renewal or option to do so or such an evident historical practice.
The existence of the contractual relationship between the parties was found to be a factor in assessing the income loss in a decision of the Alberta Human Rights Tribunal. 3
Ms. Cowling was employed pursuant to a series of four fixed term contracts commencing in May of 1999 through to May of 2007. There were occasional gaps in the continuum during which she continued to perform her regular duties. Approximately one year prior to the expiry of the last of these agreements, she was advised that there would be no further renewal, a decision which prompted her successful human rights application, based on age.
In assessing the lost income claim for the period of five years to the date of the award, the Tribunal considered that the existence of the contractual relationship was a factor to be considered in the damage assessment and reflected the inherent fragility of same to discount the award by thirty percent.
This issue is also reviewed here.