Casual culture no excuse for harassment

Hugs, comments lead to award of $15,000 for self-employed real estate broker

Friendly, casual workplaces do not excuse sexual harassment, even if the affected person is self-employed and does not immediately complain.

These were a few of the takeaways for employers in a recent Human Rights Tribunal of Ontario case involving a real estate brokerage firm.

Adria Panucci was a self-employed commission salesperson working under the supervision of Ronald Stockdale, broker of record at Seller’s Choice Stockdale Realty in Brantford, Ont., from 2007 until she resigned in late 2012. The relationship apparently took a turn in 2012 when Panucci alleged Stockdale started making comments about her appearance. She said he asked her to spend more time with him, drink wine with him and give him hugs. The agent also said he touched her shoulder in a caressing manner and tried to kiss her.

A co-worker told Panucci she had similar encounters with Stockdale. Panucci also said she told the supervisor his attentions were unwelcome and she wanted him to stop.

After this, Stockdale was less helpful at work, according to Panucci, who eventually resigned. Stockdale then sent her several letters requesting repayment of monies allegedly owed to the brokerage.

Stockdale said he ran his business in an informal way, and described his style as casual and friendly. He said he tried to encourage Panucci in her work and mentored her in trying to improve her sales. Stockdale said he paid her compliments and tried to boost her confidence, but he did this for all the agents.

He also agreed they had hugged but denied the agent ever told him he made her uncomfortable, until Panucci and her husband met with him before she left.

In the end, the tribunal ordered Stockdale and his brokerage to pay $15,000 for violations of Panucci’s right to be free from discrimination and injury to her dignity, feelings and self-respect. They also were required to implement a policy aimed at preventing and addressing sexual harassment.

Despite being self-employed, Panucci was still covered by human rights legislation, said the tribunal, as it concerned a matter “with respect to employment.”

The fact that Panucci wasn’t a traditional employee was not a bar to her claim, said Daniel Pugen, partner at Torkin Manes in Toronto. 

“The takeaway is if you’re working for a company, whether it’s as a contractor of self-employed commissioned sales agent, it’s going to be difficult for an employer to rely on that technicality to dismiss a claim,” he said. “Human rights violations can capture relationships that are beyond the T4 payroll employee.”

It’s a good reminder for employers, said Barry Kwasniewski,  partner at Carters Professional in Ottawa.

“Even if they hire people, for whatever reason, not as employees but on an independent contractor basis or on a self-employed basis, if they’re actually providing services… in the premises of the employer or under the direct control of the employer, then the human rights laws may apply.”

It’s an employment-like relationship and the tribunal and the courts have taken a very broad view with respect to relationships that fall within the ambit of the Ontario Human Rights Code, said Abdul-Basit Khan, partner at WeirFoulds in Toronto.

“One could have argued on her behalf that even if it didn’t fall into employment, it fell into contracts because there is a prohibition in the code against discrimination on the basis of protected grounds in the entering into with contracts.”

Workplace culture was also a factor in the case, as Stockdale described it as casual and informal, calling people “beautiful” and suggesting they go on a cruise together, for example. But these, “more likely than not, had an unintended effect on some recipients,” said the tribunal.

Employers need to be aware that comments on physical attributes, particularly if they are persistent, may well be viewed as workplace harassment. And an employer that tolerates a workplace culture that allows such comments to go unchecked will be at greater risk of code harassment claims, said Kwasniewski.

“What an employer may consider as a casual and friendly atmosphere, an employee may think otherwise. The employee may think it’s not a casual and friendly atmosphere — it’s an atmosphere where the employer takes undue liberties with their employees. So it’s something that employers and managers need to be aware of.”

While some may consider this kind of culture “old school,” it persists, he said.

“It is still a problem, even with younger managers, if they get the impression from the people heading the organization that certain behaviours are acceptable in the workplace.”

In this day and age, hugs should not be happening in the workplace, said Khan.

“You just don’t want to go there, no matter what side of the equation you’re on — whether you’re a boss, you’re an employee, you’re male or female, it just doesn’t matter — you want to avoid physical contact, period, other than professional handshakes and so forth,” he said.

“I don’t care how informal you are, but as soon as you get into touching and caressing and commenting, you are going to be facing a formal process.”

Complaint process
Stockdale did not consider his comments flirtatious or inappropriate, and apparently saw them as part of his role to boost people’s confidence and keep up morale, found the tribunal.

“Whether or not the personal respondent was told the conduct was unwelcome by the applicant, he ought reasonably to have known that persistent comments about the physical attributes of the people working with him and for him were unwelcome.”

Stockdale tried to argue that the issues were never brought to his attention — but if it happened, it happened, said Pugen.

“If it’s not brought to your attention, perhaps there’s an adverse inference that it never happened because ‘If it did happen, you would have talked to me about it.’ But things aren’t that simple in terms of how you react to harassment or inappropriate conduct in the workplace, especially when there’s a power imbalance between the boss and subordinates.”

Panucci’s reluctance to confront Stockdale did not give the tribunal reason to conclude the conduct did not occur or was unwelcome, said Kwasniewski.

“This is one more reason why a workplace culture that condones such conduct is dangerous from a code compliance perspective. The (tribunal) recognizes that people may not come forward, for fear of reprisals. This is why having a harassment policy (including sexual harassment) in place is important,” he said. 

“You can carry out discriminatory conduct without meaning it — you don’t have to intend to discriminate to be found by the tribunal to have engaged in unlawful discrimination.”

Case law has shown that individuals will sometimes be victims of unwelcome conduct but persist in staying at the workplace for various reasons, such as sustenance, said Khan.

“The fact that someone decides to continue to work in the face of unwelcome conduct doesn’t necessarily mean the condemnation or acceptance of that conduct.”

And with a small employer, a potential victim of misconduct or unwelcome conduct really has a black-and-white choice — she either stays or leaves, he said.

“They don’t have a whole hierarchy to work through, they don’t have the opportunity to move to a different department, make a complaint; they either leave the workplace and make a complaint or try and continue, as long as they’re able to do that.”

Award amount
In assessing the award amount, the tribunal referred to the 2013 case Smith v. The Rovers Rest, which reviewed amounts given for sexual harassment and related issues, ranging from $12,000 to $50,000. For this case, “while the unwanted comments appeared to have been ubiquitous, the instances of unwanted physical contact were fewer and less serious than that found in some of the cases referenced,” said adjudicator Jay Sengupta.

However, the “objective seriousness” of the harassment was significant, he said.

“Unwelcome comments about one’s appearance or feeling that one has to submit to unwanted physical contact in the workplace are, by any objective standard, demoralizing in their impact and would leave most people feeling devalued and under stress. 

“In this case, given that the source of the unwanted comments and touching was a person the applicant relied upon for advice and who was in a mentoring relationship, the conduct is even more serious, when viewed objectively.”

The amount awarded fell within the lower end of the scale, said Kwasniewski, and not all of Panucci’s complaints were accepted by the tribunal. 

“If all the applicant’s claims were accepted, then the damages would likely have been more than the $15,000 awarded,” he said, adding the agent also did not make any claim for income loss.

But Pugen was surprised by the amount.

“To be blunt, I wasn’t expecting $15,000, I was expecting around $7,500,” he said. “I think a lot of employers would be surprised at the award.”

“If you look at the allegations that were substantiated, really, at the end of the day, it’s a hug and a touch to the shoulder. So I’m not downplaying the seriousness of the misconduct but I think many employers and many HR managers would be surprised that that conduct, which some people may do every day or without a second thought, would result in damages of $15,000.”

It’s also notable that Panucci didn’t resign because of the harassment but because she wasn’t doing well as a real estate agent, said Pugen. 

And the agent didn’t provide any medical evidence of her distress, he said, adding for a small brokerage house, $15,000 is a significant amount.

The award is consistent with prior awards where there is a finding of misconduct but it’s not so egregious that it puts the award at the high end of the scale, said Khan.

“It’s not conduct that resulted in loss of employment, she was likely leaving the industry anyway… so it’s not as though this was a long-term employment relationship that came to an end as a result of conduct that was more egregious on the scale of things.”
There’s a lot of discretion around the scope of the awards, he said.

 “If the award is low, what message does it send? ‘It’s the cost of doing business.’ At a certain level, it’s always going to be the cost of doing business, but if it’s lower (employers may think) ‘Let’s take our chances — if the worst result is we have to pay $10,000… and not have to pay any of a complainant’s costs, legal costs, it’s not really a big deal.’”

But employers should expect an upward tick in amounts over time, said Khan.

“Some of the reference points for the earlier awards are awards that were given four, five, seven, eight years ago, so one should not expect awards to be static over time.”

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