Friday, October 3, 2014

Divisional Court Upholds Reinstatement Remedy - A Decade Later

There's a new decision out of the Divisional Court, Hamilton-Wentworth District School Board v. Fair, on a judicial review application from the Human Rights Tribunal of Ontario.

The upheld a decision by the HRTO reinstating Ms. Fair, with back pay retroactive to her termination 2004.

This has gotten some media attention in the last few days, because it's so unusual and such a significant sum of money.


This is a case with a long history.  Ms. Fair was employed as a Supervisor, Regulated Substances, Asbestos.  In 2001, she developed generalized anxiety disorder (and later depression and PTSD), in connection with job stress.  She received LTD benefits for a time, which terminated in April 2004.  On July 8, 2004, the school board determined that it could not accommodate her disability, and terminated her employment.

In November of 2004, Ms. Fair made a complaint to the Ontario Human Rights Commission.

As a sidebar, it's important to understand that this was prior to important amendments to the Human Rights Code.  At that time, the process meant that you first complained to the OHRC, which would investigate the complaint and determine whether it warranted a referral to the Tribunal.  There were a number of problems - perceived and real - with that process, and the Commission developed a backlog inconsistent with the purposes of the Code.  So the legislature amended the Code and created what we call a "direct access" model - as of July 2008, if you think your human rights have been violated, you file an application directly with the Tribunal.

However, the question remained as to what to do with the Commission's backlog, and the answer was to create a couple of transitional streams for these issues:  Basically, if you had a live complaint before the Commission, you had until June 2009 to convert it to a transitional application to the Tribunal.  The Tribunal assigned a lot of resources, and created an entirely different set of procedural rules, just to get through this backlog.

Therefore, in 2009, Ms. Fair turned her complaint into a transitional application.  The application form asked her what she wanted, and she sought reinstatement.  This is apparently the first time she indicated that she wanted reinstatement, but the complaint form to the commission apparently didn't require her to specify the remedy being sought.  (It's been a very long time since I've seen one of those forms; I'm unable to independently verify that.  It's also not entirely clear to me whether she would have used the 'self-draft' complaints the Commission started using in October 2004, or an older questionnaire.)

So there's the employer, five years after dismissing her, and suddenly she's seeking a reinstatement remedy.  The important thing to know about reinstatement is that, in the human rights context, it's almost certain to come with full back pay.  In a moment, the school board's monetary exposure expanded exponentially, not to mention the difficulty it might expect to have placing her.

It still took until February 2012 to get a decision on liability - i.e. whether or not the board had discriminated against Ms. Fair - and until March 2013 to get a decision on remedy.  Not particularly ridiculous in terms of legal proceedings generally, but rather slower than the HRTO should be moving.

The HRTO's Decision

The decision on liability is here, and the decision on remedy is here.  In essence, the adjudicator determined that there would have been work positions into which Ms. Fair could have been placed without causing undue hardship, but the employer had failed to make the requisite effort to accommodate her.

On remedy, the Tribunal ordered the school board to reinstate her to "a suitable position", at or equivalent to the level she was at before her dismissal.  The board argued that the passage of time made the reinstatement remedy unfair, but the Tribunal noted that most of the delay wasn't the applicant's fault.  (Not really the board's fault, either - it was a failure of the system itself.)

In terms of back pay, she had made some casual and part-time earnings, but not much, so as of the liability decision date (March 2013), the retroactive back pay was calculated at nearly $420,000(!!!), plus pension and CPP adjustments and compensation for lost medical benefits, and a gross-up for tax, which again is an absolutely huge sum - basically it means that she needs to get the after-tax income she would have received over all those years, despite the fact that she'll be at the very highest marginal tax rate for the year in which she receives the lump sum.

The Judicial Review Application

I received a copy of the Divisional Court's reasons earlier this week, but they were just posted today on CanLII.

The Divisional Court does not hold hearings de novo for such matters.  They aren't going to listen to much, if any, evidence, nor decide which side they believe.  Their job is to decide whether or not the adjudicator made a mistake, and adjudicators are entitled to a lot of deference.

The school board made arguments about sufficiency of reasons, and that the adjudicator's findings were unreasonable in the circumstances.  That's a tough sell to make, most of the time, and the Divisional Court didn't accept it.

The board also argued that the adjudicator shouldn't have allowed her to seek a new remedy of reinstatement - but the fact that she wasn't required to specify the remedy sought in the old process was a full answer to that.

The other argument by the board is, perhaps, the most interesting:  That there was a reasonable apprehension of bias.  The HRTO's hearings are not generally recorded (a fact for which the Ontario Court of Appeal has already chastised them), and there was a disagreement as to something the adjudicator said.  The employer alleged that, at the start of the hearing on remedy, the adjudicator asked if the Board would place Ms. Fair in a senior labour relations role; the Board answered no, and the adjudicator allegedly responded to the effect that she "would write a decision and that the lack of a position would be no excuse for no reinstatement".  (That quotation is from the Divisional Court's description of how the employer's counsel paraphrased it.)

However, in her decision, the adjudicator made it very clear that her caution had been to the effect of what the case would be if (not when) she decided reinstatement was appropriate.  This does not suggest a closed mind.  (Likewise, there was another case recently where a Deputy Judge was accused, unsuccessfully, of bias after encouraging parties to engage in settlement discussions because he was prepared to decide the issue but they may or may not like his decision.  It is a well-recognized reality that adjudication is a hammer that doesn't really allow for the kinds of creative and mutually beneficial settlements parties might be able to craft on their own.)


This is an interesting case.  There aren't many cases dealing with reinstatement at the HRTO, and the transitional applications aren't really supposed to have much precedent value, but a Divisional Court decision upholding the reasonableness of such a decision...will be harder to ignore.

Of course, with stakes this high, it would be really surprising if the school board didn't seek to appeal this further, which will take more time.  In that time, they're still presumably not reinstating Ms. Fair, and their liabilities continue to grow - assuming that they aren't ultimately successful.  Of course, now that they're into the civil courts, there are possible cost consequences, too - whichever party is ultimately successful will likely be entitled to a contribution to their legal fees through the judicial review application and appeals therefrom.

Ultimately, however, while this case does illustrate how badly the system needed to be changed, I'm not sure it's a particularly flattering reflection of the new system, either.  Justice delayed is justice denied - let's assume that she's ultimately successful in another year and a half or so (could be less, could be more), and gets reinstated some 12 years after the termination.  Because of systemic delay, that's 12 years she's been without steady employment, 12 years of wages that the employer has to pay her, plus probably hundreds of thousands more dollars for the tax gross-up...and as nice as it will be for her to get that lump sum, consider that she'll also be returned to work having been out of the workplace for 12 years.  Her skills will be rusty and probably out-of-date.  People will have changed, systems will have changed, the requirements of the job will have changed.  And her best case scenario is being put back into an equivalent position; that's 12 years of career progress she's lost.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.

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