Thoughts from a Management Lawyer

The Law of Insubordination

Conduct amounting to insubordination sufficient to establish cause for dismissal was described half a century ago by Lord Evershed in Laws v. London Chronicle:

Since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service. It is, no doubt, therefore, generally true that wilful disobedience of an order will justify summary dismissal, since wilful disobedience of a lawful and reasonable order shows a disregard – a complete disregard – of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master and that, unless he does so, the relationship is, so to speak, struck at fundamentally. [Emphasis added]

The law of just cause dismissals in a non-union setting has changed over the years with the Supreme Court of Canada setting out a "contextual approach" in McKinley v. BC Tel, but insubordination, when proven remains a disciplinable offence.  Whether termination is the right penalty will depend on the circumstances and the context.    

In some rare cases, a single act of insubordination can justify dismissal.  In Amos v. Alberta, the following factors were considered:

... it depends on a large mix of factors. It is not possible, from one fact alone, to conclude if insubordination in a particular situation can justify summary dismissal. Usually, one instance of insubordination will not be sufficient to summarily fire an employee. However, one incident of insubordination can be enough if:

• the insubordination is grave;
• it consists of wilful and deliberate disobedience of an order;
• work rules were made known to the employee;
• work rules were consistently enforced;
• work rules were clearly communicated to the employee;
• the work order was authorized, that is, that it came within the scope of the worker’s duties;
• the worker was made aware, unequivocally, that discipline is the penalty for disobedience;
• the work order was lawful and reasonable in content;
• the employee has no reasonable excuse for disobedience;
• the breach is serious.

In summary, the court must assess all relevant circumstances to determine if, in a particular case, insubordination justifies summary dismissal.

In a Union setting, a majority of a Board of Arbitration clearly and succinctly set out the law with respect to insubordination in Toronto Rehabilitation Institute:

When a clear direction is given to perform a task, a failure to comply with that direction may amount to insubordination.  Defenses to an allegation of insubordination may include health, safety or other legitimate grounds for refusal.  However, the general rule is that an employee must follow directions and then later grieve any perceived impropriety.

Insubordination undermines managements authority and ability to effectively lead the organization. Once proven, the turns to penalty.

Defamation in Employment Cases and Qualified Privilege

Every so often we see defamation claims crop up in wrongful dismissal actions. They come up in different contexts such as performance reviews, reference checks and post-termination documentation.  

The British Columbia Court of Appeal considered this matter in Dawydiuk v. Insurance Corporation of British Columbia.  There were a number of issues, but with respect to the defamation claim, the Court summarized the matter as follows:

In the course of the proceedings, the [employer] produced various documents including an email dated September 28, 2004 from ICBC’s supervisor, ..., to an internal ICBC email address. The email was also copied to specific individuals at various other email sites of the respondent.

When this document was produced, [the employee] amended her statement of claim to include a claim for defamation based upon the contents of the supervisor’s email.

The Court provided more information about the background/basis for the claim:

Following [the employee's] termination, [her supervisor] completed an internal document required by ICBC’s human resources department describing the circumstances leading to the termination.  In the document he selected from a list of potential answers three reasons for dismissing [the employee], including that she was “dissatisfied with change” and that she was “dissatisfied with work environment”, and “inadequate performance”.  In addition, [the supervisor] advised that he considered [the employee] as “not re-hireable” and rated her as “unsatisfactory”.

The question was whether this was defamatory and, if so, whether a defence existed.  

The Trial judge found that there was no defamation.  The Court of Appeal disagreed referring to the words of Mr. Justice Binnie in WIC Radio Ltd. v. Simpson: 

Under the present law, if a plaintiff shows the defendant published something harmful to his or her reputation, then both falsity and damage are presumed, and the onus shifts to the defendants to establish an applicable defence, including the defence of fair comment.

The Court of Appeal concluded that the comments were defamatory and then turned to the employer's main defence - that the words were protected by qualified privilege.

A qualified privilege was discussed by Professor Raymond E. Brown in his treatise “The Law of Defamation in Canada”

There are certain occasions on which a person is entitled to publish untrue statements about another, where he or she will not be liable even though the publication is defamatory.  One such occasion is called a conditional or qualified privilege.  No action can be maintained against a defendant unless it is shown that he or she published the statement with actual or express malice.  An occasion is privileged if a statement is fairly made by a person in the discharge of such public or private duty, or for the purpose of pursuing or protecting some private interest, provided it is made to a person who has some corresponding interest in receiving it.  The duty may be either legal, social or moral.  The test is whether persons of ordinary intelligence and moral principle, or the great majority of right-minded persons, would have considered it a duty to communicate the information to those to whom it was published. 

There is a discussion of qualified privilege in a reference check in this case and a detailed discussion in McGarrigle v. Dalhousie University.

The BC Court of Appeal concluded that while the supervisor "had an interest in making the statements in question" and the Human Resources personnel "had a corresponding duty to receive it” there was a snag:

The report was, however, also sent to an individual named Glenda Mohr.  There was no evidence about Ms. Mohr’s position or status with ICBC, so the trial judge was left with no basis upon which he could conclude that she had any duty to receive Mr. Rees’ report.

So, while members of the HR department and even the employee's supervisor seem to have had a duty to receive the report it was not clear if this other individual had such a duty.  Qualified privilege applied except with respect to the disclosure to Ms. Mohr.

There are many lessons here.  In the employment context, qualified privilege is available however it is not a complete shield in all cases.  Care must be taken not only about what is written or said, but about who is provided with the information.  Going beyond those having a "duty to receive" it can have consequences and the qualified privilege will not apply.

Dan Michaluk also has a post on the case.  

Who has to prove discrimination?

The recent Ontario Human Rights Tribunal case of MacNeil v. LOFT Community Services got me thinking about the shifting burden in discrimination cases.  In this case, the Tribunal dismissed the complaint because the complainant had not met the onus that was upon him of establishing a prima facie case of discrimination.

The Tribunal's approach in these cases is described in Jagit v. IN TECH Risk Management as follows:

[18] The onus is on the applicant to establish a prima facie case of discrimination.  A prima facie case is one which covers the allegations made and which, if they are believed, is complete and sufficient to justify a finding in the applicant's favour in the absence of an answer from the respondent: see Ontario Human Rights Comm. v. Simpsons-Sears, 1985 CanLII 18 (S.C.C.), at para. 28.  Upon establishing a prima facie case, the burden shifts to the respondent to provide a credible and rational explanation demonstrating, on a balance of probabilities, that its actions were not discriminatory. 

[19]   It is well-established that the threshold for establishing a prima facie case of discrimination is not high, discrimination is often not overt, the employer may have knowledge of facts or possess evidence of discrimination that is not accessible to an employee whose employment is terminated, and that in many, if not most, cases the burden will shift to the respondent to provide a non-discriminatory reason for its actions. On the other hand, where the applicant has failed to establish a prima facie case, it is neither legally correct nor, in my view, fair, just and expeditious to shift the burden to the respondent to provide a non-discriminatory reason for its actions. 

It is only upon establishing a prima facie case, that the burden shifts to the respondent (e.g. employer) to provide a "credible and rational explanation demonstrating, on a balance of probabilities, that its actions were not discriminatory".

A three-step analysis has been applied in these cases to determine if a prima facie case of discrimination has been made out.  

This approach was recently discussed by the British Columbia Court of Appeal in Armstrong v. British Columbia (Ministry of Health):

It was set out by Chief Justice Finch in Health Employers Assn. of British Columbia v. British Columbia Nurses’ Union, 2006 BCCA 57 (CanLII), 2006 BCCA 57, 264 D.L.R. (4th) 478, a case involving the provision of the Code (s. 13) dealing with discrimination in the employment context:

[38]  ... Therefore, under s. 13(1)(a), to establish a prima facie case of discrimination, an employee must establish that he or she had (or was perceived to have) a disability, that he or she received adverse treatment, and that his or her disability was a factor in the adverse treatment ...

Again, it is only where the complainant can make out a prima facie case of discrimination that it becomes necessary to determine whether there was a bona fide and reasonable justification for the discrimination.  

Furthermore, on the prima facie test, Madam Justice Abella's comments in McGill University Health Centre (Montreal General Hospital) v. Syndicat des employés de l’Hôpital général de Montréal are of assistance:

[49]  What flows from this is that there is a difference between discrimination and a distinction. Not every distinction is discriminatory.  It is not enough to impugn an employer’s conduct on the basis that what was done had a negative impact on an individual in a protected group. Such membership alone does not, without more, guarantee access to a human rights remedy.  It is the link between that group membership and the arbitrariness of the disadvantaging criterion or conduct, either on its face or in its impact, that triggers the possibility of a remedy.  And it is the claimant who bears this threshold burden.

[50]  If such a link is made, a prima facie case of discrimination has been shown.  It is at this stage that the Meiorin test is engaged and the onus shifts to the employer to justify the prima facie discriminatory comment.

Employer's often don't put the employee/complainant to the onus of showing a prima facie case (or at least vigorously putting the complainant to the onus).  Maybe that's not surprising given that the prima facie hurdle is a relatively low one, but, in an appropriate case, it is important to push the issue.  As the cases above show, in an appropriate case, this can result in a positive and cost effective outcome for the employer and an early dismissal of the complaint.

Congratulations to Mike Fox of Jottings by an Employer's Lawyer

My friend Mike Fox, author of Jottings by an Employer's Lawyer celebrated his 8th blog anniversary (you read that correctly - 8!)  

When Mike started writing his blog there were a handful of legal blogs (forget about labour and employment blogs, there really weren't any). Now there are, well, hundreds of legal blogs.  They come, a good number disappear after some period of experimentation, some have staying power. Some of us "old timers" as Mike affectionately (I think) has been known to call us, go through, after all these years, fits and starts of writing.  Mike's blog remains one of those that is a consistently great and informative read.  

Congratulations Mike!  

Suing your Employer While Still Employed

I can't imagine a more difficult decision for an employee than suing your employer while you're still employed. As you'd expect, it rarely happens.  That said, it happens.  What's the effect of launching the lawsuit on the employment relationship?  Is it just cause for summary dismissal?  The cases are mixed so the answer is "it depends".

The issue was recently considered by the British Columbia Court of Appeal in Lewis v. Terrace Tourism Society. The case highlights the different approaches to the issue as the majority and dissenting judgments demonstrates.  

Mr. Justice Frankel, in dissent, put the issue as follows:

Ms. Lewis submits that the summary trial judge erred in finding that she had repudiated her contract of employment by initiating her small claims action.  In support of her argument, she refers to authorities which hold that not every action commenced by an employee against an employer will amount to repudiation of a contract of employment.  That proposition is non-contentious:  Zaraweh v. Hermon, Bunbury & Oke, 2001 BCCA 524 (CanLII), 2001 BCCA 524, 94 B.C.L.R. (3d) 223 at paras. 21, 22.  However, commencing an action will constitute repudiation by the employee when doing so is incompatible with the employee’s continued employment.  Such is the case when, as here, an employee alleges that the employer has already wrongfully terminated the contract of employment:  Suleman v. B.C. Research Council 1990 CanLII 746 (BC C.A.), (1990), 52 B.C.L.R. (2d) 138 at 144 (C.A.); Podas v. Pacific Press Ltd. 1991 CanLII 1955 (BC C.A.), (1991), 61 B.C.L.R. (2d) 196 at paras. 9-12 (C.A.).

Mr. Justice Frankel would have held that the commencement of the lawsuit, in the circumstances of this case, amounted to just cause.  In his view, there had been no prior repudiation by the employer and, as such, the commencement of the lawsuit was incompatible with the employment relationship and, therefore, cause for dismissal.  

The majority, whose decision was written by Madam Justice Levine, held that the employer constructively dismissed the employee and had repudiated the contract of employment.  Having regard to the authorities, the commencement of the lawsuit was not a repudiation of the contract.  For example, In Zaraweh the Court held that:

Absent a prior repudiation by the partnership which would allow Ms. Zaraweh to elect to end the contract, or which alternatively could be viewed as justifying her termination of the contract, such actions must be viewed as unjustified repudiation by Ms. Zaraweh. This result is consistent with the decision of our Court in Suleman v. B.C. Research Council 1990 CanLII 746 (BC C.A.), (1990), 52 B.C.L.R. (2d) 138 in which this Court held that commencement of the action amounted to repudiation of the contract of employment.

Notwithstanding that conclusion, Justice Levine went on to consider,  in obiter,, whether the commencement of the action repudiated the employment contract.  She held that:

If it could be said that the Society’s actions did not amount to repudiation of her employment contract, I would nonetheless find that she had not repudiated the employment contract by bringing her Small Claims action.

Madam Justice Levine then distinguished the earlier cases holding that:

In these circumstances, where all of the indicia of the employment relationship had ended with the employer’s cessation of business, it would constitute a “trap for the unwary” to hold that an employee cannot sue to have a court declare her rights without risking a finding that she had, by doing so, repudiated whatever vestige of the employment contract might remain. 

There are divergent lines of cases on this issue and the particular facts of the case will, of course, determine the result.   

Production of Medical Documents at the Human Rights Tribunal

The recent Tribunal decision of Iley v. Sault Community Information and Career Centre provides a good review of the principles that will be applied when ordering production of documents at the Tribunal and, more specifically, when dealing with production medical information by the applicant.  

The Tribunal, in an earlier decision, ordered the applicant to produce certain medical records including all clinical records, notes and reports from one of the applicant’s treating neurologists.  The applicant did so, but redacted some information.  Furthermore, according to the Tribunal "none of the documents were organized by index and it was difficult to determine the author."  The employer/respondent argued that it would be highly prejudicial to force it to proceed to a hearing without knowing the contents of the redacted documents.

The Tribunal laid down the following principles:

1. The Tribunal is not bound by any particular rule that mandates the production of medical records. However, the test for production of medical records is the same as for other types of documents. That is, they must be of arguable relevance, as long as there is no fishing expedition into the applicant’s medical history.  The Tribunal can order disclosure of medical records to itself, then may review the documents and, if arguably relevant, can order them disclosed. 
2. Privilege with respect to medical records is decided on a case by case basis, balancing the general duty to produce all relevant documents and the invasion of the applicant’s privacy.  If the medical records are arguably relevant, the Tribunal will order the applicant to provide the medical records for inspection by the Tribunal at the hearing in order to assess their relevance to the proceedings.
3. Where the existence or severity of a disability is itself very much in issue, the Tribunal must engage in a balancing exercise.  In such cases, the Tribunal must balance the general duty to require production of all arguably relevant material in disability cases so that respondents have sufficient opportunity to advance their case, versus the invasion of the applicant’s privacy vis-à-vis his confidential conversations and private records with his physicians.

   [Emphasis added]

To similar effect on point #3 is McEwan v. Commercial Bakeries Corporation the Tribunal held that:

As a matter of natural justice and fairness, the Tribunal must balance the general duty to require production of all relevant material in disability cases, where the disability itself is in dispute, so that Respondents have sufficient opportunity to advance their case, versus the invasion of the Complainant’s privacy vis-à-vis his confidential conversations and private records with his physicians and psychological counsellors. [Emphasis added]

In McEwan, the Tribunal found that the medical records more than met the test of arguable relevance and ordered the Complainant to "contact all of his treating physicians and psychological counsellors and provide them with a signed release, so that he can allow the Tribunal to inspect certain medical documents" at which time the Tribunal would "determine if they are of actual relevance to the proceedings herein and will make a further Order if required with respect to their production".

With respect to the medical records, the Tribunal in Iley v. Sault Community Information and Career Centre ordered as follows:

The applicant will produce unredacted documents to the respondents. Shall he wish to withhold medical documents based on a concern for his privacy, he may raise that issue by way of a Request For Order During Proceedings at the outset of the hearing when it re-commences.  A determination as to relevance in accordance with the test and considerations outlined above shall be made, and the applicant further directed as to medical documents relevant for production should the question of privacy be raised. [Emphasis added]

The only question I would have is whether it was possible to fashion an order that would have allowed the production issues to be dealt with prior to the re-scheduled hearing date as was done in McEwan.    

The Tribunal, in the First Interim decision in McEwan, Ordered as follows:

1. The Complainant must execute and deliver releases to all his treating physicians and psychological counsellors within ten business days from the date of this decision, for production to the Tribunal of all of their clinical notes and records, reports already created, charts, diagnostic test results, psychological or other counselling reports, counselling notes and counselling records, emergency records, records of prescriptions, and diagnostic results including x-rays;
2. The Respondents must reimburse the Complainant for the costs of such production to the Tribunal, since it is being done at their request; and
3. The Tribunal shall inspect such documents and determine their relevance to this matter, if any.  If required, a subsequent Interim Decision shall order production of particular documents. [Emphasis added]

In a subsequent Interim decision dealing with production, the Tribunal held:

The Tribunal has reviewed both sets of documents, in order to determine if they met the test of arguable relevance to the proceedings herein, and to ensure that the Complainant’s privacy is not invaded unduly.

The Tribunal has determined that the documents are relevant to this matter, that the Complainant’s privacy will not be unduly breached, and that the documents ought to be produced to all parties in their entirety.

Copies were made and ordered produced to the parties.

Would it have been possible to fashion a similar "pre-hearing" type order in Iley?  Maybe the circumstances were such that the answer is "no".  But McEwan does provide some support for "pre-hearing" production where medical information is in issue.  If the production issues are dealt with at the hearing, there's a reasonable chance that an adjournment will be requested to permit the party receiving production to review the documents, seek counsel (especially with medical documents) and determine how, if at all, they impact on the case.

 

Poll Suggests that Bullying is Pervasive at Work

In light of the coming into force of Ontario's Bill 168, violence and harassment in the workplace is (or should be) front of mind for employers in this province.  It should be front of mind for employers even without legislation.  

As reported in HR Magazine Bullying remains rife in the workplace.  According to the article a recent poll suggests that "more than one in five of respondents (21%) feel ‘bullied’ by their boss at work and a further 28% feel picked on by a co-worker in the office" 

Vale Workers Approve Collective Agreement

A few days ago I posted that Vale and Steelworkers Reach Tentative Deal and that this was subject to ratification.  Well, the Globe and Mail reports that the Nickel workers approve contract with Vale thus ending one of the longest strikes in Canadian history.  

Length of Examinations for Discovery

The Ontario Rules of Civil Procedure were recently amended (with effect on January 1, 2010) and significantly and substantively changed the manner in which civil litigation matters proceed in Ontario. The changes followed an exhaustive review by the Honourable Coulter A. Osborne, Q.C. whose Summary of Findings and Recommendations of the Civil Justice Reform Project is available.

One area identified as needing reform was Discovery where it was noted:

Many with whom I met expressed similar concerns about oral discoveries being fishing expeditions, unfocused or conducted by poorly prepared counsel who are unduly concerned about overlooking potential facts and issues. A few also noted lawyers' self-interest in prolonging examinations to achieve billing targets. As I have suggested, prolonged oral discoveries did not appear to be a problem in smaller Ontario communities.

However, what was consistent among the views I heard was that a default of one day (or seven hours) of examination per party is sufficient in most cases. I emphasize that the one-day limit should be a default time. There will be cases where more than one day will be required. The one-day default rule ought to permit parties to agree to more than one day for discoveries. Failing agreement, the court would determine the discovery time allocation. [Emphasis added]

Rule 31.05.1 provides that (in a "regular" non-Simplified Rules action): 

No party shall, in conducting oral examinations for discovery, exceed a total of seven hours of examination, regardless of the number of parties or other persons to be examined, except with the consent of the parties or with leave of the court.

In deciding whether to grant leave, the Rules provide that the Court shall have regard to:

(a) the amount of money in issue;

(b) the complexity of the issues of fact or law;

(c) the amount of time that ought reasonably to be required in the action for oral examinations;

(d) the financial position of each party;

(e) the conduct of any party, including a party’s unresponsiveness in any examinations for discovery held previously in the action, such as failure to answer questions on grounds other than privilege or the questions being obviously irrelevant, failure to provide complete answers to questions, or providing answers that are evasive, irrelevant, unresponsive or unduly lengthy;

(f) a party’s denial or refusal to admit anything that should have been admitted; and

(g) any other reason that should be considered in the interest of justice.

A nice review of the factors relevant to granting leave to extend time for examinations for discovery can be found in two (2) cases of my former partner Master Benjamin Glustein:

• Osprey Capital Partners v. Gennium Pharma Inc.
• Hancock v. Lunn

In Hancock, it was alleged that the employer terminated "his employment contract as Director of Public Works as a result of a campaign by Lunn to have him dismissed.  Hancock alleges that Lunn acted based on speculation, innuendo, and with malicious intent."  Hancock asked the Court to allow him to examine Lunn for 3 days.  The Court agreed after considering the factors set out in the Rules.

In Osprey, the Court granted leave to Osprey to "exceed a total of seven hours for examinations for discovery of the three defendants, and order that Osprey is entitled to seven hours of examination for discovery of each of the defendants Patterson, Marshall, and Genpharm".

These are two helpful cases on the circumstances to consider when seeking (or defending a motion) leave to exceed the time limit for examination for discovery under the Rules.  The Rules are new and the cases are a work in progress but show that, in appropriate cases, the Rules will be applied with some flexibility where the circumstances warrant. 

Vale and Steelworkers Reach Tentative Deal

It may well be that the long and sometimes bitter strike at Vale may be coming to an end. The strike that started on July 13, 2009 and resulted in a fair amount of litigation both at the Ontario Labour Relations Board before the Courts may (depending on the wishes of the members) be coming to a close.  

According to the Sudbury Star, the parties have reached a tentative agreement.  The Toronto Star also has an article and the tentative deal will now be put to the membership on Wednesday and Thursday who will decide whether it is acceptable.