COURT OF APPEAL FOR ONTARIO

DATE: 20211015 DOCKET: C68253

Feldman, Harvison Young and Thorburn JJ.A.

BETWEEN

John Hucsko Plaintiff (Respondent)

and

A.O. Smith Enterprises Limited Defendant (Appellant)

Counsel: Jeffrey B. Simpson, Paul Boshyk and Kristen Pennington, for the appellant Pamela Krauss, for the respondent

Heard: April 12, 2021 by video conference

On appeal from the judgment of Justice Gerald E. Taylor of the Superior Court of Justice, dated April 22, 2020, with reasons reported at 2020 ONSC 1346.

Feldman J.A.:

A. Introduction

[1] The appellant employer, A.O. Smith Enterprises Limited, terminated the employment of the respondent employee, John Hucsko, for just cause following an investigation into a complaint made by a female co-worker, the complainant, regarding four inappropriate comments that constituted sexual harassment. Following the investigation, the respondent was offered the opportunity to take remedial action including sensitivity training, which he agreed to, and to make a direct apology to the complainant, which he refused. Following that refusal, the appellant terminated the respondent’s employment for just cause.

[2] The trial judge found that the termination for cause was not justified, and awarded damages to the employee in lieu of 20 months’ notice.

[3] For the following reasons, I would allow the appeal. The trial judge erred in law by failing to find that the inappropriate, demeaning comments that the employee made to the complainant justified the action taken by the employer, and that the employee’s failure to accept the opportunity offered by the employer to remediate the situation resulted in an irreparable breakdown in the employment relationship that could not be tolerated by the employer.

B. Facts

[4] The respondent, a Senior Product Designer, was a 20-year employee with the appellant or its predecessor when his employment was terminated on July 25, 2017. The complainant joined the employer as a Project Manager in 2014. She worked with the respondent on a number of projects. The respondent was 62 years old at the time of the trial. The complainant was about ten years younger.

[5] On June 28, 2017, the complainant made a formal complaint to the employer through Nodine Kalcic, the Human Resources Manager, in which she reported four separate incidents where Mr. Hucsko made comments to her that were inappropriate. She included her responses to the comments as well as a description of the involvement of Mr. Hucsko’s immediate superior, Ayman Abdel-Rehim, a Product Development Engineering Manager. The formal complaint read as follows:

Following is the description of incidents pertaining to inappropriate comments/gestures made by John Hucsko:

1. The day after all managers in the engineering department had dinner with Robert during one of his visits, John approached me and asked how the dinner was and I told him that “it was good, we all had a good time” and then he asked if I danced on the tables, in response I told him that it was an inappropriate comment and walked away
2. John, myself and Ayman were sitting in Ayman's office discussing project progress and I had posed a question that “ok so what is our step, what do we need to do next” in response John said to me that “now you need to go and sit on Simon's lap and ask him nicely to do…” (mentioned some action items) in response Ayman and I both told him that it was an inappropriate comment; I also approached Ayman afterwards and asked him to talk to John and make sure he understands that this is his last warning if he doesn't refrain from making such comments I will report to HR, as per Ayman he communicated that to John; I had also mentioned the incident number 1 to Ayman. I started to keep John at one arm distance and so John approached me and asked if everything was alright between us and I told him that I did not appreciate his comments and that they were inappropriate and requested that he refrains from making such comments so as to have a respectful working relationship
3. Week of June 19th I was at John's desk talking about manuals and labels for one of our projects and at the end of the conversation we spoke a bit about gardening and I said that I finally got the front yard done with planting new plants but paid for it the next day and he responded “oh it's all good any reason for you to bend over and go down on your knees” at the time I did not say anything and walked away from his desk thinking what did he mean because it did not sound right to me, the choice of words the way he said it, it just didn't sound right. I had not mentioned this incident to Ayman as I wasn't sure about it and then soon after that the incident number 4 happened
4. On Monday June 26th I approached John at his desk and told him that he needs to send me the power point presentation for the design review that I had scheduled for June 27th, in response John said that he was about to do that and then he went to Outlook and started composing an email to me so he could send the ppt, as he clicked the letter "S" in the address field it automatically dropped down a list of names of the people starting with the letter "S" and my name was on top of the list so I said “hey look I am on top of the list” and in response he said “of course you are on top, you are getting pumped from under the skirt till you can't stand anymore” and he made a multiple thrusting gesture with his hips while he made this comment; I at that point was very shocked and infuriated by his comment and I walked away from his desk; I did not say anything to anyone that day but the next day I approached Ayman and told him what John had said, Ayman and I both agreed that we can no longer deal or resolve this issue within the team and that it needs to be brought to HR's attention

[6] In her testimony at trial, the complainant testified about her understanding of each of the comments. According to the trial judge, she took the “dancing on the tables” comment as a reference to exotic dancing, the “sit on lap” comment as a reference to lap dancing and flirting with a co-worker, the “down on your knees” comment as a reference to a sexual position, and the “pump the skirt” comment as a reference to a sexual act. The complainant was not cross-examined on any of her testimony. As a result, her description was unchallenged.

[7] Mr. Hucsko provided the court with explanations regarding each of the four incidents and his statements to the complainant. The “dancing on the tables” comment followed a managers’ dinner that the complainant, the only female manager, had told Mr. Hucsko she did not want to attend, but then when they discussed it the following day, she said she was happy she went and that everyone had enjoyed themselves. Mr. Hucsko’s position was that he then asked not if she had danced on the tables, but if “everyone” was dancing on the tables, meaning that they had had a lot of fun.

[8] With respect to the “sit on lap” comment, Mr. Hucsko testified that it arose in a meeting among himself, Mr. Abdel-Rehim and the complainant, where she was complaining that she had not received information from another co-worker, Simon. Mr. Hucsko said he told her to sit on Simon until he produced the information. His intent was to convey that she should pin him down until she received the information she needed.

[9] The third incident occurred when Mr. Hucsko and the complainant were discussing gardening. Mr. Hucsko testified that he suggested she use a kneeling pad while removing weeds from her lawn. He denied making a thrusting gesture with his hips, stating that his chair had become stuck in a rut in the carpet in his cubicle, and he was trying to extract the chair from the rut.

[10] Regarding the “pump the skirt” comment, Mr. Hucsko’s explanation at trial was that he and the complainant were discussing a difficult project that she had managed, and that he told her she would be praised for completing successfully. He told her that “they’re going to pump so much sunshine up [her] skirt, [she] won’t be able to sit down”, a colloquialism taken from a 1970s movie that means to praise someone or give them a lot of credit.

[11] In response to receiving the written complaint from the complainant, the employer appointed John Weiler, the Director of Finance and Administration, and Ms. Kalcic to conduct an investigation. They held a meeting with Mr. Hucsko where they read the complainant’s allegations to him, although they did not give him a copy of her written complaint. At that time his response to each incident was:

a) he did not recall making the “dancing on tables” comment, but if he did, it was a colloquialism about having a good time, and he suggested wording he might have used; b) he also did not specifically recall the meeting where he was alleged to have made the “sit on lap” comment, but he did not deny making it, and said it meant to pin someone down so they couldn’t get away, and did not have a sexual connotation; c) he did not recall the “down on your knees” comment, but he did not deny making it and he confirmed that they did discuss gardening; and d) he explained the “pump sunshine up the skirt” comment was a colloquialism meaning to give a person a lot of praise.

[12] Mr. Hucsko suggested that the complainant’s complaints were motivated by his challenging her at a meeting, and suggested other employees to interview, which was done. In the investigators’ interview with Mr. Abdel-Rehim, he confirmed he had been present when the “sit on lap” comment was made, he had told Mr. Hucsko that it was inappropriate, but he did not take it seriously enough to report it to the human resources department. He also commented that the complainant could be sensitive to comments made to her. Another employee confirmed that the complainant had been very upset with Mr. Hucsko at a meeting, and commented that Mr. Hucsko acted professionally by removing himself from the meeting. Another employee was asked if she had witnessed anyone making inappropriate comments and responded that she had not.

[13] The investigation also included a meeting with the complainant. She told the investigators that she wanted Mr. Hucsko’s comments to stop and she wanted him to recognize that they were unwelcome. She also told them that if Mr. Hucsko only received a slap on the hand, she would have to decide whether to resign from her position.

[14] A few days after his initial meeting, Mr. Hucsko requested a second meeting with the investigators. At that meeting, he explained that the hip thrusting gesture described by the complainant was as a result of his chair becoming stuck in a rut in the carpet. He also said that he made the dancing on tables comment but it was directed at the group who were at the meeting and not at the complainant specifically.

[15] Ms. Kalcic inspected Mr. Hucsko’s work cubicle when he was not present and noticed that the carpet was worn, but was unable to locate a rut which would cause the chair to become stuck. She also searched the internet and found a reference to dancing on tables consistent with Mr. Hucsko’s explanation that it was a colloquialism. Mr. Weiler searched the internet and found a reference from a 1970s movie about pumping sunshine up one’s skirt being a form of praise.

[16] Following the investigation, they concluded that Mr. Hucsko had made the inappropriate comments, and met with him on July 10. At that meeting, they gave him the following memo:

TO: John Hucsko FROM: John Weiler DATE: July 10, 2017 RE: Investigation Summary and Final Warning

John,

This summarizes the Company’s findings with respect to a female employee’s allegation of sexual harassment due to inappropriate comments you made directed to her on at least four occasions.

The Company has conducted an investigation and has concluded that you made inappropriate comments. Further, you were specifically advised by your supervisor on at least one occasion that your comments were inappropriate. Despite this, you continued to make inappropriate comments. This is a very serious matter. Your conduct is not acceptable and will not be tolerated by the Company. The required corrective action is as follows:

1. Final Warning – This corrective action memo will-become a permanent part of your personnel file. This is a final warning. Should there be another instance of inappropriate comments of this nature toward the same employee or another employee, it will result in your immediate discharge.
2. Additional Training – You will be required to participate in sensitivity training to familiarize you with the impact your comments have on others. The Company will arrange this training and advise you when it is scheduled.
3. Apology – You will be required to provide a direct apology to the female employee to whom you directed your inappropriate comments. Your supervisor and Human Resources Manager will also be present.

Please sign below to indicate that you have received this final warning.

[17] Mr. Hucsko did not agree with the investigation’s conclusions and asserted that he had not done or said anything inappropriate to the complainant. He asked for time to seek advice, and consulted a lawyer who wrote to the appellant on July 19. In that letter, the lawyer advised that while Mr. Hucsko was adamant that training was unnecessary, he would comply with the additional training requirement set out in the investigation summary. However, he was not prepared to issue an apology to the complainant admitting to any wrongdoing. The letter continued:

Given the circumstances where the facts are in dispute and the complaint is disconcerting to Mr. Hucsko who prides himself on his professionalism, it is our position that an apology is not appropriate.

[18] The employer did not respond to the lawyer’s letter. It suspended Mr. Hucsko, and then, on July 25, telephoned him and read a letter that was subsequently delivered to him. The letter stated that Mr. Hucsko’s employment was being terminated for cause effective immediately due to “an irreparable breakdown in the employment relationship” based on:

I. You made inappropriate and vexatious comments to a co-worker, despite being advised by both the co-worker and your supervisor that your comments were unwelcome and inappropriate. The Company conducted an investigation into the matter and found your conduct to be inconsistent with the Company’s policies related to anti-harassment and respect in the workplace. II. Throughout the investigation and following its conclusion you have shown no remorse for your misconduct and have demonstrated an inability to recognize the seriousness of the matter. Therefore, the Company does not believe that you are willing and able to correct your behaviour going-forward. III. Your refusal to accept and comply with the Company’s decision on corrective action constitutes serious, willful insubordination that cannot be condoned by the Company.

C. Findings of the Trial Judge

[19] The trial judge found that although the focus of the trial was about whether the employee’s comments amounted to sexual harassment, it was unnecessary for him to categorize the comments because regardless of how they were categorized, they did not justify summary dismissal. He found that it was unclear whether the employer had concluded that the employee’s conduct amounted to sexual harassment. He also found that the employee was not dismissed for sexual harassment but for “serious and wilful insubordination”, which he said was not specified in the termination letter, but which he presumed was a reference to an apology to the complainant.

[20] The trial judge noted that the letter did not indicate that the apology could be in writing or that the employee could apologize only for a misunderstanding of his comments. Mr. Weiler had testified at the trial that such an apology would have been acceptable. The trial judge criticized the appellant for failing to negotiate the content of the apology with the employee before terminating his employment after 20 years of service. He also found that an important factor in the appellant’s decision to terminate was that the employee had consulted a lawyer, and that that was not a justifiable reason to dismiss an employee of long service.

[21] In coming to the result of the trial, the trial judge found that the employer had faced a situation where “two employees were in a difficult working relationship” and the employer was entitled to choose which of the two employees it wished to continue to employ. However, “[w]hat the [appellant] was not entitled to do was create a situation in which it could rely on just cause to terminate the [respondent’s] employment.”

[22] The trial judge’s ultimate finding was that the employee’s conduct “did not justify a conclusion that there had been an irreparable breakdown in the employment relationship.” He went on to calculate the appropriate period of notice and awarded damages in lieu of notice.

D. Issues

[23] The basis of the appellant employer’s appeal can be broken down into three main issues:

1. Did the trial judge make a palpable and overriding error of fact by finding that the appellant did not conclude that the respondent’s four comments to the complainant amounted to sexual harassment?
2. Did the trial judge err in law by failing to correctly apply the test for determining whether the appellant had just cause to dismiss the respondent?
3. Did the trial judge err by failing to find that the appellant had just cause to terminate the respondent’s employment?

E. Analysis

(1) Did the trial judge make a palpable and overriding error of fact by finding that the appellant did not conclude that the respondent’s four comments to the complainant amounted to sexual harassment?

[24] The trial judge came to the conclusion that it was “unclear” whether the employer made a finding, following its investigation, that the four impugned comments amounted to sexual harassment of the complainant. His conclusion is contrary to both the written and testimonial evidence.

[25] The Investigation Summary and Final Warning dated July 10, 2017 that the appellant handed to the respondent, begins with the following statements:

This summarizes [A.O. Smith]’s findings with respect to a female employee’s allegation of sexual harassment due to inappropriate comments you made directed to her on at least four occasions.

[A.O. Smith] has conducted an investigation and has concluded that you made inappropriate comments.

[26] The investigation’s finding that the comments were inappropriate was in the specific context of a complaint of sexual harassment. The investigation did not conclude that the comments were “inappropriate” in the abstract. It concluded that the specific allegation of sexual harassment due to inappropriate comments was substantiated. There was nothing unclear about this conclusion.

[27] Nor was it unclear to the respondent. In his cross-examination testimony, he agreed that in the meeting where he was given the Investigation Summary and Final Warning document, he was told that his comments constituted sexual harassment, and that even if the investigators had not used the word “sexual” in the meeting, he understood that that was their finding.

[28] In addition, Mr. Weiler testified that the investigators had concluded that the comments fit the definition of sexual harassment in the employer’s Workplace Harassment Policy & Procedure, in that they were inappropriate comments of a sexual nature that were known or ought to have been known to be inappropriate. They also concluded that the comments fit the definition of sexual harassment under the Occupational Health and Safety Act, R.S.O. 1990, c. O.1, and that the respondent had singled out the complainant for those comments because of her gender. Mr. Weiler explained that they had taken all four comments into account and that they saw a pattern of comments with a sexual nature. The trial judge made no adverse credibility finding against Mr. Weiler, nor did he suggest a basis to reject the conclusions reached by the investigation.

[29] In my view, the trial judge made a palpable and overriding error of fact, based on the record, when he stated that it was unclear whether the appellant had found that the four comments constituted sexual harassment. The evidence was clear that the appellant made that finding and communicated it to the respondent, and that he understood it.

(2) Did the trial judge err in law by failing to correctly apply the test for determining whether the appellant had just cause to dismiss the respondent?

[30] The appellant submitted that the trial judge erred by failing to properly apply the test for just cause and thereby side-stepped the “core question” in this case, namely, whether the employee had engaged in misconduct that gave rise to a breakdown in the employment relationship or that was irreconcilable with sustaining the employment relationship. I agree that the trial judge failed to correctly apply the test set out in this court’s decision in Dowling v. Ontario (Workplace Safety & Insurance Board) (2004), 246 D.L.R. (4th) 65 (Ont. C.A.), that explained and elaborated on the test in McKinley v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161.

[31] Referring to the Supreme Court of Canada decision in McKinley, at paras. 48, 51 and 53, the trial judge stated that the test to determine whether an employer was justified in terminating the employee’s employment for cause must be assessed in context, and that a balance must be struck between the severity of the employee’s conduct and the sanction imposed. These statements are correct.

[32] However, in applying the test, the trial judge erred by failing to properly identify and characterize the conduct for which the employee was terminated. The trial judge found that the underlying conduct for which the employee was disciplined, and which the employer found to be sexual harassment, was irrelevant to the calculus because the basis for the termination was only the employee’s failure to apologize as instructed. The trial judge concluded that the employee’s refusal to apologize did not amount to a breakdown in the employment relationship.

[33] I will examine these errors in the context of the three-part test for determining whether termination for cause was justified, as explained in this court’s decision in Dowling, at paras. 49-50:

[49] Following McKinley, it can be seen that the core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship. The rationale for the standard is that the sanction imposed for misconduct is to be proportional – dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the employment relationship. This is a factual inquiry to be determined by a contextual examination of the nature of the misconduct.

[50] Application of the standard consists of:

1. determining the nature and extent of the misconduct;
2. considering the surrounding circumstances; and
3. deciding whether dismissal is warranted (i.e. whether dismissal is a proportional response).

[34] In Dowling, the court went on to explain the requirements of each step. At the first step, the nature and extent of the misconduct must be determined, and the employer is entitled to rely on wrongdoing by the employee that is discovered both before and after the termination. The second step considers the employee within the employment relationship, including the employee’s age, employment history, seniority, role and responsibilities, and for the employer, the type of business, any relevant policies or practices, and the employee’s position in the organization, including the degree of trust reposed in the employee. The third step assesses “whether the misconduct is reconcilable with sustaining the employment relationship”, and “whether the misconduct is sufficiently serious that it would give rise to a breakdown in the employment relationship”: Dowling, at paras. 51-53.

[35] In oral submissions, counsel for the respondent argued that although the trial judge did not refer to the Dowling test, he implicitly applied this three-step approach in his reasons, where he found that however the impugned comments were characterized, they did not warrant summary dismissal. I would reject this submission. The trial judge’s analysis, in substance, does not engage the analytical steps explained in Dowling.

[36] The first step of the test is to determine the nature and extent of the misconduct. The four comments that the respondent made to the complainant were the subject of a formal complaint of sexual harassment and a misconduct investigation. That investigation resulted in a finding that the comments were inappropriate, and the requirement that the respondent take two steps to address the situation: take sensitivity training and apologize to the complainant. The respondent agreed to the training but refused to make an apology.

[37] The respondent’s conduct consisted of making the four inappropriate comments, including after he was told by the complainant that they were inappropriate and unwelcome and after he was warned by his superior, Mr. Abdel-Rehim, and then his refusal to apologize when he was told by his employer that that was required as discipline to remedy the situation.

[38] The refusal to apologize is only part of the misconduct that the appellant had to consider when deciding whether there has been a breakdown in the employment relationship. The refusal to apologize did not occur in a vacuum. The degree of seriousness of the misconduct that led to the discipline, and then to the dismissal, is critical to the ultimate assessment of the propriety and proportionality of the employer’s response. But the trial judge eschewed this analysis, finding instead that the nature and seriousness of the respondent’s comments were irrelevant and focusing solely on his refusal to apologize.

[39] The trial judge also did not adequately address the second step of the analysis. While he did take into account the fact that the respondent was a long-term 20-year employee of the appellant, he did not discuss or weigh such factors as the Workplace Harassment Policy of the employer and the recent training the respondent had undergone with respect to the Policy. He also did not consider the senior position the respondent held and the degree of trust that arose from that in the employer-employee relationship.

[40] When it came to the third step, the trial judge’s assessment of whether dismissal was warranted by the respondent’s misconduct was tainted by his failure to consider, as part of that misconduct, the inappropriate, sexually harassing comments that the respondent made to the complainant, that were the basis for the investigation and discipline.

(3) Did the trial judge err by failing to find that the appellant had just cause to terminate the respondent’s employment?

a) The Nature and Extent of the Misconduct

[41] In order to apply the first step of the three-part test from Dowling, the trial judge was required to decide whether the respondent’s four impugned comments amounted to sexual harassment and to assess that misconduct, along with the refusal to apologize, which together formed the basis for the appellant’s decision to terminate the respondent’s employment.

[42] The Supreme Court provided the following definition of sexual harassment in the workplace in its decision in Janzen v. Platy Enterprises Ltd., [1989] 1 S.C.R. 1252, at p. 1284:

Without seeking to provide an exhaustive definition of the term, I am of the view that sexual harassment in the workplace may be broadly defined as unwelcome conduct of a sexual nature that detrimentally affects the work environment or leads to adverse job-related consequences for the victims of the harassment. It is, as Adjudicator Shime observed in Bell v. Ladas, supra, and as has been widely accepted by other adjudicators and academic commentators, an abuse of power. When sexual harassment occurs in the workplace, it is an abuse of both economic and sexual power. Sexual harassment is a demeaning practice, one that constitutes a profound affront to the dignity of the employees forced to endure it. By requiring an employee to contend with unwelcome sexual actions or explicit sexual demands, sexual harassment in the workplace attacks the dignity and self-respect of the victim both as an employee and as a human being.

[43] Sexual harassment is not confined to actions but includes comments with a sexual innuendo. In Arjun P. Aggarwal and Madhu M. Gupta’s well-recognized text, Sexual Harassment in the Workplace, 3rd ed. (Toronto: Butterworths, 2000), at p. 119, the authors provide the following summary of sexual harassment in the workplace:

[B]riefly summarized, sexual harassment is a form of discrimination based on sex. It occurs when a person is disadvantaged in the workplace as a result of differential treatment in the workplace. It is an unwarranted intrusion upon the sexual dignity of a person. It consists of acts that are unwarranted, unsolicited, and unwelcome. It can be overt or subtle. Even if the nature of the harassment is not physical, it can still be considered to be sexual harassment if it creates a poisoned environment, even if there is no economic consequence such as loss of one’s job, loss of seniority, or economic consequences of a similar nature. It is also clear that even if it might be considered that what has occurred is sexual banter, common to the workplace, if a person finds it objectionable and makes it known in clear and precise terms that such actions are not acceptable to such person, then that is the standard of behaviour that is established vis-à-vis that person.

[44] And as far back as 1998, Carthy J.A. concluded this court’s decision in Bannister v. General Motors of Canada Ltd. (1998), 40 O.R. (3d) 577 (C.A.), with the observation that, even in an industrial plant where “no one expects profanity or vulgarity to be eliminated … unwelcome conduct or expression based upon gender cannot be tolerated”: at p. 590.

[45] It is also important to view the respondent’s comments in the context of the appellant’s written Workplace Harassment Policy, which contains the following definition of sexual harassment:

Sexual harassment is unsolicited conduct, comments or physical contact of a sexual nature that is unwelcome to the recipient. It includes any unwelcome sexual advances (oral, written, physical), requests for sexual favours, sexual and sexist jokes or remarks and the display of degrading or offensive material when:

a. such conduct might reasonably be expected to cause insecurity, discomfort, offence or humiliation; or b. such conduct has the purpose or effect of interfering with a person’s work performance or creating an intimidating, hostile, offensive work environment; or c. submissions to such conduct is made either implicitly or explicitly a condition of employment; or d. submission to, or rejection of, such conduct is used as a basis for any employment decision (i.e. job security, promotion, change in salary and benefits).

[46] Applying these definitions and descriptions of sexual harassment to the four comments the respondent made and the circumstances in which they were made, there is no doubt that they constituted sexual harassment of the complainant.

[47] First, they were each based on gender and bore an unmistakable sexual connotation. They were comments that would only have been made to a woman, not to a man.

[48] Second, the comments were demeaning and undermined the dignity of their recipient. They implied provocative behaviour by the recipient or that she welcomed sexual suggestions by the respondent.

[49] Third, the comments were unwelcome and the respondent knew that. He was told as much by the complainant, as well as by his superior Mr. Abdel-Rehim when he heard the respondent make the “sit on lap” comment.

[50] Fourth, they created a poisoned atmosphere for the complainant in her workplace. In the words of the appellant’s Workplace Harassment Policy, the comments were unsolicited and unwelcome, they were of a sexual nature, and they might reasonably be expected to cause discomfort and humiliation and create a hostile and offensive work environment.

b) The Surrounding Circumstances

[51] At the second step of the test, the court considers the circumstances of both the employee and the employer. The respondent had just recently received training on the Workplace Harassment Policy and, as a senior employee with a lengthy 20-year tenure, he would have been trusted to abide by the Policy in his relations with his co-workers. The complainant was a project manager who had to work closely with the respondent from time to time. He was clearly expected to treat her with dignity and respect.

[52] The appellant’s Workplace Harassment Policy is another relevant consideration. The Policy provided a complaints procedure that was followed by the appellant. It conducted an investigation, including giving the respondent the opportunity to address the allegations against him. It determined that he had made sexually inappropriate comments to the complainant, and delivered its findings to him along with its decision regarding the steps he was required to take to address the situation.

[53] The Policy sets out the corrective action that the employer may take if it finds that an employee engaged in harassment or sexual harassment in the workplace, up to and including termination. It provides:

Corrective Action Where an investigation substantiates conduct contrary to the policy, corrective action will be taken. Such corrective action will include addressing any relevant issues in the work environment, as well as addressing any employees who have personally engaged in comments or conduct contrary to this policy.

The objective of the corrective action directed at individuals is to change attitudes and behaviour and eliminate workplace harassment or discrimination as defined by the policy. Such action may range from educating such persons on the appropriateness of his or her behaviour to transfers, demotions, suspensions or termination. Any disciplinary action will be noted on the employee’s personnel file.

c) Whether Dismissal Is Warranted

[54] Having identified the nature and extent of the misconduct by the respondent, and taken into account the surrounding circumstances, the third step of the test requires the court to determine whether the misconduct was sufficiently serious that it resulted in a breakdown of the employment relationship, and whether dismissal was a proportional response by the appellant.

[55] In his testimony at trial, the respondent confirmed that he understood that sexual harassment was a “fireable offence” and that that was a common understanding within the organization.

[56] However, the appellant did not initially terminate the respondent’s employment as a result of his sexually harassing conduct. It gave him the opportunity to redeem himself and to save his job by taking sensitivity training and apologizing to the complainant. In his testimony, the respondent described the course of corrective action directed by the employer as an “ultimatum”, and understood that the memo constituted a “final warning”. This was a fair and proportionate response by the employer.

[57] In response, the appellant consulted a lawyer, as he was entitled to do, and gave his response through counsel. He agreed to take the additional sensitivity training, but at the same time, he was “adamant” that it was unnecessary. This indicated a complete failure to acknowledge the nature and the seriousness of his conduct, and the effect it had on the complainant and on the atmosphere of the workplace.

[58] In addition, through his lawyer’s letter, the respondent refused to “issue an apology to [the complainant] admitting any wrongdoing”, on the basis that the facts were in dispute and the complaint was disconcerting to him. The letter expressly took the position that an apology was not appropriate, and did not seek any negotiation of the form or terms of an apology. In his testimony, the respondent acknowledged that “if you’re guilty of sexual harassment, or any kind of harassment, the complainant or the victim deserves an apology. That’s a no-brainer.” However, he stood firm in his position that “I was not going to apologize, because I did not harass that woman”.

[59] In those circumstances, the only conclusion the appellant could reach was that there was a complete breakdown in the employment relationship as (i) he was either unwilling or unable to understand the purpose and effect of the Workplace Harassment Policy and to take its requirements seriously and (ii) he was unwilling to accept the discipline imposed on him as a consequence of his misconduct of sexually harassing a co-worker. As a result, the appellant could have no confidence that the respondent would not continue with the same type of misconduct in the future.

[60] Faced with the respondent’s lack of contrition, lack of understanding of the seriousness of his conduct, and his refusal to comply with the reasonable and essential requirement of an apology to the complainant and target of his comments, the appellant’s decision to terminate the respondent’s employment was a proportional and wholly warranted response.

[61] It follows that I reject the trial judge’s suggestion that in those circumstances, it was incumbent on the appellant to try to negotiate an acceptable form of apology with the respondent. I similarly reject the respondent’s submission in oral argument that the appellant was required to warn the respondent that if he did not apologize, his employment may be terminated. The respondent was treated fairly. He refused to comply with the discipline imposed and understood that this discipline presented an “ultimatum”. He could not have reasonably expected that he would be able to continue with his employment without apologizing to the complainant for his comments, that were found to be inappropriate.

[62] Contrary to the observation of the trial judge, this was not a situation where the employer was faced with two employees who could not get along and had to choose between them. One employee had engaged in workplace misconduct. It was that employee who had to either accept the appropriate disciplinary measures imposed by the employer to retain his position, or risk losing that position.

[63] I also reject the trial judge’s conclusions that the appellant’s decision to terminate the respondent’s employment was motivated by the fact that he sought legal advice, and that it was the appellant that created a situation that gave it just cause to terminate. These conclusions find no basis in the record.

[64] The appellant’s decision to terminate the respondent’s employment in these circumstances was justified and appropriate based on the three-part test from Dowling.

F. Conclusion

[65] I would allow the appeal, set aside the judgment below, and dismiss the claim. There is therefore no need to address the issue of mitigation.

[66] Counsel advised the court that they would try to agree on costs. If they are unable to agree, they may make brief written submissions (maximum three pages) within three weeks of the release of these reasons, addressing the costs of the appeal and below.

Released: October 15, 2021 “K.F.” “K. Feldman J.A.” “I agree. Harvison Young J.A.” “I agree. Thorburn J.A.”