Ifrah v. National Income Protection Plan Inc., 2014 HRTO 1637

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Hana Ifrah

Applicant

-and-

National Income Protection Plan Inc.

Respondent

DECISION

Adjudicator: Mark Hart

Date: November 7, 2014

Citation: 2014 HRTO 1637

Indexed as: Ifrah v. National Income Protection Plan Inc.

APPEARANCES

Hana Ifrah, Applicant

Grace Vaccarelli, Counsel

National Income Protection Plan Inc., Respondent

Vilija Ycas, Representative

1This Application is dated April 22, 2013, and alleges discrimination with respect to employment because of sex contrary to the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). At the outset of the hearing, a request was made by the applicant to amend the Application to allege discrimination in relation to the right to contract protected under s. 3 of the Code, and to allege discrimination because of family status. This request was granted on consent.

2The issue in this proceeding is whether it amounts to discrimination because of sex or family status for the respondent to have denied paying a retention bonus to the applicant because she was on maternity leave during the final month of the retention period. The respondent takes the position that it was not required to pay the retention bonus because the applicant was not an active employee for the full 12-month period.

3The hearing in this matter was held in Toronto on August 11, 2014. I heard evidence from the applicant and a witness called as part of her case, and from the President and CEO of the respondent.

Background

4The respondent formerly was the owner of a company called Oncidium Health Group (“OHG”), which assists employers with absence management and provides services such as short-term disability plans and the adjudication of claims on behalf of employers who self-insure for sick leave absences.

5The applicant commenced employment with OHG in 2002, eventually becoming Director of Client Services in 2010.

6In 2011, the respondent sold OHG to another company. Some employees, including the applicant, were asked to sign a Key Employee Retention letter at the time of sale. The applicant’s Key Employee Retention letter was signed by her on July 5, 2011 and provides, in its material part, that a retention bonus of $8,500 would be paid to her by the respondent on June 30, 2012, “conditional on employment continuance”. The respondent’s President and CEO testified that at the time the Key Employee Retention letters were signed, he explained to the key employees that “employment continuance” meant that they needed to remain actively employed with OHG as of June 30, 2012. This is disputed by the applicant. In my view, nothing turns on whether or not this was discussed at that time.

7The applicant continued to work for OHG in the same position under the new company. Following the sale, the applicant became pregnant and gave birth on June 5, 2012. The last day that she actively worked for OHG, in the sense of being at her desk and performing her usual duties, was June 1, 2012. On this date, the applicant received payment not only of her earnings up to June 1, 2012, but also of nine personal days that she had accumulated and 12 days of accrued vacation. As a result, the pay that the applicant received on June 1, 2012 actually included pay for unused personal and vacation days which extended to July 2, 2012. This was recognized by the Employment Insurance Commission in determining her entitlement to E.I. benefits during her maternity leave.

8In May 2012, the applicant began inquiring with the respondent about her retention bonus. She advised the respondent that she was about to take a maternity leave, and asked if she could receive payment of the retention bonus at an earlier time than June 30, 2012. The respondent did not respond to this request.

9The applicant followed up with the respondent about her retention bonus in early July 2012. The respondent requested confirmation that the applicant was a full-time employee with OHG as of June 30, 2012. As proof of this, the respondent required a copy of the applicant’s payslip from OHG for a period including June 30, 2012. The applicant replied that she did not have a payslip covering that period, as her last payslip had been issued on June 1, 2012, immediately prior to the commencement of her maternity leave. The applicant took the position that, as she remained an OHG employee and had full intention of returning to work for OHG following her maternity leave, she was entitled to the retention bonus.

10Further e-mail correspondence was exchanged between the parties during the ensuing weeks, which did not resolve their differences over the applicant’s entitlement to the retention bonus. In particular, on July 16, 2012, the respondent took the position that as the applicant was on leave from OHG, this did not satisfy the requirement of “continued employment” under the Key Employee Retention letter. Further, in an e-mail dated July 18, 2012, the respondent states: “When you elected to leave OHG on maternity leave at the beginning of June, you chose not to fulfil the condition of the key employment letter.” The applicant testified that she found this statement to be offensive, in that pregnancy and childbirth are not properly characterized as an “election” or “choice”.

11The applicant provided two letters to the respondent from the company that had purchased OHG: the first, dated July 9, 2012, confirms that the applicant remained actively employed with OHG; and the second, dated July 18, 2012, confirmed that prior to her maternity leave, the applicant was paid for nine personal days representing the period from June 4 to June 16, 2012, and for 12 vacation days representing the period from June 17 to July 2, 2012, during which time the applicant continued to provide services to OHG. The letter states that the applicant’s last day of active employment therefore was July 2, 2012. The applicant also explored with the purchaser company whether she could get a revised payslip showing that she received pay for a period that included June 30, 2012, but these efforts were unsuccessful as a payslip showing these payments already had been issued on June 1, 2012.

12These letters were not satisfactory to the respondent, as it understood that the last day when the applicant had been actively employed with OHG prior to taking her maternity leave was June 1, 2012 and because it still insisted on receiving a payslip that covered June 30, 2012 as proof of the applicant’s continued employment.

13I heard evidence from a co-worker of the applicant who also had signed a Key Employee Retention letter with the respondent at the time of the sale. The evidence before me indicates that this employee had taken four weeks of vacation during the period from July 1, 2011 to June 30, 2012 and also had taken six paid “well days”. When she inquired with the respondent about receiving her retention bonus, she was asked to provide a payslip for a period that included June 30, 2012, and she was able to do so as she was not on an unpaid leave at that time. She received the retention bonus in exchange for signing a simple release.

Analysis and Decision

14In my view, the analysis in this case is relatively straightforward. The terms of the Key Employee Retention letter state that payment of the retention bonus was “conditional on employment continuance” to June 30, 2012. The evidence before me indicates that the applicant fulfilled this requirement on the basis that she was paid her unused personal days and accrued vacation time for the period up to and including June 30, 2012.

15The respondent sought to distinguish the applicant’s situation from that of her co-worker, on the basis that the co-worker was able to produce a payslip for a period that included June 30, 2012, even though that co-worker had taken four weeks of vacation and six “well days” at an earlier time in the preceding year. The respondent further gave evidence that it still would have paid the retention bonus even if the employee had been on vacation or on paid sick leave as of June 30, 2012. With respect, that is the applicant’s situation. According to the purchasing company, the applicant remained on paid leave as a result of her unused personal days and vacation time until July 2, 2012. The only difference is that she was given payment for this earned time in advance, prior to taking her maternity leave.

16The reason that the respondent refused to pay the retention bonus, as evidenced by its e-mail correspondence, is twofold: (1) because she could not produce a payslip for a period including June 30, 2012; and (2) because she commenced a maternity leave as of June 1, 2012. With regard to the first point, the reason that the applicant could not produce the requested payslip was because, in accordance with the payroll practices of the purchaser company, she was paid out her unused personal and vacation days on the last payslip issued prior to her maternity leave, even though the evidence indicates that this pay was attributable to the period up to July 2, 2012. As a result, the applicant’s inability to provide the requested payslip is directly attributable to the applicant’s maternity leave, and hence her pregnancy. With regard to the second point, I am aware of the respondent’s evidence that it would have made the same decision regardless of the nature of the unpaid leave taken by the applicant, whether it was maternity leave, disability leave or some kind of unpaid sabbatical. However, the respondent was aware that the reason for the applicant’s leave of absence was due to her pregnancy, and directly declined payment on that basis.

17In my view, given my finding that the applicant had actually fulfilled the requirements of the Key Employee Retention letter, the respondent’s refusal to pay the retention bonus represents direct discrimination because of sex, which is defined under the Code to include pregnancy, given the direct correlation between the twofold reason for refusing payment and the applicant’s maternity leave which is directly related to her pregnancy. In my view, the situation in this case is more aptly characterized as discrimination because of sex or pregnancy, rather than discrimination because of family status.

18While the applicant sought and was granted an amendment of her Application to include an alleged breach of s. 3 of the Code, which guarantees the right to contract without discrimination, in my view the situation in this case is more properly characterized as a breach of s. 5(1) of the Code, which guarantees the right to equal treatment without discrimination “in respect of employment”. While the applicant was not an employee of the respondent at the time the retention bonus became payable on June 30, 2012, the basis and underpinning of the Key Employee Retention letter is entirely attributable to her former status as an employee of the respondent and the desire for her to continue as a key employee of the purchasing company.

19This Tribunal has held repeatedly that the term “with respect to employment” extends beyond what may traditionally be regarded as employer-employee relationships and that a breach of s. 5(1) of the Code may arise between an employee and other persons who are not “employers” in the traditional sense. The issue in each case is whether there is a sufficient nexus or link to employment in the relationship between the parties: see Payne v. Otsuka Pharmaceuticals Co Ltd., 2001 CanLII 26231; Sutton v. Jarvis Ryan Associates, 2010 HRTO 2421; Sutherland v. Bradstock, 2011 HRTO 619; Chaudhry v. Choice Taxi of Cornwall Inc., 2012 HRTO 391; Halliday v. Van Toen Innovations Incorporated, 2013 HRTO 583.

20In my view, the fact that the Key Employee Retention letter originated in the context of an employment relationship between the applicant and the respondent and was expressly related to her continuing employment with the purchasing company, provides a sufficient nexus or link to make this situation fall within the phrase “with respect to employment” within the meaning of s. 5(1) of the Code.

21Having made that finding, I need to consider the defence provided in s. 24(1)(b) of the Code, which states that “the right under section 5 to equal treatment with respect to employment is not infringed where . . . 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”. In my view, this defence is not available to the respondent for two reasons.

22First, the defence provision on its own terms refers to sex being a reasonable and bona fide qualification “given the nature of the employment”, which indicates that there must be something about the nature of the employment itself which supports sex as a qualification. In the instant case, the issue is not about the nature of the applicant’s employment: there is no dispute that she performed well and capably in her position when she was employed by the respondent and continues to perform well and capably in her position since the sale. The issue here is not about the nature of her employment, but rather her entitlement to the retention bonus.

23Second, even if this defence provision was applicable in these circumstances, I would need to be satisfied that the applicant not being on maternity leave as of June 30, 2012 was a reasonable and bona fide qualification or requirement for her to receive the retention bonus. This is simply not supported by the evidence.

24In British Columbia (Public Service Employee Relations Commission) v. BCGSEU, 1999 CanLII 652 (SCC), [1999] 3 S.C.R. 3 (“Meiorin”), the Supreme Court established a three-step test and the underlying principles for determining whether a standard is a reasonable and bona fide qualification. The Court states, at para. 54, that an employer may justify the impugned standard by establishing on the balance of probabilities:

a. that the employer adopted the standard for a purpose rationally connected to the performance of the job;

b. that the employer adopted the particular standard in an honest and good faith belief that it was necessary to the fulfilment of that legitimate work-related purpose; and

c. that the standard is reasonably necessary to the accomplishment of that legitimate work-related purpose. To show that the standard is reasonably necessary, it must be demonstrated that it is impossible to accommodate individual employees sharing the characteristics of the claimant without imposing undue hardship upon the employer.

25This test requires me to ascertain what the underlying purpose of the retention bonus was. The retention bonus was to be paid by the respondent as the vendor company, rather than by the purchasing company. The respondent’s evidence is that the offering of this retention bonus was not a requirement of the sale. Rather, the testimony before me indicates that the respondent offered the retention bonus in the interest of trying to protect itself from an allegation by and potential liability to the purchasing company on the basis that the business failed to succeed, which concern arose, I understand, from certain promissory notes associated with the sale. In order to assist in a smooth transition to the purchasing company and the continued success of the business, the respondent offered the retention bonuses as an incentive to key employees to remain with OHG for a one-year period following the sale.

26In cross-examination, the respondent’s President and CEO agreed that the purchasing company got the benefit of the retention of the applicant as a key employee and a smooth transition of the business. In fact, on the evidence before me, the applicant continues to the date of the hearing to be employed by OHG and continues to perform an important role in the business. The respondent’s President and CEO agreed that the respondent wanted the applicant to remain with the business to help it succeed, and does not dispute that she did this. He further agreed that at the end of the day, all parties had achieved their goals.

27Accordingly, while the requirement for the applicant to be actively at work as of June 30, 2012, may have been rationally connected to the respondent’s desire to see her remain as a key employee to ensure the continued success of the business and may have been a requirement adopted in an honest and good faith belief that it was necessary to achieve that purpose, I find that, in the specific circumstances of this case, this requirement was not reasonably necessary to the accomplishment of that legitimate purpose. I make this finding not only on the basis of my previous finding that the applicant actually fulfilled the requirement under the Key Employee Retention letter, but also on the basis of the respondent’s agreement that she fulfilled the underlying purpose and objective of the requirement.

28Accordingly, I find that the respondent has not satisfied me that the requirement that the applicant be actively at work on June 30, 2012 meets the requirements for constituting a reasonable and bona fide qualification or requirement.

29In making this finding, I want to be clear that I am dealing with a situation where the evidence before me indicates that the applicant actually fulfilled the requirement for receipt of the retention bonus due to her unused personal days and vacation time. I am not dealing with a situation where an employee has been on maternity or disability leave for a significant portion of the period for which the retention bonus is applicable, so as to effectively frustrate the purpose for which the retention bonus was offered. Rather, I am dealing with a situation where the applicant actually satisfied the requirement and fulfilled the purpose of the retention bonus, but was denied payment of the bonus for reasons that I have found to be discriminatory.

30In making this determination, I also have considered a number of cases before me which deal with the kinds of employment benefits an employee is entitled to while on an unpaid leave, including: Ontario Nurses’ Association v. Orillia Soldiers Memorial Hospital, (1999) 1999 CanLII 3687 (ON CA), 42 O.R.(3d) 692, Boundy v. Ontario (Children and Youth Services), 2009 HRTO 1667, Koroll v. Automodular, 2011 HRTO 774, and Dumont-Ferlatte v. Canada (Employment and Immigration Commission), [1996] C.H.R.D. No. 9. In my view, all of these cases are distinguishable on the basis that the issue in those cases arose from an employee who had not fulfilled the requirement to receive a particular benefit as a result of being on an unpaid leave. In the instant case, I have found that the applicant in fact was not on an unpaid leave as of June 30, 2012, and that she fulfilled the requirement to receive the retention bonus.

Remedy

31Having found that the respondent has violated the applicant’s right to equal treatment with respect to employment without discrimination because of sex contrary to s. 5(1) of the Code, I need to consider the appropriate remedy to award to the applicant pursuant to s. 45.2 of the Code.

32Obviously, based upon my finding, the applicant is entitled to payment of the retention bonus in the amount of $8,500, in exchange for her signing the simple release in the form signed by her co-worker. The applicant also is entitled to pre-judgment interest on this amount at the annual rate of 1.3%. The evidence before me indicates that the applicant’s co-worker was paid her retention bonus by cheque dated July 19, 2012, which in my view represents a reasonable date from which pre-judgment interest should accrue. From that date to the date of this Decision, pre-judgment interest is awarded in the amount of $254.60.

33The applicant also claims compensation for injury to dignity, feelings and self-respect in the amount of $25,000.

34The Tribunal’s jurisprudence has primarily applied two criteria in evaluating appropriate compensation for injury to dignity, feelings and self-respect: the objective seriousness of the conduct and the effect on the particular applicant who experienced discrimination: see Arunachalam v. Best Buy Canada, 2010 HRTO 1880 at para. 52, and Sanford v. Koop, 2005 HRTO 53.

35The Tribunal also strives for consistency in its awards of this kind of compensation, so that like cases are treated alike and awards are proportional to the circumstances in which awards have been made in other cases.

36In this case, the applicant testified with deep feeling and emotion regarding the impact on her of the respondent’s refusal to pay the retention bonus. She testified that she experienced a significant amount of anxiety in trying to obtain the retention bonus, at a time when she was particularly vulnerable as a new mother. She was and remains very committed to her work, and felt deeply hurt by the respondent’s refusal to honour its commitment to her by paying the retention bonus. Further, she had hoped to be able to use the retention bonus to finance the nursery for her new baby.

37At the same time, while any act of discrimination is serious, the assessment of the objective seriousness of the respondent’s refusal to pay the retention bonus needs to be viewed in the context of other situations that come before this Tribunal. This is not a case where the applicant lost her employment as a result of discrimination because of sex or pregnancy. And while the respondent’s comments characterizing her pregnancy as being an “election” or “choice” were inappropriate and discriminatory, the dispute between the parties centered on the proper interpretation of the Key Employee Retention letter, as opposed to cases before this Tribunal where the respondent’s conduct has been prolonged and egregious.

38A number of cases were put before me in terms of awards of compensation for injury to dignity, feelings and self-respect where the applicant had experienced discrimination because of pregnancy. In Maciel v. Fashion Coiffures Ltd., 2009 HRTO 1804, the applicant was found to have lost her employment because of her pregnancy and was found to be particularly vulnerable as she was young, just out of school and coping with an unplanned pregnancy and because the loss of her employment left her with no source of income and left her ineligible for maternity leave benefits. In that case, the applicant was awarded compensation for injury to dignity, feelings and self-respect in the amount of $15,000.

39In Charbonneau v. Atelier Salon & Spa, 2010 HRTO 1736, the Tribunal found that the applicant was not re-hired due to her impending maternity leave. Once again, it was found that the applicant was particularly vulnerable because she was young and had no prospects of employment in Canada that would entitle her to maternity leave benefits. In that case, the award of compensation for injury to dignity, feelings and self-respect was in the amount of $10,000.

40In other cases where it has been found that an applicant’s employment was terminated because of pregnancy, awards of compensation for injury to dignity, feelings and self-respect have ranged from $10,000 to $20,000: see Tekyi-Annan v. 2191214 Ontario Inc., 2013 HRTO 1947 ($10,000); McKenna v. Local Heroes Stittsville, 2013 HRTO 1117 ($17,000); Shinozaki v. Hotlomi Spa, 2013 HRTO 1027 ($20,000); Korkola v. Maid Day! Maid Day! Inc., 2013 HRTO 525 ($13,000); Peart v. Distinct HealthCare Services Inc., 2013 HRTO 305 ($12,500); Ong v. Poya Organics & Spa Ltd., 2012 HRTO 2058 ($12,000); Graham v. 3022366 Canada Inc. o/a Response Safety Security & Investigations, 2011 HRTO 1470 ($20,000).

41In my view, the circumstances of this case, while understandably upsetting to the applicant, are not as objectively serious as cases where an applicant has lost her employment because of pregnancy or plans to take a maternity leave, with the result of being ineligible for maternity leave benefits. Having carefully considered all of the relevant factors, it is my view that the appropriate and proportional award of such compensation in this case is in the amount of $5,000.

42The applicant is entitled to pre-judgment interest on this amount at the rate of 1.3% per annum for the same period as indicated above, in the amount of $149.77.

43In terms of non-monetary remedies, the applicant requested that the respondent’s President and CEO be directed to complete the “Human Rights 101” on-line training available through the website operated by the Ontario Human Rights Commission within 30 days of the date of the Decision, and provide confirmation to applicant’s counsel that he has done so. At the hearing, the respondent’s President and CEO indicated that he currently has no active business in Ontario. In my view, no purpose would be served under the Code by making an order requiring him to take this training.

ORDER

44For the foregoing reasons, I hereby make the following order:

a. Upon receipt of a signed Release in the form signed by the applicant’s co-worker, the respondent shall pay to the applicant the sum of $8,500 for failure to pay the retention bonus, plus the amount of $254.60 for pre-judgment interest;

b. The respondent shall further pay to the applicant the sum of $5,000 as compensation for injury to dignity, feelings and self-respect, plus pre-judgment interest in the amount of $149.77; and

c. The respondent shall pay post-judgment interest from the date of this Decision at the rate of 3.0% per annum on any amount unpaid as of 30 days from the date of receipt of the signed Release.