Middleton v. 491465 Ontario Ltd.
1991-08-21
Ontario Board of Inquiry
Sherry Middleton
Complainant
v.
491465 Ontario Ltd., carrying on business as Cannonball Restaurant
and
John Chang (also known as Young Hee Kwon) and Bill Walsh
Respondents
Date of Complaint:
July 21, 1989
Date of Decision:
August 21, 1991
Before:
Ontario Board of Inquiry, Constance Backhouse
Comm. Decision No.:
417
Appearances by: Kaye Joachim and Lauren Bates, Counsel for the Ontario Human Rights Commission
Russ Hamlyn, on behalf of the Respondent 491465 Ontario Ltd.
PREGNANCY — employment terminated — BONA FIDE OCCUPATIONAL QUALIFICATION — CUSTOMER PREFERENCE — absence of pregnancy for waitress — sufficient risk to safety — LIABILITY — of corporation when ownership has changed
Summary: The Board of Inquiry finds that Bill Walsh and the Cannonball Restaurant discriminated against Sherry Middleton by firing her from her employment as a waitress because she was pregnant.
Sherry Middleton was hired by the Cannonball Restaurant in 1986 and worked there until July 1989 when she was fired. She was approximately four months pregnant at the time.
The Board of Inquiry finds that she was fired because of being pregnant, and that the respondents have presented no evidence to establish that not being pregnant was a bona fide occupational qualification for the job of waitress. While the respondents assert that they were concerned that Ms. Middleton might have been hurt during the course of her work because the bar was sometimes rowdy, no evidence was provided to establish that not being pregnant was a bona fide occupational qualification due to safety reasons.
The Board of Inquiry also rejects the argument that the customers might have preferred non-pregnant waitresses, since customer preference has been long understood not to justify discrimination.
The Board finds that the respondents violated the Ontario Human Rights Code, 1981 and orders them to pay Ms. Middleton $10,955.60 in compensation for lost wages and $2,500 in compensation for damage to feelings and self-respect.
Cases Cited
Ballantine v. Molly 'N' Me Tavern (1982), 1982 CanLII 4881 (ON HRT), 4 C.H.R.R. D/1191 (Ont. Bd.Inq.): 3
Berry v. Manor Inn (1980), 1980 CanLII 3927 (NS HRC), 1 C.H.R.R. D/152 (N.S. Bd.Inq.): 34
De Jong v. Horlacher Holdings Ltd. (1989), 1989 CanLII 9045 (BC HRT), 10 C.H.R.R. D/6283 (B.C.H.R.C.): 34
Hajla v. Nestoras (1987), 1987 CanLII 8545 (ON HRT), 8 C.H.R.R. D/3879 (Ont. Bd.Inq.): 34
Imberto v. Vic and Tony Coiffure (1981), 1981 CanLII 4320 (ON HRT), 2 C.H.R.R. D/392 (Ont. Bd.Inq.): 34
Lutz v. Gray's Lakehouse Restaurant (1990), 1990 CanLII 12511 (ON HRT), 13 C.H.R.R. D/158 (Ont. Bd.Inq.): 39
Varma v. G. B. Allright Enterprises Inc. (1988), 1988 CanLII 8913 (BC HRT), 9 C.H.R.R. D/5290 (B.C.H.R.C.): 34
Wiens v. Inco Metals Inc. (1988), 1988 CanLII 8869 (ON HRT), 9 C.H.R.R. D/4795 (Ont. Bd.Inq.): 32
Legislation Cited
Ontario
Human Rights Code, 1981, S.O. 1981, c. 53
s. 4(1): 30
s. 8: 30
s. 9(2): 30
s. 23(1)(b): 31
s. 23(2): 31
s. 44(1): 40
Statutory Powers Procedure Act, R.S.O. 1980, c. 484
s. 6: 6
s. 7: 10
Authorities Cited
Clark, Stephen D. A. and Michael G. Quigley, Business Law Reference Materials (Law Society of Upper Canada, 32nd Bar Admission Course Materials): 37
Hadden, Tom, Robert E. Forbes and Ralph L. Simmonds, Canadian Business Organizations Law (Toronto: Butterworths, 1984): 37
1This inquiry involves a complaint made by Sherry Middleton (the "complainant") against 491465 Ontario Ltd., carrying on business as Cannonball Restaurant, John Chang also known as Young Hee Kwon,1 and Bill Walsh (the "respondents"). The complaint, dated July 21, 1989, alleges discrimination in employment on the basis of sex contrary to the Ontario Human Rights Code, 1981, S.O. 1981, c. 53. I was appointed to serve as the chair of a board of inquiry by the Minister of Citizenship on May 30, 1991.
PRELIMINARY MATTERS
a) Parties to the Proceeding
2The complaint originally listed the respondents as the Cannonball Restaurant, John Chang also known as Young Hee Kwon, Bill Walsh and Vasilios Dountas. On June 7, 1991, Elaine Ziemba, Minister of Citizenship, advised me that Vasilios Dountas was no longer a respondent in the case but the alleged owner of Cannonball Restaurant, and I deleted his name from the list of respondents, as requested.
3At the outset of the hearing, counsel for the Ontario Human Rights Commission sought to have the complaint amended to delete "Cannonball Restaurant" and substitute the entity's correct legal name as "491465 Ontario Ltd., carrying on business as Cannonball Restaurant." I allowed the alteration after determining that the requested amendment constituted a minor correction which involved no prejudice to the respondent. The officers of the corporation had been aware of the complaint from the beginning and knew that the corporation was the entity against which the complaint had been brought. In Ballantine v. Molly 'N' Me Tavern(1982), 1982 CanLII 4881 (ON HRT), 4 C.H.R.R. D/1191 at D/1198, an Ontario Board of Inquiry concluded that "reference to a trade name should, as in the case in civil proceedings, be taken to be a sufficient reference to the entity carrying on business under that name."
4A corporate search conducted by the Ontario Human Rights Commission showed that 491465 Ontario Ltd. was incorporated by Vasilios (Bill) Dountas (the director of the corporation) on September 16, 1981, to operate and manage a tavern and restaurant known as the Cannonball Restaurant. On May 18, 1989, the shares were sold to Young Hee Kwon, who replaced Bill Dountas as the director. On October 29, 1990, Bill Dountas reassumed control of 491465 Ontario Ltd. pursuant to a security agreement signed by Young Hee Kwon, which was in default. Mr. Dountas also reassumed his position as director of the corporation.
b) Notice to the Parties and Absence of the Respondents at the Hearing
5The complaint was formally served upon Bill Walsh, John Chang, and 491465 Ontario Ltd. through its director at the time — John Chang — through mail delivery, Priority Post, on January 29, 1990. Subsequent discussions between John Chang, Bill Walsh and an officer of the Ontario Human Rights Commission between February and May 1990, indicated that the respondents had received the complaint and were prepared to enter into discussions for the purpose of investigation and conciliation.
6When settlement discussions did not prove fruitful, on May 30, 1991, the Board of Inquiry Administrative Office of the Ministry of Citizenship served Bill Walsh, John Chang, and 491465 Ontario Ltd. through its current director with a notice that a board of inquiry had been appointed and that the hearing was set to commence by way of conference call on June 28, 1991. This notice complied with the requirements of s. 6 of the Statutory Powers Procedure Act, [R.S.O. 1980, c. 484], since it provided a statement of the time, place and purpose of the hearing, a reference to the statutory authority under which the hearing would be held, and a statement that if the party notified did not attend the hearing, the tribunal was authorized to proceed in his or her absence and that he or she would not be entitled to any further notice in the proceedings.
7The hearing commenced by way of a conference call on June 28, 1991. The participants were:
a) the complainant, Sherry Middleton;
b) Kay Joachim representing the Ontario Human Rights Commission;
c) the respondent, John Chang (who answered to the name of Young Hee Kwon);
and
d) Lillian Dountas, who was reached by telephone at the Cannonball Restaurant and undertook to notify the owner and/or manager of the proceedings.
8Bill Walsh had been personally served with notice of the conference call by an officer of the Ontario Human Rights Commission on June 18, 1991. Walsh advised the officer that if he was "not out of town," he could be reached in the hotel room which was his residence, at The Rosetown Inn in Brampton. However, the staff at The Rosetown Inn reported that there was no answer at his room on the requisite date at the time reserved for the conference call, and the call proceeded in his absence.
9All of the parties present on the conference call agreed to the setting of July 22, 23 and 26 for the actual hearing in Toronto. Since Bill Walsh was not involved in the conference call, extra efforts were made to inform him of the dates. The Board of Inquiry mailed notification of the hearing to him at his last known permanent address as well as to The Rosetown Inn. An officer of the Ontario Human Rights Commission reached him by telephone at The Rosetown Inn on July 16, 1991, where he was living under the name of "William Wall." Bill Walsh admitted his identity to the officer, who advised him that she would deliver to his hotel, on July 17, 1991, a letter advising him of the dates of the hearing. He agreed to collect the letter from the front desk, and the letter was subsequently delivered there. Concerned about Walsh's appearance at the hearing, the Ontario Human Rights Commission also attempted to make personal service of a summons to him at The Rosetown Hotel [sic]. An officer of the Ontario Human Rights Commission attempted personal service at 7:00 p.m. on July 18, 1991, at 1:00 p.m. on July 19, 1991, at 8:00 p.m. on July 18, 1991, and at 7:30 p.m. on July 21, 1991. She also attempted to reach him again by telephone, unsuccessfully, once on July 18, 1991, two times on July 19, 1991, and once on July 21, 1991. On July 21, 1991, the OHRC officer was advised at the hotel front desk that Walsh had checked out.
10Bill Walsh did not attend either day of the hearings on July 22 or 23, 1991. I am persuaded, however, that he was properly advised of the complaint, of his status as a personal respondent, and of the dates and time set for the Board of Inquiry. The notice for the conference call, which commenced the hearing, was personally served on Bill Walsh, and this notice met all of the requirements under the Statutory Powers Procedure Act. Section 7 of that Act further provides:
Where notice of a hearing has been given to a party to any proceedings in accordance with this Act and the party does not attend at the hearing, the tribunal may proceed in his absence and he is not entitled to any further notice in the proceedings.
Properly notified of the conference call, Bill Walsh was not entitled to any further notification of the dates of the continuation of the hearing. Despite this, extensive efforts were made to provide Mr. Walsh with notice, and it is a fair inference from the evidence of the letters mailed and hand-delivered to his residence at The Rosetown Inn, along with the telephone communication from the officer of the OHRC, that he did have notice of the subsequent hearing dates.
11At the first full day of hearing in Toronto, July 22, 1991, John Chang was also absent. He had agreed during the conference call to attend the hearing in person, but did not attend. Since there is absolutely no doubt about the sufficiency of notice to Mr. Chang, there was no impropriety with proceeding in his absence.
12Vasilios (Bill) Dountas, the current shareholder and director of 491465 Ontario Ltd., also did not appear personally at the hearing. Instead Russ Hamlyn, the current manager of Cannonball Restaurant, appeared to represent the interests of the corporation. Mr. Dountas chose not to retain counsel to represent the corporation.
13In the absence of respondents John Chang and Bill Walsh, it is difficult to be certain that the Board of Inquiry has obtained a full description of the events which are central to this hearing. Since it appears that the absence of these two respondents is as a result of their conscious decision to avoid participating in the Inquiry, in my view it is proper to proceed with caution. I have considered the evidence with great care, and directed numerous questions to the witnesses from the position of Chair. I have searched for discrepancies in the testimony, and taken pains to seek corroboration from several witnesses before relying upon any evidence. It is my view that the facts described below have been proven on the preponderance of the evidence.
THE FACTS
14Sherry Middleton is a 36-year-old, married, mother of three children (two biological sons and one step-daughter), who lives in Brampton, Ontario. For over thirteen years her occupation has been that of a waitress. Since 1980 she has chosen to work as a waitress in strip bars, because the remuneration involved is significantly higher than that from other waitressing positions.
15In September 1986, Sherry Middleton was hired to work as a waitress by Bill Dountas, then the owner of 491465 Ontario Ltd., carrying on business as Cannonball Restaurant, a strip bar in Brampton. This was a particularly advantageous opportunity for the complainant, since she was the mother of a newborn (Jenym, born May 6, 1986) and the bar was less than ten minutes from her home. Her hours of work were 11:00 a.m. to 6:00 p.m., Monday to Friday. The job duties were to serve food and drinks to the customers, and to clear tables as required.
16The Cannonball Restaurant employed a variety of individuals. At any one time there could be two bartenders, one doorman, one busboy, one cook, one manager, three to five waitresses, and ten to seventeen dancers. Although the dancers were required to strip during their performances, the waitresses worked fully clothed. Specific uniforms were not required of the waitresses, but their attire was regulated quite strictly. Initially they were obliged to wear danceskin leotards with wrap-around skirts, but eventually this outfit was altered, and the waitresses were told to dress in short black mini-skirts and white blouses.
17Waitressing wages were $4.25 an hour, plus tips, a portion of which had to be shared with the bartender and busboy. Take-home tips generally averaged between $50 and $70 daily. There were no maternity leave provisions, sick leave or disability plans, or vacation entitlements beyond the statutory minimum. Sherry Middleton worked continuously at the Cannonball Restaurant except for a brief break of a few months around the end of 1988. She attributes the break in employment to her temporary decision to quit when a new manager cut her hours after she had come in late several times. She returned to the Cannonball Restaurant as a full-time waitress in March 1989.
18On May 18, 1989, Bill Dountas sold all of the shares of 491465 Ontario Ltd. to John Chang, also known as Young Hee Kwon. John Chang and Maria (John Chang's wife) apparently advised all of the employees that they would have to fill out new applications of employment. Sherry Middleton did so, and she, along with the other employees, was subsequently rehired by Chang. Several weeks later, the Changs hired Bill Walsh, a frequent customer at the Cannonball Restaurant, to take over as manager. Sherry Middleton described her working relationship with Bill Walsh and John Chang as positive, and free from complaints. She was described by fellow-employees as [a] "good waitress — a hustler — who kept up with her customers." Vicky Spence, the headwaitress on Sherry Middleton's shift, testified: "She was a good waitress. She did her job." As a regular, longterm employee, she also had few problems with rowdy customers, who tended not to bother her.
19There were, however, rumours among the employees that some staff changes were in the works. Prior to his appointment as manager, Bill Walsh had apparently spoken to some of the dancers about the changes he planned to make. The waitresses were left with the impression that he wanted "nice, young looking girls" working there, and that some of the incumbent employees would have to go.
20The situation was complicated by the fact that Sherry Middleton was pregnant, with her second son Claren, who would eventually be born on November 29, 1989. Sherry Middleton testified that she gained approximately sixty pounds during this pregnancy, and that she was very visibly pregnant by the end of the first trimester. She had made no secret of her pregnancy, and the other staff members were well aware of her condition. She testified that she planned to work right to the end of her term, as she had done during her first pregnancy. Her first son, Jenym, had been born on November 29, 1989 [sic], when she had been employed as a waitress and bartender at Cheaters Tavern, a strip bar on Yonge Street in Toronto. The complainant had found that her first pregnancy did little to interfere with her job. She remained on the job until the very day she gave birth, and returned to her position a mere five weeks after the delivery. She was not worried, however, that the rumours circulating about imminent staff firings would pose problems for her, because of the pregnancy.
21On Friday, July 7, 1989, Sherry Middleton was approximately four months pregnant. She was approached by John Chang when she was in the back area of the restaurant. Ostensibly unaware of the complainant's pregnancy until then, Chang pointed at her stomach and asked if she "had a baby in there." Sherry Middleton replied "yes," although there was no further conversation at that point. At the end of her shift when she went to "cash out," Bill Walsh came up to her and announced that he was giving her one week's notice. When the complainant asked why, Walsh pointed at her stomach. When she queried "you are firing me because I am pregnant?" Bill Walsh replied "yes."
22Sherry Middleton was required to come into work for that last week, after she had been issued her termination notice. During that time she advised John Chang that Bill had fired her for being pregnant. Chang said nothing in response. The complainant had also told the other waitresses that she had been fired. On Monday morning, July 10, 1989, Vicky Spence (the headwaitress), Alison McMurray (a waitress), another waitress and a bartender questioned Bill Walsh about the dismissal. He was forthright in his reply. According to the separate testimony of both Vicky Spence and Alison McMurray, Walsh admitted that pregnancy was the reason for firing Sherry Middleton.
23Vicky Spence testified that Bill Walsh had told them that he was afraid of fights breaking out. Spence stated that Walsh said he fired the complainant "because she could get hurt here, because it is a strip club, and he does not want pregnant women working here." According to Spence, Walsh was particularly concerned that if a pregnant waitress got hurt, she might sue the club. He was afraid of lawsuits. Alison McMurray testified that she then objected that "that is discriminating [against] her. You cannot just go and fire somebody because they are pregnant." Bill Walsh replied, "Well, I did." At this point, Vicky Spence apparently advised Bull Walsh that she had worked at the Cannonball Restaurant, under the management of Bill Dountas prior to Walsh's tenure, until she was seven months pregnant with her daughter. Walsh retorted that if he had been the manager, she would also have been fired.
24On July 13, 1989, Sherry Middleton telephoned the offices of the Ontario Human Rights Commission to register a complaint of discrimination on the basis of sex. Peggy Molloy, the intake officer with the Commission, telephoned Bill Walsh on July 14, 1989, to advise him of the allegations. He admitted that the dismissal was in response to Sherry Middleton's pregnancy, and explained that there were often rowdy customers in the restaurant, who could become very aggressive and that he was fearful of lawsuits if the complainant was hurt.
25On July 17, 1989, Peggy Molloy made her second telephone call to Bill Walsh regarding the case. During this discussion, he advised her that pregnancy was not the reason for termination. Instead, he alleged that Sherry Middleton "was not performing her fair share of the work." He made reference to her sitting around, smoking, rather than attending to customers. When Molloy pointed out the inconsistency between his response of July 14 and 17, Walsh merely became more insistent that pregnancy was not a reason for the firing.
26Gary Speranzini, the special investigator with the legal unit of the Ontario Human Rights Commission, also testified concerning a conversation he had with Bill Walsh on June 18, 1991. During a discussion about the imminent hearing of the Board of Inquiry, this was the exchange which took place:
GS: Was [Sherry Middleton] wearing maternity clothes when she was hired?
BW: Yes. She must have been 7 or 8 months pregnant. She was out to here (gesturing with hands). She was with us for about four or five weeks when I fired her.
GS: Why was she fired?
BW: I fired her, first of all because she was tired, she was chain smoking and she wasn't working her section.
GS: Was [sic] there any other worries or concerns you had?
BW: Well, I was a little worried about the health of the child, sure, and about a law suit against me if something happened to her. This is a strip club, and people are rowdy. There are fights, lots of them, I've got scars to prove it.
I can tell you about another girl we had, I forget her name, she was a waitress. She had had her appendix out and was back only a few days when a customer, there was a fight or pushing going on, and his elbow hit her in the side and reopened her stitches.
GS: Is there anything more?
BW: I really fired her because she wasn't performing the duties in her section. She was sitting down too much at a table chain smoking. She would always tell me "I'm having a cigarette break," but the thing is no sooner she'd put one out but she'd light another. She'd go into her section once every 15 or 20 minutes but a customer can down a rum and coke in about 5 minutes.
GS: Did she serve customers while she was smoking?
BW: No. She didn't. She'd leave it in her ashtray at the table. She was an experienced waitress.
GS: So why, what were all the reasons you had to fire her?
BW: The only concern I had was she was overtired. She couldn't perform her duties. She could have stayed right up to the end before she had her baby if she could perform her duties.
GS: Who fired her, you or [John Chang] the owner?
BW: I did. When I fired her she said "You can't fire me because I'm pregnant." I said I'm not firing you because you're pregnant, but because you're too tired to do your work. She said "Well, can't you see I'm pregnant?" The point is I'm trying to run a business — what if I had 15 waitresses and they were all pregnant?
GS: Did you discuss your decision to fire Sherry with John [Chang]?
BW: Yes, I discussed it with him.
GS: What were his comments when you discussed firing her?
BW: He said "You're the boss. You do whatever you think is best."
27Although Bill Walsh did not appear at the hearing to testify in his own behalf, this exchange as described by Gary Speranzini provides some information about the arguments Mr. Walsh might have made. Unsatisfactory work performance appears to have been the argument Walsh would have advanced for termination of the complainant's job. However, the testimony provided by Sherry Middleton, corroborated by Vicky Spence and Alison McMurray, indicates that there had been no criticism of the complainant's work performance prior to the termination. While the manager did occasionally chastise the waitresses for sitting and smoking at the staff table rather than serving tables, this was apparently a common practice amongst all of the employees at the Cannonball Restaurant, and Sherry Middleton had not been singled out for doing this before.
28In the absence of Bill Walsh and John Chang's direct testimony, it is with great caution that I have concluded that the facts described by the complainant and the Commission witnesses are a truthful reflection of the relevant events. I have taken care to search for any inconsistencies and to ensure that all material matters have been corroborated by more than one witness. I am further persuaded of the truthfulness of these witnesses by the evidence which was put in by Russ Hamlyn, the manager of Cannonball Restaurant. Russ Hamlyn had been originally hired as manager by Bill Dountas in the summer of 1987 to oversee all staff and payroll matters. He was fired by John Chang after the sale of the business, when the two disagreed over personnel matters. On October 29, 1990, John Chang defaulted on the security agreement he had made out with Bill Dountas, the previous owner of Cannonball Restaurant. Bill Dountas reassumed control of 491465 Ontario Ltd. pursuant to that security agreement. Bill Dountas immediately rehired Russ Hamlyn as manager, a position he currently holds.
29Russ Hamlyn was not working as manager of Cannonball Restaurant when Sherry Middleton was fired, but he testified that Alison McMurray telephoned him at his home to convey the news. Russ Hamlyn described how he went down to the strip bar to speak to Bill Walsh about the dismissal. Russ Hamlyn's evidence in this regard provided further corroboration of the complainant's position and the evidence of the previous witnesses. Mr. Hamlyn testified that Bill Walsh admitted to him that he had fired the complainant because she was pregnant. Russ Hamlyn testified that he advised Bill Walsh that he couldn't fire someone because she was pregnant. Instead he advised Walsh to "cut her hours back maybe two or three days a week to make sure she is in safe health, she is not overworked, overtired, or whatever the case may be." But he cautioned Walsh, "you cannot fire a person because they are pregnant. It is just not done." Hamlyn also testified that during this discussion Bill Walsh said nothing to him abut the complainant's smoking or sitting around. Furthermore, he added that that had always gone on. "Waitresses sit down for a cigarette break when it is not busy, you know, what are you going to do? I do not see nothing wrong with it."
LIABILITY UNDER THE ONTARIO HUMAN RIGHTS CODE
30It is my finding that Sherry Middleton, a waitress at the Cannonball Restaurant, was dismissed from her job on July 7, 1989 because of pregnancy. This is a violation of ss. 4(1) and 8 of the Ontario Human Rights Code. Section 4(1) provides:
- (1) Every person has a right to equal treatment with respect to employment without discrimination because of . . . sex . . .
Section 9(2) provides that:
- (2) The right to equal treatment without discrimination because of sex includes the right to equal treatment without discrimination because a woman is or may become pregnant.
Section 8 provides that "no person shall infringe or do, directly or indirectly, anything that infringes a right under this Part."
31Furthermore, there do not appear to be any grounds which might provide a legal defence to this violation of the Code. The only possible ground of argument would have been a "BFOQ" defence under s. 23(1)(b) of the Code, which provides:
- (1) The right under section 4 to equal treatment with respect to employment is not infringed where . . .
(b) the discrimination in employment is for reasons of . . . sex . . . if the . . . sex . . . of the applicant is a reasonable and bona fide qualification because of the nature of the employment.
This defence is restricted by s. 23(2) which provides:
- (2) . . . a board of inquiry . . . shall not find that a qualification under clause (1)(b) is reasonable and bona fide unless it is satisfied that the circumstances of the person cannot be accommodated without undue hardship on the person responsible for accommodating those circumstances considering the cost, outside sources of funding, if any, and health and safety requirements, if any.
32It appears to have been Bill Walsh's position that pregnancy impeded the ability of waitresses to work in a strip bar because of potential safety considerations. The evidence clearly failed to meet the burden of proof on this issue, however. It was the testimony of the complainant, the headwaitress, and another waitress at the Cannonball Restaurant that they had never heard of a waitress being injured on the job — from rowdy customers or otherwise. At most, there would have been a very slight risk. The proper test, in my opinion, is that enunciated in Wiens v. Inco Metals Company, Ontario Division (1988), 1988 CanLII 8869 (ON HRT), 9 C.H.R.R. D/4795 at D/4819 [para. 37290]: "It is more in keeping with equality objectives to allow the individual the informed choice of accepting the very slight risk or rejecting the very slight risk in favour of alternative employment."
33The other potential BFOQ argument related to the question of whether it is appropriate for pregnant women to work as waitresses at an establishment where there are dancers taking off their clothes as a form of entertainment. There were some indications from the pre-hearing discussions with the respondents that they seemed to feel that this might be "inappropriate," perhaps even impairing the enjoyment of the patrons. This argument was not raised at the hearing, but in the absence of several of the respondents, and counsel for the respondents, I felt that the issue should be canvassed fully to ensure that all potential avenues of argument that could be raised were explored.
34A long line of human rights decisions has enunciated the clear principle that customer preference cannot be used to justify a discriminatory act. Berry v. Manor Inn(1980), 1980 CanLII 3927 (NS HRC), 1 C.H.R.R. D/152 at D/153 [paras. 1358–59] states:
To say that the preference of an employer's customers or clients . . . is a bona fide occupational qualification based on sex, would be tantamount to creating a "community standard" test to determine whether discrimination exists. It would be a minor extension of this principle to hold that if most customers in a restaurant held prejudices against Blacks or Jews or Scotsmen, the proprietor would be legally entitled to refuse to serve Blacks or Jews or Scotsmen. The long history of human rights struggles on this continent and elsewhere can leave no doubt that such an argument is totally without merit . . .
The standards are set by the Act, and were intended to be universally applicable throughout the province, regardless of group or community sentiment.
[See also De Jong v. Horlacher Holdings Ltd.(1989), 1989 CanLII 9045 (BC HRT), 10 C.H.R.R. D/6283; Varma v. G. B. Allright Enterprises Inc. (1988), 1988 CanLII 8913 (BC HRT), 9 C.H.R.R. D/5290; Imberto v. Vic and Tony Coiffure(1981), 1981 CanLII 4320 (ON HRT), 2 C.H.R.R. D/392; Hajla v. Nestoras (1987), 1987 CanLII 8545 (ON HRT), 8 C.H.R.R. D/3879.]
35Thus, whether the customers preferred non-pregnant waitresses (or not) would be legally irrelevant. However, it was the evidence of Sherry Middleton, Vicky Spence and Alison McMurray that each of them had served as waitresses at a strip bar while visibly pregnant, and that there had been no adverse reactions from the clientele. Furthermore, Gary Speranzini of the Ontario Human Rights Commission testified that Bill Walsh had discussed the matter with him as well. Speranzini asked Walsh whether it didn't "look bad if the waitress [was] pregnant?" Walsh replied:
Well, no, really, it doesn't matter. The guys are there to see the dancers on stage. They have to look good. They don't care about how the waitresses look much. Sure if your waitresses are good looking it can help a bit. But if you're there you're looking at the stage and you want to get your drinks. So if the service is good, that's important.
In conclusion, it appears that there was no reason to believe that pregnancy would impede a waitress's ability to do the job, and no evidence to substantiate a BFOQ defence.
WHO IS LIABLE
a) Bill Walsh
36Bill Walsh, the manager of 491465 Ontario Ltd. at the relevant time, was the individual who actually fired Sherry Middleton. His decision to do so comprises a direct infringement of the complainant's rights not to be discriminated against because of pregnancy. He is thus found to be personally liable for the violation of the Code.
b) The Corporation
37The corporation, which carried on business as Cannonball Restaurant, was 491465 Ontario Ltd. throughout the term of Sherry Middleton's employment. Bill Walsh, the manager of 491465 Ontario Ltd., committed an act which violated the Code during the course of his employment. The corporation is vicariously liable for Walsh's violation of the Code. A corporation is an entity separate and distinct from its shareholders and it is the corporation that owns and operates the business and incurs the liabilities.2 The shares and directorship of the corporation were in the hands of John Chang at the time when Sherry Middleton was fired, but have reverted to Vasilios Dountas at present. One who acquires the shares of a corporation acquires an interest "in the whole of the company, including not only the productive assets it is interested in acquiring but also other possibly less useful assets, and even more importantly, the liabilities of the corporation."3
38The corporation was not legally represented at the hearing, but the Board of Inquiry received a letter from Brett D. Murray, solicitor for 491465 Ontario Ltd., in advance of the hearing, dated July 18, 1991. The letter stated that "our client has no knowledge of the matters filed against the Cannonball Restaurant by Sherry Middleton." Russ Hamlyn, appearing for the corporation at the hearing, took a similar position, arguing that it was John Chang and Bill Walsh who were responsible for the termination of the complainant's employment, and that the present owner and manager of the corporation were completely unaware of the particulars of the incidents.
39With respect to the corporate liability, this is no defence. The complaint was lodged against 491465 Ontario Ltd., carrying on business as Cannonball Restaurant, not against Vasilios Dountas or Russ Hamlyn personally. The corporation had ample notice of the complaint. The current owner of the corporation represents it and must bear the consequences for any unlawful activity carried out under its auspices. (See Lutz v. Gray's Lakehouse Restaurant(1990), 1990 CanLII 12511 (ON HRT), 13 C.H.R.R. D/158 at D/160.)
40The Ontario Human Rights Code provides in s. 44(1) that:
- (1) . . . any act or thing done or omitted to be done in the course of his or her employment by an officer, official, employee or agent of a corporation . . . shall be deemed to be an act or thing done or omitted to be done by the corporation . . .
As a consequence, when Bill Walsh is found to have infringed the Code, 491465 Ontario Ltd., carrying on business as Cannonball Restaurant, is responsible as well.
c) John Chang
41John Chang was the owner of 491465 Ontario Ltd. at the time of Sherry Middleton's dismissal. The question of his personal liability for Bill Walsh's decision to terminate Sherry Middleton's employment is somewhat problematic. There was some evidence to suggest that John Chang knew of Sherry Middleton's pregnancy and that Bill Walsh's decision was made as a result of that condition. However, it is my opinion that there was not sufficient evidence adduced to persuade me that John Chang should be held personally responsible for a breach of the Code. Consequently I have not affixed liability to John Chang individually.
DAMAGES
42The complainant's damages constitute the lost income she would have earned if she had not been dismissed contrary to the Code. She testified that she had planned to work right to the end of her pregnancy, and provided medical documentation to substantiate this. It is my finding that she would have been able to work from July 14, 1989, to November 24 [sic], 1989, when her child was born. Subtracting two weeks of vacation (which the evidence showed would have been unpaid) this amounts to seventeen weeks. The complainant testified that she would have taken an unpaid maternity leave from November 24, 1989, to June 30, 1990. She then began actively searching for work as of July 1, 1990, and was not able to find a new position until September 7, 1990. This constitutes a second period of lost employment of ten weeks.
43I have calculated the lost income on the basis of a weekly salary of $138.12 and tips of $250.00 [per] week. The lost income from twenty-seven weeks of employment amounted to $10,479.24. Other proven losses included a legal bill of $476.36, pursuant to a notice of sale under the mortgage, when the complainant's mortgage went into default because of her severe financial distress flowing from the dismissal. The special damages thus total $10,955.60, upon which interest is owed from January 29, 1990, in accordance with the Courts of Justice Act, at the rate of 14.5 percent for 1990, 14 percent for the first quarter of 1991, and 11 percent for the second quarter of 1991. There is some possibility that the complainant received unemployment insurance and/or welfare benefits during the period of unemployment, and the respondents should contact the appropriate agencies to determine what amounts should be deducted from this award, and remitted directly to the governmental agencies concerned. In view of the stress, financial dislocation, and personal embarrassment attendant upon the loss of the complainant's job, general damages are also awarded in the amount of $2,500.
ORDER
44It is the finding of this tribunal that Bill Walsh and 491465 Ontario Ltd., carrying on business as Cannonball Restaurant, are jointly and severally liable for the damages flowing from the firing of Sherry Middleton contrary to the Ontario Human Rights Code.
45The damages payable consist of:
a) special damages in the amount of $10,955.60 plus interest as stipulated above;
b) general damages in the amount of $2,500.
NOTES
1 During the proceedings, respondent Chang/Kwon was referred to by different parties and witnesses via both names. For simplicity of discussion, I have referred to him as John Chang throughout this decision.
2 Stephen D. A. Clark and Michael G. Quigley, Business Law Reference Materials (Law Society of Upper Canada, 32nd Bar Admission Course Materials) at pp. 1–12.
3 Tom Hadden, Robert E. Forbes and Ralph L. Simmonds, Canadian Business Organizations Law (Toronto: Butterworths) at p. 493.