Genesis of Lost Income Claim

A claim for lost income may arise in various ways. It may come from a direct termination, or due to a “poisoned work environment”, or it may be based on a general reprisal claim. In the latter case there is no necessity to prove that the substantive claim succeed on its merits.¹

Make Whole

Many past cases have linked the length of the complainant’s employment history to the quantum of the lost income claim. This principle is incorrect. The purpose of the human rights remedy is to make-whole, that is, to restore the complainant to their position as it “would have been had the discriminatory [conduct] not occurred. ²

As the remedy is restitutional in nature, the length of employment and the “quality” of the position held are irrelevant factors in the assessment of the income loss.^{3 4  5}

The tribunal must assess what the complainant would have earned if the discrimination had not occurred.⁶In the immediate case, Ms. Heintz obtained employment for a short time period after her last day of work and then enrolled in a training and placement program and attended a full-time information technology program for one year, from July 2001 to July 12, 2002. She testified that she was required to change her career path due to the extreme emotional anxiety she suffered due to the conduct of the respondent. A full lost income claim was awarded for the time period as noted, such being 21.5 months, less any sums received. ⁷

The modern view of the income loss is based on the claim made from the date of the event giving rise to the loss to the date of the hearing. The income loss will follow once the causal connection has been established. The continuum of the claim may then be subject to mitigation issues and other arguments.⁸

A further example of this principle is the 1992 Ontario Board of Inquiry decision in which the applicant was found to have been adversely treated due to age. He was allowed his lost income for a five year period through to his intended retirement age of 65. ⁹ He recovered $118,000 for lost income plus the sum of $54,000 for a pension loss due to his termination at age 60. This was not a "future" loss as discussed elsewhere. It is a loss suffered due to termination for the enhanced pension he would have earned had his employment continued to age 65.

Common Law Concepts Not Followed

Wrongful dismissal concepts are foreign to the determination of this income loss. ¹⁰

Anomalies Noted

Many past cases have deviated from the rules set by the Court of Appeal and set the lost income based on wrongful dismissal factors. ¹¹ In Baylis-Flannery v DeWilde (Hendriks), a claim was allowed for lost income and also awarded an increase in the rate of pay which had been withheld as a reprisal. Although the words expressed in the decision speak of restitution as the principle of assessing the lost income claim, the period allowed was 4 weeks, apparently influenced by the length of employment of four months. It was noted that the date of termination was March 17, 2000 and that alternate employment was attained “sometime in the summer of 2000”.¹²These decisions do not follow the make whole philosophy. It is respectfully submitted that they are not good law.

Need for a Causal Link

The first test then to establish the causal link is the application of the “but-for” test. The issue may develop that there may be multiple causes, as noted.  Arguments have been made to amend this test from “but-for” to “material contribution” to the risk. This has not been done, however, to date. ¹³

The complainant has the onus to show "some causal connection" between the adverse conduct and the loss. ¹⁴. The causation required to consider remedy is distinct from the causation needed to show liability.

Causation, in this respect, that is, to determine the lost income claim, is distinct from causation to establish liability. As stated by the tribunal in Francis:

Causation is “simply an expression of the relationship that must be found to exist” between the wrongful act of the respondent and the injury to the complainant in order to justify compensation:

The need to show the causal connection leads to two arguments. The first is that the presence of other factors impacting the lost income claim may lead to a discount of the claim, depending on the impact of this extraneous influence.

The second is that even though there is shown a causal connection to allow the commencement of the lost income claim, other factors may later intervene to cause the cessation of the lost income claim.

The Walsh case illustrates the application of this causal connection to set the damage claim. It was determined that the income loss ¹⁵ was initially caused by the conduct of the employer until 2000, at which time, however, other forces had intervened to lead to the conclusion that the causal link was no longer extant.

The very same situation arose in an Ontario case ¹⁶ in which the applicant had been terminated due to a medical disability in October of 2001. His physician found him medically able to return to employment in February of 2002. A lost income claim had been sought to August 2002. The claim for lost income was allowed to June of 2002. The tribunal found that beyond that date, other factors had intervened to cause the income loss for which the employer could not be held responsible.

This principle is reviewed in further detail here.

Contingent Risk

The tribunal may consider the submission that the fact that the harm suffered as a result of discrimination may have been suffered in any event due to other non-discriminatory causes or unrelated events. When successful, this plea may result in the application of a discount to account for this risk. ¹⁷

This was the case in the Kelly case. ¹⁸

The B.C. Human Rights Tribunal considered this issue of income loss in a case in which a medical doctor’s application for a post-graduate specialized training was delayed due to a mental disability of ADHD and Non-Verbal Language Disorder. An income loss was found due to the delay in the applicant’s ability to enter this field for a 6 year period. This submission was one of first instance, to allow a claim based on the delay incurred in entering the training program.

The ratio of the discount was to reflect the risk of the applicant not completing the program, which was set at 10% and that he may not have been able to maintain a full-time practice and/or may have been required to take on a reduced volume of patients, a factor which was set at a further 20%.

The total lost income sum was set at $385,000.

A similar discount to the wage loss was noted in Francis v Justice. The tribunal agreed with the submission that extraneous litigation relating to the applicant's litigation prolonged and excaerbated the applicant's mental illness. A discount was allowed of 20% to this factor.

The same concept was applied by the B.C. tribunal in its 2013 decision. ¹⁹ The tribunal found that issues with the applicant's prior employment resulted in publicly available adverse commentary which were determined to add to his difficulties in finding alternate employment. A discount of 25% was applied.

Further Submissions

There may be other arguments made that certain events have intervened which have disrupted the causal  connection. In addition, the employer may argue that the employment relationship was destined to end due to performance issues, the closing of the business or economic redundancies and similar factors. These are reviewed here.

In addition, submissions may be made that there should be no lost income or it should be reduced due to expected termination due to an existing contract which sets the termination date, or a prior set retirement date, as discussed here.

Mitigation

Mitigation will also be an issue. Human rights cases have been aggressive in reducing or eliminating a claim due to the failure to mitigate, as considered here.

Disability Insurance Issue

It was not apparent from the decision in the Walsh case if there was disability insurance coverage in place at the time the medical disability arose. The issue of disability insurance and a lost income claim is reviewed here.

Foreseeability

The concept of foreseeability is not a relevant consideration when assessing income loss. ²⁰ That is, the question of how long it may take for the applicant to have found other employment is not the question to be asked. This would be contrary to the basic principle of “restitutio in integrum”. ²¹

Foreseeability is limited to the issue of what type of compensation might be awarded, such as compensatory damages or loss of income. Once the loss of income is shown as foreseeable, the extent of such a claim is not governed by foreseeability.^{22 23}

In some cases it may be possible to assess the damage loss to the date of hearing and even beyond that date.²⁴

Principled Discretion

It would be expected that, apart from mitigation issues, ²⁵or otherwise an application of “principled discretion”, an order of reinstatement would be accompanied by an award for lost income to the date of reinstatement, subject to the limiting arguments as noted above which may negatively impact the award.

Examples of Exceptional Past Income Awards

Such was the case for a lost income award for an 8.5 year period from the date of dismissal to the date of hearing. ²⁶

Similar awards have been made for a wage differential for approximately 8 years in which the complainant Karumanchiri was instated to the promoted position of Chief Chemist. ²⁷

The same conclusion was reached by the Canadian Human Rights Tribunal in Singh v Statistics Canada (Mactavish) in which the applicant was instated to a more senior position due to a finding of adverse treatment due to age. He was awarded the income differential from August 1989 to the date of instatement in November of 1998. [/efn_note]

An award of salary arrears was also made of roughly 9 years not only to the applicant but also his spouse who had also been treated unfairly. ²⁸

An award of 2 years and 3 months lost income due to a medical discrimination complaint. ²⁹A potential lost income loss was set in one case at 10 years, ³⁰and a loss of 10 years to the date of the hearing in another. ³¹

The Ontario tribunal allowed a claim of lost income for 5 years and 7 months, to co-ordinate with the applicant's 65th birthday. ³²

The B.C tribunal ordered a lost income compensation for 7 years and 4 months, in the case of a permanent disability caused by the employer's conduct. ³³ and 5 years and 4 months in a subsequent decision. ³⁴

A claim for a future income loss is considered here.

A summary of past and future lost income claims in chart format is found here.