Rehiring a problem employee may not be a wise decision
Imagine that
- Harvey Weinstein was previously your employee.
- He was alleged to have sexually harassed another employee.
- An investigation took place.
- He was then dismissed without cause.
- Years later, one of your managers, unaware of the history, offers Weinstein a job.
- However, the employee who initially brought the harassment complaint is still with the company, and she refuses to return to work, alleging constructive dismissal.
In Colistro v Tbaytel, 2019 ONCA 197, a woman had been employed at the company for about two decades when she learned that her former supervisor was being hired back. The same supervisor had been dismissed a decade earlier after allegations of sexual harassment were raised against him by the woman and other employees.
The employee was deeply concerned about the return of her alleged harasser, and the company proposed that it could move her to a different location. However, the employee “would accept nothing less” than the company not proceeding with hiring him. Ultimately, she did not return to work, was diagnosed with post-traumatic stress disorder (PTSD) and depression, and sued for constructive dismissal.
The trial judge found that the company knowingly hired an executive who had previously sexually harassed the woman and that this constituted a constructive dismissal which warranted damages for wrongful dismissal plus $100,000 in damages for the company’s bad faith conduct. This decision is a useful reminder that bad faith damages (also known as moral damages or Honda damages) are still relevant.
The woman appealed the trial judge’s decision not to award damages for intentional infliction of mental distress. The Ontario Court of Appeal dismissed the appeal, holding that the company could not have known that its actions would cause serious psychological injury. The company cross-appealed, arguing that the trial judge erred in finding that the company had constructively dismissed the appellant and, in any event, erred in awarding Honda damages. The court dismissed the cross-appeal as well.
Unfortunately, although the woman was technically successful at trial, she had failed to accept a settlement offer from the company which exceeded the amount awarded at trial and, therefore, the court awarded a massive costs award against her ($200,000). The Court of Appeal denied her leave to appeal the costs award. That element of the decision is a good reminder to all parties that offers to settle can be used strategically, and choosing not to accept them can be quite risky.
Duty to keep employees safe
As you may recall, Bill 132 amended Ontario’s Occupational Health and Safety Act and created new obligations for employers to take reasonable steps to prevent and address sexual harassment in the workplace. With the rise of the #MeToo movement, we saw a dramatic shift in the landscape with respect to sexual harassment. The shift began with the Harvey Weinstein scandal.
We are no longer a society where the consequences of sexual harassment are treated as simply a cost of doing business. We have evolved to the point where many organizations will cut ties with anyone at the hint of a sexual harassment scandal, although the pendulum does seem to have swung back somewhat to a status where employers will investigate before firing.
Employers have a duty in Ontario to keep employees free from workplace violence and harassment, including workplace sexual harassment. The Occupational Health and Safety Act in Ontario puts a strict onus on employers to have a violence and harassment policy that includes responsibilities surrounding reporting, investigations, and other protective mechanisms for employees.
So, what should you do as an employer when an individual who had allegations of harassment raised against them attempts to return to your workplace? The one thing that you should not do is hire back the individual without considering the impact on other employees in the workplace. In other words, don’t simply place the company’s “business interests above the expectations and concerns of a valued, long-time employee,” like the employer did in this case.
