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Who’s on the hook? Vicarious liability and human rights law

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One question that often arises when addressing incidents of discrimination or harassment under human rights legislation is who is liable. This issue arose in a recent decision of the Ontario Superior Court of Justice, Incognito v Skyservice Business Aviation Inc., 2022 ONSC 1795 (CanLII), leave to appeal refused 2022 ONSC 3421 (CanLII) (Ontario Divisional Court), a decision in a motion to strike part of a claim for sexual assault and sexual harassment.

In addition to naming the alleged harasser personally, the claim also named the corporate employer, on the basis that the corporation was vicariously liable for the incidents of sexual assault and sexual harassment. The claim for sexual harassment was brought under s 46.1 of the Ontario Human Rights Code (the “Ontario Code”), which permits a claim that would otherwise fall within the jurisdiction of the Human Rights Tribunal of Ontario to be brought as part of a civil action.

The court granted the corporation’s motion to strike the claim of vicarious liability for sexual harassment on the basis that, under s 46.3 of the Ontario Code, an employer was not deemed liable for harassment under ss 5(2) or 7 of the Code. The court did, however, grant leave to amend to include claims that arose under other provisions of the Ontario Code.

The principle of vicarious liability for discrimination and harassment was addressed in Robichaud v Canada (Treasury Board), [1987] 2 SCR 84 (CanLII),  where the Supreme Court of Canada determined that an employer may be vicariously liable for acts of discrimination or sexual harassment conducted by its employees. The Court held that the rationale for this liability was broader than vicarious liability at common law for negligence, as intent was not a factor in determining liability for a breach of human rights legislation, and as human rights legislation is remedial rather than punitive and focusses on the effects of discrimination, not its causes. The decision made it clear that an employer has an obligation to provide a workplace free of discrimination and harassment, and may be liable for not doing so.

In some Canadian jurisdictions, the issue of deemed or vicarious liability is not specifically addressed in the legislation, and is generally determined in line with the Supreme Court’s reasoning in Robichaud. In others, human rights legislation may contain provisions which specifically address deemed or vicarious liability. For example, s 44(2) of the British Columbia Human Rights Code effectively codifies Robichaud. In other jurisdictions, however, the legislation may limit or qualify the scope of vicarious liability in human rights proceedings. For example, under s 65(2) of the Canadian Human Rights Act,1the deeming does not apply if the impugned action was done without the employer’s consent, if the employer had exercised all due diligence to prevent the discriminatory act, and if the employer had further exercised all due diligence to mitigate or avoid the effects of the conduct in question.

As noted by the court in Incognito, harassment, including sexual harassment, is excluded from the deemed liability provision in s 46.3(1) of the Ontario Code; this would be the case whether the vicarious liability claim was brought to the Human Rights Tribunal of Ontario or, as in this case, as part of an action under s. 46.1 of the Code. However, though an employer may not be deemed liable for an act of sexual harassment under this section, that is not the end of the issue. The court in Incognito allowed the plaintiff to seek to amend her claim to include relief under other provisions of the Code, specifically pointing to two cases, Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520 (CanLII), at paragraph 68, and Ontario Human Rights Commission v. Farris, 2012 ONSC 3876 (CanLII) (Div Ct), at paragraph 33, which set out two other means by which a corporation may have liability for incidents of sexual harassment.

First, if management is aware of the harassing conduct and fails to address it, they may be found to have created a poisoned work environment. If an employee suffers harm, including sexual harassment, due to a poisoned work environment, the failure of management to have taken steps to address the issue may amount discrimination under s 5(1) of the Ontario Code, for which an employer will be deemed liable under s 46.3(1). The claim, as set out in paragraph 7 of Incognito, clearly allege a workplace where management not only failed to address sexual harassment, but in fact had set up a workplace environment which created a “fertile atmosphere for sexual harassment.”

Second, case law relying on the organic theory of corporate liability has generally held that where the alleged harasser is a “directing mind” of a corporation, the corporation could be held liable for incidents of harassment, despite s 46.3(1) of the Code. That case law has generally held that an individual is a “directing mind” if they provide some function of management.2  The court in Incognito noted that there was no allegation in the claim as filed that the individuals responsible for the harassment were directing minds of the company. However, the individual respondent was a vice president, and in light of the court’s reference to Strudwick and Farris, both of which note that a corporation may be liable for the actions of a directing mind, presumably it was open to the plaintiff to amend her claim accordingly.

In light of the principles set out in Robichaud that the focus of human rights legislation is on addressing the impact of the conduct, courts and tribunals have recognized that responsibility for objectionable behaviour should include those who are in a position to make the changes necessary to ensure a workplace free of discrimination and harassment. It is well established that in human rights legislation, rights should be interpreted broadly, and exceptions narrowly.3 Though this does not mean a court or tribunal can simply ignore the words used in the legislation, the interpretation given must nonetheless consider the broader purpose of human rights legislation when determining who may be on the hook.4 In Incognito, though the court, correctly, noted that an employer would not, under s.46.3(1), be deemed liable for a claim of harassment under ss.5(2) or 7 of the Code, it left it open for the plaintiff to amend her claim to nonetheless hold the employer liable.

1 Robichaud was a federal case, but it was interpreting the Canadian Human Rights Act provisions as they read prior to s 65(2) coming into force.

2 See George v 1735475 Ontario Limited, 2017 HRTO 761 (CanLII), at paragraph 60; Halliday v Van Toen Innovations Incorporated, 2013 HRTO 583 (CanLII), at paragraph 84; and Fu v Ontario (Government Protection Service), 1985 CanLII 5209 (ON HRT), at paragraph 27(5).

3 See British Columbia Human Rights Tribunal v Schrenk, 2017 SCC 62 (CanLII) at paragraph 31; Landau v Ontario (Finance), 2011 HRTO 1521 (CanLII), at paragraph 12; and Kuti v Bondfield Construction Co. Ltd., 2018 HRTO 478 (CanLII), at paragraph 13.

4 See Shrenk, at paragraph 32.

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