McConaghie v. Systemgroup Consulting Inc., 2014 HRTO 527

Human Rights Tribunal of Ontario

B E T W E E N:

Sheryl (a.k.a. Sheri) McConaghie

Applicant

-and-

Systemgroup Consulting Inc.

Respondent

RECONSIDERATION DECISION

Adjudicator: Ruth Carey

Date: April 11, 2014

Citation: 2014 HRTO 527

Indexed as: McConaghie v. Systemgroup Consulting Inc.

WRITTEN SUBMISSIONS

Systemgroup Consulting Inc., Respondent

Eric Fournie, Counsel

1The respondent seeks reconsideration of the Tribunal’s Decision 2014 HRTO 295. In that Decision the Tribunal finds that the respondent breached sections 5(1) and 8 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”). The respondent’s Request for Reconsideration is limited in scope in that it concerns only one of the remedies awarded to the applicant.

2Among other remedies the respondent was ordered to pay to the applicant lost wages for the period April 16, 2012 to October 8, 2012, inclusive, less statutory deductions and applicable taxes. The Request for Reconsideration states that:

1. The Tribunal’s Decision contains an error in that lost wages were awarded in excess of what the applicant was entitled to under her written employment contract; and

2. The Tribunal erred in failing to credit the respondent the negative balance in the applicant’s draw account.

3Rule 26.5 of the Tribunal’s Rules of Procedure says:

26.5 A Request for Reconsideration will not be granted unless the Tribunal is satisfied that:

a) there are new facts or evidence that could potentially be determinative of the case and that could not reasonably have been obtained earlier; or

b) the party seeking reconsideration was entitled to but, through no fault of its own, did not receive notice of the proceeding or a hearing; or

c) the decision or order which is the subject of the reconsideration request is in conflict with established jurisprudence or Tribunal procedure and the proposed reconsideration involves a matter of general or public importance; or

d) other factors exist that, in the opinion of the Tribunal, outweigh the public interest in the finality of Tribunal decisions.

4The respondent’s Request for Reconsideration relies on paragraphs c) and d) above.

Lost Wages and the Applicant’s Employment Contract

5The Request for Reconsideration correctly states that the applicant and the respondent had a written contract of employment which says in part:

If at any time [the respondent] determines that your services are no longer required, you shall be entitled to, and will accept 2 weeks notice or 2 weeks base pay per completed year of service in lieu of notice, to a maximum of 12 months, in full satisfaction of any and all claims you may have related to your employment with and the termination of such employment from [the respondent].

6The Request for Reconsideration concerns paragraph 221 of the Decision in which the Tribunal says:

The applicant received salary from the respondent for the period ending four weeks after March 19, 2012, or up to April 15, 2012. The evidence with respect to the applicant’s job search supports the conclusion that she reasonably mitigated her losses and found alternative employment commencing October 9, 2012. Therefore, she is entitled to lost wages for the period April 16, 2012 to October 8, 2012, inclusive, less statutory deductions and applicable taxes.

7The respondent now argues:

The courts of the Province of Ontario and of Canada have consistently upheld the enforceability of clear and unambiguous termination clauses in employment agreements … where the parties have agreed to exclude entitlement to reasonable notice of termination or pay in lieu thereof under the common law.

8The problem with this argument is the Tribunal is not a court awarding damages for termination pay in lieu of notice; it is a statutory tribunal charged with enforcing the Code. Section 45.2(1)1 of the Code says:

45.2 (1) On an application under section 34, the Tribunal may make one or more of the following orders if the Tribunal determines that a party to the application has infringed a right under Part I of another party to the application:

1. An order directing the party who infringed the right to pay monetary compensation to the party whose right was infringed for loss arising out of the infringement, including compensation for injury to dignity, feelings and self-respect.

9This provision authorises the Tribunal to order a respondent to pay losses arising out of an infringement of the Code. Where the Tribunal finds that a termination of employment is in violation of the Code that means the Tribunal is authorised to award lost wages.

10It is trite law to say that the Code is quasi-constitutional legislation. This means it prevails over provincial laws and private employment contracts. Unlike the situation with the common law, employers and employees are not permitted to contract out of the Code. (See for example: Heintz v. Christian Horizons, 2008 HRTO 22, overturned in part for other reasons in 2010 ONSC 2105.)

11As a result I am not satisfied that awarding the applicant lost wages for the period April 16, 2012 to October 8, 2012, inclusive less statutory deductions and applicable taxes, is in conflict with established jurisprudence or that the issue involves a matter of general or public importance.

The Draw Account

12As observed in paragraph 76 of the Decision the respondent’s letter terminating the applicant’s employment says in part: “[the respondent] will also waive the repayment of the negative balance of your outstanding draw account against unearned commission in the amount of $8,261.” The draw account is a reference to the fact that on top of her salary the applicant was entitled to receive commission on sales during the course of her employment.

13The Request for Reconsideration argues that by failing to reduce the lost wages awarded to the applicant by this amount the Tribunal overcompensates the applicant unfairly because: “This is an amount to which [the applicant] would not have been entitled had her employment with [the respondent] continued.”

14Assuming that it is open to the respondent to retroactively retract its waiver of repayment of the negative balance in the draw account, the problem with this argument is that contrary to the statement of fact in the Request for Reconsideration quoted above, the evidence led at the hearing was insufficient to establish what commission the applicant would have earned if her employment had not been terminated in violation of the Code. This issue is explicitly addressed in the Decision at paragraph 222 because the applicant asked the Tribunal to award lost commission earnings on top of lost wages. That paragraph says:

The applicant also requested lost commission earnings for that period. It is not clear to me that the applicant experienced any loss in commissions and if she did, the evidence is insufficient for the Tribunal to calculate it with any accuracy. I say this because the documentary evidence seems to indicate that commission was payable on billed business, not closed business. As of the date of the applicant’s termination her billed business was just over $300,000. According to her contract, although there was an advance on commission, it was still calculated based on sales over $800,000. That means that whether or not the applicant would earn commission in the period up to October 9, 2012, would depend on how quickly the business she had closed was billed. As it is possible it might have taken longer than that for her closed business to become billed, she might not have been entitled to any commission. Absent evidence with respect to when the applicant’s closed business was billed after her employment was terminated, it is impossible to know if she would have received any commission at all for the period up to October 9, 2012.

15The missing billed business data referred to in this paragraph was at all times in the possession of the respondent, which chose not to introduce it at the hearing.

16Given all of the above, I am not satisfied that the Decision’s treatment of the commission earnings issue is in conflict with established jurisprudence or an issue that involves a matter of general or public importance.

17The Request for Reconsideration shall therefore be denied.

DECISION

18The Request for Reconsideration is denied.