This is the second in a (broken) series of posts about reprisals. This time, reprisals under section 74 of the Employment Standards Act, 2000 which reads as follows:
No employer or person acting on behalf of an employer shall intimidate, dismiss or otherwise penalize an employee or threaten to do so,
(a) because the employee,
(i) asks the employer to comply with this Act and the regulations,
(ii) makes inquiries about his or her rights under this Act,
(iii) files a complaint with the Ministry under this Act,
(iv) exercises or attempts to exercise a right under this Act,
(v) gives information to an employment standards officer,
(vi) testifies or is required to testify or otherwise participates or is going to participate in a proceeding under this Act,
(vii) participates in proceedings respecting a by-law or proposed by-law under section 4 of the Retail Business Holidays Act,
(viii) is or will become eligible to take a leave, intends to take a leave or takes a leave under Part XIV; or
(b) because the employer is or may be required, because of a court order or garnishment, to pay to a third party an amount owing by the employer to the employee.
The onus rests on the employer to demonstrate that it did not contravene the Act.
The purpose of these provisions is to ensure that employees can pursue their statutory rights without fear of adverse employment consequences.
The Ontario Labour Relations Board (the “Board) recently considered the reprisal provisions in Mucollari v 1196811 Ontario Limited (Il Gabbiano Ristorante), 2013 CanLII 21009 (ON LRB).
A long-term employee claimed that his employer had terminated his employment as a reprisal for having exercised certain rights, including filing a complaint, under the ESA. The employer denied that there was a reprisal.
The Employment Standards Officer (the “Officer”) held that a termination had taken place and awarded termination pay to the employee under the Act calculated on the basis of the complainant’s earnings in the 12-week period immediately preceding the termination, but declined to find a reprisal in the circumstances.
The background to the case is not complicated.
On April 8, 2011, there was a heated argument between the owner of the restaurant and the applicant in which the owner acknowledged using inappropriate language. On April 9, 2011 the owner informed the applicant that his hours were being reduced by 50% for one week as discipline for not following his direction.
The complainant informed the owner on April 13, 2011 that he had filed a human rights complaint and a complaint under the Act with the Ministry of Labour in respect of payment of overtime.
The complainant testified that:
…. the following week, until the termination of his employment his schedule was reduced from working three evening shifts to working two shorter dinner shifts. [the applicant] provided copies of the restaurant’s schedule which corroborated his testimony. [the applicant] testified that he supplemented his hours by picking up additional shifts from other members of the staff.
The company paid the overtime claim in July 2011 and appears to have had some discussion with the Officer about terminating the complainant’s employment and the timing of a termination. Following the resolution of the overtime claim, the complainant kept threatening “that he would make further claims against the restaurant”.
The incident that ultimately gave rise to the case was summarized by the Board as follows:
[The appliant] planned to take vacation time during the first week of August 2011. [The appliant] testified that he followed the restaurant’s usual practice of requesting vacation by leaving a note on the schedule for the manager .... Following his vacation when [the appliant] called the restaurant to inquire what his schedule was for the following week, he was told that [the owner] had erased [the appliant's] name from the schedule. [The appliant] was provided with an undated letter which stated “Your services at Il Gabbiano are no longer need (sic) with us.”.
The employer took the position that the complainant was terminated for having taken vacation after the request had been denied.
Following the termination, the complainant testified that he found other employment between August 2011 and December 2011 and then collected employment insurance until August 2012.
The complainant appealed the Officer’s decision to the Board. There were two (2) issues before the Board:
- Had the employer engaged in a reprisal contrary to section 74 of the Act; and
- Should the award of termination pay be increased since it was based on the fact that the complainant’s hours had been decreased in the 12 weeks prior to the termination.
As noted above, the Act specifically places the onus on the employer of establishing that the conduct complained of was not a reprisal.
The employer’s position was that the 50% reduction in shifts following the April 2011 altercation was a disciplinary response and that the ongoing reduction in shifts and the termination of the complainant’s employment was due to a decline in business.
However, the Board was concerned as the employer had also testified that the complainant’s employment was terminated because he went on vacation without permission and, further, that he had discussed with the Officer the possibility and timing of a termination.
The complainant noted that he had followed the usual procedure regarding the taking of vacation and that he never spoke with the owner and, of course, the employer never denied his request to go on vacation.
In addition, the timing of the decision (possibly more than anything else) was of concern to the Board:
[The appliant's] employment was terminated approximately two weeks after the employer settled [The appliant's] initial MOL claim for overtime pay. [The owner] testified that the [Officer] had told him that [The appliant's] employment could not be terminated until the MOL had concluded its investigation.
In assessing whether the conduct amounted to a reprisal, the Board confirmed that if any part of a decision “was made as a result of the employee engaging in a protected activity, then the decision is tainted and a violation of the Act will be found”.
While the Board did not discuss this, the Ministry of Labour Policy and Interpretation Manual has adopted a four-part test for determining if a reprisal has taken place:
Step 1. Is the person alleged to have committed a reprisal the employee's employer or a person acting on behalf of the employee's employer?
Step 2. Did the employer or person acting on behalf of the employer intimidate, dismiss or otherwise penalize or threaten to intimidate, dismiss or otherwise penalize the employee?
Step 3. Did the employee engage in any of the protected activities set out in clause 74(1)(a) or was the employer required by a court order or garnishment to pay an amount owing to the employee over to a third party as described in clause 74(1)(b)?
Step 4. Did the employer or person acting on behalf of the employer intimidate, dismiss or otherwise penalize or threaten to intimidate, dismiss or otherwise penalize the employee because he or she engaged in the protected activities described in clause 74(1)(a) or because of a situation described in clause 74(1)(b)?
The Board found that the employer had engaged in a reprisal and awarded damages for the period between the complainant’s termination and the date on which he secured other employment. However, since the applicant found work immediately after his termination, he suffered no loss and no damages were awarded.
The Board awarded the complainant $3,248.50 representing compensation for “loss of opportunity of continued employment”.
The Board declined to award any damages for out-of-pocket expenses and emotional pain and suffering because of a lack of evidence.
The Officer awarded termination pay calculated based on the complainant’s earnings in the 12 weeks prior to the date of termination. The earnings had been reduced by reason of the cut in hours.
The Board held that “ Mr. Mucollari’s termination pay should be based on his schedule prior to the reduction in his hours. The employer should not be allowed to benefit from his reprisal by illegally reducing Mr. Mucollari’s hours and then having termination pay calculated on those hours.”
The applicant should have received $2,702.76 representing termination pay and vacation pay thereon. From this was deducted what he had already been paid and the Board found that he was entitled to a further $1,320.47.
Timing can really swing the decision-making pendulum in one direction or another. The Board, in the recent case of Frances Eleanor Elie v. Rainone Construction (2007) Limited and Director of Employment Standards, (2013) CanLII 14073 (ON LRB) put it this way:
A termination that follows shortly after an employee’s engagement in a protected activity under the Act raises suspicions.
No question that timing and optics are critically important here as elsewhere in employment law. That being said, timing is not determinative and the suspicion can be rebutted through clear evidence that the decision to, for example, terminate, had nothing to do with the section 74 elements.
In any termination or discipline case the employer should be able to answer the following questions:
- Why are we terminating?
- Why this employee?
- Why now?
Objectively, dispassionately and honestly answering these questions before implementing the decision, can help avoid some heartache if challenged.
Employers are always advised to proceed with care and thought when dealing with any employment situation, but especially where there are factual complexities present. While the damages awarded in Mucollari might seem small, that was because the applicant found work almost immediately after being terminated. There is broad remedial authority under the reprisal provisions that can be significant.