Gordon Russell v. 2175033 Ontario Inc., Brute Manufacturing Limited and Bangor Metal Corp., 2010 HRTO 1775

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Gordon Russell

Applicant

-and-

2175033 Ontario Inc., Brute Manufacturing Limited and Bangor Metal Corp.

Respondents

INTERIM DECISION

Adjudicator: Mary Truemner

Date: August 30, 2010

Citation: 2010 HRTO 1775

Indexed as: Russell v. 2175033 Ontario

1This is an Application filed on July 17, 2009 under section 34 of Part IV of the Human Rights Code, R.S.O. 1990, c. H.19 as amended (the "Code"). The applicant alleges that he was discriminated against on the basis of disability during his employment with the respondent, Brute Manufacturing Limited ("Brute") which culminated in his termination for allegedly discriminatory reasons.

2It would appear from the pleadings that the respondent, Bangor Metal Corporation ("Bangor"), owns Brute, while 2175033 Ontario Inc. (the "numbered company") is a company that purchased some of Brute's assets near the end of the applicant's employment. In submissions, the applicant refers to documents filed by the numbered company, and documents filed by John W. Mercer who is identified in the Application as the CEO of Brute and the owner of Bangor, and the applicant maintains that while he is uncertain as to which of the respondents was responsible for his termination, the termination was discriminatory.

3Neither Brute nor Bangor have filed a Response, although the Tribunal received correspondence from Mr. Mercer. In his correspondence to the Tribunal, Mr. Mercer states that Brute and Bangor are insolvent companies with no assets and no employees. He states that Bangor is the parent company of Brute, and that Bangor is in receivership. He also states that Clemmer-Steelcraft, a company affiliated with the numbered company, made the decision about which of Brute's employees should be hired to work with Brute's assets once Brute became the subject of proceedings under the Companies' Creditors Arrangement Act, R.S.C. 1985 c.C-36, as amended (the "CCAA"), and once those assets were sold to the numbered company.

4In the Tribunal's Interim Decision, 2010 HRTO 200, the parties were requested to provide submissions with respect to the effect of proceedings under the CCAA on these proceedings, and they did so.

5The purpose of this Interim Decision is to address the failure of Brute and Bangor to file a Response and to address the effect of the CCAA proceedings on this Application.

Failure to File Responses

6The applicant was employed by Brute from September 1993 to July 17, 2008 when he says that Brute terminated his employment.

7In October 2007, while the applicant was still employed by Brute, it sought relief or protection from creditors under the CCAA. On July 15, 2008, while the applicant continued to be employed by Brute, a court order approved the sale of some of Brute's assets to the numbered company. In a court order dated October 18, 2007, a stay of proceedings against Brute was granted. There were several extensions to the stay. The most recent court order is dated September 25, 2008, and it extends the stay to October 22, 2008. There is no indication that the stay was extended beyond that date which means that the stay is no longer in effect. There is no indication that there is any other order or legal bar to prevent the Application from proceeding against Brute.

8While it appears from the documents filed by the numbered company and by Mr. Mercer that Brute has no assets or employees, the applicant does not consent to removing Brute as a respondent. On the basis of the material before me, I see no reason to find that Brute is not a proper party. Thus, Brute will remain a party to these proceedings.

9While Mr. Mercer has provided some information to the Tribunal in response to the Tribunal's request for submissions, Brute has not filed a Response (Form 2). Brute is therefore not in compliance with the Tribunal's Rules of Procedure which require that the Response (Form 2) be filed within 35 days after the Notice of Application was issued.

10An application to the Tribunal starts a legal proceeding. A finding that a violation of the Code has occurred may lead to various orders, including monetary compensation, other forms of restitution to the applicant, and orders to take action to promote compliance with the Code. Failure to file a response or participate in a Tribunal proceeding may lead to orders against individual and corporate respondents without their participation. The respondent's attention is drawn to Rule 5.5 of the Tribunal's Rules of Procedure which reads as follows:

5.5 Where an Application is delivered to a Respondent who does not respond to the Application, the Tribunal may:

a) deem the Respondent to have accepted all of the allegations in the Application;

b) proceed to deal with the Application without further notice to the Respondent;

c) deem the Respondent to have waived all rights with respect to further notice or participation in the proceeding;

d) decide the matter based only on the material before the Tribunal.

11If Brute wishes to participate in this proceeding, it shall file a Response by September 1, 2010. If a Response is not received, the Tribunal may proceed without further notice to Brute, and may take any or all of the steps set out in Rule 5.5.

Bangor as a Respondent

12The applicant also wishes to proceed against Bangor. As with Brute, there is no evidence before me confirming that, at the time when the Application was filed, there was a stay of proceedings with respect to Bangor under the CCAA or in the context of receivership proceedings.

13As with Brute, Bangor must file a Response (Form 2) by September 13, 2010 if it wishes to participate in this proceeding. Bangor must include submissions in its Response on whether s.46.3 of the Code affects Bangor given that it appears to be a parent company of Brute.

14The other parties shall provide submissions on whether s.46.3 affects Bangor within 14 days of receiving Bangor's Response, or, if Bangor provides no Response, by October 1, 2010.

The Numbered Company as a Respondent

15The numbered company has requested that it be removed as a respondent because it claims it merely purchased assets belonging to Brute, and the applicant has disclosed no prima facie case against it because the Application describes incidents that are related to Brute only.

Prima Facie Case

16With respect to whether the applicant has disclosed a prima facie case against the numbered company, the Application alleges discrimination which primarily occurred before the numbered company purchased some of Brute's assets in 2008. The Application does, however, state the following:

The agreement of purchase & sale provides that the "buyer will offer employment to certain designated employees. The current APA [Assets Purchasing Agreement] provides for transfer of approximately two-thirds (2/3) of the employees, with it contemplated that Brute will be responsible for the remaining one third (1/3) employees' termination and severance claims."

17The numbered company argues that it had no knowledge of the applicant's existence as an employee of Brute because he was not on the list of employees that Brute provided to the numbered company after it purchased Brute's assets. The numbered company implies that it hired Brute's employees only if they were on the list. The numbered company requests that the Application against it be dismissed on the basis that no prima facie case has been disclosed by the applicant. In contrast, Mr. Mercer states in his letter to the Tribunal that Brute never made recommendations about who should be hired by the numbered company. In addition, he states that the numbered company had full access to all of Brute's personnel records and made the decisions about who to hire.

18In reply to the respondents' conflicting submissions, the applicant argues that either Brute or the numbered company or both were fully aware of the applicant's disability, and decided not to hire him because of his disability. The applicant argues that a hearing is required in order to determine whether the numbered company knew about the applicant's disability and decided not to hire him as a result.

19The Tribunal has stated that it may consider the question of no prima facie case at a preliminary stage, before the applicant has presented evidence. In such circumstances, although there is no evidence before the Tribunal, the threshold test is whether the applicant raises allegations that, if accepted to be true, would be enough to establish a violation of the Code. See Arias v. Centre for Spanish Speaking Peoples, 2009 HRTO 1025, at para. 7.

20In the circumstances of this case, however, it is apparent that there is a significant disagreement regarding the facts. Having regard to the material filed and the apparent disagreement, I am satisfied that this is not an appropriate case for determining whether or not the applicant has established a prima facie case of discrimination against the numbered company prior to the hearing. At this stage of the proceedings, the numbered company's request that the Application be dismissed against it is denied.

The Effect of the Numbered Company's Purchase of Brute's Assets

21The Sale Approval and Vesting Order issued by the Superior Court of Justice on July 15, 2008 states that the numbered company's purchase of Brute's assets are "free and clear" of any claims against Brute. This would appear to preclude the Tribunal from addressing the applicant's allegations against the numbered company with respect to his treatment while employed by Brute. However, the Sale Approval and Vesting Order does not appear to restrict the Tribunal's jurisdiction to deal with the applicant's allegation in his submissions that the numbered company decided not to hire him because of his disability after the assets were purchased.

22Accordingly, the numbered company will remain a respondent in these proceedings with respect to the allegation that it failed to employ him after it purchased the assets of Brute.

23I am not seized.