HUMAN RIGHTS TRIBUNAL OF ONTARIO
B E T W E E N:
Yasmin Madhani
Applicant
-and-
Sears Canada Inc., Stephen Muscat, Calvin MacDonald, Ismat Mirza and Sam Pasani
Respondents
INTERIM DECISION
Adjudicator: Judith Keene
Indexed as: Madhani v. Sears Canada Inc.
APPEARANCES
Yasmin Madhani, Applicant
Philip R. White, Counsel
Sears Canada Inc., Stephen Muscat, Calvin MacDonald, Ismat Mirza and Sam Pasani, Respondents
Shana French, Counsel
Introduction
1This is an Interim Decision in respect of an Application filed under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging discrimination with respect to employment because of disability and sex.
2On the same date as they filed their Response, the respondents filed a Request for an Order During Proceedings (“Request”) asking that the individuals named as personal respondents should be removed as respondents to the Application. The request stated that the personal respondents are respectively the chief executive officer, a manager in human resources, the senior vice president of human resources (who is no longer employed with the company) and the divisional vice president of human resources. The Request indicates that “at all material times [the four personal respondents] were acting within the course of their employment with” the corporate respondent. The corporate respondent ”agrees that for the purposes of the present application the conduct of [the four personal respondents] is deemed to be the conduct of” the corporate respondent. The Request also states that the corporate respondent “is able to fully respond to the allegations and in the event that the application is successful, remedy the breach without the assistance of [the four personal respondents], particularly as the applicant does not seek any non-monetary remedies in respect of any individual respondent”. The respondents relied upon the Tribunal’s decisions in Sigrist and Carson v. London District Catholic School Board, 2008 HRTO 14, Persaud v. Toronto District School Board, 2008 HRTO 31, Parastatidis v. Ford Motor, 2009 HRTO 2107, and Lehoux v. Baxter, 2010 HRTO 299.
3The respondents assert that the Tribunal’s decisions recognize “that acts carried out by an employee in the performance of an employment related activity is an act of the organization and, in such circumstances, the organization is the only proper respondent to an alleged infringement” of the Code.
4The applicant responded to the respondents’ Request, and requested and received an extension of time to file a Reply to the Response. In her Reply, the applicant notes that the respondents’ Request was filed with the Tribunal prior to the release by the Ontario divisional Court of Ontario Human Rights Commission v. Farris, 2012 ONSC 3876 (Div. Ct.) (“OHRC v. Farris”). The applicant submits that OHRC v. Farris “significantly narrowed the jurisprudence as set out in Sigrist, Persaud and Parastatidis… to the extent that the Persaud factors remain relevant (if at all) to determining whether or not an individual respondent should be removed…the respondents’ request should be denied.”
5The respondents filed a letter on 12 August 2012 that purported to be a reply to the applicant’s Response to their Request. By letter filed on Aug 13, 2012, the applicant objected to the reply, noting correctly that there is no provision in the Rules for a reply to a Response. The applicant requested by letter that paragraphs 24 to 45 of the reply be struck or ignored. I do not consider it necessary to make a ruling of this nature in the circumstances of this case.
6The additional material filed by the respondents includes a submission that the decision in OHRC v. Farris, rather than departing from or narrowing the factors raised in previous Tribunal decisions “provided greater clarity on how the Tribunal should apply the fourth factor in the Persaud test, being a determination of whether the individual conduct is central to the nature of the alleged conduct”.
7For the reasons given below, I do not consider it appropriate to remove the personal respondents as requested, at least at this point in the proceedings.
ANALYSIS
8This decision deals with a relatively narrow fact situation: a request to remove three personal respondents, made on the same date as the Response was filed, is being considered at a point before the parties have filed witness statements and other documents upon which they intend to rely at a hearing. This decision will be kept to that situation. However, the topic of removal of personal respondents in a wide range of situations is linked to the legal liability of individuals for breach of the Code, which was the subject of the recent decision in OHRC v. Farris. As the legal liability of individuals underlies the identification of individuals as parties, some discussion of relevant context is in order.
9There is not much jurisprudence dealing with the removal of parties prior to the 2008 procedural changes relating to the enforcement of substantive Code rights. This may be due to the fact that, prior to these changes, the Human Rights Commission had carriage of cases before the Tribunal and its predecessor Boards of Inquiry, and, in cases in which the Commission referred the matter to a hearing, the naming of responding parties reflected a previous investigative process and representation by counsel. The relatively few published decisions that discuss related principles largely deal with misnomer of a party, (see for example Morano v. Company Garden Centre (1988), 1988 CanLII 8871 (ON HRT), 9 CHRR D/4876 (Ont. Bd.Inq.)), or with the addition of a respondent, and deal with fairness principles such as notice. In Nawagesic v. Rauman (1978) unreported (Ont. Bd. Of Inquiry) and Tabar and Lee v. Scott and West End Construction Ltd (1982), 1982 CanLII 4887 (ON HRT), 3 CHRR D/1073, for example, individuals who were principals in the respondent business were added where the Board was satisfied that they had received appropriate notice of the complaint since its inception.
10To the best of my knowledge, only one decision prior to the 2008 procedural changes focuses on the removal of personal respondents. In Makkar v. Scarborough (City) (1987), 1987 CanLII 8552 (ON HRT), 8 CHRR D/4280 (Ont. Bd. Inq.), the original complaint had named not only the City of Scarborough but a number of its employees as respondents. On the second day of the proceedings, after opening submissions had been made, counsel for the Commission announced that the Commission no longer wished to proceed against the individual respondents. Counsel for the respondent then asked the Board to award costs against the Commission for one day of counsel fee for each of the individual respondents because of the additional preparation that was required as a result of their original inclusion and because of the emotional strain and embarrassment suffered by the individual respondents owing to their inclusion as parties to these proceedings. This request was subsequently withdrawn, but the Chair of the Board of Inquiry issued a rebuke to the Commission that was clearly occasioned by the lateness of the decision not to proceed: “because of the tremendous impact that can be caused upon a person as a result of an allegation of a violation of the Human Rights Code, the Commission should exercise great caution when it decides to name an individual as a party to proceedings. Individuals should not be named unless there is a real need to include them as parties and unless the Commission has a real intention to proceed against them. This is especially so where there is a corporate respondent and no practical need to name individuals in order to process the claim” (at para 33588).
11The 2008 procedural changes to the Code ushered in a “direct access” model. The aspect of the new model that is most relevant to the topic of identification of respondents is that applicants now apply directly to the Tribunal. The vast majority of applicants currently are not represented by counsel.
12At the same time, the Tribunal was specifically tasked in the Code with adopting “the procedures and practices provided for in its rules or otherwise available to the Tribunal which, in its opinion, offer the best opportunity for a fair, just and expeditious resolution of the merits of the applications” (s.40).
13Section 36 of the Code provides that the parties to an application under section 34 or 35 are the following:
In the case of an application under subsection 34 (1), the person who made the application.
In the case of an application under subsection 34 (5), the person on behalf of whom the application is made.
In the case of an application under section 35, the Commission.
Any person against whom an order is sought in the application.
Any other person or the Commission, if they are added as a party by the Tribunal. 2006, c. 30, s. 5.
14The Tribunal’s Rules of Procedure now specifically provide (at Rule 1.7) that:
In order to provide for the fair, just and expeditious resolution of any matter before it the Tribunal may:
b) add or remove a party.
15An applicant filing an Application may take a fairly broad approach to the naming of respondents, for many reasons. The reasons for a broad approach in any individual case stem from a huge range of fact situations. At one end of the factual spectrum, an applicant may lack understanding of the Tribunal’s jurisdiction and therefore name respondents whose alleged actions or omissions, even if proven, could not possibly infringe the Code. Farther along the spectrum, an unrepresented applicant may believe that the only way to get the evidence of an individual before the Tribunal is to name that individual as a party. At the far end of the spectrum, the allegations, if proven, would clearly breach the Code, but the applicant is not in a position to know sufficient detail to be sure who was actively involved or responsible; that information is in the hands of the respondent(s). In my view, a broad initial approach in this last situation may actually be fairer to all involved; while being named as a respondent is not good news, persons named as respondents thereby get early notice of the allegations.
16Even where all respondents are alleged to have acted in a way that would breach the Code, difficulties can arise from the presence of many respondents that can affect fairness, justice and expeditious resolution of Applications. Examples of this type of difficulty also vary according to the actual fact situation: an applicant may name an individual who, once more facts are known, apparently has no connection to the action or omission at issue; where many respondents are included, this can make it difficult to negotiate early settlement of an Application; a hearing featuring numerous parties and their counsel is likely to be lengthier and more complicated than may actually be necessary to achieve a fair and just result.
17A final aspect of the context is that the Rules give the Tribunal the discretion to implement a wide range of procedural strategies to achieve fairness, justice and expediency in getting to the merits of an Application. Removal of a respondent is only one of these. Even when removal of a respondent is considered, the timing of a request, and of a decision, to remove can vary to meet the requirements of fairness, justice and expediency. To use examples from the spectrum of circumstances noted above, there may be situations in which an applicant names respondents whose alleged actions or omissions, even if proven, could not possibly infringe the Code. In such a case, very early removal of that respondent may be appropriate. In other situations, such as where the allegations, if proven, would clearly breach the Code, but the applicant is not in a position to know sufficient detail to be sure who was actively involved or responsible, the removal of a respondents may not be warranted until after the pre-hearing documents and witness statements are filed, or until after the evidence is heard.
18Tribunal decisions concerning the removal of personal respondents have been issued at the request of parties as well as on the Tribunal’s own motion. Decisions have been made in a wide range of fact situations, and, as noted above, the circumstances of the individual case are extremely important.
19In Greenhorn v. 621509 Ontario Inc. (c.o.b. Belleville Dodge Chrysler Jeep), 2006 HRTO 22, the Tribunal dealt with a request to add respondents in a Commission-referred Complaint. Obviously, with requests to add parties, there are fairness issues to be addressed relating to the timing of a request. The Tribunal applied a two-part inquiry: whether there were facts alleged that, if proven, could support a finding that the proposed respondent violated the complainant's rights, and whether the addition of the proposed respondent would cause substantial prejudice to that party’s ability to make full answer and defence to the allegations that cannot be alleviated by procedural orders of the Tribunal.
20In more recent decisions, the Tribunal has focussed on requests to exclude individuals as respondents where a corporation with which the individuals are involved is a party. In a number of these decisions, the Tribunal has taken an approach that has been understood by the respondent in this matter actively to discourage proceeding against individuals for which a corporation is responsible. The considerations often applied are discussed in Sigrist and Carson v. London District Catholic School Board, 2008 HRTO 14 (“Sigrist”), at paragraph 42, and Persaud v. Toronto District School Board, 2008 HRTO 31 (“Persaud”), at paragraph 5.
21Sigrist was an Interim Decision addressing motions brought by the complainants to add a number of party respondents, including individuals to a complaint alleging discrimination on the ground of disability in the provision of services (education). The Tribunal reviewed the allegations, and decided in each case that, even if they were found to have contributed to an infringement of the rights of either or both complainants, there was no “appropriate basis upon which to award a personal remedy against them over and above any remedy that may be ordered against” the corporate respondent. The Tribunal set out a general approach to this issue, stating as follows at para. 42:
The unnecessary naming of personal respondents is a practice to be discouraged, as this serves to unnecessarily add to the complexity of proceedings and can often operate as a roadblock to resolution. Pursuant to section 45(1) of the Code, a corporation is deemed to be liable for “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”. Where there is no issue as to the ability of a corporate respondent to respond to or remedy an alleged Code infringement and no issue raised as to a corporate respondent’s deemed or vicarious liability for the actions of an individual who is sought to be added as a personal respondent, then in my view the individual ought not be added as a personal respondent in the absence of some compelling juridical reason. A compelling juridical reason may exist, for example, where it is the individual conduct of a proposed personal respondent that is a central issue as opposed to actions which are more in the nature of following organizational practices or policies or where the nature of the alleged conduct of a proposed personal respondent may make it appropriate to award a remedy specifically against that individual if an infringement is found.
22Persaud was, like Sigrist, a complaint, made under the system that preceded the 2008 procedural changes, that alleged discrimination in the provision of education services, in this case on the grounds of race and colour. In Persaud, the Commission advised that it would no longer be proceeding as against four out of five named personal respondents. The Tribunal ruled without further comment that these four would no longer be parties to the proceeding, then proceeded to consider the removal of the fifth personal respondent. Adopting the Sigrist approach, the Tribunal decided to remove the individual as a respondent. In doing so, the Tribunal expanded on the Sigrist approach as follows, at para. 5:
Applying these principles to the Tribunal’s power to remove a personal respondent from a proceeding, the following non-exhaustive list of factors may be helpful in assessing whether a personal respondent should be removed:
Is there a corporate respondent in the proceeding that also is alleged to be liable for the same conduct?
Is there any issue raised as to the corporate respondent’s deemed or vicarious liability for the conduct of the personal respondent who [is] sought to be removed?
Is there is any issue as to the ability of the corporate respondent to respond to or remedy the alleged Code infringement?
Does any compelling reason exist to continue the proceeding as against the personal respondent, such as where it is the individual conduct of the personal respondent that is a central issue or where the nature of the alleged conduct of the personal respondent may make it appropriate to award a remedy specifically against that individual if an infringement is found?
Would any prejudice be caused to any party as a result of removing the personal respondent?
In considering whether any compelling reason exists to continue the proceeding against a personal respondent, one way of approaching this question is to ask whether it is necessary to involve this person as a party in order to have a fair, just and expeditious resolution of the merits of the complaint.
23Parastatidis v. Ford Motor, 2009 HRTO 2107 (“Parastatidis”), one of the decisions cited by the respondent, was a brief Interim Decision in which a corporate respondent’s request to remove three individual respondents was not opposed by the applicant. In Parastatidis, the Alternate Chair reviewed the Persaud factors and concluded (at para 4):
There is no question that the named personal respondents were acting in the course of their employment and there is no issue as [to] the corporate respondent’s ability to provide a remedy. In these circumstances, I do not see a compelling reason to continue this Application against the personal respondents…
24In Lehoux v. Baxter, 2010 HRTO 299 (“Lehoux”), another Interim Decision cited by the respondent, allegations concerning disputed facts are set out in the first paragraphs:
The applicant alleges that she was discriminated in employment by the respondents on the basis of pregnancy. She asserts that they failed to accommodate her requests for accommodation for symptoms related to her pregnancy from September 22, 2005 until she took an early maternity leave on February 6, 2006. She alleges that the respondents required her to take a leave of absence and therefore she made a claim for short term disability benefits to Maritime Life which was denied.
The respondent Lisa Ward is the corporate respondent’s Human Resources Manager. The respondent Betty Mercer was the applicant’s immediate supervisor. The respondent Peter Weiss is the applicant’s manager. The respondents assert that they accommodated the applicant’s pregnancy related needs based on the medical information provided by her treating physician and that the applicant declined to accept some of the suggested accommodations. In January 2006 the respondents found work for the applicant within her restrictions until February 2006 when the applicant chose to take an early maternity leave.
25The concluding paragraph of Lehoux reads as follows:
Apart from a single allegation that Ms. Mercer was rude and unsympathetic, I find that the allegations against the personal respondent relate to their efforts (or lack thereof) to find appropriate accommodation for the applicant. There is no dispute about the corporate respondent’s vicarious liability or capacity to provide a remedy. The mere request for an apology cannot be used to justify retaining the personal respondents. In these circumstances, the personal respondents will be removed from the style of cause.
26It is clear that the approach taken in Sigrist and Persaud has frequently been taken in decisions on Applications filed after the 2008 procedural changes. Most of these decisions, being interim rulings in the course of dealing with the merits of a matter, understandably do not set out all of the facts and circumstances of the individual case. In some of these, while the facts of the particular case that are considered relevant to the issue of removal of individual respondents may be set out, the practice of routinely using the phrase “compelling reason to continue” the proceeding against a personal respondent, particularly when also quoting paragraph 42 of Sigrist, may give rise to the misapprehension that there is a rebuttable presumption that personal respondents should be removed absent “a compelling reason” to retain them. Certainly this appears to be the understanding of the respondents in this case; as noted above, they assert that the Tribunal’s decisions recognize “that acts carried out by an employee in the performance of employment related duties is an act of the organization and, in such circumstances, the organization is the only proper respondent to an alleged infringement” of the Code (emphasis added).
27In what way does the Farris case affect the considerations applied by the Tribunal in dealing with requests to remove respondents?
28In Farris v. Staubach Ontario Inc., 2011 HRTO 979, the Tribunal issued a Decision finding a breach of the Code because of sex discrimination in employment. Farris was a complaint referred to the Tribunal by the Ontario Human Rights Commission in 2006, under the provisions of the Code, in effect at that time. In that case, the Tribunal found that two personal respondents who had been named by the Commission, who were in management positions and were also the only two shareholders in the corporation that owned the corporate respondent, failed to recognize and address a poisoned work environment and terminated the complainant’s employment contrary to the Code. However, the Tribunal did not find these individuals jointly and severally liable for any portion of the damages awarded against the corporate respondent, which was at that time an inoperative company. In dismissing the Commission’s submission that there had been a juridical reason for naming the individual respondents, the Tribunal noted that there was no evidence that the corporation was bankrupt, and that, in any event, it was not appropriate to make an order against individuals on the presumption that the corporation would not be able to pay.
29On June 28, 2012, the Divisional Court set aside this decision and remitted the issue to the Tribunal for reconsideration in accordance with its reasons. It is notable that OHRC v. Farris does not speak directly to a decision to remove personal respondents; no such decision had been made by the Tribunal in the case under review. However, the Divisional Court made a number of observations about personal and vicarious liability under the Code that in my view are instructive in dealing with this case.
30In OHRC v. Farris, at paras. 31-36 and 45, Sachs, J. stated :
Section 46.3(1) of the Code provides for the vicarious liability of corporations for the acts of their officers, employees or agents. That section reads:
46.3(1) For the purposes of this Act, except subsection 2 (2), subsection 5 (2), section 7 and subsection 46.2 (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, trade union, trade or occupational association, unincorporated association or employers’ organization shall be deemed to be an act or thing done or omitted to be done by the corporation, trade union, trade or occupational association, unincorporated association or employers’ organization.
Thus, under the Code, a corporation cannot be held vicariously liable for the acts of its employees, agents or officers when it comes to sexual harassment. Those complaints are to be brought against the individual who actually committed the harassment.
Management employees who fail to take appropriate action to prevent discriminatory harassment in the workplace once they know of the offending conduct may be found personally liable for infringing an employee’s right to a workplace free from sex discrimination under s. 5(1). Failing to deal with the harassment, thereby creating a poisoned work environment is a violation under s. 5(1) of the Code, a violation for which the corporation can be held vicariously liable. Furthermore, if the individual responsible for the harassment is a directing mind of the corporation, then the corporation can also be held liable for the individual act of harassment (see Moffat v. Kinark Child and Family Services (No. 5) (1999), 1999 CanLII 35166 (ON HRT), 36 C.H.R.R. D/346 (Ont. Bd. Inq.); Naraine v. Ford Motor Co. of Canada (No.4) (1996), 1996 CanLII 20059 (ON HRT), 27 C.H.R.R. D/230 (Ont. Bd. Inq.), aff’d 1999 CanLII 18727 (ON SCDC), (1999), 124 O.A.C. 39 (Div. Ct.), rev’d on other grounds 2001 CanLII 21234 (ON CA), (2001), 209 D.L.R. (4th) 465 (Ont. C.A.), leave to appeal ref’d [2002] S.C.C.A. No. 69).
The fact that a corporate respondent may also be jointly and severally liable for the conduct of employees is not a basis to insulate the employees from personal liability (Drummond v. Tempo Paint and Varnish Co. (No.4) (1998), 1998 CanLII 29860 (ON HRT), 33 C.H.R.R. D/175 (Ont. Bd. Inq.)). The purpose of s. 46.3 of the Code is to confirm the parallel statutory liability of corporations for the actions of their employees, not to replace it (Reyes v. Seepersaud, 2010 HRTO 933, 2010 HRTO 933 at para. 7).
Section 45.2 of the Code governs the grant of remedies. It provides that “the Tribunal may make one or more of [emphasis added]” a number of orders against a party to the application, including the payment of monetary compensation. The section is clearly discretionary.
The aim of the Code is the removal of discrimination. The Code’s main approach is not to punish the discriminator, but rather to provide relief to the victims of discrimination. Remedies must be effective and consistent with the “almost constitutional” nature of the rights protected (Ontario Human Rights Commission v. Simpson-Sears Ltd., 1985 CanLII 18 (SCC), [1985] 2 S.C.R. 536; Robichaud v. Canada (Treasury Board), 1987 CanLII 73 (SCC), [1987] 2 S.C.R. 84).
This failure to expressly articulate a reason why the managers should not be found personally liable for damages constitutes a gap in the Tribunal’s reasons. We agree that the mere existence of such a gap does not in and of itself render the decision an unreasonable one. As Newfoundland and Labrador Nurses’ Union, supra, makes clear, the reasons are not to be reviewed in a vacuum, instead “the result is to be looked at in the context of the evidence, the parties’ submissions and the process” (para. 18).
31The considerations in Sigrist were subjected to the following remarks by the Court in OHRC v. Farris at paras. 54-57:
In its decision of May 20, 2011 and in its Reconsideration Decision of September 29, 2011, the Tribunal’s reasoning on this point appears to be driven by the case law on whether individual respondents should be “named” in a human rights proceeding when a corporation is also named.
However, this case law was developed in the context of complainants’ motions to add respondent parties to a proceeding that had already been commenced. On such motions there is a two-part test to be applied, as noted in Sigrist and Carson v. London District Catholic School Board, 2008 HRTO 14, 2008 HRTO 14 at paragraph 7:
The first part of the test is whether there are facts alleged that, if proven, could support a finding that the proposed respondent violated the complainant’s rights. The second part of the test is whether the addition of the proposed respondent would cause substantial prejudice to that party’s ability to make full answer and defence to the allegations that cannot be alleviated by procedural orders of the Tribunal. [Citations omitted.]
Generally, where there is no issue about a corporation’s ability to pay or about its vicarious liability, human rights tribunals have displayed a reluctance to add personal respondents, for fear of unnecessarily augmenting the complexity of the proceedings and decreasing the prospects that the complaint will be resolved (Sigrist and Carson, supra at para. 42).
It is difficult to see why this case law would be relevant to a situation where the issue is not whether the personal respondents should be named, but whether they should be found jointly and severally liable for damages. Once a proceeding is being adjudicated there is no longer a concern about increased complexity or about barriers to resolution. Furthermore, even if this case law were apposite to the situation at bar, in this case there is a real concern about the corporation’s ability to pay.
32The Court did not comment on the Persaud decision, and therefore did not address the considerations listed in that decision.
33In the decision that the Tribunal issued on the remitted case, Farris v. Staubach Ontario Inc., 2012 HRTO 1826 the Tribunal briefly summarised the Divisional Court’s finding as follows at para 7:
In the course of its reasons, the Court highlighted the importance of two of the fundamental principles of human rights law: first, a finding of corporate liability is not meant to act as a shield against a finding of individual liability where the acts of the individual constitute a violation of the Code; and second, the focus of human rights legislation is to provide an effective remedy to the complainant (one measure of which is the degree to which the damages can be collected).
34To state the obvious, there is nothing in the Code that exempts individuals from personal responsibility or states a presumption that a personal respondent should be removed. For this reason, I have some difficulty with the fourth Persaud criterion. The Divisional Court in OHRC v. Farris reminds us that a corporate respondent’s possible joint and several liability for the conduct of employees is not a basis to insulate those employees from personal liability, as well as indicating that the Tribunal is expected to articulate case-based reasons why, having found liability under the Code, a remedy might not be imposed against a particular respondent.
35In considering whether any principled reason exists to remove any respondent, corporate or personal, from the proceeding, one approach is to ask whether the removal of this person or entity as a party could jeopardise or promote the fair, just and expeditious resolution of the merits of the complaint.
36In my view, the first consideration should be the purpose of the Code. It may be useful to look at the preamble, which among other things, speaks of “the creation of a climate of understanding and mutual respect for the dignity and worth of each person so that each person feels a part of the community and able to contribute fully to the development and well-being of the community and the Province”. As summarized by the Divisional Court in Farris, “[t]he aim of the Code is the removal of discrimination.”
37A related consideration is any relevant Code provision engaged by the particular circumstances of the case. Clearly, in the light of s. 46.3(1) of the Code, there are reasons relevant to fairness and justice to retain as respondents individuals allegedly involved in harassment as defined in the Code. However, the Code’s direction in s.40 toward “a fair, just and expeditious resolution of the merits” may raise a wide range of other considerations, depending on the circumstances of the case. And as noted in the opening paragraphs of this decision, the Tribunal’s caseload throws up a vast range of circumstances.
38In considering the removal of individual respondents who are not alleged to have been involved in harassment, the factors listed in Persaud (which, as stated in that decision, are not a closed list) continue to be useful, although in my view, the fourth Persaud factor should be restated (a suggested restatement is set out later in this decision).
39The availability of a remedy, addressed in the third Persaud factor, is clearly a relevant consideration. As noted by the Divisional Court in OHRC v. Farris, “t]he Code’s main approach is not to punish the discriminator, but rather to provide relief to the victims of discrimination. Remedies must be effective and consistent with the “almost constitutional” nature of the rights protected.” Most recent Tribunal decisions involving requests to remove personal respondents have focussed on the availability of a remedy. To date there has been little discussion in decisions of the availability of other than financial remedies requested by the applicant. Given that “public interest” remedies may be requested by the applicant or imposed by the Tribunal on its own motion, this issue is obviously likely to be dealt with when the circumstances arise.
40Another issue in relation to availability of remedy is how certain the Tribunal can be that a remedy will be available; as the Farris case illustrates, corporate circumstances can change over time. This is an example where a decision to remove may be heavily influenced by the timing of the request and the stage of the proceeding.
41Although the Farris decision was also focussed on remedy, OHRC v. Farris reminds us that this is not the sole consideration; there are other factors that must be considered when there is a request to remove a respondent, such as the issue of personal responsibility for actions or omissions that breach the Code, and the purposes of the Code, as noted in paragraphs 34 and 36 of Farris.
42Where the Tribunal is asked to remove a personal respondent who is an employee or agent of a corporation that is also named as a respondent, facts that speak to the nature and degree of involvement of that individual should in my opinion be the starting point. Would the facts as alleged or the evidence available to date support a finding that the conduct of the personal respondent was no more than the conveying or effecting of a decision taken by the directing mind(s) of a corporate or other institutional respondent? Is there any reason to believe that the alleged adverse effect, if established, might be as much a product of the agency of the individual respondent as of any policy or decision of the directing mind(s)? For an example of a decision considering the agency of the individual, see Ruddick-Scott v. Niagara Health System, 2012 HRTO 1862.
43In my view, a request to remove a respondent because he or she is unlikely in the circumstances to be found personally liable under the Code should be considered with great caution where the applicant (and the Tribunal) is not in a position to know sufficient detail to be sure who was actively involved or responsible. Where the request has been made before disclosure of documents and witness statements, there is usually much less information available that could be relevant to the decision to remove a respondent.
44The earlier the stage at which a request is made, and the less the agreement between the parties as to the facts, the more difficult it is to come to a principled decision. Section 36 of the Code does not contain any obvious limit to the Tribunal’s power to effectively reverse an earlier decision to remove a party, but there are predictable issues that might arise in respect of fairness in such a case; a cautious approach is clearly advisable at the earliest stages of a proceeding.
45A recent decision of the Tribunal applies such a properly cautious approach. In Budd v. McDougall, (2013 HRTO 93), the applicant alleged discrimination in respect of employment on the basis of disability, and claimed that her employer refused to accommodate her. The Application named three respondents; a corporation and two individuals. One individual was an owner and administrator of the corporation, and the other was an administrator who also served as secretary of the corporation. At the time of the Application, the corporation was in receivership. The Court appointed Receiver wrote to the Tribunal taking the position that the proceeding was stayed against the corporation. The applicant responded by stating that she wished to withdraw against the corporation and continue against the two named individuals. The individuals filed a limited Response with general assertions that they made various attempts to accommodate the applicant, but also argued that the proceeding should be stayed against them. “The respondents stated that they were no longer employed at Craiglee and had no access to related records which are in the nursing home.” (at para 6).
46The Tribunal summarized the submissions and arguments that had been made at this point (at paras. 10-12 and 14-16) as follows:
With respect to Ms. McDougall, the applicant submits that she provided direction to the assistant director of care to not accommodate her and repeatedly refused to return her to work. The applicant submits that in the fall of 2008, she was told specifically by Ms. McDougall that she would not be coming back to work unless she could do her regular job. The applicant relies on various documents relating to her disability and the issue of accommodation in support of her submissions regarding Ms. McDougall. Some of the documents are authored by other managerial staff or the WSIB but are copied to both of the named respondents. There is also a letter to the applicant from Ms. McDougall dated August 13, 2008 in which Ms. McDougall provides direction to the applicant to remain off work until she is able to resume normal duties.
The applicant also relies on the age related comment in respect of Ms. McDougall. In the conference call hearing, the applicant clarified that in a meeting pertaining to her, the issue of it being “hard” for the applicant to do things arose and in response Ms. McDougall stated that “I guess it’s time for you to go [because we] need young blood.”
The applicant makes no specific allegations against Mr. McDougall other than she submits that a manager at Craiglee told her that the issue of her accommodation was “in the hands of the McDougalls”, which she presumes includes him. The applicant states that as administrator for the period up to 2008, she also presumes that decisions had to go through Mr. McDougall. The applicant relies on various documents that she submits reflect Mr. McDougall’s involvement in the accommodation issue. One of these letters is addressed to her from Mr. McDougall confirming her return to work effective July 29, 2008. Mr. McDougall is also copied on certain correspondence such as the letter to the applicant from the assistant director of care stating that Craiglee is unable to meet her requirements and a letter from a case manager at the WSIB requesting a meeting to assist in the applicant’s return to work and obligations.
Ms. McDougall states that she was involved with the interactions with Ms. Budd and the issue of accommodation, but that she relied on direction from professionals such as the director of care in dealing with the issue. Ms. McDougall states that Mr. McDougall was not directly involved although decisions were made in consultation with management and thus he would have been consulted “to some extent”. Ms. McDougall states that from November 2008, Mr. McDougall was not involved at all as he had ceased his involvement in the day to day management of the home for medical reasons.
Ms. McDougall argues that to the extent the applicant is making a claim about accommodation, her actions were those of the corporation and she is not an owner of the corporation and thus should not face individual liability. Ms. McDougall acknowledges that an individual would be responsible for the age-related comment allegedly made although in this case, she disputes that the comments were made as alleged.
Ms. McDougall filed further written submissions after the hearing referencing the “organic theory of corporate responsibility” (stating that a corporation should be liable where employees are part of the directing mind of the corporation) and section 46.3 of the Code, which deals with vicarious liability. Ms. McDougall submits that she and Mr. McDougall acted as agents of Craiglee and should be dealt with in the same manner (i.e. “dropped from the file”).
47The Tribunal in Budd decided against removing the personal respondents at this early stage, noting that the Application contained allegations that could, if established, support a finding that the personal respondents had violated the Code. The Tribunal noted (at para 24) an argument by one of the personal respondents that, “to the extent she did or did not accommodate the applicant, she did so as an agent of the corporation. However, in this case, given the nature of the employer (a family run business in which she was a secretary of the corporation and occupied a senior position of either assistant administrator/administrator), the nature of the allegations against her (that she played a critical role in refusing to accommodate the applicant particularly in the fall of 2008 and into 2009), the early stage of the proceeding and the absence of a respondent organization defending it, I find that it is appropriate to continue the Application against Ms. McDougall”.
48In respect of the second personal respondent, the Tribunal noted that the applicant had not “pointed to any specific allegation” regarding him, and that the inclusion of this respondent was made on the basis that he was one of two shareholders of the corporate respondent, was administrator until a date that was “mid-point in the applicant’s allegations”, and the subject of an assumption by the applicant “that decisions had to go through him (a claim that is supported by a manager telling her that the issue of her accommodation was in the hands of the “McDougalls” and some of the documentation being authored or copied to him)….[u]ltimately, while I have some reservations, I have determined that the Application should continue against Mr. McDougall.”
49The Tribunal stressed that the “decision to continue the Application against both respondents is not a final decision as to whether either is liable for the alleged discrimination should discrimination be proven, nor is it a decision that if either respondent is found liable, it will result in a remedy being ordered against them”. The decisions notes that “[a]t this stage, I have only a nominal Response to the Application which does not address in any detail the reasons why the applicant was not accommodated. Having regard to all of the circumstances, including the nature of the corporate entity, and the acknowledgement by Ms. McDougall that decisions were made in consultation with management, and the absence of a corporation defending the Application, Mr. McDougall will remain a respondent”.
50I find the approach of the Tribunal in Budd instructive. After reviewing relevant decisions including Persaud and Farris, the Tribunal characterized the central question as “whether or not there are allegations made against either respondent that could support a finding that the respondent violated the Code” and added that, “[i]n the course of addressing that question, the Tribunal should also be mindful of all the factual circumstances and the legal framework, including the factors set out in Persaud and fundamental principles of human rights law recently affirmed by the Divisional Court.” As noted above, I think the use of the “compelling reasons” language in Persaud has been misunderstood; when considering the removal of a respondent, the following non-exhaustive list of factors to consider, some of which reflect the Persaud factors, appears reasonable to me:
Have allegations been made against this respondent that could support a finding that the respondent violated the Code?
Is there a juridical reason to remove this respondent from the proceeding?
Is there a procedural or remedial provision of the Code, such as section 46.3, that has relevance in respect of the allegations? More specifically, has a corporation, trade union, trade or occupational association, unincorporated association or employers’ organization been named as a respondent along with the personal respondent? Is the personal respondent alleged to have breached subsection 2 (2), subsection 5 (2), or section 7? Is there any issue as to the corporate respondent’s deemed or vicarious liability for the conduct of the personal respondent who [is] sought to be removed? Is there is any issue as to the ability of the corporation, trade union, trade or occupational association, unincorporated association or employers’ organization respondent to respond to or remedy the alleged Code infringement?
Would the removal of this respondent promote the fair, just and expeditious resolution of the merits of this Application?
Would any prejudice be caused to any party as a result of removing the this respondent?
51In my view, OHRC v. Farris suggests that a decision to remove a respondent should set out case-based reasons for the decision.
Application to the facts of this case
52As noted above, an important factor to consider in determining whether an individual should be removed as a personal respondent is what involvement the individual is alleged to have had in the facts at issue in the application.
53The applicant has alleged that Mr. Muscat, her manager at the time, harassed her with sexist and racist comments and jokes about her weight and threatened her with violence if she should file a harassment complaint against him. She alleges that he also discriminated against her in respect of accommodation required after a medical leave of absence. If proven, these allegations might constitute harassment under the Code. A finding of harassment contrary to the Code can lead to different findings with respect to liability as between corporate and personal respondents: section 46.3 (see also, OHRC v. Farris at paragraphs 31 – 33). In her response opposing the Request, the applicant noted that she has alleged harassment by personal respondent Muscat, and that vicarious liability provisions in the Code do not apply where harassment is at issue.
54Clearly, allegations have been made against this respondent that could support a finding that the respondent violated the Code. There appears to me to be no juridical reason to remove this respondent from the proceeding. The respondent notes that the applicant has not made a request for a remedy specifically against this respondent, but the absence of such a request is not determinative; in addition to addressing a successful applicant’s request for order(s), the Tribunal may make an order that has not been requested by the applicant; see s.45.2(2)(b) of the Code, Payne v. Otsuka Pharmaceutical Co. et al (2002), 2002 CanLII 46516 (ON HRT), 44 CHRR D/203 and Lepofsky v. Toronto Transit Commission, 2007 HRTO 41.
55The allegations against this respondent include an alleged breach of s. 7(2) of the Code, and if these allegations are established, s. 46.3 would not apply. While the corporate respondent has indicated willingness to take responsibility for the actions of this respondent, it is not at this stage clear to me that the personal respondent should not take personal responsibility.
56For the above-noted reasons, personal respondent Muscat will not be removed.
57In respect of the other personal respondents, (referred to by the applicant as “the managerial respondents”) the applicant indicates that she filed two anonymous written complaints about harassment, one by e-mail of January 6, 2012 copied to respondents McDonald and Mirza, and one with the corporate respondent’s “Ethic Hotline” on January 13, 2012. She also stated that she made a verbal complaint to the Vice President of Strategy and Project Management, and was informed by him that this information was passed along to respondent Mirza. Finally, the Application indicates that the applicant met with respondent Pizani on January 19, 2012 to complain about harassment.
58The applicant indicates that the managerial respondents did not take any steps to investigate her allegations until they were contacted by her counsel following the termination of her employment, and that they terminated her employment on January 23, 2012 in reprisal for her allegations. She takes the position that the acts of the managerial respondents are central to her Application. She also maintains that the managerial respondents were not operating in compliance with their duties as employees of the corporate respondent, as they breached corporate policies and procedures, and did not advance a legitimate business interest of the corporate respondent. She states that this is “not a case where corporate policy, implemented in good faith, has unintentionally breached the Code and therefore it would be inappropriate to proceed against individual employees”, but a case in which the managerial respondents “acted in breach of their duty to the company”.
59The applicant also points out that the managerial respondents are represented by the same legal counsel as is representing the corporate respondent and would be required to attend the hearing as witnesses in any event.
60In their letter filed on August 12, 2012, the respondents deal separately with each personal respondent. The following summarises their submissions:
Respondent MacDonald: this individual was the President and Chief Executive Officer of the corporate respondent at the relevant time. The respondents state that he had no personal involvement or interaction with the applicant while she was an employee of the corporate respondent, while agreeing that he was copied on an e-mail sent anonymously by the applicant on January 6, 2012.
Respondent Mirza: Ms. Mirza was Senior Vice President of Human Resources for the corporate respondent at the relevant time. She was also copied on the anonymous e-mail of January 6, 2012.
Respondent Pizani: this respondent was a Divisional Vice President of the corporate respondent. The respondents state that this respondent was acting solely within the course of his employment.
61Obviously, the applicant and the respondents have different positions as to the facts relevant to the nature and degree of involvement of respondents McDonald, Mirza and Pizani. However, it is at this stage clear that allegations been made against each of these respondents that could support a finding that the respondent violated the Code. It is possible that later in the process the respondents may successfully assert that the involvement of respondent McDonald was at best peripheral and that he ought to be removed as a respondent for this reason, but in my view a cautious approach is warranted prior to a point in the process in which more information and evidence is exchanged between the parties and copied to the Tribunal.
62The respondent’s submission that respondents McDonald, Mirza and Pizani should be removed because the applicant has not requested “any specific remedy against the individual respondents” is subject to the finding made above.
63In my view, it is not necessary for the purposes of the Code to inquire into the applicant’s assertion that the personal respondents “acted in breach of their duty to the company”. On the basis of the material filed, it appears that s. 46.3 would apply to create vicarious liability for the corporate respondent in respect of breaches of the Code by respondents McDonald, Mirza and Pizani. While the corporate respondent has indicated willingness to take responsibility for the actions of these respondents, it is not at this stage clear to me that the personal respondents should be relieved of personal responsibility.
64Finally, the applicant indicates that there is “a very real risk” that the corporate respondent “will not be able to respond to or remedy the managerial respondents’ infringements of the Code”. She cites articles published in 2012 in business-related publications that indicate that the corporate respondent may be suffering financial difficulties that could end in bankruptcy.
65In regard to corporate respondent’s ability to fulfill any remedy ordered by the Tribunal, the respondents indicate that the corporate respondent “will not use the human rights process to provide evidence on its financial viability, nor should it be compelled to do so”. They submit that there is no compelling reason for the Tribunal to assume that the corporate respondent would not be able to fulfill any financial or other remedy awarded. They assert that the corporate respondent has the ability to remedy any human rights violations found if ordered to do so by the Tribunal.
66However reasonable the respondents’ position might be in regard to disclosure of evidence at this stage, this leaves me with no more than a contradicting assertion from the respondents. Having for other reasons reached the conclusion that the respondents’ request to remove the personal respondents should not be granted at least at this stage, I will not deal in this Interim Decision with the arguments about the corporate respondent’s ability to meet the terms of any order that might ultimately be made by this Tribunal.
ORDER
67The respondents’ Request is denied, without prejudice to their right to raise this issue later in the proceedings.
68At this point, the parties have attempted to reach a mediated settlement without success. A hearing date will be set in due course.
69I am not seized.
Dated at Toronto, this 25th day of February, 2013.
“signed by”
Judith Keene
Vice-chair