March 29, 2018
We updated this publication on March 11, 2020.
The #metoo and #timesup movements drove workplace sexual harassment to the front and center of employers’ – and employees’ – minds. The March 11, 2020 sentencing of movie mogul Harvey Weinstein to 23 years in prison for rape and criminal sexual act (a mere 3 days after International Womens’ day) is helping to keep it there. But workplace sexual harassment isn’t a new issue: 30 years ago, the Supreme Court of Canada, in the landmark case of Janzen v. Platy Enterprises, decided workplace sexual harassment is a form of sex discrimination in employment and violates human rights laws. And the latest numbers make it crystal clear: workplace sexual harassment remains one of the most significant workplace issues employers face. The many forms and frequent “invisibility” of workplace sexual harassment and its victims’ fears of reporting it can make it challenging for employers to prevent and effectively respond to it; yet this is exactly what the law demands they do. The scope, the effects – and the legal, financial liability and business risk exposure – of workplace sexual harassment make it an issue employers simply can’t ignore.
It’s time for employers to act to address workplace sexual harassment. Here’s a five-step risk mitigation plan to help employers minimize the growing legal, financial liability and business risks of workplace sexual harassment.
No employer wants to admit sexual harassment either could or already has happened in their workplace. But employers need only see, hear or read the daily news to know that workplace sexual harassment isn’t limited to the entertainment – or any – industry: there have been publicized reports of sexual harassment in sectors ranging from the hospitality to the tech start-up to the political sectors. And that it’s not just a U.S. issue: it’s happening around the world – including in Canada. The latest numbers showing the shockingly frequent incidence of workplace sexual harassment and violence should confirm that workplace sexual harassment can happen – and probably has – in many Canadian workplaces.
These numbers also confirm what many already believed: women aren’t the only targets of workplace sexual harassment – but they are the primary target.
Employers’ legal, financial liability and business risk exposure for workplace sexual harassment is high. And as more employees become aware of their rights and comfortable speaking up about sexual harassment they experience – and rightfully so – that exposure is only getting higher. These risks warrant equally high-level attention: have a board member or committee take the issue of workplace sexual harassment on as an important and a priority project, and back them up by allocating the necessary resources to get the job done.
If the scope of workplace sexual harassment hasn’t been an eye-opener for employers, the legal liability exposure should be. The law has recognized the effect of workplace sexual harassment by imposing legal obligations on employers to take steps both to prevent it and to act when it does occur.
Occupational Health & Safety (OHS) Laws. All provincial and federal OHS laws oblige employers to take reasonable precautions (or some variation of this wording) to maintain a safe and healthy workplace for all employees. This is now generally accepted to encompass both psychological and physical safety, even if it’s not explicitly stated. And it’s trite to state a workplace in which sexual harassment occurs is neither psychologically nor physically safe. A number of OHS laws expressly deal with workplace sexual harassment and violence, prohibiting them and mandating provincially regulated employers to take specific steps to prevent and/or respond – and that number is growing. For example:
Human Rights Laws. Harassment on the basis of a ground protected by human rights laws amounts to discrimination on that ground. Canadian human rights laws universally expressly prohibit employers from both refusing to employ and refusing to continue to employ anyone on a discriminatory basis, or discriminating in any employment term or condition based on “sex” – and it’s long-settled that sexual harassment constitutes discrimination on the basis of sex. This protection is broad: in December 2017, the Supreme Court of Canada (in British Columbia Human Rights Tribunal v. Schrenk) confirmed what many employment law lawyers already believed: the human rights law obligation of a “person” not to discriminate in employment prohibits discrimination against employees whenever that discrimination has a sufficient connection to employment; it’s not limited to discrimination by their superiors. Similar to OHS laws, many human rights laws, such as the Ontario Human Rights Code, now also expressly prohibit workplace sexual harassment; against whom that protection extends depends (as in any case) on the wording of the law. However, decision-makers interpret human rights laws as broadly as they can.
Employment Standards Laws. Employment standards laws in each province and federally set the minimum standards for employment rights. Again, like OHS and human rights laws, many expressly prohibit workplace sexual harassment and impose obligations on employers to make “every reasonable effort” (or words to this effect) to ensure no employee is subjected to it, mandating steps employers must take to prevent and respond to workplace sexual harassment.
Criminal Law. The Criminal Code makes sexual assault an offence, and defines it very broadly to encompass a wide scope of conduct that can range from threats to rape. In addition to the offence of sexual assault, however, Criminal Code section 217.1 imposes a legal duty on anyone and everyone who directs the work of others, “to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task” – and imposes personal criminal liability on people who fail to meet that duty. The genesis of section 217.1 is the 1992 Westray, N.S. mine disaster. To date, section 217.1 hasn’t been applied in the context of workplace sexual assault. But what if: the employer directs an employee to participate in a social function(s) as part of their job duties; knowing there’s alcohol available and widely consumed; perhaps knowing there’s a history of questionable conduct at the function; perhaps without taking steps to ensure the employee knows they can, or with a means to, leave (like a taxi chit, for example) if they feel exposed to sexual misconduct … and a sexual assault occurs? In the current climate, employers can expect the law to develop, and for employees and Crown prosecutors to push to extend both protections against and consequences for workplace sexual assault – such as applying section 217.1.
Employment Contract. A safe and harassment-free workplace is an implied term of every employment contract – and every employer has an employment contract with every employee, whether it’s in writing or not.
Collective Agreement. The legal obligations imposed under OHS, human rights and employment standards laws are incorporated into every collective agreement, whether or not the agreement expressly says so. Collective agreements often expressly include anti-discrimination and harassment prohibitions and obligations in addition to – and more onerous than – those the laws impose. And arbitrators have also recognized it as an implied term of every collective agreement that supervisors must exercise their authority in a non-abusive, non-harassing manner.
Financial Liability Risks
These legal obligations create legal – and financial – liability if the employer fails to address workplace sexual harassment at all, or does so inadequately. Regardless of the avenue an aggrieved employee chooses to pursue, and there are many options, the employer will incur the legal and other financial costs of dealing with the issue – and the legal and financial risks of the outcome.
Monetary Compensation. Decision-makers that have found employers liable for workplace sexual harassment haven’t hesitated to award the victimized employee financial compensation. Depending on the particular facts and on the forum, the monetary awards compensate the victim for: past and future wage loss; general damages (compensation for pain and suffering); specific losses, such as intentional infliction of mental suffering or assault; aggravated damages (in the context of employment law, often relating to the manner in which the employer dismissed the employee); and punitive damages (a monetary award intended to punish the wrong-doer rather than to compensate the victim).
Monetary Fines. Many regulatory laws and the Criminal Code authorize relevant authorities to impose fines against corporate offenders and, in some cases, the perpetrator and/or corporate officers and directors, managers and supervisors – personally.
Jail Time. Some regulatory laws and the Criminal Code also authorize the imposition of jail time on individuals.
An employee who suffers workplace sexual harassment can seek redress from their employer, the person who perpetrated the harassment and/or the perpetrator’s employer, through several avenues – but these avenues aren’t necessarily mutually exclusive. Depending on the circumstances, an employee could pursue one or more of them concurrently or consecutively.
Workplace harassment policy complaint. If the employer has an internal harassment policy, a harassed employee could lodge a compliant against the alleged perpetrator under it. But many employees choose not to pursue this avenue at all, or to pursue it as but one of a multi-pronged approach. The main reasons: fear of retaliation and of not being believed, and a lack of consequences for the harassers, according to Newsweek’s October 2017 article, How Human Resources Is Failing Women Victims Of Workplace Sexual Harassment (that, notably, cites an example from New Brunswick, Canada). Another factor could be the limited remedies that internal harassment policies offer the harassed employee: it’s unlikely that an employer will offer financial compensation for any pain or other losses they might have suffered as a result of the harassment.
OHS, human rights or employment standards law complaint. The employee could lodge a complaint against the alleged perpetrator (depending on the wording of the law and the relationship between the perpetrator and the complainant), their own employer, or both, with the relevant regulatory authorities under any (or more than one) of the laws, simultaneously or consecutively, and either contemporaneously with, before or after a workplace policy complaint. Filing a complaint typically triggers a process by the relevant regulatory body entailing notice to the accused and the employer, an investigation, a conclusion and consequences. Human rights and employment standards laws are, in large part, “remedial” rather than “punitive”: their primary purpose is to cure the harassment, not to punish the perpetrator (or the employer, its officers, directors or managers). However, most OHS laws impose obligations – and liabilities – on not just a company but also its directors, officers and supervisors, typically authorizing the imposition of personal fines and jail time.
Criminal complaint. The employee could choose to involve police and lodge a criminal complaint against the perpetrator for sexual assault – and this could also lead to criminal charges against the victim’s employer (i.e. the company) and its officers, directors and supervisors personally, under Criminal Code section 217.1. In the case of a company a court finds guilty, the Code authorizes the imposition of fines; but convicted individuals who violate section 217.1 are exposed to personal fines and to jail time.
Civil Lawsuit. An employee can sue both the harasser, whether that’s a co-worker, a customer, a supplier, or otherwise, as well as its own employer (and the harasser’s employer, if the harasser isn’t a co-worker) in a civil court of law.
The key reasons an employee might pursue a civil lawsuit instead of, or in addition to, a criminal complaint or other avenues are:
Grievance. Unionized employees don’t necessarily have the option of suing their employer, but they can grieve an incident of sexual harassment under the relevant collective agreement whether or not it includes a specific term(s).
In addition to direct monetary consequences, there are business risks and related costs to employers that don’t deal with sexual harassment at all, or properly.
Reputational Damage. In today’s age of “metoo” and social media, harassment victims are taking to publicly naming and shaming the alleged harassment perpetrators – and often, their employers. Any legal action can be highly publicized, but workplace sexual harassment cases often are. Workplace sexual harassment can cause employers immense reputational – and often resulting financial – consequences.
Opportunity Costs. Workplace sexual harassment and harassment complaints cost management time. And they have a significant negative impact on all of targeted employees, their co-workers and managers. Effective prevention and response to sexual harassment reduces staff turnover and fosters a more productive and healthy work environment, all of which can generate significant cost savings. Targeted employees experience effects including: impaired concentration or decision-making ability; distress, anxiety, sleep disturbances, substance abuse and/or suicidal thoughts or actions; and physical illness. These lead to reduced work performance and lack of attention when working, and thus safety hazards, increased employee absenteeism and ultimately higher employee turnover. And these negative effects typically extend far beyond the targeted individual(s). Employees in a workplace in which others are subject to sexual harassment or in a “poisoned work environment” (one in which an ongoing culture of sexualized, discriminatory and harassing behaviours is pervasive) can experience negative consequences similar to those the target experiences despite not being the target themselves.
Once you understand your obligations, assess your current situation to determine both the risk exposure of your employees to sexual harassment and of the employer’s financial exposure for any workplace sexual harassment.
Risk Assessment. The OHS and other laws of some provinces expressly require employers to undertake a risk assessment in relation to workplace violence; some also require workplace harassment risk assessments. Regardless of whether a risk assessment is expressly mandated by law, it’s prudent for every employer to undertake one.
Financial Risks. As part of their risk assessment process, employers should also consider whether and what steps they’ve taken to mitigate their financial exposure in the event of a workplace sexual harassment or violence claim against it. For example, employers should carefully assess their situation with their insurance broker: insurance coverage for workplace sexual harassment claims by employees and others against the employer, its employees, directors and officers is often available – and advisable.
An employer’s best defence to the liability risks of workplace sexual harassment is preventing it from happening in the first place. Failing that, the best defence to a workplace sexual harassment incident is by properly responding, handling and resolving it. And failing that, the best defence to a legal claim, regardless of its nature (whether a regulatory complaint, a criminal charge or a civil lawsuit) is proof the employer took reasonable steps to prevent it from happening and responded to it properly. A well-drafted, effectively implemented and consistently enforced workplace sexual harassment policy is the lynchpin to achieving all of these objectives.
The basic principles of developing and implementing enforceable workplace policies apply equally to a workplace sexual harassment policy. But as with any significant workplace policy,when developing, implementing, enforcing and refreshing a sexual harassment policy there are nuances to which the employer must pay particular attention, including:
Consultation. A workplace sexual harassment policy is one area in which employers can benefit significantly from legal consultation and advice, as well as consultation with workplace sexual harassment experts and workplace stakeholders, in particular the occupational health and safety committee and the union (if a unionized workplace).
Drafting. When reviewing or writing a sexual harassment policy, pay close attention to these elements:
Manager & Supervisor Training. Employers are entitled to rely on managers and supervisors to comply with and to enforce a sexual harassment policy – but sufficient training is absolutely necessary to do so. And because of the insidious nature and the significant liability risks of sexual harassment, managerial and supervisory training is arguably most effectively delivered by external trainers, in a substantive depth, ideally including sessions by each of a legal, workplace and health professional with relevant expertise, customized to the workplace and the policy.
Employee Training. For the same reasons, a sexual harassment policy warrants stand-alone, specific and in-person employee training. Again, consider whether it’s most effective for an internal person to deliver this training, or if the circumstances warrant engaging an external expert to do so.
Policy Prosecution. Consistent, immediate and decisive enforcement of the sexual harassment policy is critical: seeing is believing for both complainants and potential perpetrators. Angus Reid’s #Metoo: Moment or movement reports that of the approximately 25% of employees who said they reported an incident of sexual harassment or assault, only about 9.5% said their employer was both responsive and took appropriate action; the remainder said their employer was responsive but didn’t take any concrete action, or was both dismissive and didn’t take any concrete action.
The limitation period (the maximum amount of time in which legal action can be taken after an incident has occurred) for a civil lawsuit varies by province. Many civil lawsuits are subject to a limitation period; for example a breach of contract lawsuit might be subject to a two-year limitation period. But in many provinces, there’s no limitation period for a civil lawsuit based on sexual misconduct, though the scope of misconduct exempt from any limitation period varies. Similarly, there’s no limitation period in Canada for serious (i.e., “indictable”) criminal offences, which can include sexual assault. The lack of a limitation period means workplace sexual harassment incidents have a long life – and could come back to haunt employers many years after they occur. It’s imperative that the employer be in a position to prove what happened, what it did, and that it acted diligently at the time – at any time, maybe even years later. To do so, employers must ensure they document everything about their actions and those of their employees in relation to workplace sexual harassment, and that they implement a system to collect and to maintain such documentary evidence in a secure and confidential manner. This includes detailed, legible and dated documentation of:
Please contact your McInnes Cooper lawyer or any member of our Labour & Employment Law Team @ McInnes Cooper to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
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