In the Superior Court of Ontario decision Incognito v. Skyservice Business Aviation Inc., 2022 ONSC 1795, Justice Vermette held that there is no independent tort of sexual harassment, and it cannot be a standalone cause of action in a lawsuit. The Judge also stated that a corporation cannot be held “vicariously liable” for sexual harassment perpetrated by an officer or employee pursuant to the Ontario Human Rights Code (the “Code”). Those complaints are to be brought against the individual who committed the harassment.

Background

The defendant, Skyservice Business Aviation (“Skyservice”), facilitates private flight operations. The plaintiff, Maria, sued for sexual assault and sexual harassment. Among other things, she alleged that she was subjected to a sexually charged work environment; that  the Vice President of Sales sexually harassed and sexually assaulted her; that a Director of the Company had made inappropriate comments about her breast size; and that she allegedly complained to “senior management” about sexually suggestive comments by a client, but that the Company failed to take any action, and rather, told her that “[she] should go out with him. He is rich.” She further alleged that the Company knew and failed to provide her with a work environment free of gender-based discrimination and harassment and failed to ensure that her complaints were properly investigated.

Skyservice brought a motion to strike Maria’s claim of the company’s vicarious liability for the sexual harassment she alleged. Skyservice argued that vicarious liability for sexual harassment is not a recognized tort in Ontario and the court thereby did not have jurisdiction, and the claim should thereby be struck. It further argued that it could not be held vicariously liable for sexual harassment under the Code. 

Maria argued that a recent court decision left the door open for the possibility of a tort of harassment in certain contexts, and that considering the “Me too” movement, there would be a good policy reason to recognize the tort.

The Decision

Justice Vermette held that the Code expressly excludes employers being subject to “vicarious liability” for sexual harassment. Section 46.3 of the Code, states in part as follows:

46.3 (1) For the purposes of this Act, except subsection 2 (2), subsection 5 (2), section 7 and subsection 46.2 (1), any act or thing done or omitted to be done in the course of his or her employment by an officer, official, employee or agent of a corporation….shall be deemed to be an act or thing done or omitted to be done by the corporation….

She went on to describe the jurisprudential history of the tort of sexual harassment. The court has held that no such tort is recognized and cannot be an independent cause of action in Ontario. The Code already exists to address these allegations and remedies. 

The plaintiff did not allege that controlling minds of the company were directly responsible for the harassment. The plaintiff’s sexual harassment claim was struck. However, the court noted that, despite the Code prohibition on vicarious liability, Maria could amend her pleadings to advance her claim for monetary compensation on different grounds.  

But Employers Can Still Be Liable for Workplace Sexual Harassment by an Employee, Officer, or Director

The decision should not be taken as a blanket rule that employers cannot be liable for sexual harassment committed by an employee, officer or manager.  

It is difficult to reason, from a public policy or remedial perspective, that an employer is vicariously liable for acts of sexual discrimination, but not for sexual harassment.  Sexual harassment by its very nature is a form of (sexual) discrimination. 

The Supreme Court in Janzen v. Platy Enterprises Ltd., [1989] 1 SCR 1252   (quoting from La Forest J. in 1987 CanLII 73 (SCC) | Robichaud v. Canada (Treasury Board) | CanLII (“Robichauld”)) held that remedies under human rights legislation should not be aimed at determining fault or punishing conduct. It is remedial. Its aim is to identify and eliminate discrimination. If this is to be done, then the remedies must be effective, consistent with the “almost constitutional” nature of the rights protected. 

In Robichauld, the Supreme Court clarified the remedial objectives of human rights legislation would be “stultified” if its remedies were not available as against the employer in connection with workplace sexual misconduct.

Notwithstanding section 46.3 of the Code, an employer can be held liable for harassment committed by an employee if it creates a poisoned work environment, which is considered discriminatory conduct in violation of section 5 of the Code.  Otherwise, a corporation may be liable pursuant to the “organic theory of corporate liability” under the Code.  The organic theory of liability means an organization may be liable for acts of sexual harassment carried out by its employees if it can be proven that management was aware of the harassment, or the harasser is part of the management or “directing mind” of the organization. According to the Ontario Human Rights Commission, the decisions, acts, or omissions of the employee will engage the liability of the organization where:

• The employee who is part of the “directing mind” engages in harassment or inappropriate behaviour that is contrary to the Code; or
• The employee who is part of the ‘directing mind” does not respond adequately to harassment or inappropriate behaviour of which he or she is aware, or ought reasonably to be aware;

Holding an employer  liable under the Code for sexual harassment committed by an employee is consistent with the broad remedial purposes of the legislation.  Employers have a statutory obligation to maintain a work environment free of sexual discrimination and sexual harassment. The ultimate responsibility for a healthy and inclusive environment rests with employers. The remedial purpose of the Code is intended to place responsibility for an organization on those who control it and are in a position to take effective action to remove harassment and discrimination from the workplace.

Takeaway

Care should be taken when drafting a claim to ensure that claims are adequately pled.   Organic theory of liability should have been but was not specifically argued or addressed in this  decision, nor was it pled by the Plaintiff.  There were factual allegations in her statement of claim, which if true, would have arguably supported liability by the Company on the basis of an organic theory of corporate liability or otherwise, that the individuals were directing minds of the Company. 

Contact Us

If you are dealing with a sexual harassment situation in the workplace or are responding to a complaint, you should reach out to the lawyers at JPAK for advice on your legal rights and obligations.

Contact us at info@jpakemploymentlaw.com or here.