



COURT OF APPEAL FOR ONTARIO

CITATION:
Hucsko
    v. A.O. Smith Enterprises Limited, 2021 ONCA 728

DATE: 20211015

DOCKET: C68253

Feldman, Harvison Young and Thorburn JJ.A.

BETWEEN

John Hucsko

Plaintiff

(Respondent)

and

A.O. Smith Enterprises Limited

Defendant

(Appellant)

Jeffrey B. Simpson, Paul Boshyk and Kristen Pennington,
    for the appellant

Pamela Krauss, for the respondent

Heard: April 12, 2021 by video conference

On appeal from the judgment of Justice Gerald E. Taylor
    of the Superior Court of Justice, dated April 22, 2020, with reasons reported
    at 2020 ONSC 1346.

Feldman J.A.:

A.

Introduction

[1]

The appellant employer, A.O. Smith Enterprises Limited, terminated the
    employment of the respondent employee, John Hucsko, for just cause following an
    investigation into a complaint made by a female co-worker, the complainant, regarding
    four inappropriate comments that constituted sexual harassment. Following the
    investigation, the respondent was offered the opportunity to take remedial
    action including sensitivity training, which he agreed to, and to make a direct
    apology to the complainant, which he refused. Following that refusal, the
    appellant terminated the respondents employment for just cause.

[2]

The trial judge found that the termination for cause was not justified, and
    awarded damages to the employee in lieu of 20 months notice.

[3]

For the following reasons, I would allow the appeal. The trial judge
    erred in law by failing to find that the inappropriate, demeaning comments that
    the employee made to the complainant justified the action taken by the
    employer, and that the employees failure to accept the opportunity offered by
    the employer to remediate the situation resulted in an irreparable breakdown in
    the employment relationship that could not be tolerated by the employer.

B.

Facts

[4]

The respondent, a Senior Product Designer, was a 20-year employee with
    the appellant or its predecessor when his employment was terminated on July 25,
    2017. The complainant joined the employer as a Project Manager in 2014. She
    worked with the respondent on a number of projects. The respondent was 62 years
    old at the time of the trial. The complainant was about ten years younger.

[5]

On June 28, 2017, the complainant made a formal complaint to the
    employer through Nodine Kalcic, the Human Resources Manager, in which she
    reported four separate incidents where Mr. Hucsko made comments to her that were
    inappropriate. She included her responses to the comments as well as a
    description of the involvement of Mr. Hucskos immediate superior, Ayman
    Abdel-Rehim, a Product Development Engineering Manager. The formal complaint
    read as follows:

Following is the description of incidents pertaining to
    inappropriate comments/gestures made by John Hucsko:

1.       The day after all managers in the engineering
    department had dinner with Robert during one of his visits, John approached me
    and asked how the dinner was and I told him that it was good, we all had a
    good time and then he asked if I danced on the tables, in response I told him
    that it was an inappropriate comment and walked away

2.       John, myself and Ayman were sitting in Ayman's office
    discussing project progress and I had posed a question that ok so what is our
    step, what do we need to do next in response John said to me that now you
    need to go and sit on Simon's lap and ask him nicely to do (mentioned some
    action items) in response Ayman and I both told him that it was an inappropriate
    comment; I also approached Ayman afterwards and asked him to talk to John and make
    sure he understands that this is his last warning if he doesn't refrain from
    making such comments I will report to HR, as per Ayman he communicated that to
    John; I had also mentioned the incident number 1 to Ayman. I started to keep
    John at one arm distance and so John approached me and asked if everything was
    alright between us and I told him that I did not appreciate his comments and
    that they were inappropriate and requested that he refrains from making such
    comments so as to have a respectful working relationship

3.       Week of June 19
th

I was at John's desk talking
    about manuals and labels for one of our projects and at the end of the conversation
    we spoke a bit about gardening and I said that I finally got the front yard
    done with planting new plants but paid for it the next day and he responded oh
    it's all good any reason for you to bend over and go down on your knees at the
    time I did not say anything and walked away from his desk thinking what did he
    mean because it did not sound right to me, the choice of words the way he said
    it, it just didn't sound right. I had not mentioned this incident to Ayman as I
    wasn't sure about it and then soon after that the incident number 4 happened

4.       On Monday June 26
th

I approached John at his
    desk and told him that he needs to send me the power point presentation for the
    design review that I had scheduled for June 27
th
, in response John
    said that he was about to do that and then he went to Outlook and started
    composing an email to me so he could send the ppt, as he clicked the letter
    "S" in the address field it automatically dropped down a list of
    names of the people starting with the letter "S" and my name was on
    top of the list so I said hey look I am on top of the list and in response he
    said of course you are on top, you are getting pumped from under the skirt
    till you can't stand anymore and he made a multiple thrusting gesture with his
    hips while he made this comment; I at that point was very shocked and
    infuriated by his comment and I walked away from his desk; I did not say
    anything to anyone that day but the next day I approached Ayman and told him what
    John had said, Ayman and I both agreed that we can no longer deal or resolve
    this issue within the team and that it needs to be brought to HR's attention

[6]

In her testimony at trial, the complainant testified about her
    understanding of each of the comments. According to the trial judge, she took
    the dancing on the tables comment as a reference to exotic dancing, the sit
    on lap comment as a reference to lap dancing and flirting with a co-worker,
    the down on your knees comment as a reference to a sexual position, and the
    pump the skirt comment as a reference to a sexual act. The complainant was
    not cross-examined on any of her testimony. As a result, her description was
    unchallenged.

[7]

Mr. Hucsko provided the court with explanations regarding each of the
    four incidents and his statements to the complainant. The dancing on the
    tables comment followed a managers dinner that the complainant, the only
    female manager, had told Mr. Hucsko she did not want to attend, but then when
    they discussed it the following day, she said she was happy she went and that
    everyone had enjoyed themselves. Mr. Hucskos position was that he then asked
    not if she had danced on the tables, but if everyone was dancing on the
    tables, meaning that they had had a lot of fun.

[8]

With respect to the sit on lap comment, Mr. Hucsko testified that it
    arose in a meeting among himself, Mr. Abdel-Rehim and the complainant, where
    she was complaining that she had not received information from another
    co-worker, Simon. Mr. Hucsko said he told her to sit on Simon until he produced
    the information. His intent was to convey that she should pin him down until
    she received the information she needed.

[9]

The third incident occurred when Mr. Hucsko and the complainant were
    discussing gardening. Mr. Hucsko testified that he suggested she use a kneeling
    pad while removing weeds from her lawn. He denied making a thrusting gesture
    with his hips, stating that his chair had become stuck in a rut in the carpet
    in his cubicle, and he was trying to extract the chair from the rut.

[10]

Regarding
    the pump the skirt comment, Mr. Hucskos explanation at trial was that he and
    the complainant were discussing a difficult project that she had managed, and
    that he told her she would be praised for completing successfully. He told her
    that theyre going to pump so much sunshine up [her] skirt, [she] wont be
    able to sit down, a colloquialism taken from a 1970s movie that means to
    praise someone or give them a lot of credit.

[11]

In
    response to receiving the written complaint from the complainant, the employer
    appointed John Weiler, the Director of Finance and Administration, and Ms. Kalcic
    to conduct an investigation. They held a meeting with Mr. Hucsko where they read
    the complainants allegations to him, although they did not give him a copy of
    her written complaint. At that time his response to each incident was:

a)

he did not recall making the dancing on tables comment, but if he did,
    it was a colloquialism about having a good time, and he suggested wording he
    might have used;

b)

he also did not specifically recall the meeting where he was alleged to have
    made the sit on lap comment, but he did not deny making it, and said it meant
    to pin someone down so they couldnt get away, and did not have a sexual
    connotation;

c)

he did not recall the down on your knees comment, but he did not deny
    making it and he confirmed that they did discuss gardening; and

d)

he explained the pump sunshine up the skirt comment was a colloquialism
    meaning to give a person a lot of praise.

[12]

Mr.
    Hucsko suggested that the complainants complaints were motivated by his
    challenging her at a meeting, and suggested other employees to interview, which
    was done. In the investigators interview with Mr. Abdel-Rehim, he confirmed he
    had been present when the sit on lap comment was made, he had told Mr. Hucsko
    that it was inappropriate, but he did not take it seriously enough to report it
    to the human resources department. He also commented that the complainant could
    be sensitive to comments made to her. Another employee confirmed that the
    complainant had been very upset with Mr. Hucsko at a meeting, and commented
    that Mr. Hucsko acted professionally by removing himself from the meeting.
    Another employee was asked if she had witnessed anyone making inappropriate
    comments and responded that she had not.

[13]

The
    investigation also included a meeting with the complainant. She told the
    investigators that she wanted Mr. Hucskos comments to stop and she wanted him
    to recognize that they were unwelcome. She also told them that if Mr. Hucsko
    only received a slap on the hand, she would have to decide whether to resign from
    her position.

[14]

A
    few days after his initial meeting, Mr. Hucsko requested a second meeting with
    the investigators. At that meeting, he explained that the hip thrusting gesture
    described by the complainant was as a result of his chair becoming stuck in a
    rut in the carpet. He also said that he made the dancing on tables comment but
    it was directed at the group who were at the meeting and not at the complainant
    specifically.

[15]

Ms.
    Kalcic inspected Mr. Hucskos work cubicle when he was not present and noticed
    that the carpet was worn, but was unable to locate a rut which would cause the
    chair to become stuck. She also searched the internet and found a reference to
    dancing on tables consistent with Mr. Hucskos explanation that it was a
    colloquialism. Mr. Weiler searched the internet and found a reference from a
    1970s movie about pumping sunshine up ones skirt being a form of praise.

[16]

Following
    the investigation, they concluded that Mr. Hucsko had made the inappropriate comments,
    and met with him on July 10. At that meeting, they gave him the following memo:

TO:             John Hucsko

FROM:        John Weiler

DATE:         July 10, 2017

RE:              Investigation Summary and Final Warning

John,

This summarizes the Companys findings with respect to a female
    employees allegation of sexual harassment due to inappropriate comments you
    made directed to her on at least four occasions.

The Company has conducted an investigation and has concluded
    that you made inappropriate comments. Further, you were specifically advised by
    your supervisor on at least one occasion that your comments were inappropriate.
    Despite this, you continued to make inappropriate comments. This is a very
    serious matter. Your conduct is not acceptable and will not be tolerated by the

Company. The required
    corrective action is as follows:

1. Final Warning  This corrective action memo will-become a
    permanent part of your personnel file. This is a final warning. Should there be
    another instance of inappropriate comments of this nature toward the same
    employee or another employee, it will result in your immediate
discharge.

2. Additional Training  You will be required to participate in
    sensitivity training to familiarize you with the impact your comments have on
    others. The Company will arrange this training and advise you when it is
    scheduled.

3. Apology  You will be required to provide a direct apology
    to the female employee to whom you directed your inappropriate comments. Your
    supervisor and Human Resources Manager will also be present.

Please sign below to indicate that you have received this final
    warning.

[17]

Mr.
    Hucsko did not agree with the investigations conclusions and asserted that he
    had not done or said anything inappropriate to the complainant. He asked for
    time to seek advice, and consulted a lawyer who wrote to the appellant on July
    19. In that letter, the lawyer advised that while Mr. Hucsko was adamant that training
    was unnecessary, he would comply with the additional training requirement set
    out in the investigation summary. However, he was not prepared to issue an
    apology to the complainant admitting to any wrongdoing. The letter continued:

Given the circumstances where the facts are in dispute and the
    complaint is disconcerting to Mr. Hucsko who prides himself on his
    professionalism, it is our position that an apology is not appropriate.

[18]

The
    employer did not respond to the lawyers letter. It suspended Mr. Hucsko, and then,
    on July 25, telephoned him and read a letter that was subsequently delivered to
    him. The letter stated that Mr. Hucskos employment was being terminated for
    cause effective immediately due to an irreparable breakdown in the employment
    relationship based on:

I.

You made inappropriate and vexatious comments to a co-worker, despite
    being advised by both the co-worker and your supervisor that your comments were
    unwelcome and inappropriate. The Company conducted an investigation into the
    matter and found your conduct to be inconsistent with the Companys policies
    related to anti-harassment and respect in the workplace.

II.

Throughout the investigation and following its conclusion you have shown
    no remorse for your misconduct and have demonstrated an inability to recognize
    the seriousness of the matter. Therefore, the Company does not believe that you
    are willing and able to correct your behaviour going-forward.

III.

Your refusal to accept and comply with the Companys decision on
    corrective action constitutes serious, willful insubordination that cannot be
    condoned by the Company.

C.

Findings of the Trial Judge

[19]

The
    trial judge found that although the focus of the trial was about whether the
    employees comments amounted to sexual harassment, it was unnecessary for him to
    categorize the comments because regardless of how they were categorized, they
    did not justify summary dismissal. He found that it was unclear whether the
    employer had concluded that the employees conduct amounted to sexual
    harassment. He also found that the employee was not dismissed for sexual
    harassment but for serious and wilful insubordination, which he said was not
    specified in the termination letter, but which he presumed was a reference to
    an apology to the complainant.

[20]

The
    trial judge noted that the letter did not indicate that the apology could be in
    writing or that the employee could apologize only for a misunderstanding of his
    comments. Mr. Weiler had testified at the trial that such an apology would have
    been acceptable. The trial judge criticized the appellant for failing to
    negotiate the content of the apology with the employee before terminating his
    employment after 20 years of service. He also found that an important factor in
    the appellants decision to terminate was that the employee had consulted a
    lawyer, and that that was not a justifiable reason to dismiss an employee of
    long service.

[21]

In
    coming to the result of the trial, the trial judge found that the employer had
    faced a situation where two employees were in a difficult working
    relationship and the employer was entitled to choose which of the two
    employees it wished to continue to employ. However, [w]hat the [appellant] was
    not entitled to do was create a situation in which it could rely on just cause
    to terminate the [respondents] employment.

[22]

The
    trial judges ultimate finding was that the employees conduct did not justify
    a conclusion that there had been an irreparable breakdown in the employment
    relationship. He went on to calculate the appropriate period of notice and
    awarded damages in lieu of notice.

D.

Issues

[23]

The
    basis of the appellant employers appeal can be broken down into three main issues:

1)

Did the trial judge make a palpable and overriding error of fact by finding
    that the appellant did not conclude that the respondents four comments to the
    complainant amounted to sexual harassment?

2)

Did the trial judge err in law by failing to correctly apply the test
    for determining whether the appellant had just cause to dismiss the respondent?

3)

Did the trial judge err by failing to find that the appellant had just
    cause to terminate the respondents employment?

E.

Analysis

(1)

Did the trial judge make a palpable and overriding error of fact by
    finding that the appellant did not conclude that the respondents four comments
    to the complainant amounted to sexual harassment?

[24]

The
    trial judge came to the conclusion that it was unclear whether the employer made
    a finding, following its investigation, that the four impugned comments
    amounted to sexual harassment of the complainant. His conclusion is contrary to
    both the written and testimonial evidence.

[25]

The
    Investigation Summary and Final Warning dated July 10, 2017 that the appellant
    handed to the respondent, begins with the following statements:

This summarizes [A.O. Smith]s findings with respect to a
    female employees allegation of sexual harassment due to inappropriate comments
    you made directed to her on at least four occasions.

[A.O. Smith] has conducted an investigation and has concluded
    that you made inappropriate comments.

[26]

The
    investigations finding that the comments were inappropriate was in the
    specific context of a complaint of sexual harassment. The investigation did not
    conclude that the comments were inappropriate in the abstract. It concluded
    that the specific allegation of sexual harassment due to inappropriate comments
    was substantiated. There was nothing unclear about this conclusion.

[27]

Nor
    was it unclear to the respondent. In his cross-examination testimony, he agreed
    that in the meeting where he was given the Investigation Summary and Final
    Warning document, he was told that his comments constituted sexual harassment,
    and that even if the investigators had not used the word sexual in the
    meeting, he understood that that was their finding.

[28]

In
    addition, Mr. Weiler testified that the investigators had concluded that the
    comments fit the definition of sexual harassment in the employers Workplace
    Harassment Policy & Procedure, in that they were inappropriate comments of
    a sexual nature that were known or ought to have been known to be
    inappropriate. They also concluded that the comments fit the definition of
    sexual harassment under the
Occupational Health and Safety Act
, R.S.O.
    1990, c. O.1, and that the respondent had singled out the complainant for those
    comments because of her gender. Mr. Weiler explained that they had taken all
    four comments into account and that they saw a pattern of comments with a
    sexual nature. The trial judge made no adverse credibility finding against Mr.
    Weiler, nor did he suggest a basis to reject the conclusions reached by the
    investigation.

[29]

In
    my view, the trial judge made a palpable and overriding error of fact, based on
    the record, when he stated that it was unclear whether the appellant had found
    that the four comments constituted sexual harassment. The evidence was clear
    that the appellant made that finding and communicated it to the respondent, and
    that he understood it.

(2)

Did the trial judge err in law by failing to correctly apply the test
    for determining whether the appellant had just cause to dismiss the respondent?

[30]

The
    appellant submitted that the trial judge erred by failing to properly apply the
    test for just cause and thereby side-stepped the core question in this case,
    namely, whether the employee had engaged in misconduct that gave rise to a
    breakdown in the employment relationship or that was irreconcilable with
    sustaining the employment relationship. I agree that the trial judge failed to
    correctly apply the test set out in this courts decision in
Dowling v.
    Ontario (Workplace Safety & Insurance Board)
(2004), 246 D.L.R. (4th)
    65 (Ont. C.A.), that explained and elaborated on the test in
McKinley v. BC
    Tel
, [2001] 2 S.C.R. 161.

[31]

Referring
    to the Supreme Court of Canada decision in
McKinley
, at paras. 48, 51
    and 53, the trial judge stated that the test to determine whether an employer
    was justified in terminating the employees employment for cause must be
    assessed in context, and that a balance must be struck between the severity of
    the employees conduct and the sanction imposed. These statements are correct.

[32]

However,
    in applying the test, the trial judge erred by failing to properly identify and
    characterize the conduct for which the employee was terminated. The trial judge
    found that the underlying conduct for which the employee was disciplined, and which
    the employer found to be sexual harassment, was irrelevant to the calculus
    because the basis for the termination was only the employees failure to
    apologize as instructed. The trial judge concluded that the employees refusal
    to apologize did not amount to a breakdown in the employment relationship.

[33]

I
    will examine these errors in the context of the three-part test for determining
    whether termination for cause was justified, as explained in this courts
    decision in
Dowling
, at paras. 49-50:

[49]    Following
McKinley
, it can be seen that the core
    question for determination is whether an employee has engaged in misconduct
    that is incompatible with the fundamental terms of the employment relationship.
    The rationale for the standard is that the sanction imposed for misconduct is
    to be proportional  dismissal is warranted when the misconduct is sufficiently
    serious that it strikes at the heart of the employment relationship. This is a
    factual inquiry to be determined by a contextual examination of the nature of
    the misconduct.

[50]    Application of the standard consists of:

1. determining the nature and extent of the misconduct;

2. considering the surrounding circumstances; and

3. deciding whether dismissal is warranted (i.e. whether
    dismissal is a proportional response).

[34]

In
Dowling
, the court went on to explain the requirements of each step.
    At the first step, the nature and extent of the misconduct must be determined,
    and the employer is entitled to rely on wrongdoing by the employee that is
    discovered both before and after the termination. The second step considers the
    employee within the employment relationship, including the employees age,
    employment history, seniority, role and responsibilities, and for the employer,
    the type of business, any relevant policies or practices, and the employees
    position in the organization, including the degree of trust reposed in the
    employee. The third step assesses whether the misconduct is reconcilable with
    sustaining the employment relationship, and whether the misconduct is
    sufficiently serious that it would give rise to a breakdown in the employment
    relationship:
Dowling
, at paras. 51-53.

[35]

In
    oral submissions, counsel for the respondent argued that although the trial
    judge did not refer to the
Dowling
test, he implicitly applied this
    three-step approach in his reasons, where he found that however the impugned
    comments were characterized, they did not warrant summary dismissal. I would
    reject this submission. The trial judges analysis, in substance, does not engage
    the analytical steps explained in
Dowling
.

[36]

The
    first step of the test is to determine the nature and extent of the misconduct.
    The four comments that the respondent made to the complainant were the subject
    of a formal complaint of sexual harassment and a misconduct investigation. That
    investigation resulted in a finding that the comments were inappropriate, and
    the requirement that the respondent take two steps to address the situation:
    take sensitivity training and apologize to the complainant. The respondent
    agreed to the training but refused to make an apology.

[37]

The
    respondents conduct consisted of making the four inappropriate comments,
    including after he was told by the complainant that they were inappropriate and
    unwelcome and after he was warned by his superior, Mr. Abdel-Rehim, and then
    his refusal to apologize when he was told by his employer that that was
    required as discipline to remedy the situation.

[38]

The
    refusal to apologize is only part of the misconduct that the appellant had to
    consider when deciding whether there has been a breakdown in the employment
    relationship. The refusal to apologize did not occur in a vacuum. The degree of
    seriousness of the misconduct that led to the discipline, and then to the
    dismissal, is critical to the ultimate assessment of the propriety and
    proportionality of the employers response. But the trial judge eschewed this
    analysis, finding instead that the nature and seriousness of the respondents
    comments were irrelevant and focusing solely on his refusal to apologize.

[39]

The
    trial judge also did not adequately address the second step of the analysis.
    While he did take into account the fact that the respondent was a long-term
    20-year employee of the appellant, he did not discuss or weigh such factors as
    the Workplace Harassment Policy of the employer and the recent training the
    respondent had undergone with respect to the Policy. He also did not consider
    the senior position the respondent held and the degree of trust that arose from
    that in the employer-employee relationship.

[40]

When
    it came to the third step, the trial judges assessment of whether dismissal
    was warranted by the respondents misconduct was tainted by his failure to
    consider, as part of that misconduct, the inappropriate, sexually harassing
    comments that the respondent made to the complainant, that were the basis for
    the investigation and discipline.

(3)

Did the trial judge err by failing to find that the appellant had just
    cause to terminate the respondents employment?

a)

The Nature
    and Extent of the Misconduct

[41]

In
    order to apply the first step of the three-part test from
Dowling
, the
    trial judge was required to decide whether the respondents four impugned
    comments amounted to sexual harassment and to assess that misconduct, along
    with the refusal to apologize, which together formed the basis for the appellants
    decision to terminate the respondents employment.

[42]

The
    Supreme Court provided the following definition of sexual harassment in the
    workplace in its decision in
Janzen v. Platy Enterprises Ltd.
, [1989]
    1 S.C.R. 1252, at p. 1284:

Without seeking to provide an exhaustive definition of the
    term, I am of the view that sexual harassment in the workplace may be broadly
    defined as unwelcome conduct of a sexual nature that detrimentally affects the
    work environment or leads to adverse job-related consequences for the victims
    of the harassment. It is, as Adjudicator Shime observed in
Bell v. Ladas
,
supra
, and as has been widely accepted by other adjudicators and
    academic commentators, an abuse of power. When sexual harassment occurs in the
    workplace, it is an abuse of both economic and sexual power. Sexual harassment
    is a demeaning practice, one that constitutes a profound affront to the dignity
    of the employees forced to endure it. By requiring an employee to contend with
    unwelcome sexual actions or explicit sexual demands, sexual harassment in the
    workplace attacks the dignity and self-respect of the victim both as an
    employee and as a human being.

[43]

Sexual
    harassment is not confined to actions but includes comments with a sexual
    innuendo. In Arjun P. Aggarwal and Madhu M. Guptas well-recognized text,
Sexual
    Harassment in the Workplace
, 3rd ed. (Toronto: Butterworths, 2000), at p. 119,
    the authors provide the following summary of sexual harassment in the workplace:

[B]riefly summarized, sexual harassment is a form of
    discrimination based on sex. It occurs when a person is disadvantaged in the
    workplace as a result of differential treatment in the workplace. It is an
    unwarranted intrusion upon the sexual dignity of a person. It consists of acts
    that are unwarranted, unsolicited, and unwelcome. It can be overt or subtle.
    Even if the nature of the harassment is not physical, it can still be
    considered to be sexual harassment if it creates a poisoned environment, even
    if there is no economic consequence such as loss of ones job, loss of
    seniority, or economic consequences of a similar nature. It is also clear that
    even if it might be considered that what has occurred is sexual banter, common
    to the workplace, if a person finds it objectionable and makes it known in
    clear and precise terms that such actions are not acceptable to such person,
    then that is the standard of behaviour that is established
vis-à-vis
that
    person.

[44]

And
    as far back as 1998, Carthy J.A. concluded this courts decision in
Bannister
    v. General Motors of Canada Ltd.

(1998), 40 O.R. (3d) 577 (C.A.), with
    the observation that, even in an industrial plant where no one expects
    profanity or vulgarity to be eliminated  unwelcome conduct or expression based
    upon gender cannot be tolerated: at p. 590.

[45]

It
    is also important to view the respondents comments in the context of the
    appellants written Workplace Harassment Policy, which contains the following
    definition of sexual harassment:

Sexual harassment is unsolicited conduct, comments or physical
    contact of a sexual nature that is unwelcome to the recipient. It includes any
    unwelcome sexual advances (oral, written, physical), requests for sexual
    favours, sexual and sexist jokes or remarks and the display of degrading or
    offensive material when:

a.

such conduct
    might reasonably be expected to cause insecurity, discomfort, offence or
    humiliation; or

b.

such conduct has
    the purpose or effect of interfering with a persons work performance or
    creating an intimidating, hostile, offensive work environment; or

c.

submissions to
    such conduct is made either implicitly or explicitly a condition of employment;
    or

d.

submission to,
    or rejection of, such conduct is used as a basis for any employment decision
    (i.e. job security, promotion, change in salary and benefits).

[46]

Applying
    these definitions and descriptions of sexual harassment to the four comments
    the respondent made and the circumstances in which they were made, there is no
    doubt that they constituted sexual harassment of the complainant.

[47]

First,
    they were each based on gender and bore an unmistakable sexual connotation. They
    were comments that would only have been made to a woman, not to a man.

[48]

Second,
    the comments were demeaning and undermined the dignity of their recipient. They
    implied provocative behaviour by the recipient or that she welcomed sexual
    suggestions by the respondent.

[49]

Third,
    the comments were unwelcome and the respondent knew that. He was told as much by
    the complainant, as well as by his superior Mr. Abdel-Rehim when he heard the
    respondent make the sit on lap comment.

[50]

Fourth,
    they created a poisoned atmosphere for the complainant in her workplace. In the
    words of the appellants Workplace Harassment Policy, the comments were
    unsolicited and unwelcome, they were of a sexual nature, and they might
    reasonably be expected to cause discomfort and humiliation and create a hostile
    and offensive work environment.

b)

The
    Surrounding Circumstances

[51]

At
    the second step of the test, the court considers the circumstances of both the
    employee and the employer. The respondent had just recently received training
    on the Workplace Harassment Policy and, as a senior employee with a lengthy
    20-year tenure, he would have been trusted to abide by the Policy in his relations
    with his co-workers. The complainant was a project manager who had to work
    closely with the respondent from time to time. He was clearly expected to treat
    her with dignity and respect.

[52]

The
    appellants Workplace Harassment Policy is another relevant consideration. The
    Policy provided a complaints procedure that was followed by the appellant. It
    conducted an investigation, including giving the respondent the opportunity to
    address the allegations against him. It determined that he had made sexually
    inappropriate comments to the complainant, and delivered its findings to him
    along with its decision regarding the steps he was required to take to address
    the situation.

[53]

The
    Policy sets out the corrective action that the employer may take if it finds
    that an employee engaged in harassment or sexual harassment in the workplace,
    up to and including termination. It provides:

Corrective Action

Where an investigation substantiates conduct contrary to the
    policy, corrective action will be taken. Such corrective action will include
    addressing any relevant issues in the work environment, as well as addressing
    any employees who have personally engaged in comments or conduct contrary to
    this policy.

The objective of the corrective action directed at individuals
    is to change attitudes and behaviour and eliminate workplace harassment or
    discrimination as defined by the policy. Such action may range from educating
    such persons on the appropriateness of his or her behaviour to transfers, demotions,
    suspensions or termination. Any disciplinary action will be noted on the
    employees personnel file.

c)

Whether
    Dismissal Is Warranted

[54]

Having
    identified the nature and extent of the misconduct by the respondent, and taken
    into account the surrounding circumstances, the third step of the test requires
    the court to determine whether the misconduct was sufficiently serious that it
    resulted in a breakdown of the employment relationship, and whether dismissal
    was a proportional response by the appellant.

[55]

In
    his testimony at trial, the respondent confirmed that he understood that sexual
    harassment was a fireable offence and that that was a common understanding
    within the organization.

[56]

However,
    the appellant did not initially terminate the respondents employment as a
    result of his sexually harassing conduct. It gave him the opportunity to redeem
    himself and to save his job by taking sensitivity training and apologizing to the
    complainant. In his testimony, the respondent described the course of
    corrective action directed by the employer as an ultimatum, and understood
    that the memo constituted a final warning. This was a fair and proportionate
    response by the employer.

[57]

In
    response, the appellant consulted a lawyer, as he was entitled to do, and gave
    his response through counsel. He agreed to take the additional sensitivity
    training, but at the same time, he was adamant that it was unnecessary. This
    indicated a complete failure to acknowledge the nature and the seriousness of
    his conduct, and the effect it had on the complainant and on the atmosphere of
    the workplace.

[58]

In
    addition, through his lawyers letter, the respondent refused to issue an
    apology to [the complainant] admitting any wrongdoing, on the basis that the
    facts were in dispute and the complaint was disconcerting to him. The letter
    expressly took the position that an apology was not appropriate, and did not
    seek any negotiation of the form or terms of an apology. In his testimony, the
    respondent acknowledged that if youre guilty of sexual harassment, or any
    kind of harassment, the complainant or the victim deserves an apology. Thats a
    no-brainer. However, he stood firm in his position that I was not going to
    apologize, because I did not harass that woman.

[59]

In
    those circumstances, the only conclusion the appellant could reach was that there
    was a complete breakdown in the employment relationship as (i) he was either
    unwilling or unable to understand the purpose and effect of the Workplace
    Harassment Policy and to take its requirements seriously and (ii) he was
    unwilling to accept the discipline imposed on him as a consequence of his
    misconduct of sexually harassing a co-worker. As a result, the appellant could
    have no confidence that the respondent would not continue with the same type of
    misconduct in the future.

[60]

Faced
    with the respondents lack of contrition, lack of understanding of the
    seriousness of his conduct, and his refusal to comply with the reasonable and
    essential requirement of an apology to the complainant and target of his
    comments, the appellants decision to terminate the respondents employment was
    a proportional and wholly warranted response.

[61]

It
    follows that I reject the trial judges suggestion that in those circumstances,
    it was incumbent on the appellant to try to negotiate an acceptable form of
    apology with the respondent. I similarly reject the respondents submission in
    oral argument that the appellant was required to warn the respondent that if he
    did not apologize, his employment may be terminated. The respondent was treated
    fairly. He refused to comply with the discipline imposed and understood that
    this discipline presented an ultimatum. He could not have reasonably expected
    that he would be able to continue with his employment without apologizing to the
    complainant for his comments, that were found to be inappropriate.

[62]

Contrary
    to the observation of the trial judge, this was not a situation where the
    employer was faced with two employees who could not get along and had to choose
    between them. One employee had engaged in workplace misconduct. It was that
    employee who had to either accept the appropriate disciplinary measures imposed
    by the employer to retain his position, or risk losing that position.

[63]

I
    also reject the trial judges conclusions that the appellants decision to
    terminate the respondents employment was motivated by the fact that he sought
    legal advice, and that it was the appellant that created a situation that gave
    it just cause to terminate. These conclusions find no basis in the record.

[64]

The
    appellants decision to terminate the respondents employment in these
    circumstances was justified and appropriate based on the three-part test from
Dowling
.

F.

Conclusion

[65]

I
    would allow the appeal, set aside the judgment below, and dismiss the claim. There
    is therefore no need to address the issue of mitigation.

[66]

Counsel
    advised the court that they would try to agree on costs. If they are unable to
    agree, they may make brief written submissions (maximum three pages) within
    three weeks of the release of these reasons, addressing the costs of the appeal
    and below.

Released: October 15, 2021 K.F.

K.
    Feldman J.A.

I agree.
    Harvison Young J.A.

I agree.
    Thorburn J.A.


