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The rising tide of damages

Historically, damages were likely too low to dissuade employers from questionable practices

By Stuart Rudner

Not that long ago, I wrote an in-depth article for Canadian HR Reporter's HR Strategy magazine (formerly Executive Series Digest) entitled “7 Figure Pain”, in which I discussed the fact that while historically, damages awarded in Canada for mental distress, human rights breaches, punitive damages and the like have been relatively minimal compared to our neighbours to the south, the amounts have been rising in recent years. In the article, I pointed to a number of six and even seven-figure awards, though it is clear that those are still anomalies.

However, in recent years we have seen the Ontario Human Rights Tribunal’s authority to award damages increase, along with the continuation of rising awards. Most recently, in the case of O.P.T. v. Presteve Foods Ltd., we saw an award of $200,000 in damages arising out of breaches of the Human Rights Code. This is, effectively, a new high watermark in the context of human rights damages, and seems to confirm the trend that I identified a few years ago.

Historically, the reality is that our damages were probably far too low to effectively dissuade most employers from engaging in questionable practices, as the penalty if they were caught would be relatively minimal. My law partner, Natalie MacDonald, authored the leading text in this area, Extraordinary Damages in Canadian Employment Law. She provides a thorough review of an often confusing area, explaining the differences between — among other things — punitive damages, aggravated damages, damages for mental distress, moral damages, et cetera. One of the underlying themes of her book, and of presentations she has given, is that general damages in Canada are far too low to be effective, and if we really want to eliminate problems such as discrimination and harassment, the cost of engaging in such behaviour must be dramatically higher.

In the Presteve Foods case, the facts were particularly egregious and horrific. The two complainants were sisters who moved from Mexico to Ontario to work as temporary foreign workers. As is often recognized, temporary foreign workers are particularly vulnerable to abuse, and in many cases, they continue to suffer in silence out of a legitimate fear that if they complain or resist, they will lose their jobs and be sent back to their home country.

In the Presteve Foods case, the evidence showed that the owner of the company, Mr. José Pratas, engaged not only in sexual harassment (not to minimize the impact of such conduct), but also in sexual assault. This conduct was not only horrific, and a breach of the Human Rights Code, but also criminal. Among other things, the evidence was that Mr. Pratas sexually assaulted both sisters, including touching their legs and vaginas over their clothes, forcing them to take off their pants, forcing them to touch his penis, grabbing their breasts, kissing them without consent, forcing them to perform fellatio, and on at least three occasions, forcing them to engage in sexual intercourse.

The tribunal explicitly noted that this was unlike any other case it had heard, and used the egregiousness of the conduct and the vulnerability of the complainants to justify the award of $150,000 to the older sister and $50,000 to the younger sister (many of the acts reported above were in relation to the older sister). Notably, the award was against Mr. Pratas personally, but also found that the corporate respondent was jointly liable for the damages. The company was also required to provide all of its temporary foreign workers with information and training regarding their human rights.

The facts of this case are horrific. Hopefully, some good will come out of this due to the fact that the two sisters were brave enough to come forward with their claim and pursue it all the way to a hearing, and the tribunal took the opportunity to send a strong message to this employer and others that such conduct will not be tolerated. Employers must start to recognize that discrimination, harassment, and particularly criminal assault, will not be tolerated and will result in significant consequences. That is the only way that we can expect to see a decrease in such behavior. In the past, the awards given to victims were often viewed as “the cost of doing business,rather than any substantial penalty for misconduct.

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Stuart Rudner

Stuart Rudner is a founding partner of Rudner MacDonald LLP in Toronto. Follow him on Twitter @CanadianHRLaw. He can be reached at srudner@rudnermacdonald.com.
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