Honda v Keays: LEAF argues that courts need more complete jurisdiction

Last Wednesday, the Supreme Court of Canada (“SCC”) heard the case of Keays v Honda Canada Inc, 82 OR (3d) 161, a wrongful dismissal case dealing with the appropriate compensation for discrimination and harassment for employees with disabilities. One of the interveners in the case is Women’s Legal Education and Action Fund (“LEAF”). LEAF’s interest in Honda stems from the reality that the decision will have particular importance for women who experience sexual harassment and sex discrimination at work.

The Case

Last week, contributor, Michael Lynk, provided an excellent analysis of many of the issues arising out of this case. To summarize, the case is the result of Honda Canada’s dismissal of Kevin Keays, who is disabled by the invisible condition of Chronic Fatigue Syndrome. At the Ontario Superior Court, Mr. Keays argued that he was dismissed because of his disability and after a period of harassment. He was awarded 15 months of salary in lieu of notice, 9 months in Wallace damages due to the bad faith exhibited by Honda in the manner of dismissal, and a groundbreaking $500,000 in punitive damages. This decision was upheld by the Ontario Court of Appeal, though the amount of punitive damages awarded was reduced to $100,000. Honda appealed the decision to the Supreme Court.
The case is being closely watched by employers and employees alike because of its broad implications for the law surround the duty of accommodate disabilities.

The problem of jurisdiction

LEAF’s factum addresses the fact that Canadian employees who are the victims of workplace harassment are faced with the problem of choosing the appropriate forum to hear their case. If they suspect that the harassment amounts to discrimination, they can take their case to the appropriate human rights tribunal; however, if discrimination is not established, the harassment goes unremedied. Yet, if instead the harassed employee decides to take their case to court, the Bhadauria decision works to prevent the court from explicitly considering the human rights claims in a wrongful dismissal trial. Neither forum offers complete jurisdiction over such a claim. In order to access the full range of remedies, an employee must file their complaint both in court and at the appropriate human rights tribunal, hindering the employee’s access to justice by leading to higher costs, increased complexity and a duplication of work.

The need for an implied ‘non-discrimination’ contractual term

LEAF’s proposed solution to this problem is for the SCC to provide employees with access to courts that have the jurisdiction over all of aspects of the employee’s claim. This can be done by recognizing human rights obligations through an implied ‘non-discrimination’ term in the common law employment contract.
Such implied terms are not a new concept; in fact, the requirement for employers to provide reasonable notice upon termination, which is the basis for a wrongful dismissal claim, is already an implied term of the common law employment contract.

An improved damages analysis

Not only would an implied term of ‘non-discrimination’ provide employees who face harassment and discrimination with a clear forum at court, it would also create “a foundation for providing appropriate remedies, resulting in a more coherent analytical structure for the assessment of damages.” First, intangible or non-pecuniary harms would be compensated through general damage awards. As LEAF states in its factum:

Wrongful dismissal tainted by discrimination goes to the core of an employee’s identity and self-respect. It offends her dignity. General Damages can be awarded in order to compensate the complainant for the intrinsic value of the infringement of rights, and to recognize the right to be free from discrimination and the experience of victimization. It is compensation for injury to dignity and self-respect per se.

Second, Damages for mental distress would be compensated through a head of damages distinct from the general damages. As LEAF’s factum points out:

Mental distress is a major feature of harm done to women by workplace sex discrimination. Sexual harassment, for example, constitutes a form of discriminatory abuse, experienced differently by different women, that can result in women feeling afraid, alienated, demeaned, intimidated, embarrassed, and objectified. This form of harm is not abnormal, it does not constitute a pathology and it does not flow from some inherent weakness in the employee, but from the breach of the implied term and condition of employment of non-discrimination. An implied term of non-discrimination reflects a legitimate expectation of a respectful work environment… Compensation for mental distress flowing from its breach recognizes the harm that results from workplace discrimination, harm that can range from a disruption to the employee’s life and peace of mind, to a shattering of her sense of self and personal security. Extreme situations of harassments can escalate to become life threatening.

Third, the implied term of non-discrimination would also allow for Wallace damages (i.e., damages arising from the bad faith exhibited by the employer in discharging the employee) which require the employee to prove a separate actionable wrong. A breach of the implied term would provide this separate actionable wrong and give the court the foundation upon which to order aggravated or punitive damages.

Last, as LEAF’s factum argues, “the ‘non-discrimination’ implied term applies to the entirety of the employment contract, the damages analysis would not be confined temporally to an assessment of the manner of termination itself, as is the case with regard to breach of the implied reasonable notice requirement.”


It will be interesting to see if LEAF’s arguments resonate with the SCC. If an implied ‘non-discrimination’ term is brought into the common law employment contract, access to justice will be increased by affording courts more complete jurisdiction in employment related discrimination claims and improving the damage analysis in wrongful dismissal claims.

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