Work Place Post

Employer's Failure to Act Constitutes Discrimination Says BC Court

On January 12, 2010, the Supreme Court of BC upheld a 2008 decision of the BC Human Rights Tribunal, in which the employer was found to have discriminated against one of its former employees, based on lack of action to deal with a 'poisoned work atmosphere' created by another employee. The decision of Kinexus Bioinformatics Corp. v. Asad is based on some interesting facts and provides some useful lessons for employers.

Mr. Asad had been employed by Kinexus for approximately a year when the events of September 11, 2001 occurred. Mr. Asad's place of origin is Saudi Arabia and he was Muslim. Prior to September 11th he had enjoyed a good relationship with his employer and fellow employees however, one of Mr. Asad's colleagues, Ms. Stoute, developed an unfounded suspicion that he was a member of the group responsible for the attacks on New York and Washington, D.C. Ms. Stoute reported Mr. Asad to the RCMP, who attended at the workplace and questioned Mr. Asad. After some further investigation, the police decided that the report was baseless and closed the file.

Management representatives of Kinexus did not know that Ms. Stoute had contacted police until after the RCMP attended at the workplace. In fact, the Human Rights Tribunal found that Ms. Stoute had made the report on her own time, outside of the workplace. Ms. Stoute subsequently disclosed to Kinexus that she had reported Mr. Asad, but asked that her identity as the person who reported Mr. Asad not be disclosed. According to the evidence at the Human Rights hearing, Mr. Asad was traumatized by the police investigation; he repeatedly asked Kinexus to disclose the identity of the person who had reported him.

The Tribunal found that Kinexus management failed to provide Mr. Asad with a safe and healthy work environment by failing to take steps to address the suspicions that Ms. Stoute and other employees held about Mr. Asad, and by mistakenly deciding that Ms. Stoute's complaint was a police matter rather than an employment matter. Thus, while their discrimination was not intentional, Kinexus management was found liable for damages based on the fact that their inaction contributed to the poisoned work environment, and because they did not take any positive steps such as issuing a memorandum or other statement to the effect that the RCMP had closed its investigation, that no charges were laid against Mr. Asad, and instructing employees to treat Mr. Asad as an innocent person. The Tribunal found that by leaving Mr. Asad to "fend for himself", the employer's failure to act amounted to discrimination under s. 13(b) of the BC Human Rights Code.

Unfortunately, Mr. Asad's relationship with Kinexus continued to deteriorate until Kinexus terminated him for cause 18 months later. The Tribunal agreed with Kinexus, however, that its reasons for terminating Mr. Asad's employment were not based on discriminatory reasons. While the damages awarded to Mr. Asad for the discrimination were not large ($6,000 for injury to dignity, plus costs of $5,000) it was noted that the award would have been much higher if the statutory limit to damages for injury to dignity had not been $7,500 at the time of the complaint. Further, the costs to Kinexus to do the initial hearing would have been very large, given the hearing lasted 26 days over a six month period.

Thus, the important lesson from this decision is that whether or not the source of the conflict originates in the workplace, employers have a positive duty to take steps to alleviate the situation, and not leave it up to the 'injured' worker to sort things out.

Nicole Byres

West Bay – Can a claim for wrongful dismissal proceed once the employer has obtained protection under the CCAA?

West Bay SonShip Yachts Ltd. (Re) 2009 BCCA 31

On this appeal, Mr. Esaw, a long term employee of West Bay, had commenced a claim for wrongful dismissal upon his termination from the company shortly after West Bay obtained protection under the Companies Creditors Arrangements Act ("CCAA"). Mr. Esaw did not file a proof of claim and took the position that his claim for wrongful dismissal ought not to be compromised by the plan of arrangement. Mr. Esaw's reasoning was that the claim for damages for breach of his employment contract did not accrue during the course of his employment but only arose when he was terminated. Therefore, West Bay had no liability, contingent or otherwise, until the termination of employment which occurred after West Bay sought protection under the CCAA. Thus, the claim for damages could not be compromised by the plan.

West Bay argued that, while the right to bring the claim for wrongful dismissal may not have crystallized until notice of termination was given, the company's obligation to pay severance was in existence, either in whole or in part, as of the filing date for protection under the CCAA. Thus, the claim is a "pre-filing" claim and is compromised by the plan.

The Court of Appeal determined that, while the claim was not a pre-filing claim, it was nonetheless captured by the plan of arrangement. The ongoing employment contract was an executory contract as there were obligations on both parties that were yet to be completed. Accordingly, the claims for damages for breach of the executory contract fell within the definition of "claim" in the plan and Mr. Esaw's claim was subject to the plan of arrangement. Accordingly, Mr. Esaw's wilful failure to file a proof of claim disentitled him to participate under the plan of arrangement.

John Fiddick