Ontario tribunal offers reminders for employers in decision involving harassment allegations
Recently, the Human Rights Tribunal of Ontario (HRTO) took the opportunity to outline notable differences for employers when it comes to defining and understanding the liability of a poisoned work environment compared to claims of harassment.
The case involved a former GoodLife employee who worked as a personal trainer in London, Ont. from Nov. 13, 2017 to Jan. 2, 2018 when concerns about performance and behaviour led to her dismissal.
Several months later, she alleged sexual harassment by a co-worker while working at GoodLife. She said she made complaints about the harassment both before and after she lost her job, but the employer said it only heard about the complaints after the termination.
Ultimately, the tribunal dismissed the application because the former employee failed to establish that the company “failed in its duty to investigate the [employee’s] complaints of harassment.”
In addition, HRTO member Marinus Lamers pointed out that “caselaw has repeatedly held that an employer respondent has no legal duty to conduct a workplace investigation where the person requesting the investigation is no longer an employee.”
Defining a poisoned work environment
While the former employee did not allege that the harassment rose to the level of a poisoned work environment, the tribunal thought it “appropriate to address the issue of the sake of completeness.”
There are important distinctions between harassment and a toxic work environment, it said in its recent decision. In the human rights context, the latter will be found if there has been a “particularly egregious, stand-alone incident” or “serious, wrongful behaviour sufficient to create a hostile or intolerable work environment that is persistent or repeated.”
Relevant factors for a poisoned workplace include: the number of comments or incidents; their nature; their seriousness; and whether taken together, it had become a condition of the applicant’s employment that they must endure discriminatory conduct and comments.
A toxic environment “tends to be characterized by some serious conduct that creates a hostile, intolerable kind of work environment, that even a reasonable person in a similar situation would just conclude that a person could not continue to work there,” says Paulette Haynes, founder of Haynes Law Firm in Toronto.
This could include, for example, insulting or degrading behaviour, harassing comments, micromanaging or overly scrutinizing, offensive graffiti, she says.
“It can be argued when somebody is a victim of sexual harassment, generally, that environment can also be a poisoned work environment, such that it makes it untenable or insufferable for that person to continue to work there.”
An environment can become poisoned where there's discrimination or harassment on a code-protected ground, and it becomes essentially part of a person's workplace “to the point where they almost consider it a condition of that person's employment — that's how far the harassment has gone,” says Lori Anne Khaouli, associate lawyer at Grosman Gale Fletcher Hopkins in Toronto.
Employer liability with toxic environment
Further to the issue, the tribunal outlined differences for employers when it comes to liability with harassment or a poisoned work environment.
With the former, an employer is not automatically liable for acts or omissions by employees that violate the protections under the Code, it said. However, case law has held that an employer may be held liable in a case of harassment in two circumstances:
- under the “organic theory of corporate liability”, where the harasser is part of the “directing mind” of the corporate or organizational respondent
- where management knew or ought reasonably to have known of the harassment and failed to take appropriate steps to address it.
“Essentially, the directing mind of a corporation is someone who has maybe management of the corporation, or they have that level of responsibility that they can be considered a directing mind of a company,” says Khaouli. “If so, if they don't take any actions, they fail to act on known harassment, then it can lead to liability.”
The “organic theory of corporate liability” means an employer may be liable for acts of harassment carried out by its employees, says the HRTO, “if it can be proven that management was aware of the harassment, or the harasser is part of the management or directing mind of the organization.”
In contrast, where a poisoned work environment is found, an employer will be deemed to be liable under the Ontario Human Rights Code, without regard to:
- whether or not the comments or conduct that created the poisoned work environment were reported to management or management took reasonable steps to address such comments or conduct
- whether the individual responsible for the comments or conduct that created the poisoned work environment was part of the employer’s “directing mind” or just a co-worker.
If management is aware of the harassment and fails to address it, they may be found to have created a poisoned work environment, says Haynes.
“An employer will be deemed liable under s 46.3(1) if the employee suffers harm, such as sexual harassment, due to a poisoned work environment and management failed to take steps to address the issue under s5(1).”
The OHRC website provides additional information on “vicarious liability,” she says, which means an employer could be held responsible for discrimination, including acts or omissions, committed by employees or agents in the course of their employment.
While vicarious liability does not apply to the parts of the Code dealing with harassment — because a poisoned environment is a form of discrimination — when harassment amounts to or results in a poisoned environment, vicarious liability does apply, says Haynes.
“Importantly, under the Human Rights Code, there is no vicarious liability against an employer in respect of sexual harassment claims. This means that complaints must be brought against the individual who committed the sexual harassment, for example, a specific employee — not against the company.”
Risks of constructive dismissal claim
A poisoned environment can also result in a claim for constructive dismissal, which can be costly for employers.
“That's definitely a takeaway for employers from this case,” says Khaouli.
“Obviously, no one agrees to enter into an employment agreement or an employment contract that says anything related to ‘You’re consenting to a bad work environment or consenting to harassment’… If the employee is unilaterally being forced into essentially accepting a term of employment that they didn't agree to, then it can result in a constructive dismissal claim.”
While constructive dismissal wasn’t involved with the GoodLife case, often former employees will allege that there has been constructive dismissal on the part of the employer because of a toxic or poisoned work environment, says Haynes
“That need not be tied to a prohibited grounds,” she says.
“An employer arguably be found potentially liable for poisoned work environment on the claim of constructive dismissal, and that would be because in the employment contract there is, in fact, an implied duty that the employer will provide a work environment that is not so unwelcoming that a reasonable person in that situation will conclude the employee had no other choice but to leave.”
Employers should keep in mind that employees have up to one year to file a human rights complaint in Ontario, from the culminating event, and up to two years for a constructive dismissal claim, from the date of termination.
Investigating allegations of a poisoned work environment
Of course, an employer has an overarching obligation to provide and maintain a respectful workplace that's free of harassment and discrimination, under both the Human Rights Code and the Occupational Health and Occupational Health and Safety Act, says Haynes.
And when HR is faced with those kinds of allegations, “they should act promptly, respectfully, and in good faith, to explore what has gone on,” she says, adding the employer should take proactive steps to address the issue, which should mean an internal inquiry or external investigation.
“Employers, in an effort to minimize or avoid liability, they need to demonstrate that they were diligent in preventing and responding to allegations of harassment when it's brought to their attention during the course of employment.”
In cases like this, it's always good to keep a paper trail — whether you’re the employee or employer — to document the alleged harassment or poisoned work environment, says Khaouli.
“The main issue here is, essentially, the employer having… at a minimum, either the knowledge or they ought to have knowledge or awareness of the existence of harassment. If the employer never had knowledge, then they wouldn't have had any opportunity to conduct investigations or take the reasonable steps that they need to address the poisoned work environment.”
Appropriate responses to workplace toxicity
A big challenge for HR is how to respond to a finding of a poisoned work environment. Should the problem individual be put on leave or terminated, for example?
If there's a finding that there was toxicity, the employer could allow the complainant to work remotely when the perpetrator is at work, says Haynes.
“Certain accommodations could be there, that's one way in which perhaps these situations would be addressed.”
Or HR could consider transferring the perpetrator to another department, she says, “assuming that that transfer is not excessively unreasonable for that person that we don't want that person alleging constructive dismissal, in that their fundamental terms and conditions of employment have changed because they're being transferred.”
Transferring someone would be a good option in some circumstances, says Khaouli, however, “if they're not functioning well in one area, who knows if being transferred would even help.”
The employer’s response to findings of toxicity would definitely depend on the circumstances, she says.
“Some people may not even be aware that they're causing a poisoned work environment; like a manager, for example.”
There are varied levels of discipline possible in this situation, says Khaouli.
“I don't know if it is always the right decision to just terminate following [a finding of a poisoned work environment...] a lot of these cases come down to ‘he said/she said,’ and how much evidence that they can show, so I would say the level of discipline is going to vary a lot, depending on the circumstances.”
Preventing a poisoned work environment
It’s something to keep in mind because a lot of employers don't have reporting procedures, says Khaouli.
“Showing that the employer is taking preventative steps, before anything happens with it, I think that's a consideration that a tribunal will consider in these kinds of decisions.”
To avoid potential liability and to maintain staff safety and morale, harassment and discrimination policies should include a complaint mechanism so employees have somewhere they can go if needed, says Haynes.
And there should be a process for administering that complaint, whether informal or formal, with staff trained on those policies and procedures, she says.
“The tribunal is going to look very carefully at what due diligence steps the employer took to maintain the worksite: ‘Did they respond, did they take steps to prevent, to stop the behaviour, etc.?’ They will be looking at that.”
And because the tribunal looks at different factors when it comes to a poisoned work environment — such as how serious certain incidents or comments were and whether they became a condition of that employee's employment — employers should be training and instructing the people who would be considered a directing mind of the company, says Khaouli.
“Senior managers, for example, or directors, they should be aware of things because a lot of them don't know, unfortunately, when they're actually contributing to a poisoned work environment, and so [it’s about] being aware of what could actually contribute to a finding of poisoned work environment, what actually impacts how people conduct themselves.”
