Denied: Employer's appeal of wrongful dismissal after harassment

The British Columbia Court of Appeal has dismissed an employer’s challenge of a determination that it shouldn’t have fired a worker for sexually harassing a subordinate.

The decision demonstrates how difficult it is for employers to be successful on a just cause termination, according to Natalia Tzemis, an employment and labour lawyer at Harris and Company in Vancouver.

“I appreciate the employer had a lot of good arguments as to why there were errors in the trial judgment,” says Tzemis. “But it was an uphill battle for the employer and I think it really does speak to the practicality of how challenging it is.”

Worker acknowledged inappropriate touching

The 62-year-old worker was employed as a head baker with Café La Foret in Burnaby, BC, for two stints totalling two years.

On Nov. 9, 2020, the worker was discussing a massage he had received on his neck, shoulder, and lower back with a female subordinate. As he described the massage, he touched the subordinate’s back, shoulders, neck, and right buttock.

The worker complained to management. The general manager met with the worker, who acknowledged touching the subordinate without thinking. Surveillance camera footage showed the worker touching her shoulder but was unable to show anything else.

The worker admitted that he had made a mistake and offered to either sign an apology letter or resign if the subordinate was distressed about what happened. The general manager said that management would investigate.

The subordinate said that she wanted a written apology from the worker so that she could report the incident to police. The general manager asked the company’s corporate secretary to write an apology letter to be signed by the worker. The apology letter was prepared in the form of an affidavit.

The worker expressed a willingness to sign an apology letter, but he refused to sign the affidavit for legal reasons – the affidavit referred to “inappropriate touching” and required the worker to avoid female staff members, which the worker felt was impossible to do if he continued to work at the café. The company told him that if he didn’t sign the affidavit, his employment would be terminated.

The company issued a record of employment (ROE) on Nov. 18 citing the reason for issuance as dismissal for “sexual harassment and bullying of female subordinate staff.”

Wrongful dismissal suit

The worker sued for wrongful dismissal, while the company maintained that it had just cause for dismissal for sexual harassment, dishonesty during the investigation, and an unwillingness to apologize.

The BC Supreme Court found in the worker’s favour, noting that the company’s attempts to obtain an apology and repair the employment relationship showed that it didn’t think that the harassment was serious enough on its own to justify dismissal.

The court found that the worker’s inappropriate touching of the subordinate was sexual harassment, but it was on the less-serious side of the spectrum that didn’t rise to the level of just cause.

The court also found that the worker was not dishonest, as he acknowledged touching the subordinate and offered to apologize. The worker refused to sign the affidavit because it was different than an apology letter, had legal implications, and made it impossible for him to continue in his job.

The court ordered Café La Foret to pay the worker three months’ wages in lieu of notice plus $25,000 in aggravated and punitive damages for bad-faith conduct from requiring the worker sign an affidavit that essentially made him out to be a sexual offender in order to save his employment.

Employer appeal of sexual harassment ruling

Café La Foret appealed, arguing that the trial court erred in finding that the worker was not dishonest, the court didn’t consider the worker’s cumulative misconduct, and it incorrectly assessed the nature and extent of the sexual harassment. The company also challenged the global award of aggravated and cumulative damages.

The Court of Appeal agreed with the trial court that the worker was not dishonest. The worker acknowledged touching the subordinate and admitted to making a mistake. Although Café La Foret contended that the worker denied touching the subordinate’s buttocks, the appeal court found it was reasonable for the trial court to find that the worker admitted to all of the touching at the time of the meeting with the general manager.

“The Court of Appeal said that it couldn't, on the evidence, say that [the worker] didn't admit to touching [the subordinate’s] buttocks because there was some exchange with his supervisor at the time of the incident where the supervisor asked him, ‘Did you touch her shoulder, buttocks and another body part?’ and the worker responded that he did and he was very sorry,” says Tzemis. “And so the Court of Appeal couldn’t overturn that finding because there was evidence to support the trial judge's finding that he wasn't dishonest and that he did, at the time, admit to touching the [subordinate’s] buttocks.”

The appeal court also agreed with the trial court’s finding that the worker was not dishonest in refusing to sign the affidavit, as the affidavit had different connotations than an apology letter. The worker was clear in his willingness to apologize, said the Court of Appeal.

The appeal court also discounted the café’s ground of appeal related to the cumulative assessment of the worker’s misconduct. Given that the worker was not found to be dishonest, it was reasonable to assess the sexual harassment on its own, said the court.

Just cause analysis

With regards to the contextual analysis for just cause, the Court of Appeal also noted that the company’s willingness to work towards an apology before resorting to dismissal was one of many factors the trial court considered, as opposed to using that willingness to lessen the seriousness of the harassment.

“Unlike the employer’s willingness to remedy the relationship - which could be a factor - the employee’s willingness to remedy the relationship will be a significant factor as to whether or not the employer has just cause,” says Tzemis. “In this particular case, the remedial efforts ended up failing not because of [the worker’s] conduct, but because of Café La Foret’s conduct.”

The Court of Appeal also found that, while all sexual harassment is serious, there is a spectrum to be considered. The worker’s light touching of the subordinate was at the lower end of the spectrum, as opposed to more serious forms such as “more prolonged touching, more extensive body contact, forced kissing and fondling,” said the appeal court.

Both the appeal court and the trial court also considered that the worker’s intentions were not to harass the subordinate, says Tzemis.

“The Court of Appeal agreed that intention isn't relevant to whether or not sexual harassment took place but, in the context of a just cause dismissal, it does have some relevancy because the question is whether or not the misconduct amounts to just cause,” she says. “And if somebody did something intentionally, you could see how that would weigh in favor of the misconduct being for just cause.”

One thing upon which the Court of Appeal agreed with Café La Foret was that the trial judge erred in characterizing the damages as both aggravated and punitive in a global award. The two types of damages are “distinctive remedies, with aggravated damages compensating for mental distress stemming from the manner of termination, while punitive damages are intended to punish the employer for egregious or outrageous behaviour,” the appeal court said.

However, the Court of Appeal agreed with the trial court in that the company’s manner of terminating the worker involved bad faith and the worker’s evidence was that he felt betrayed and depressed, so aggravated damages were appropriate. The $25,000 total was appropriate for aggravated damages with no need for punitive damages, as “nothing more is needed to achieve the goals of denunciation, deterrence, and retribution,” said the appeal court.

The Court of Appeal dismissed Café La Foret’s appeal, with the exception of varying the damages to be only aggravated with no punitive damages.

Café La Foret had some solid arguments, but the odds weren’t in its favour, says Tzemis.

“The employer was arguing some factual findings that the [trial] judge had made, and those are generally quite difficult to be successful on appeal when you're challenging a finding of fact,” she says. “The employer did a great job identifying those grounds for appeal, but ultimately they weren't successful because either the Court of Appeal agreed with those findings of fact or, if there was some disagreement as to whether or not certain factors should have been considered, the Court of Appeal found, at the end of the day, they're not material to the decision so it doesn't warrant overruling the trial judge’s decision.”

See Café La Foret Ltd. v. Cho, 2023 BCCA 354.