Robert Bruce Adams Complainant
Bata Retail, a Division of Bata Industries Limited and Richard Erhart Respondents
Place: Toronto, Ontario
Before: Peter P. Mercer
Comm. Decision No.: 350
Appearances by:
Michael Fleishman and Lorna Boyd, Counsel for Ontario Human Rights Commission
Ronald McCloskey and Faryl Hausma, Counsel for Bata Retail and Richard Erhart
AGE DISCRIMINATION — employment terminated — BUSINESS NECESSITY — employment policy discriminatory because of staff renewal — COSTS — poor investigation of complaint by human rights commission
Summary: The Board of Inquiry dismisses the complaint of Robert Adams alleging that he was terminated from his employment with Bata Retail because of his age.
Robert Adams worked for thirty-nine and a half years for a number of companies that are part of the "Bata shoe organization." His most recent position was as Assistant Manager of the Distribution Centre in Ottawa where he was supervised by Mr. Vrana. In November 1984 at the age of 62, Mr. Adams' employment was terminated by Richard Erhart, General Manager. He alleges that his termination was because of his age and that the company wished to hire younger staff.
The Board of Inquiry finds no evidence of discrimination because of age. It accepts the company's testimony that Mr. Adams was terminated because of poor performance and because the company was making changes in an effort to overcome financial difficulties. Other older employers terminated at the same time, including Mr. Adams' supervisor, Mr. Vrana, were also terminated for poor performance or for reasons unrelated to age.
The Board of Inquiry, though it expresses concern that the investigation of the complaint was selective, declines to award costs against the Commission.
The complaint is dismissed.
1. Introduction
1I was appointed by the Honourable Gerry Phillips, the Minister of Citizenship, on March 7, 1988, as a board of inquiry under the Ontario Human Rights Code, 1981, S.O. 1981, c. 53 (hereafter referred to as the "Code"), to hear and decide the complaint made by Mr. Robert Bruce Adams dated October 15, 1985, and amended October 26, 1987, alleging discrimination in employment on the basis of age against Bata Retail, a division of Bata Industries Limited, and Richard Erhart, general manager of Bata Retail. The hearing took place over six days, including the hearing of oral argument, having commenced April 5, 1988, and having been concluded August 24, 1988. Final transcripts of the hearing were received by me on September 7, 1988.
2The complainant alleges in his amended complaint (Exhibit No. 1), that the respondents contravened s. 4(1) and s. 8 of the Code, which read:
4.(1) Every person has a right to equal treatment with respect to employment without discrimination because of . . . age. . . .
- No person shall infringe or do, directly or indirectly, anything that infringes a right under this Part.
3The specific allegations set out in the complaint are as follows:
I started working for the above cited respondent employer in 1945 as a manager in training and progressed through various positions to the position of assistant manager of the Distribution Centre.
On November 23, 1984 I was called into the office of Mr. Richard Erhart, General Manager, and in the presence of the personnel manager, Mr. D. Marshall, was advised that I was being terminated, effective that day because the company had to cut down on expenses. I believe this is untrue. I believe I was treated as described because of my age.
During my 39 ½ years of employment at the above cited respondent company, I received commendation for excellent performance. Despite this, I was terminated presumably according to Mr. Richard Erhart to cut down on expenses. I have knowledge that the respondent has hired younger men at nearly twice the salary for my position of assistant manager of the Distribution Centre and for the position previously held by another older employee, Mr. J. Vrana, Distribution Centre Manager.
I also have knowledge that three other employees in the same group as myself were also terminated. I believe that their terminations were because of their age.
It is my belief that I was treated as previously described because of my age.
I am a 62 year old person and I have reason to believe that my right to equal treatment with respect to employment has been infringed because of my age, in contravention of Section 4(1) and 8 of the Human Rights Code, 1981, Statutes of Ontario, 1981, Chapter 53 as amended by Statutes of Ontario, 1984, Chapter 58, Section 39; Statutes of Ontario, 1986, Chapter 64, Section 18, and Section 70.
4The sole change to the complaint, by the amendment of October 26, 1987, was to remove the name of Mr. David Marshall, personnel manager of Bata Retail, as a respondent.
2. Exposition of the Facts
5The nature of this complaint makes appropriate a summary of Mr. Adams' personal and employment history. Mr. Adams was born on July 11, 1923, in Waterloo, Ontario. He attended primary school in Toronto and then attended Danforth Technical School for one and one-half years before joining the Robert Simpson Company in the parcel department. His next job was with Tippet-Richardson, where he was first in charge of equipment and then assistant manager of city delivery. He then became a truck driver with Fenwick and Company before joining the air force, some two years after leaving school.
6On August 2, 1945, having left the air force, Mr. Adams began employment with Falcon Shoe Company, a predecessor of Bata Retail. The Falcon Shoe Company Limited was incorporated in January 1940; the name of the company was changed to Kent Shoes Limited in June 1950 and changed again to Bata Industries Limited in October 1969. After six months with Falcon, Mr. Adams was made manager of one of the Toronto stores. Over the next eight years he managed several different stores in Toronto and gave evidence that each store was larger than its predecessor and brought an increase in salary. In 1953 he went to a store in Stratford and, after fifteen months at the Stratford store, during which business increased substantially, moved to Prince Albert, Saskatchewan, to open a new Bata shoe store. One and one-half years later he went to Lethbridge to open a new Bata store and, three years after that, he was sent to manage the largest store in Calgary. As manager of the stores, he was responsible for all aspects of store operations, including the hiring and firing of staff, stock maintenance, displays, sales and budget-keeping.
7After two years in Calgary, Mr. Adams was promoted to buyer for women's footwear for the chain and was transferred to the head office in Batawa, Ontario. He testified that he was then buying for eighty stores. Mr. Adams held this position for three years before being transferred to the Maritimes as district manager, where he supervised fifteen stores in Nova Scotia and New Brunswick. He then took the position of warehouse manager in Trenton, Ontario. He held this position for three years and, toward the end of that period, he helped plan and execute the move of the warehouse to Don Mills, Ontario. He continued in the position of warehouse manager after the move to Toronto. As manager, it was his job to receive and shelve merchandise and ship it the fastest and most economical way in order to fill regular weekly and special orders from all the stores.
8In 1967 Mr. Adams was approached about going to the United States to help straighten out the warehouse in the Bata Shoe Company U.S.A. He accepted the offer and moved to Baltimore, Maryland. After six months, during which time Mr. Adams testified he "got their warehouse in order," he was promoted to store operations manager and remained in that position for approximately three years. He was then put in charge of real estate and store building programs and remained in that position until 1981. During that time he also supervised a group of warehouse-type sales outlets that fluctuated in number between five and eleven.
9As the result of an amalgamation in 1981, all the head office and warehouse staff in Baltimore were released from employment. Mr. Adams decided to return to Canada, so wrote to the personnel department of Bata Industries Limited in Toronto. No position was available in the personnel department so Mr. Adams contacted the retail department, which advised that they could offer a store managership. Mr. Adams did not feel this position was sufficient for his years of service, so wrote a letter to Mr. T. J. Bata, President of Bata Limited, outlining his experience and asking for assistance. Bata Limited is a consulting firm which offers a large range of financial and development services under contract to other companies in the Bata organization and to other shoe companies.
10Following Mr. Adams' correspondence with Mr. Bata, he was contacted by Mr. Randolph, then general manager of Bata Retail, who advised him that he could take six months' retraining, at which time a suitable position might be available. Mr. Adams completed the first half of the six-month retraining period but then took over the position of the district manager in Ottawa for the three months that the incumbent was on sick leave. For this special effort he was paid a bonus of $500. During that time he supervised thirteen or fourteen stores and opened two new stores.
11At the conclusion of this three-month period, Bata Retail created the position of price inventory controller for Mr. Adams. This job was essentially to establish the correct inventory in all the stores, numbering about thirty-five, in four districts. He was in this position for seven to eight months before being transferred into the warehouse, or retail distribution centre, as the assistant manager. As he described it, Mr. Adams' job (Exhibit No. 9) was oriented essentially to supervision of from twenty to forty-five employees to ensure that receiving, shelving, packing, pricing and shipping facilities were being performed correctly. He in turn was supervised by the manager of the retail distribution centre, Mr. Joseph Vrana. Mr. Adams occupied the position of assistant manager for approximately one and one-half years until his employment was terminated in November 1984.
12This case turns on the facts, about which there was substantial disagreement. Mr. Adams' position, in summary, is that after some thirty-nine and one-half years' service with the same company he was terminated for no good reason when he was competent to continue working with the company until the normal retirement age, and that the circumstances disclosed that he, together with others, was terminated because of age. The respondents' position, on the other hand, is that Mr. Adams had been hired at age 58 by Bata Industries Limited, when it had no obligation to offer him a job, that they had gone to considerable lengths to find a position for him within the company, that his performance was mediocre, that due to severe financial conditions they were required to cut back and identified him as a weak performer suitable for termination, but that they nonetheless offered him a generous severance package despite his having been with Bata Retail for fewer than three years.
13It is undisputed that when Mr. Erhart advised Mr. Adams of his termination on November 23, 1984, he did not indicate in any way that age was a factor. Mr. Erhart's evidence was that he advised Mr. Adams that he was not satisfied with Mr. Adams' performance in the job as assistant manager of the warehouse and that he was therefore to be terminated. Mr. Adams, on the other hand, testified that he was simply told that he was being let go because the company had to cut back. The argument advanced on behalf of the complainant was that his performance had not been shown to be unsatisfactory, that his termination was not for financial, cost-cutting reasons, and that the circumstances justified an inference that he had been terminated because of his age. These circumstances included, in the submission of counsel for the Ontario Human Rights Commission, first, that no other job had been found for him; second, that other similarly situated employees had been similarly discriminated against on the basis of age; third, that the termination of the complainant and of the other three similarly situated employees was part of a larger plan by Bata and that this plan would be shown by way of evidence gathered by the Ontario Human Rights Commission. I will deal with these points in order.
A. THE COMPLAINANT'S JOB PERFORMANCE
14Mr. Adams testified that he had not been given any indication that his performance was unsatisfactory prior to his termination by Mr. Erhart in November 1984. Indeed, he testified that, on the occasion of his termination by Mr. Erhart, no mention was made of unsatisfactory performance and that he was simply told that he had to be terminated because of a general move to cut back on costs. He testified that he had regularly received good evaluations to that point in his career and that, in his view, the operation of the warehouse was proceeding smoothly.
15Mr. Adams' employment record is one of loyal service to a number of companies that were part of what was occasionally referred to as the Bata shoe organization. He was frequently willing to accept appointments and transfers on relatively short notice and I accept his testimony that frequently "the company came first." He impressed me, however, as someone who would be unlikely to exercise initiative in the performance of his job functions and who would find it difficult to take charge of discipline problems in the workplace and resolve them. Indeed, he preferred to take a limited rather than expansive view of his employment responsibilities and, on occasion, to adopt even a blinkered view of the business realities around him. I will return to this point in Part B, below.
16Mr. Erhart, by contrast, impressed me as an ebullient person who was forthright and direct in his testimony save when his expansiveness gave way to exaggeration. I accept his testimony and find that he made reference to unsatisfactory performance in his brief interview with Mr. Adams on November 23, 1984.
17Mr. Erhart's testimony made clear that his evaluation of Mr. Adams' job performance was only in respect of the tasks assigned to Mr. Adams subsequent to Mr. Erhart joining the company in October 1982. Mr. Erhart testified that Mr. Adams' tenure as price inventory controller had been unsuccessful, as 95 percent of the inventory control tasks had to be performed again by the district managers. There was no evidence tendered to support this figure and I conclude that, even though Mr. Adams' performance in the position may not have been exemplary, this figure must be exaggerated. Circumstances do suggest, however, that this "experiment" was not particularly successful. The position of price inventory controller was essentially created for Mr. Adams, and, when he was removed from the position after only a few months, the inventory control tasks were again assigned to the district managers who had performed them previously. Mr. Adams testified that at no point had he been told that his performance of these functions was unsatisfactory, but the foregoing affords some basis for inferring that he was in fact not performing the task to expectations.
18The crucial period, with respect to the question of satisfactory job performance, is the period during which Mr. Adams served as assistant manager of the warehouse. Mr. Adams testified that the warehouse functions were being performed competently and that the job was being done. This was not the view of Mr. Erhart and was not the view of a number of employees in the warehouse at the time. Several warehouse employees who were questioned by Mr. Edwards, the investigator for the Ontario Human Rights Commission, stated that Mr. Adams appeared incapable of performing his managerial functions, that he largely kept to himself and seemed incapable of disciplining employees and maintaining order and that he was on balance not performing effectively. Mr. Erhart himself testified that he had witnessed a lack of discipline and efficiency on his bi-weekly visits to the warehouse and that Mr. Adams was usually in his office rather than on the warehouse floor. He specifically mentioned the fact that the employees were engaged in a simulated game of basketball using tissue paper and that boxes were left lying around the warehouse. He further testified that others had complained to him concerning this state of affairs and that he had regularly discussed the matter with Mr. Vrana, the manager of the warehouse. According to Mr. Erhart, after his discussions with Mr. Vrana the situation would improve slightly but then begin to deteriorate again. Mr. Vrana was not called to testify. Based on all the evidence adduced, I conclude that Mr. Adams was generally perceived as not adequately performing the functions necessary to maintain a disciplined and efficient warehouse operation in 1985.
19Mr. Adams' evidence that the warehouse was, in his view, operating properly was also not shared by Mr. Erhart. His view was that too much time was being taken to move goods and that the operating costs were too high. Figures which he produced on operating costs indicated that, as a result of changes which were made in 1984 and beyond, the efficiency of the warehouse operation considerably improved (Exhibit No. 52). Warehouse costs of 63 cents per pair of shoes in 1983 and 1984 were reduced to 51 cents per pair by 1987. Aside from the termination of Mr. Vrana and Mr. Adams, the significant change was the removal of the entire warehouse operation to Trenton and combining it with the Bata footwear warehouse operation in 1985.
20Argument was further advanced on behalf of Mr. Adams that, if his performance had indeed been below standard, he would have received a performance evaluation to that effect. The evidence was that he did not in fact receive a written performance evaluation or any other formal indication that his performance was unsatisfactory while he was assistant manager of the warehouse. Mr. Erhart testified that his review of the previous system of performance evaluations indicated that they were largely useless, both because they were not sufficiently specific to be helpful and because his predecessor, Mr. Randolph, had invariably classified employees as "outstanding" or "very good." Mr. Erhart therefore initiated changes in the system by instituting a new evaluation form for sales personnel. For managerial personnel he took the position that the best indicator of performance was the remuneration which the employee received. In this regard, it is noted that, despite Mr. Adams' repeated requests for a raise, no raise was forthcoming, and he must reasonably have concluded that this was because Mr. Erhart's view of his performance was, at least in some respects, unfavourable.
21I therefore conclude that Mr. Erhart decided to terminate Mr. Adams' employment primarily on the basis of unsatisfactory performance. Mr. Adams made mention of the fact that for the three months which he spent as a deputized district manager in Ottawa he received a bonus of $500 and that this is clear evidence of satisfactory or even superior job performance. It may be that this assertion is correct, although the evidence is equally consistent with the view that the $500 bonus was paid to Mr. Adams for the willingness on his part to assume the position and for the inconvenience which he suffered in being thus separated from his spouse. I base my conclusion, however, on the facts, as found above, indicating that Mr. Adams' performance as price inventory controller and as assistant manager of the warehouse was honestly perceived by Mr. Erhart to be below standard. It is important to emphasize that Mr. Adams was not terminated for just cause without notice; instead, the position taken by Mr. Erhart was that, particularly in light of the financial exigencies facing the company, he needed a higher standard of performance than was being provided by Mr. Adams in the assistant manager's position and by Mr. Vrana as manager.
B. THE FINANCIAL SITUATION OF BATA INDUSTRIES LIMITED
22The position initially taken by counsel for the Ontario Human Rights Commission was that the evidence would not substantiate that there was a plan by Bata Retail to reorganize in order to cut costs (Transcript, volume I, pp. 5–6). On the contrary, the evidence conclusively demonstrates that the company was in an adverse financial situation, that Mr. Erhart was hired away from another Bata organization in Martinique specifically to help turn the company around, and that the reorganization of the operation has resulted in a significant change in the financial condition, moving from a position of a 5.7 million dollar loss in the retail division in 1982, a 4.1 million dollar loss in 1983, a 3.2 million dollar loss in 1984, a 1.9 million dollar loss in 1985, to a 2.2 million dollar profit in 1986 and a 4.4 million dollar profit in 1987. There is ample evidence that Mr. Erhart's activities in terminating the employment of various members of the head office staff, closing certain unprofitable stores and opening others while increasing the number of retail employees and changing the warehouse operations were all directed to reorganizing the company in order to turn its financial situation around. Indeed, it was found by Mr. Edwards, the investigator for the Ontario Human Rights Commission, that there was such a plan of reorganization. This was in fact conceded by counsel for the Commission in his final argument.
23In light of all the circumstances, it must have been known to any employee of Bata Retail that the company was in difficult financial circumstances in 1984. It is thus incredible that Mr. Adams would not know anything about the financial position of the company at the time of his termination on November 23, 1984. I note the following exchange during his cross-examination by counsel for the respondents:
Q. Did you know what the financial condition of the company was?
A. No.
Q. Didn't know at all?
A. I have no idea, no reason I should.
Q. You didn't know if it was suffering a loss or making enormous profits?
A. None of my business.
Q. So if he stated to you that the company needed to cut back, you had no facts on which to base your opinion that he was stating to you something that wasn't the case?
A. Yes, I did.
Q. What were those?
A. They spent I don't know how much money, but thousands of dollars, putting in a complete new 'phone system in the fall of that year, in that complex. They put in a complete new — or added on to their IBM system, or whatever system they have. They got a bigger, larger Xerox. They hadn't had an Operations Manager for two years and they went out and hired one at about $60,000 a year. [Transcript, volume I, pp. 105–106]
24Mr. Erhart testified that he did not mention the specific fact of needing to cut back in operations during his termination interview with Mr. Adams on November 23, 1984. He stated that he did not think this was necessary, since any employee would have known the precarious financial circumstances of the company and would therefore understand that certain changes had to be made in operations. Whether Mr. Erhart referred to it directly or whether indeed Mr. Adams was already aware of the financial situation of the company, I conclude nonetheless that Mr. Adams understood that the financial circumstances of the company, and the need to cut back on certain operating expenses, were part of the reason for Mr. Erhart's decision to terminate his employment. Mr. Adams disagrees that this was really a reason for his termination and mentions the fact that thousands of dollars were spent on a new telephone system and that replacement warehouse managerial personnel were hired at a considerably higher salary than he had been receiving. Mr. Erhart, when examined by counsel for the respondents, explained the basis of the decision to put in a new 'phone system. He indicated that it had been done on the basis of an estimate of significant cost savings and that, when the decision was made later to move the warehouse operation to Trenton, Ontario, the system had in fact been sold. He further testified that it was perfectly consistent with his strategy of how to turn around operations to hire replacement personnel at higher salaries. In his view, the major question was productivity and efficiency, and he stated unequivocally that he was prepared to pay to have a job done well.
25I conclude therefore that Mr. Adams must have known something of the precarious financial circumstances of the company but that he did not have a realistic appraisal of those circumstances and did not appreciate how some of the strategies employed by Mr. Erhart might be successful in turning the financial situation around. I further conclude that part of the reason for Mr. Erhart's decision to terminate Mr. Adams' employment was that, in light of the financial circumstances of the company, it was impractical to retain Mr. Adams when his job performance was at a relatively modest level.
C. AGE AS A FACTOR
26The position taken on behalf of the complainant is that he was not really terminated for unsatisfactory performance or because of financial restructuring and cost-cutting, but because of his age. It was quite clear from the authorities, that if age was even a factor in Mr. Erhart's decision to terminate Mr. Adams' employment, this constitutes discrimination as defined under the Ontario Human Rights Code, 1981. The arguments advanced in support of Mr. Adams' complaint basically fall into three categories: first, that discrimination on the basis of age is indicated by the fact that no attempt was made to find another job for Mr. Adams in Bata Retail; secondly, that other similarly situated employees were similarly discriminated against on the basis of age; thirdly, that the specific discrimination against Mr. Adams on the basis of age was part of a larger plan by Bata Retail and that this would be confirmed by statistical and other evidence.
i) No Other Job was Offered
27It is clear from the evidence that no other position was offered to Mr. Adams on November 23, 1984. He was simply offered five and one-half months' salary and two weeks' pay in lieu of notice together with the option of early retirement with waiver of the usual pension reduction penalty that would otherwise apply to those retiring before age 65. Counsel for the Ontario Human Rights Commission argued that given the large increase in the retail sales staff and the fact that Mr. Adams had performed competently in a number of other employment positions, the failure to offer him another position was further circumstantial evidence that his termination was really effected on the basis of age and part of an attempt to rejuvenate the operation by hiring younger employees. Mr. Erhart stated that, in his view, Mr. Adams had been given an opportunity to perform in a job specifically created for him, that of price inventory controller, and this had not been successful and he had then been hired as an assistant warehouse manager (a position for which by previous experience he seemed to be eminently qualified) but that this had also not worked successfully. He further stated that he did not consider it desirable to offer somebody who had occupied reasonably senior positions a succession of junior positions for which the person did not seem either suited or inclined. In this regard it is worth noting that Mr. Adams himself was unwilling to accept a store manager's position when it was suggested that this could be made available to him on his return to Canada. On balance, therefore, I do not conclude that the fact no other job was offered to Mr. Adams is indicative of any discrimination on the basis of age.
ii) Alleged Similar Treatment of Employees Fernandes, Rilling, and Vrana
28The complainant alleges that the termination of Messrs. Fernandes, Rilling and Vrana at the same time as his own termination indicates a decision to "pre-retire" this particular group on the basis of age. The major basis for this assertion seems to be that these employees were over the age of 50 and had their employment terminated on the same day. Mr. Adams alluded to conversations which he had with these three employees in which they indicated to him that they felt they had been discriminated against on the basis of age. However, this is not borne out by the evidence.
29Mr. Vrana, manager of the warehouse during the time that Mr. Adams was assistant manager, reached a settlement with Bata Industries Limited regarding his termination and initially told Mr. Edwards that he was reluctant to discuss his termination with him, because of the settlement. The fact remains, however, that Mr. Vrana did meet with Mr. Edwards and stated specifically that he did not believe that his own termination had been on the basis of age or that Mr. Adams' termination had been on the basis of age. Instead, he felt that the termination had been effected due to a desire to reorganize the operation. In his evidence, Mr. Edwards indicated that he looked with suspicion on the statements by Mr. Vrana because of the fact that he had reached a settlement with the company. Mr. Edwards also gave the impression that he was reluctant to treat at face value the opinions expressed to him by various employees who had worked in the warehouse during Mr. Adams' tenure as assistant manager. He seemed to feel that somehow their evidence might be compromised because they continued to be employees of Bata Industries Limited at the new warehouse facility in Trenton. Again, Mr. Erhart's testimony was that Mr. Vrana was terminated on the same basis as Mr. Adams: unsatisfactory performance in maintaining a disciplined and efficient warehouse operation. There is no credible evidence before me that Mr. Vrana was discriminated against on the basis of age, and I find, on the evidence adduced, that the circumstances surrounding his termination do not support an inference of discrimination on the basis of age.
30Mr. Rilling, who had been personnel manager and then occupied a position which was loosely described as company secretary, was called to give evidence by counsel for the Commission. He stated that he had been removed from the position of personnel manager by Mr. Erhart, who had then given him responsibilities as a sort of company secretary to prepare certain reports and organize office matters. However, he felt that he did not have a clear idea of what his function was in this new position and that he was not really performing a useful function. This accords with Mr. Adams' testimony that he could not tell what Mr. Rilling did. Mr. Erhart testified that he had removed Mr. Rilling because he felt that his job performance had been inadequate in that personnel costs appeared to be out of control. In cross-examination, Mr. Rilling agreed that Mr. Erhart had expressed dissatisfaction. Mr. Erhart further testified that he had initially tried to create a position for Mr. Rilling but that this had proved unsatisfactory and that the decision had therefore been made to terminate his employment.
31It was also brought out in evidence that Mr. Rilling had achieved a settlement with Bata Industries Limited and that in consideration of doing so he had dropped the pursuit of a complaint under the Ontario Human Rights Code. Mr. Rilling took the position that he had technically not withdrawn his complaint under the Code but that the settlement which he had achieved with Bata Industries Limited was also a settlement of the human rights complaint. This was vigorously objected to by Mr. Tenenbaum, counsel for Bata Limited, in his testimony-in-chief. In my judgment, little hangs on this distinction. Mr. Rilling impressed me as someone who still felt quite angry about his termination but did not provide any convincing evidence that he was discriminated against on the basis of age.
32Mr. Fernandes, the other party mentioned as being included in the group who were discriminated against on the basis of age, had returned to Europe and was not interviewed by Mr. Edwards. The only evidence concerning Mr. Fernandes came from Mr. Erhart, who testified that Mr. Fernandes had been terminated because his work in the administration department had given rise to a series of complaints by store managers and he did not contribute sufficiently to the needs of the company.
33I therefore conclude, on the basis of the evidence presented, that the circumstances surrounding the termination of employment of Messrs. Vrana, Rilling and Fernandes do not support the view that, together with Mr. Adams, they were discriminated against on the basis of age.
iii) The Alleged Plan by Bata Retail
34In his opening statement, counsel for the Ontario Human Rights Commission indicated that it would be demonstrated that the termination of Mr. Adams and of Messrs. Vrana, Rilling and Fernandes would be shown to be part of a larger plan by Bata Retail to target for removal from employment older employees in favour of younger ones as a process of rejuvenating the company. I have concluded that the specific circumstances surrounding the employment and termination of the named individuals do not disclose discrimination on the basis of age; I now turn to the question of whether there are other indicia in the operations of the company which disclose that there was in fact such discrimination.
35In his testimony, Mr. Rilling indicated that Mr. Erhart had on one occasion made a statement to the secretaries that he had just received a memo that everybody over the age of 45 years was to be terminated. He further stated, however, that he felt that this was done in a joking fashion. Mr. Erhart testified that he could not remember specifically making this comment but that he might well have done so in a joking fashion and that this would be part of his general demeanour. My observation of Mr. Erhart is that this is entirely credible and while I accept that he probably made such a remark as part of general office patter, I conclude that it reveals nothing more than the ebullient nature of Mr. Erhart and that it cannot be relied on to support a claim of discrimination on the basis of age in respect of Mr. Adams or his colleagues.
36Mr. Rilling also testified that he "heard many comments, such as ”˜No hiring anybody under thirty-five and without a university degree'. . . . I know there was a directive come out that the hiring should be nobody over thirty-five and without a university degree" (Transcript, volume 3, p. 347). He continued by stating "That came into effect shortly after Mr. Bata (Senior) turned over the operation to Mr. Bata (Junior)." There was no further evidence adduced to show that this directive had even been issued, much less followed. Indeed, Mr. Rilling backed down from his position when cross-examined, particularly when confronted with the information that Mr. Bata Junior did not even take over the company until eight months after Mr. Rilling's termination.
37The foregoing is particularly important in assessing the credibility of Mr. Rilling's testimony concerning his meeting with Mr. Erhart on November 23, 1984. After being told that he was being terminated because the company was cutting back, Mr. Rilling testified that the following exchange occurred:
I said: "Yes, I know that, I've been aware of that, but what else is involved in it?", and that's when Richard Erhart made the remark that: "Well, you know, people are more productive under the age of 45", and he says: "I'm getting very close to it. I guess maybe I'll be next". That's his exact comments.
In light of the general uncertainty and haziness of memory exhibited by Mr. Rilling, I cannot accept that this is an exact or accurate recollection of his meeting with Mr. Erhart.
38Heavy reliance was placed by counsel for the Commission on a series of memos outlining discussions between a number of management personnel including Mr. Erhart and Mr. Janssen, a very senior executive in the Bata organization and Mr. Erhart's superior. In a memorandum dated February 10, 1984 (Exhibit No. 26), discussing the retail operations in Canada, Mr. Janssen stated the following:
Mr. Erhart needs stronger, younger, and more vigorous support in the activities he wants to do. He cannot have the large number of people reporting to him as he has today. I will have to make a special effort to help Mr. Erhart in this respect.
A memorandum of July 14, 1984 (Exhibit No. 27), from Mr. Janssen contained the following:
We discussed the importance of rejuvenating the team around Mr. Erhart and his duty to have a number of young people trained for future responsibilities. Mr. Erhart is very receptive to these suggestions, yet it does not look like we are moving fast enough in this direction.
A succeeding memorandum, dated 28 July 1984 (Exhibit No. 28), from Mr. Janssen to Mr. Erhart indicated Mr. Janssen's displeasure with the fact that twenty-two people were still reporting to Mr. Erhart as manager and that this was not acceptable and would have to change. A further memo dated 30 July 1984 (Exhibit No. 29), contained the following:
Mr. Erhart's performance has been reviewed with him (assessment). It indicates that he has been making a solid contribution over the last year. At the same time, there is a need for him to (a) bring in new fresh faces (professionals), (b) improve assets management dramatically, (c) turn around Athletes World. That will be now his challenge for the next six months.
Finally, there is the memo to Mr. Erhart from Mr. Janssen dated October 25, 1984 (Exhibit No. 31), which contains the following:
Most important is our agreement that within four weeks you will have in place a complete team of six people, including yourself, by which no more than five are reporting to you. I would suggest that two of those selected are potential, young men from within the present retail operation, and the other three will be most senior experts you can find from Kinney, Transcanada, or Agnew. Probably, in each of these companies there is somewhere a young Number 2 who would like to make faster progress. Even if they are not so young but have more experience, you still go ahead. In each case, before you make your final decision on the selected candidates, you and I should have a chat with the person first.
39Mr. Edwards testified that in light of the allegations set out in Mr. Adams' complaint, the cumulative effect of these memoranda gave him some concern. Mr. Edwards spoke of a pattern which he saw developing whereby Mr. Erhart was being asked by Mr. Janssen to change both the team and the supporting structure around him and to include within it younger people who would be trained for future responsibilities. This led Mr. Edwards to conclude that Mr. Adams was an individual who together with Messrs. Fernandes, Rilling and Vrana had been identified for pre-retirement as part of a plan of action agreed on between Mr. Janssen and Mr. Erhart. This led to Mr. Edwards' view, contained in the final sentence in his investigation summary, "that the reorganization of Bata Retail had an adverse impact on older employees, including Adams."
40It was clear from Mr. Edwards' testimony that the information contained in these memoranda figured most significantly in his recommendation of a board of inquiry. Mr. Erhart was questioned about these memoranda by counsel for the respondents and testified that, in his understanding, Mr. Janssen was primarily concerned about the productivity and profitability of the Canadian operation and that
he was looking here in bringing new ideas, changing the attitude of the people, that's what I understand by "rejuvenating." And secondly his view of having a number of young people trained for future responsibilities, I think this is part of any management duty, that you train people to get to a better position, to get more responsibilities; it's the only way a company can grow, and that simply meant that within the organization we should train more people to get more involvement and make sure that the turnaround happened. [Transcript, volume IV, p. 516]
41It is also clear on the evidence that it was Mr. Erhart who made the actual decisions as to hiring and termination of employment and it is Mr. Erhart's own unequivocal testimony that he did not make any such decisions on any basis other than ability to do the job required in light of the company's precarious financial position.
42In view of the importance of the memoranda to the complainant's case, it is most surprising that, in cross-examination, counsel for the Commission did not put a single question to Mr. Erhart on the memoranda. I will have more to say below about the appropriateness of this omission, but it raises, initially, the question of whether Mr. Erhart's responses regarding the memoranda, having gone unchallenged on cross-examination, are legally binding. This issue is dealt with by Sopinka and Lederman in their text, The Law of Evidence in Civil Cases (Toronto: Butterworths, 1974). Referring to the suggestion that a presumption of truth attaches to the testimony of a witness not subjected to cross-examination, the learned authors indicate that it is questionable whether the established principles can be extended that far, "particularly in cases where the evidence which has not been cross-examined upon is inconsistent with other evidence" (p. 516). Counsel for the Commission suggested that Mr. Edwards' testimony, given before Mr. Erhart testified, clearly revealed an interpretation of the memoranda inconsistent with that of Mr. Erhart, who was in the room to hear that evidence and who presumably responded to it in his own testimony. Based on the law as set out by Sopinka and Lederman, and in light of argument by counsel for the Commission, I cannot conclude that I am bound to accept Mr. Erhart's explanation of these memoranda, however dim a view I might take in other respects of the Commission's failure to cross-examine him on the information which they contained. I conclude, therefore, that I must evaluate Mr. Erhart's explanation in light of all the circumstances which transpired from the time of these memoranda up to the time of the complaint. Based on these circumstances, I have no hesitation in concluding that there is no reasonable basis for inferring that a pattern or plan was established for discriminating against employees on the basis of age.
43The investigator for the Commission attempted to introduce certain data to illustrate that the alleged pattern or plan was in fact borne out by the employment practices of the company. Specifically, Mr. Edwards supervised the production of two graphs (Exhibit No. 33) based on a list of head office employees terminated since November 23, 1984, and a list of those hired since that date (Exhibit No. 32). One of the graphs in Exhibit No. 33 purported to show the age distribution of employees released or retired early from head office according to age distribution. But, as counsel for the respondents noted, to the extent that the graph included people who were both early-retired and released, the age distribution component is, to use his words, "skewed," because only older people are entitled to the option of early retirement and will therefore appear disproportionately on the graph. Furthermore, the list which Mr. Edwards relied on, headed "Head Office Employees Terminated," included those who had resigned and those who had retired in the normal course of events at age 65 and not just those who had been terminated. This, however, is not reflected in the graphs. Furthermore, Mr. Edwards admitted that the hiring graph left out six of the twenty-two people who had been hired and that it is not possible to tell from the graph which employees were left out.
44In response to this submission of data by the Commission, Mr. Tenenbaum, counsel for Bata Limited, himself prepared a graph by taking the same employee list and plotting the age of every employee who appeared on that list onto the graph so that the graph depicted the age of each person who left the company for any reason, voluntarily or not. The evidence provided by Mr. Tenenbaum demonstrates that, when all the evidence is included, there is a very broad age range of employees who were terminated as part of the reorganization efforts and that many of these were young people. There is certainly no pattern of discrimination based on age distribution revealed by the data submitted by the Commission. My conclusion, therefore, is that the memoranda described above and the employment practices of the company subsequent to their promulgation do not on the evidence adduced give rise to a reasonable inference of discrimination on the basis of age either as part of a general pattern or in the particular circumstances of Messrs. Adams, Fernandes, Rilling and Vrana. The evidence shows that a number of younger employees were also terminated while a number of older employees were retained, one of whom was in his 70s and still working for the company. It is noteworthy that when Mr. Adams himself cross-examined Mr. Erhart by asking the whereabouts of a number of older employees, the uncontradicted evidence of Mr. Erhart revealed that, in most cases, they remained in the employ of the company.
45A further point raised by counsel for the Commission was Mr. Erhart's expression of preference to Mr. Konkol, who was hired to find a manager for the Trenton warehouse, for a person under the age of 45. Mr. Erhart agreed in cross-examination that he probably expressed the preference for someone under the age of 45 and that the purpose for this was to acquire a new manager who could be thoroughly trained and who would come in at a reasonable salary level. He was adamant in his testimony that, while this was an expression of preference given to Mr. Konkol, it was by no means a condition and that his only condition was that the best person available for the position be hired. It is significant that the person hired for the position, Mr. Campbell, was aged 46 at the time of hiring and that when, in Mr. Erhart's view, he proved incapable of doing the job, he himself was terminated from the manager's position after eight months. I again conclude that Mr. Erhart's statement of preference does not in the circumstances give rise to a reasonable inference that he discriminated in employment on the basis of age against Mr. Adams. It is difficult to see, in any event, how the hiring of Mr. Campbell could have anything to do with the termination of Mr. Adams and his colleagues, which is the subject of this complaint. Their employment was terminated on November 23, 1984, at which time the decision had not even been made to move the warehouse operation to Trenton.
46Finally, one of the issues that recurred throughout the inquiry was that of Mr. Adams' length of service. Mr. Adams' view, strongly advanced by counsel for the Commission, was that he was terminated after thirty-nine and one-half years of loyal service. While it is true that Mr. Adams was a loyal employee of a number of organizations that operated under what was described as the Bata shoe organization, it is also clear that this characterization obscures some salient facts. As Mr. Tenenbaum made clear during his testimony, the title "Bata Shoe Organization" is not a legal one. The Bata operations in the United States and the Bata operations in Canada are operationally independent and distinct and there is no substantive overlap between them. This is significant because it is clear on the evidence, and admitted by Mr. Adams himself, that at the time of the U.S. amalgamation in 1982, he was out of work and there was absolutely no obligation on the Bata organization in Canada to offer him employment. It was out of a sense of moral or, perhaps in the extended sense, "familial" obligation that he was ultimately offered a position after the intercession on his behalf by Mr. T. J. Bata. This was not the result of any legal obligation, however. The evidence further discloses that good-faith efforts were made by Bata Industries Limited to provide Mr. Adams with employment.
47As I have indicated above, I conclude that Mr. Erhart, as general manager of Bata Retail, made the decision that Mr. Adams was not sufficiently productive and that the warehouse was not being effectively run. It is noted that neither Mr. Erhart nor Bata Retail alleged just cause for dismissal entitling them to terminate the employment of Mr. Adams or, indeed, of Messrs. Fernandes, Rilling and Vrana without notice. Rather, there was a business judgment that there was a legitimate business reason to remove them from their positions. It is further to be noted that Mr. Adams was offered five and one-half months' salary and two weeks' salary in lieu of notice and the option of early retirement with the waiving of the penalty which would normally have applied. Mr. Adams, however, clearly felt that he should be able to work to age 65 and, in cross-examination, took the position that it was not his problem or concern whether the company had a job for him to do or whether he was perceived as being productive or indeed whether the company was turning a profit. I concur with the observation of counsel for the respondents that Mr. Adams seemed most upset over the manner of his dismissal and the fact that it was on a Friday afternoon in the month before Christmas.
3. Application of the Law
48It is well established that in pursuing a complaint alleging discrimination in employment on the basis of age, the complainant, or in this case the Ontario Human Rights Commission, must establish a prima facie case. Based on the foregoing, I conclude that no prima facie case has been established and that on a balance of probabilities neither Bata Retail nor Mr. Richard Erhart discriminated in employment on the basis of age against Robert Bruce Adams or against the other three persons alluded to in the complaint, Messrs. Fernandes, Rilling and Vrana. I therefore dismiss the complaint against both Bata Retail and Richard Erhart. I must now deal with the respondents' submission as to costs.
4. Respondents' Request for Costs
49The jurisdiction of a board of inquiry under the Ontario Human Rights Code, 1981, to award costs to a respondent is set out in s. 40(6): the subsection reads as follows:
(6) Where, upon dismissing a complaint, the board of inquiry finds that,
(a) the complaint was trivial, frivolous, vexatious or made in bad faith; or
(b) in the particular circumstances undue hardship was caused to the person complained against,
the board of inquiry may order the Commission to pay to the person complained against such costs as are fixed by the board.
At the close of his argument, counsel for the respondents suggested that this would be an appropriate case in which to award costs. He did not press this argument vigorously, but he did at several points express concern with the manner in which the Commission had pursued this complaint. In support, counsel for the respondents referred to the Board of Inquiry decision of Professor Hubbard in Pham v. Beach Industries Ltd. (1987), 1987 CanLII 8544 (ON HRT), 8 C.H.R.R. D/4008. Counsel for the respondents initially posed the question of whether the good faith of the Commission was not called into account by the fact counsel for the Commission had initially said that the evidence would not substantiate that there was a reorganization plan necessitated by the financial circumstances of Bata Industries Limited and then in argument conceded that there was clearly an organization plan. Counsel for the respondents noted that the evidence was clear that such an organization plan was being pursued and that this had in fact been the conclusion of Mr. Edwards at the time of the investigation.
50Counsel for the respondents also pointed to the fact that Mr. Edwards frequently stepped outside his role as investigator. He referred specifically to the circumstances surrounding Mr. Edwards' submission of data which appeared to have been arbitrarily organized and, in the case of the graph which omitted six of twenty-two employees, carelessly and inaccurately presented. Mr. Edwards, when given the opportunity to respond to the graph prepared by Mr. Tenenbaum based on the same information, initially indicated that he would be prepared to do so after reviewing the graph but, after having had the opportunity of doing so, refused to comment on the basis that he was not a statistician and did not understand what counsel for the respondents was attempting to prove by introducing the graph. Mr. Edwards further appeared, in the submission of counsel for the respondents, to have drawn his own inferences about the reliability of certain evidence given by persons whom he interviewed. For example, it was only on cross-examination and after a ruling by the Board that he revealed that he had interviewed seven employees who were associated with Mr. Adams while he was assistant manager of the warehouse, that six of them had negative views of Mr. Adams' performance and that none were of the view that Mr. Adams had been terminated because of discrimination on the basis of age. Mr. Edwards also appeared to take the view that Mr. Vrana's conclusion that neither he nor Mr. Adams had been discriminated against on the basis of age was tainted because Mr. Vrana had reached a settlement with Bata Retail after his own termination. Furthermore, Mr. Edwards stated in cross-examination that he did not investigate the reasons for the dismissal of Mr. Vrana, nor did he investigate his competence.
51In my view, there is some considerable basis for the concern expressed by counsel for the respondents, as it is surely for the investigator to adduce evidence both favourable and unfavourable to the respondent and to allow the board of inquiry to draw the appropriate inferences. It is inappropriate for an investigator to assume the adjudicative functions which are properly to be exercised by a board of inquiry, particularly when this involves drawing inferences that lead to an arbitrary limitation on the scope of the investigation.
52Counsel for the respondents also noted that the Commission appeared to take the view in putting forward its case that the complainant could have run the new warehouse operation in Trenton. There does not seem to have been any basis in evidence for that view. Finally, I have already discussed the fact the Commission asked for an inference of discrimination to be drawn from memoranda which they did not cross-examine Mr. Erhart upon. In view of the importance that the Commission attached to these memoranda, it would have been highly desirable to have conducted such cross-examination after Mr. Erhart was questioned on the matter by his own counsel.
53Consequently, I wish to express concern that the investigation of this complaint by the Commission appears in some respects to have been rather selective. However, based on the language of s. 40(6) and the authorities discussed by Professor Hubbard in the Pham case, I have concluded that this is not an appropriate case in which to award costs to the respondents. I consider that this case could have been better conducted by the Commission, but I am not prepared to find that the circumstances were so clear-cut that the complaint could be said to be trivial, frivolous, vexatious or made in bad faith; I reiterate, however, that the circumstances are such that no prima facie case has been established. Furthermore, I am not prepared to conclude that, in the particular circumstances, undue hardship was caused to the person(s) complained against. Counsel for the respondents indicated that the nebulous position taken by the Commission had created considerable difficulty in allowing for the preparation of a defence. Counsel for the Commission, however, did indicate that, whereas he had denied a request for production, as he was entitled to do, he would have been amenable to a request for particulars had that been forthcoming. It may be that the hardship alleged by counsel for the respondents would have been ameliorated if such a request for particulars had been made. In the result, therefore, and despite the concerns which I have expressed, I decline to award costs to the respondents.```