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Milligan v. Maczak Holdings Ltd. – Sexual harassment, and the perils of a policy-less workplace

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On September 29, 2023, the Human Rights Commission of Prince Edward Island (“PE HRC”) rendered its decision in the matter of Milligan v, Maczak Holdings Ltd.1, a case involving sexual harassment of a restaurant worker at Smitty’s Family Restaurant (“Smitty’s”) in Charlottetown, PEI.  Importantly, Smitty’s lacked any harassment policy or training at the time, which strongly informed the Panel’s analysis and remedies, including a $15,000 order for general damages. As outlined below, this case is instructive for highlighting the ignorance, myths, and misperceptions employers may hold not only about sexual harassment in the absence of related policies, but also about the extent of their fundamental responsibility for ensuring a safe and non-discriminatory work environment for employees.

The Complainant, who was a server at Smitty’s, alleged that from October 2017 to January 2018, she was subjected to a myriad of forms of sexual harassment by several male employees (some of whom were in managerial positions), including sexual joking and innuendo, the use of derogatory language, and sexual touching. Further, the Complainant alleged that she experienced sexual harassment by a regular customer who frequently asked for hugs from the servers. She testified this was unwelcome, but that she felt pressure to comply with his requests and/or to “socialize” with him. The Complainant also informed management of incidents of sexual harassment involving other staff members, including a serious allegation of sexual assault that occurred off-site between coworkers – one of whom being her stepdaughter.

Despite reporting these incidents to management on multiple occasions, the Complainant testified she found the managers unresponsive. Smitty’s provided various reasons for failing to act, including that these situations were a “he said-she said” with no witnesses to corroborate what occurred; that the Complainant was free to leave (the restaurant) if she wanted; and that there was nothing they could do. At other points, the owners denied being told of these incidents altogether. Regarding the customer’s requests, management indicated it was up to “the girls” whether to decline his hugs if they so wished, and that they were free to say “no” if they were uncomfortable. Lastly, as the sexual assault was alleged to have occurred outside of work, management did not believe there was anything they could do to protect their staff, and that off-site incidents outside of work between employees “were not the business of the employer.” Smitty’s continued to schedule these employees to work some of the same shifts, but “not alone.”

In its analysis, the Panel found Smitty’s reasons to demonstrate a fundamental “lack of awareness of an employer’s responsibility to their employees” and a display of their “collective lack of experience, knowledge and ability to deal with harassing behaviour.” It stated that allowing a customer to seek hugs from staff was a form of sexual harassment which contributed to an unsafe work environment for employees, and that this behaviour in the workplace was essentially condoned by Smitty’s.

Ultimately, the Panel found that although Smitty’s may not have seen issues or known how to address them (or chose not to), they were still responsible and that this, “combined with having no policy or training allowed sexual harassment to be normalized and become part of the work culture.” It found that on a balance of probabilities, the Complainant experienced sexual harassment at Smitty’s which cultivated a work environment that led, in part, to her ongoing mental health issues for which she required a medical leave.

Notably, when the Panel addressed remedy, it focused specifically on the Respondent’s lack of harassment policy or training, holding,

In a workplace situation, employers can, both by accident and design, create an environment where sexual harassment can occur. Sometimes actions are not seen as those attributing to an unsafe environment for employees but the workplace becomes a “poisoned” environment which allows sexual harassment to happen without consequence…

In this case, there were no procedures in place to deal with harassment. Smitty’s did not respond to the concerns raised by their employees in a timely or appropriate manner, the complaints were not taken seriously, and it was not a healthy place for the Complainant…

Combined with no policy or training about sexual harassment and no active responses to complaints by the owners, the working environment at Smitty’s was unsafe for staff and ripe for exploitation.

The Panel awarded the Complainant $15,000 in general damages, ordered Smitty’s to provide the Commission with a copy of its new Harassment Policy, and to ensure its staff received sexual harassment training within four months of the date of Order, repeated on an annual basis for three consecutive years (mandatory).

In sum, this case illuminates a number of key takeaways:

    • the significant benefits of having an updated and detailed harassment policy in place (along with regular training);
    • it ensures organizational compliance with current occupational health and safety legislation;
    • it compels employers to carefully consider, learn about, and outline forms of inappropriate conduct (such as sexual harassment); and
    • it creates discrete channels for employees to report this type of behaviour.

Moreover, it ensures managerial accountability for properly documenting, investigating, and addressing problematic sexual behaviour in a timely manner; this in turn bolsters employees’ confidence in the process, morale, and sense of safety at work. Service sector employees, especially those who are not unionized or who work in smaller restaurants with fewer procedures and policies for addressing sexual harassment, remain some of society’s most vulnerable workers. Female-identified employees, and those from minority groups, are often particularly susceptible to and impacted by forms of sexualized treatment or violence, with little recourse. Having an informed harassment policy in place may prevent the formation of a toxic and misogynistic work culture that can be hard to undo over time, especially in male-dominated work environments. While the award for general damages in this case was on the low end of the range (which varies provincially), it represents the very real cost consequences for employers, as human rights tribunals are more alive than ever to the forms and adverse impacts of sexual harassment in the workplace.

1 2023 CanLII 90442 (PE HRC).

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