Workplace Sexual Harassment

“Consensual” Relationships


Dooley - From Another Era

An early Ontario decision found that a consensual relationship between an employee and his subordinate was not grounds for dismissal. The plaintiff had maintained such a relationship with two women consecutively, the second of which came after the employer’s warning to desist from such conduct. 1 The trial decision looked to the extent of prejudice caused by the relationship which it found to be insignificant. The Court of Appeal accepted the failure to find liability in “the special circumstances of this case”. 2 More significantly, the trial court stated that the company was without the ability to order the plaintiff not to have an intimate relationship with his subordinates.

This does not reflect the current state of the law. Such was the view of a more recent review of this case in 2011,3 referring to it as “from another era”. Even with such judicial admonition, it still has been referenced in recent decisions.

This change in social mores and its impact on the courts' views of this and similar workplace issues is noted here.

The issue of whether a workplace sexual relationship was consensual was also reviewed in a 1999 decision of Swinton J.4 An action was brought against the employer in negligence for failing to have a sexual harassment policy in place and against the personal defendant for sexual assault and battery.

The test of consent used was a two-step process, the first such step being an analysis of whether there was a relationship of inequality between the parties which would be expected in a “power dependency” context. The second step was the “proof of exploitation”.5

Need to Show Exploitation - Also Old Law

It was found in this case that the relationship was consensual. Even though there was an apparent inequality of bargaining power, this would not necessarily lead to the absence of consent. The court looked to the need to show duress, unconscionability or exploitation, findings which were not made and in fact that court determined that the relationship was “not unwelcome” for a significant period.

Ontario Court of Appeal "Unwelcome"

This decision is not reconcilable with that of the Ontario Court of Appeal which followed just two years later. 6 TheHuang & Danczkay Property Management Inc. case is clearly out of step with Simpson. It remains, however, referenced in modern decisions. The Simpson case involved a plea of just cause to defend a wrongful dismissal claim brought by the alleged offender. The evidence in this case involved six different allegations, most of which were defended as consensual.

The appellate decision also stated that the question to be answered was whether the conduct was “nevertheless unwelcome”, even though consented to.

The distinction between conduct to which is consent given and yet is unwelcome will no doubt be a difficult one. Presuming momentarily that it is consent which sets the defining moment, how can it be that something to which consent is given, yet is “unwelcome” that rules the day? Does this mean that the consent was not truly voluntary, given a power imbalance? This is likely the interpretation, but it does ask the question of why this was not stated directly.

The appellate court stated that the responsibilities of a person as a manager require him or her to be mindful of the adverse consequences of his conduct as it may impact other employees and the workplace.

It is clear that the court was addressing the consensual romance as one which should be not allowed, given the potential impact on the specific employee and the workplace at large.

Also, the court noted that the questioned conduct came from a senior person, and then determined the standard to be expected of such a person, much like the Huang 7 case. Furthermore, the appellate court noted that the trial judge failed to address the fact that Mr. Simpson was the supervisor of all staff. It was an error for the trial judge to ignore the supervisory role of the respondent and to treat him as one of the employees.8

The Court of Appeal continued to note that the conduct of such a senior person, whether such conduct appeared to him as consensual or not, was to be regarded as a violating his duty to the employer. This statement sets the standard expected of management in the modern context.9

Just as importantly, while the Court of Appeal did find that the offensive conduct did create prejudice to the workplace, it also stated that the failure of the plaintiff, in this case the most senior person in the organization, to ensure a safe workplace, did, in itself, justify termination for cause. It was not necessary to prove prejudice.

These are two important general principles from Simpson. The first is that a romantic relationship between a person in authority and a subordinate should not be permitted. The second is that where the issue of consent arises, the test is not whether consent was actually given or implicitly done so by conduct, but rather whether it was “welcome”.

The same conclusion had been reached in an earlier 1998 Court of Appeal decision, 10 which similarly arose from a defence to a wrongful dismissal action. The plaintiff was the senior person in the security department and had been a participant in activities he was obliged to prevent.

A case following Simpson considered whether it was possible for a management person to have a “consensual” relationship with a subordinate. In this immediate case, the plaintiff manager had been reprimanded for a prior similarly consensual relationship. Just cause for dismissal was readily found. 11 The court did speak to the general question of whether such a relationship may lead to dismissal to which the answer was an “unequivocal sometimes”.12

The present status of the common law is that given a power imbalance, a senior manager should not be permitted to engage in a consensual, even a “welcomed” relationship, with a subordinate. There need be no uncertainty.

Some inroads to this as a general proposition were found in a fact situation in which the policy document of the employer appeared to support the existence of such a relationship,13 based on the document which contemplated one spouse reporting to another.

The case revolved around the search for such a constitutional document which prohibited this conduct and in its absence, the need for proof of prejudice. It should be noted in this instance the plaintiff had recommended his intimate acquaintance be promoted, a decision which was not reversed following his termination. The court noted that the plaintiff did not conceal the relationship.14 No cause for dismissal was found. An award of four months' notice was provided.

A further case considered a fact situation15  in which the plaintiff had a consensual relationship with a junior employee who initially did not report to him. She was later transferred to his department, a decision influenced by his recommendation.

During this relationship, the employer introduced a policy which did not forbid a consensual workplace romance, but rather mandated its disclosure by the more senior person. The manager denied the relationship to management on several occasions when he had been requested to confirm or deny the rumours in the workplace which were put to him. He then admitted the relationship, was suspended and instructed to remain away from the business premises pending the company’s deliberations, a directive which he violated twice. Just cause was found.

The court found that the plaintiff’s violation of the company’s policy book and his dishonesty to senior management was grounds for dismissal. One would expect that the breach of the policy itself, apart from the plaintiff’s deceptive tactics and his failure to follow the instruction to stay away from the workplace, would have been enough to justify dismissal.

A further case arose under the Canada Labour Code. 16 The applicant was a bank manager who had been investigated for stalking a female employee. He initially denied and then admitted an intimate relationship with his then subordinate employee. The relationship was “consensual”. He had also disclosed to her certain information from a prior unrelated performance issue.

On first level he was reinstated, notwithstanding findings made of (1) breach of confidentiality, (2) misleading the Bank initially of his relationship with the employee, (3) and that his relationship put the Bank at “real risk” in the local community due to the potential of adverse publicity.

This cannot be the correct law, following Simpson.

This decision was reviewed judicially by Rennie J. who on first instance, set aside the adjudicative decision. Rennie J. found, amongst other failings, that the first decision failed to give weight to the status of the complainant as a manager and that it was his duty to show good judgment and leadership.

Upon further review to the Federal Court of Appeal, on the issue of whether a power imbalance and resulting apparently consensual affair, the FCA did deal with the issue of “true consent” and whether the relationship was “welcome”. The Court concluded that this issue was not, however, the reason for termination.

The Appellate court noted:

This was not the basis on which BMO dismissed Mr Payne, and it has not challenged the Adjudicator’s finding that Mr Payne had not breached its anti-harassment policy.

The court appeared to fixate on the reason for termination as an alleged breach of the anti-harassment policy which required active favouritism. 17

In neither the adjudicative decision nor that of the FCA is there any reference to the principle that, given a management grade position and a “consensual” relationship with a vulnerable subordinate, two arguments should follow. 18

The first is that the very existence of this conduct should be cause for discipline and secondly that there is a distinction between consensual and welcomed conduct.

The court did disagree with the remedy of reinstatement and returned the case to the adjudicative level for a new hearing on that issue.19

A similar issue arose also in the defence of a wrongful dismissal case in which the employer argued cause based on two consensual relationships. 20

Absent a relationship of a power imbalance, the court looked to proof of actual prejudice due to the existence of the relationship. The first relationship, which was for roughly 3 years, was with an employee of a large company in Regina, which was not a client of the defendant accounting firm, although she was a personal client. She was also active in the local Chamber of Commerce, as was the plaintiff and one of the principals of the firm. This relationship had ended between one to two years by the time the plaintiff had been terminated. No prejudice could be found. Of some note, however, is that the court did not apply the test of the risk of potential prejudice and looked only to the presence of actual harm.

As to the second relationship, the plaintiff, a part owner of the defendant business, also had a “consensual” relationship with a lower level staff member. It was found that he lied three times to his co-owners in denying this relationship. It was also found that she was “vulnerable”.

On the question of whether a consensual relationship was, in itself, grounds for termination, in this context, the trial judge apparently conducted a review of common law authorities and found no law on the subject of whether a sexual relationship, given a power imbalance, can be cause for dismissal. The analysis missed the definitive authority of Simpson, although it did refer ironically refer to Dooley.

Based on a review of these authorities, the court concluded the existence of a truly consensual sexual relationship between a manager and a subordinate is not sufficient, on its own, to justify a dismissal with cause, but it is a factor that can form part of the grounds for dismissal.

With respect, the decision is wrong. It is also obiter as just cause was found for other reasons. 21 This issue may be readily resolved by a firm policy manual which defines the correct standards of workplace conduct.