



COURT OF APPEAL FOR ONTARIO

CITATION: Render v. ThyssenKrupp Elevator
    (Canada) Limited, 2022 ONCA 310

DATE: 20220420

DOCKET: C67826

Feldman, Pepall and Tulloch JJ.A.

BETWEEN

Mark Render

Plaintiff (Appellant)

and

ThyssenKrupp Elevator (Canada) Limited

Defendant (Respondent)

Chris Foulon and Behzad Hassibi, for
    the appellant

David G. Cowling and Alexander J.
    Sinclair, for the respondent

Heard: October 12, 2021 by video conference

On appeal from the judgment of Justice William
    S. Chalmers of the Superior Court of Justice, dated November 27, 2019 and March
    30, 2020, with reasons reported at 2019 ONSC 7460, and from the costs judgment,
    dated November 27, 2019 and March 30, 2020.

Feldman J.A.:

Overview

[1]

The appellant employee appeals from the judgment
    that upheld his dismissal for cause by the respondent employer. The appellant
    was a 30-year employee in a managerial role. His dismissal followed a single
    incident that occurred in the workplace where the appellant slapped a female
    co-worker on her buttocks. The trial judge found that the incident caused a
    breakdown in the employment relationship that justified dismissal for cause.

[2]

In appealing the conclusion that there was just
    cause, the appellant disputes two of the trial judges factual findings  specifically,
    that the appellants contact with his co-worker was not accidental and that the
    appellants remorse was not genuine. The appellant also submits that the trial
    judge erred in law in concluding that there was just cause. He argues that
    there was no breakdown in the employment relationship and the respondent failed
    to consider other disciplinary measures before terminating his employment.

[3]

In addition, the appellant seeks a finding that
    he is entitled to benefits under the
Employment Standards Act, 2000
, S.O. 2000, c. 41

(
ESA
)
, an issue that was not addressed by the trial judge. He
    also appeals from the trial judges failure to award punitive damages for the
    independent actionable wrong arising from the respondents litigation conduct,
    or in the alternative, he seeks leave to appeal the award of costs, which the
    trial judge used to address the litigation misconduct.

[4]

For the reasons that follow, I would dismiss the
    appeal from the finding that there was no wrongful dismissal and the award of
    no punitive damages, but I would allow the appeal with respect to the
ESA
entitlement and the costs.

Factual Background

[5]

The appellant began working at his fathers
    elevator company in 1984, and was president of the company when it was sold to
    the respondent in 2002. Under the new ownership, the appellant was made
    operations manager of the Mississauga office in 2005, and continued in that
    role until his employment was terminated in 2014. As operations manager, he was
    responsible for the service operations of the company with 4 people reporting
    directly to him and 40 technicians and mechanics reporting indirectly. He was
    also involved in hiring and training.

[6]

At the time of the incident, Linda Vieira  the
    co-worker who was slapped by the appellant  was an accounts manager in the
    Mississauga office. As the accounts manager, she reported to Gary Platt, the
    office manager. Although Ms. Vieira did not report to the appellant, she
    worked with him in what was a relatively small office with only 13 employees 
    10 men and 3 women. Also, when Mr. Platt was away, the appellant was
    responsible for the office.

[7]

There was a very social atmosphere in the
    Mississauga office, including lunches and other events and regular joking and
    bantering. The appellant described it as a friendly and joking environment that
    he fostered to reduce stress.

[8]

This atmosphere included inappropriate jokes. One
    of the men, Leo Daniel, made sexist and offensive comments to or about Ms.
    Vieira. The male workers would occasionally tap each other on the buttocks and
    say good game as if they were football players on the field or in the locker
    room. The women employees, including Ms. Vieira, were not included in this
    activity.

[9]

The appellant and Ms. Vieira would engage in
    jokes and banter, including Ms. Vieira making jokes or teasing the appellant that
    he was short and not as good‑looking as his brother. On at least one
    occasion, she jokingly punched him in the arm. On another occasion, she gave
    him a holiday party gift of an apron with a muscular man in underwear on it,
    again as a joke. For his part, in an email exchange in May 2013, Ms. Vieira
    asked the appellant if he would like her to bring anything to him at his hotel
    and he responded, Thats a loaded question. On another occasion, she was
    asked to bring a clean shirt to a job site for the appellant. When she arrived,
    she saw him with his shirt off and parked away from him. The appellant emailed
    Ms. Vieira, I heard you were afraid to see me topless and she replied, not
    afraid, just inappropriate. The appellant and Ms. Vieira occasionally saw each
    other at the gym where they both worked out. He thought they were friends. She
    testified that she participated in the joking and bantering so that she would
    not be ostracized and so that she would be respected.

[10]

On February 20, 2014, the respondent presented
    its newly introduced Anti‑Harassment and Anti-Discrimination Policy by
    way of a PowerPoint presentation and discussion. Both the appellant and Ms.
    Vieira attended the presentation. The policy states that the respondent has
    zero tolerance for harassment and discrimination, provides that sexual
    advances and touching are considered sexual harassment, states that sexual
    harassment can arise from a single incident and may include public humiliation,
    and states that an employee who engages in conduct that is contrary to the policy
    will be subject to appropriate discipline, up to and including termination of
    employment.

[11]

In addition to the Anti-Harassment and
    Anti-Discrimination Policy, the respondent had implemented a Progressive
    Discipline Process Policy in October 2011, which was revised in August 2012.
    The progressive discipline under this policy would [t]ypically begin with
    coaching, move up to a verbal warning, then a written warning, final warning
    with suspension, and termination. The policy also provides that where the misbehaviour
    is of a severe nature, the progressive discipline can be accelerated to match
    the violation. As a supervisor, the appellant was required to know and
    implement the policies, and he confirmed that he was familiar with them before
    the incident in question.

[12]

The incident that led to the appellants
    dismissal occurred on February 28, 2014. It took place in one of the employee offices
    around 2:00 p.m. Six employees were present, four of whom testified at the
    trial, including the appellant and Ms. Vieira. A fifth employees will-say
    statement was also admitted into evidence for the truth of its contents,
    although he was not called as a witness. The five versions differed in some
    details, requiring the trial judge to make findings regarding what occurred.

[13]

Although one man was on the phone, the others
    were speaking to each other loudly and jokingly. Mr. Daniel commented on a
    stain on Ms. Vieiras blouse by asking if she was lactating. The appellant said
    that Ms. Vieira made a comment about the work boots he was wearing, then stood
    on the toes of his boots, leaned in, and said, youre short, all of which she
    denied. One of the other men corroborated that she said, youre short but
    none of the others present testified that she stood on the appellants boots. Ms.
    Vieira said that she stood beside the appellant, stood up tall on her high
    heels, and looked down on him as a non-verbal joke about his height.

[14]

The trial judge found that Ms. Vieira made
    either a verbal or non-verbal joke about the appellants height. The appellant
    described what happened next. He responded to the comment youre short by
    saying, yes I am, crouching down while about 12 inches from her, and saying,
    this is how short I am when I take my boots off. He then went down on his
    knees, crouching in front of her with his face close to her breasts for two to
    three seconds. Everyone including Ms. Vieira was laughing.

[15]

Then the man on the phone finished his call and
    the appellant, who was waiting to speak to him, told everyone to leave. As he
    was getting up from his knees, he made a sweeping gesture with his right hand,
    intending to tap Ms. Vieira on the hip and said, get outta here. However, he testified
    that he either lost his balance or she turned, with the result that his hand
    touched her buttocks. When that happened, he said, good game.

[16]

Ms. Vieiras response changed the atmosphere in
    the room. She gasped, said that what he did was not okay, and that she could
    not believe he had done it. He asked if she was serious, and why she was upset
    when she had previously punched him in the arm. She responded that that was
    different because you hit me on a private sexual part of my body. He said
    that she could not punch him in the shoulder anymore, then he apologized, and
    said it would not happen again. Ms. Vieira denied that he apologized at this
    time.

[17]

Ms. Vieira documented what occurred immediately
    afterward in two emails to herself and her husband. In between, she reported
    the incident to her manager, Mr. Platt, telling him that she wanted the
    appellant to apologize. I reproduce the two emails here because they were made
    contemporaneously, and were used by the trial judge to make his findings:

We were joking around that he is short and I
    was taller than him. He was bending down pretending to be shorter and was
    coming up to my breasts, getting close  I was backing up from him, but he kept
    on invading my personal space. We were laughing about it. But he took it a step
    too far and actually spanked me on my butt. I couldnt believe it and I told
    him that it was inappropriate. It was very awkward. He said that Ive punched
    him in the shoulder before as if its an excuse. I said, no, its not the same
    thing as that was my private part. Present to witness this was Joe F., Leo D.,
    Larry S., and Mario M.



I was thinking about this and I felt upset. I
    dont want the other men in the office to think it is OK to do that to me so I
    decided to talk to my Manager about it. I went into Gary Platts office and
    told him what happened. I advised him that [the appellant] crossed a line and
    that it shouldnt have happened  not appropriate. He asked me what I wanted
    him to do about it and I said that it was OK for him to talk to [the appellant]
    about it. And that [the appellant] would need to apologize to me.

[18]

For his part, the appellant went back to his
    office, distraught at what had just happened. Two of the men who had witnessed
    the incident came to his office where they discussed what had occurred. During
    the discussion, either Mr. Daniel asked what it felt like to touch her ass or
    the appellant asked who wanted to touch the hand that slapped [her] ass. However
    the topic arose, the appellant admitted that he said, for 10 bucks you can
    shake my hand.

[19]

About ten minutes later, the appellant made eye
    contact with Ms. Vieira from the hall while she was in her office, made a
    gesture like he was slapping his hip, then went into her office. She said he
    should not have done that, in reference to hitting her buttocks, and he
    responded that it was a joke. She said it was no joke because he had hit her on
    her private parts. He responded that it was not sexual and that he was not
    trying to sleep with her. He then apologized. He believed that she accepted his
    apology, but she testified that he did not seem sincere.

[20]

A few minutes later, when the appellant was in
    the hallway near Mr. Platts office, Mr. Platt called him in and thanked him
    for apologizing to Ms. Vieira, as she expected an apology.

[21]

Upset about what had happened, the appellant decided
    to leave early at 3:45 p.m., but ran into two other employees on the way out.
    One asked what was wrong and they had a cigarette in the parking lot where the
    appellant demonstrated what had happened by crouching and making a swatting
    motion. He told them he had tapped Ms. Vieira in a playful way and expressed
    regret.

[22]

Unfortunately, Ms. Vieira observed the meeting
    from her office window and perceived that she was being mocked by the appellant,
    although she agreed in cross-examination that there was no laughing or
    high-fiving. She immediately reported her observations to Mr. Platt who sent an
    email to all the people who had been in the room when the incident took place
    and in the parking lot afterward, saying that what occurred could not happen
    again and that the matter should be put to rest. The appellant saw the email
    when he arrived home and called Mr. Platt. He told Mr. Platt that the incident
    was a joke that went badly.

[23]

At the start of the following week, on March 3, Ms.
    Vieira advised Mr. Platt that she had decided to report the incident to HR. Mr.
    Platt responded by arranging a meeting that day in the boardroom with the
    appellant and Ms. Vieira. The appellant apologized again, but Ms. Vieira felt it
    was insincere and requested that a letter go into the appellants file and the
    matter be reported to HR. In fact, she made a formal complaint to HR that day.

[24]

She also described what had occurred to Gary
    Medeiros, the vice-president of Central Canada for the respondent company who oversaw
    the branch and was working in the Mississauga office that day. He spoke with
    one of the men who had been present, who described both the incident where the
    appellant hit Ms. Vieira and the later comment that he could shake his hand for
    $10.

[25]

The next day, March 4, the HR manager Sarah
    Cleveland attended at the Mississauga office to carry out an investigation. She
    interviewed the appellant, Ms. Vieira, and others who had been present
    when the incident occurred. She advised the appellant that he may receive a
    letter in his file, suspension or termination, and that she viewed the incident
    as sexual harassment. Becoming concerned for his job, the appellant told Ms.
    Cleveland about prior incidents in which Ms. Vieira had punched him in the arm
    and she and others had made anti‑Semitic comments to him. On March 5, he
    filed a formal complaint with HR against Ms. Vieira and the company regarding
    these incidents.

[26]

After Ms. Cleveland reported the results of her
    investigation to Mr. Medeiros, they made the decision to terminate the
    appellants employment. Mr. Medeiros testified that the decision was based
    solely on the incident in which the appellant touched Ms. Vieira on the buttocks.

[27]

On March 6, the appellant and Mr. Medeiros had
    lunch with a client. The appellant left the lunch early to meet with Ms.
    Cleveland. Shortly after he arrived, Mr. Medeiros arrived and the appellant was
    handed a termination letter. He was given no severance, termination, or
    vacation pay.

Findings of the Trial Judge

[28]

Given that the appellant challenges both the
    trial judges factual findings and his legal analysis, I will describe the
    trial judges decision in some detail.

(1)

Discrepancies in the Testimony at Trial

[29]

The trial judge had to resolve some discrepancies
    in the accounts of what occurred at various stages in the narrative. The first
    was with regard to what had occurred in the office between the appellant and Ms.
    Vieira before he touched her buttocks. Ms. Vieira claimed in court that the
    appellants face was one inch from her breasts and that he moved his head back
    and forth and made a sound like a motorboat. The appellant denied this and was
    supported by one of the witnesses. The other witness, Mr. Daniel, supported Ms.
    Vieiras version.

[30]

The trial judge rejected Ms. Vieiras account
    because it was inconsistent with the two emails she had written immediately
    following the incident and what she told Mr. Platt. He also rejected Mr. Daniels
    evidence, as he had included this part of the incident for the first time after
    reading the press interview that Ms. Vieira gave during the trial.

[31]

Although he rejected the motorboating
    embellishment by Ms. Vieira, the trial judge found, based on the appellants own
    evidence, that his face was in close proximity to Ms. Vieiras breasts for two
    to three seconds, and concluded that he was invading her personal space, and that
    it was inappropriate conduct.

[32]

The second discrepancy was with respect to whether
    the appellant had slapped Ms. Vieira on the buttocks or just touched her and
    whether it was deliberate or accidental.

[33]

Ms. Vieira said it was a hard slap that stung
    for ten minutes afterward. The appellant said it was a light tap. His version
    was supported by other witnesses. The trial judge found that the slap was
    sufficient to cause Ms. Vieira to be shocked and upset. He concluded that a
    light tap would not have caused her to react the way she did.

[34]

The trial judge also rejected the appellants assertion
    that the contact was accidental, mainly for the reason that the appellant did
    not make that assertion until a few days later when termination of his
    employment was raised as a possibility.

[35]

Third, the respondent took the position at trial
    that the slap amounted to a sexual assault, whereas the appellant asserted
    throughout that it was not sexual in nature. The trial judge made the following
    findings regarding the slap:

I am of the view that the act of slapping Ms.
    Vieira on the buttocks in the presence of the other male workers is very
    serious and unacceptable conduct. Ms. Vieira testified that she felt humiliated
    by the action. She was upset and embarrassed. She was concerned that other male
    co-workers would treat her differently following the incident  Whether the act
    was a sexual harassment, sexual assault or simply a common assault, the purpose
    seems to be the same: to assert dominance over Ms. Vieira and to demean and
    embarrass her in front of her colleagues. I am satisfied that the act of
    slapping Ms. Vieiras buttocks was an act that attacked her dignity and
    self-respect. This type of conduct is unacceptable in todays workplace.

(2)

The Relevant Factors Under the
McKinley

Analysis

[36]

The trial judge considered and examined a number
    of the factual circumstances as part of the contextual analysis mandated by the
    Supreme Court of Canada in
McKinley v. BC Tel
, 2001 SCC 38, [2001] 2
    S.C.R. 161, at para. 48. He described his task at para. 12 of the reasons as
    follows:

The contextual analysis requires an
    examination of the particular facts and circumstances and considers the nature
    and seriousness of the employees conduct to determine whether it is
    sufficiently egregious so as to violate or undermine the employment
    relationship: [
McKinley
], at para. 57.

[37]

After making the factual findings I have
    described, the trial judge next considered that the appellant was a supervisor,
    and in that capacity, was responsible for ensuring a safe work environment. He found
    that the appellant was in a position of authority over Ms. Vieira and that the
    nature of the employment relationship is a factor which exacerbates the
    seriousness of the misconduct.

[38]

The trial judge next considered that the
    respondents Anti-Harassment and Anti-Discrimination Policy was a zero-tolerance
    policy that had been communicated to employees, including the appellant, just
    eight days before the incident. The policy stated that sexual harassment could arise
    from a single incident and included unwelcome touching. The PowerPoint
    presentation on the policy that the appellant had seen days prior to the
    incident noted that sexual harassment may cause humiliation. The policy provided
    that the consequence would be discipline, up to and including termination of
    employment.

[39]

The trial judge found that the appellant did not
    appreciate the seriousness of his action. Although he apologized, he did not
    believe that what he did amounted to sexual harassment. He confirmed at trial
    that he still held that belief. The trial judge commented that instead of
    taking responsibility for his actions, the appellant made a formal complaint to
    HR that Ms. Vieira had previously punched him in the shoulder. He also made a
    complaint regarding anti-Semitism. He concluded that the appellants lack of
    contrition and failure to understand the seriousness of his actions put[] into
    question whether the employment relationship could be maintained.

[40]

The trial judge also considered mitigating
    factors. One was that the appellant had a record with no discipline or
    performance issues of any kind over a 30-year career with the respondent and
    its predecessor.

[41]

However, the trial judge was not prepared to view
    the joking office culture, that included inappropriate personal jokes such as
    Ms. Vieiras comment about the appellants height and the males slapping each
    other on the buttocks like athletes on the field, as a mitigating factor. He
    referred to this courts decision in
Bannister v. General Motors of Canada
    Ltd.
(1998), 40 O.R. (3d) 577 (C.A.), at pp. 589-90, where Carthy
    J.A. stated:

The trial judge, no doubt, formed the view,
    from listening to the witnesses, that this plant was a rough environment with
    abuse and sexual innuendo flowing freely in all directions, and the female
    employees strong enough to handle the exchanges. This is probably an apt
    description of many industrial environments of the past but cannot be tolerated
    in todays cultural acceptance of gender equality. It is not a question of the
    strength or mettle of female employees, or their willingness to do battle. No
    female should be called upon to defend her dignity or to resist or turn away
    from unwanted approaches or comments which are gender or sexually oriented. It is
    an abuse of power for a supervisor to condone or participate in such conduct.

[42]

In rejecting the office culture as a mitigating
    factor, the trial judge concluded:

Although Ms. Vieira may have participated in
    the jokes, this does not mean she consented to being touched on a sexual part
    of her body. Also, she did not consent to being demeaned in front of her
    co-workers. Even in a joking environment there is a line that cannot be
    crossed, and that line includes physical touching without consent of a sexual and
    private part of someones body. There is no place for any conduct which could
    result in a person feeling demeaned or disrespected.

(3)

Application of the Circumstances to the Principle
    of Proportionality

[43]

Having reviewed the circumstances and context of
    the impugned behaviour, the trial judge next turned to applying the law to the
    facts in order to determine whether the termination of the appellants
    employment was a proportionate response to the incident, applying the principle
    of proportionality mandated by
McKinley
, at para. 53. In that context,
    he acknowledged that the case law recognizes termination of employment as the
    capital punishment of employment law and quoted from
Carscallen v. FRI
    Corp.
, 2005 C.L.L.C. 210-038 (Ont. S.C.), at para. 72, affd 52 C.C.E.L.
    (3d) 161 (Ont. C.A.):

The important factors emerging from these
    expressions of the principle of law include that the misconduct must be
    serious; that the misconduct must amount to a repudiation of the contract;
    that the acts evince of intention to no longer be bound by the contract; that
    dismissal is an extreme measure; and must not be resorted to in trifling
    cases. As previously observed, just cause is truly  the capital punishment of
    employment law.

[44]

The trial judge also noted that the onus of
    proof is on the employer to prove that there was no other reasonable
    alternative to the termination of [the appellants] employment for cause, and
    that the burden of proof to establish just cause is high, especially in the
    case of a long-serving employee.

[45]

Applying all of these principles, the trial
    judge found that the respondent had met its onus and established that summary
    dismissal was the appropriate response in all the circumstances. He emphasized
    that it was the two aspects of the appellants conduct, taken together  the
    slap on Ms. Vieiras buttocks and the lack of understanding and remorse  that
    were not reconcilable with sustaining the appellants employment. The trial
    judge found it particularly concerning that the appellant believed that a punch
    on his shoulder was equally serious as a male managerial employee slapping a
    female on the buttocks, and that the latter was not a form of sexual harassment
    or assault. In coming to his conclusion, the trial judge weighed the
    appellants conduct against his previous good record, but was satisfied that the
    impugned conduct warranted summary dismissal.

(4)

The Respondents Litigation Conduct

[46]

Although he dismissed the appellants action on
    the merits, the trial judge devoted eight paragraphs at the end of his reasons
    to expressing his serious concerns about the litigation conduct of the
    respondent and Ms. Vieira. Rather than summarize, I set these paragraphs out in
    full:

Although the action is dismissed, I wish to
    express my serious concerns with respect to the manner in which the defence was
    conducted.

Ms. Vieiras testimony was clearly impeached
    with respect to whether she considered a civil action against [the appellant]
    to be a real possibility. She initially testified that she had never considered
    an action against [the appellant]. In cross-examination, she was shown her
    Affidavit sworn on November 28, 2017 in support of her motion for intervenor
    status. At paragraph 5, she deposed that although she had not brought a civil
    action against [the appellant], she is considering it as a real possibility.
    After this was put to her in cross-examination, Ms. Vieira changed her trial
    testimony and admitted that she had considered an action against [the
    appellant].

Ms. Vieiras conduct at the trial also
    deserves comment. Although she was subject to a witness exclusion order, she
    conducted an interview with the press after her examination-in-chief was
    completed and before her cross-examination. In addition, she exchanged text
    messages about her evidence with several people including Mr. Daniel, who had
    not yet given his evidence.

I also wish to comment on the actions of the [respondent].
    I recognize that [the respondent] is not responsible for what Ms. Vieira said
    to the press during the trial. I am of the view, however, that the [respondent]
    facilitated and promoted Ms. Vieiras breach of the witness exclusion order.

The [respondent] retained Melanie Jameson
    Media Consultant on September 5, 2019. Before the trial started, she sent a
    statement about the case to 40 media outlets. The statement was sensationalist
    and read as follows:

This is important and I hope youll share
    it with interested parties. . its got sex, drama, termination, and a legal
    question that could potentially affect every work environment in Canada.

The information sent to the media outlets
    included a statement from Ms. Vieira which included allegations which were not
    proven at trial.

[47]

The trial judge then stated that the
    respondents conduct would affect its entitlement to costs and asked for
    written submissions.

[48]

In his costs endorsement, the trial judge
    reiterated his concerns about the respondents unacceptable conduct in hiring a
    media consultant, who issued an inflammatory and sensationalist press release
    prior to trial that included allegations by Ms. Vieira that were not proven at
    trial and facilitated the breach of the witness exclusion order. He also found
    that the press release was unacceptable because it may have been intended to
    put additional pressure on the appellant or to influence the court.

[49]

In the result, the trial judge declined to award
    no costs, but reduced the amount he would have awarded by 50%. The final amount
    awarded against the appellant for costs was $73,696.66.

Issues

[50]

The appellant submits that the trial judge erred
    by finding that there was just cause for dismissal based on findings of fact
    that were not supported by the evidence and on inconsistent credibility
    findings. He also submits that if the appeal is dismissed on the wrongful
    dismissal issue, the appellant should nevertheless be granted his
ESA
entitlements, punitive damages in the amount of $100,000, and the costs award of
    the trial should be set aside.

[51]

I address each of these issues in turn.

Analysis

(1)

Did the trial judge err by making findings of
    fact that were not supported by the evidence or that involved inconsistent
    credibility findings?

[52]

The appellant submits that the trial judge erred
    by finding that touching Ms. Vieiras buttocks was not accidental, because it
    required him to accept the evidence of Ms. Vieira when he had rejected her
    credibility on other issues. Second, he submits that the trial judge
    misapprehended the evidence by finding that the appellant was not remorseful
    when he had apologized a number of times.

[53]

I would not give effect to these submissions for
    two major reasons: the deferential standard of review on findings of fact and
    credibility; and the detailed reasons of the trial judge for making his factual
    findings, including the two impugned findings.

[54]

The standard of review requiring a palpable and
    overriding error or misapprehension of the evidence is trite law. The appellant
    has not identified a palpable and overriding error. Instead, his submission
    amounts to an argument that the trial judge should have accepted certain
    evidence and rejected other evidence, an argument that does not allow appellate
    intervention:
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at
    para. 23.

[55]

The trial judge specifically rejected the
    appellants evidence that his contact with Ms. Vieiras buttocks was
    accidental. He gave a number of reasons for rejecting this evidence. First, he
    rejected the appellants initial denial at trial that he was not annoyed at her
    comment about his height, and did so based on the appellants own contradictory
    discovery evidence. Second, the fact that the appellant said good game was
    consistent with what the male employees said to each other after they would
    slap one another on the buttocks. Third, although Ms. Vieira was clearly
    upset right away, the appellant did not say it was an accident. He only said
    that several days later. This was corroborated by other witnesses to the
    incident. Fourth, the trial judge found that the appellant could have stopped
    himself when he saw Ms. Vieira turning as he was moving his arm toward her but
    before he made contact.

[56]

To the extent that the third point involved an
    assessment of the credibility of the appellant and Ms. Vieira, the trial judge
    was entitled to accept Ms. Vieiras evidence that the appellant did not say to
    her that it was an accident. His other findings show the basis for his
    conclusion, which is entitled to deference.

[57]

Similarly, on the issue of remorse, the trial
    judge was aware that the appellant had apologized several times. However, the
    trial judge was concerned that the appellant did not believe that touching Ms.
    Vieiras buttocks amounted to sexual harassment, and that the appellant would
    not acknowledge the seriousness of what had occurred in a workplace context. These
    concerns were evidenced by the appellants comment afterward to his two
    co-workers in his office about charging $10 to touch his hand, and his
    testimony at trial. Again, as the trier of fact, it is for the trial judge to hear
    and see the evidence and draw conclusions from it.

(2)

Did the trial judge err in law by finding that
    there was just cause for termination of the appellants employment?

[58]

The appellant argues that the evidence shows
    there was no breakdown in the employment relationship and that there were other
    disciplinary measures available that would have adequately addressed the
    situation but which the respondent failed to consider before terminating the
    appellants employment.

[59]

Again, the standard of review plays an important
    role in considering this argument. The appellant does not say that the trial
    judge did not apply the correct legal test or case law. In effect, he is
    submitting that the trial judge failed to give sufficient weight to certain
    evidence in his analysis.

[60]

As the trial judge stated, the Supreme Court has
    held that the governing rule in termination for cause cases is proportionality:
McKinley
, at para. 53. Because the employment relationship is such a
    fundamental one in Canadian society, an employees job can only be terminated
    for cause if that is a proportionate response to the misconduct. An employer in
    a non-unionized workplace may always terminate the employment of any employee on
    reasonable notice. Termination for cause is without notice and without paying
    salary in lieu of notice. It is reserved for circumstances where the employment
    relationship cannot be sustained:
McKinley
, at para. 48.

[61]

This court recently reaffirmed in
Hucsko v.
    A.O. Smith Enterprises Limited
, 2021 ONCA 728, 74 C.C.E.L. (4th) 196, the
    three-step test set out in
Dowling v. Ontario (Workplace Safety &
    Insurance Board)
(2004), 246 D.L.R. (4th) 65 (Ont. C.A.), at paras. 49-50,
    for applying the
McKinley
standard:

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.

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).

[62]

Although the trial judge did not refer to
Dowling
,
    he applied the three-part test in his analysis of the evidence and in his
    conclusion.

[63]

The appellant submits that the trial judge
    failed to consider that the appellant remained on the job until his employment
    was terminated, even attending a client lunch with the vice-president of the
    company, and that this shows that the employment relationship remained intact
    after the incident. He also submits that there were other disciplinary measures
    that could have been imposed such as a suspension, a final warning, or a
    transfer to another office, and that the respondent failed to consider any of
    those. Finally, he argues that the respondent treated other employees more
    leniently.

[64]

The appellant is correct that the onus was on
    the respondent to prove that there were no other disciplinary measures that it
    could reasonably have taken and that dismissal was proportionate in all the
    circumstances. However, I do not agree that the respondent had a standalone
    duty to consider alternative measures, provided that in the result, the
    disciplinary measure that was ultimately imposed was proportionate.

[65]

The core question on a case of just cause
    dismissal is whether an employee has engaged in misconduct that is
    incompatible with the fundamental terms of the employment relationship:
Dowling
,
    at para. 49. In order to meet its onus on this question, the respondent does
    not have to prove that it went through the process of applying the three-part
    test prior to terminating the employee, although that would certainly be the
    best practice in order to satisfy its onus in court. The Manitoba Court of
    Appeal reached a similar conclusion regarding whether an employer has a
    procedural duty to investigate allegations of theft before terminating an
    employees employment on that basis in
McCallum v. Saputo
, 2021 MBCA
    62. As Pfuetzner J.A. said in that case at para. 22, where courts have
    commented on this duty, it is in a practical, cautionary sense rather than as
    a free-standing legal duty. If the court ultimately finds that there were
    reasonable alternatives to termination, summary dismissal will not have been
    justified, and the employer will be liable for wrongful termination. However,
    the fact that the employer did not specifically turn its mind to this question
    is not a free-standing error that turns an otherwise proportionate summary
    dismissal into a disproportionate one.

[66]

In any event, there was evidence that the
    respondent in this case did consider the availability of other disciplinary
    measures, but decided that they could not be implemented because to retain the
    appellant would send a message to other female employees that the impugned
    conduct was being condoned. Given the seriousness of the conduct, involving
    non-consensual touching of a private part of the body, the respondent
    determined that it could not condone it or be seen to condone it.

[67]

The trial judge agreed. He referred to the
    respondents Anti-Harassment and Anti-Discrimination Policy, which had just
    been implemented, plus the fact that the appellant was a manager and was
    responsible for implementing the policy, the sexual nature of the contact, and
    the appellants lack of appreciation of its seriousness in the workplace
    context. He weighed all the other circumstances, including the appellants long
    and unblemished history with the company, but concluded that the respondent was
    entitled to terminate the appellants employment for cause.

[68]

With respect to the appellants argument that
    the respondent has treated other employees more leniently in the past, it must
    be remembered that each case is to be examined on its own particular facts and
    circumstances:
McKinley
, at para. 57. For example, the appellants
    position as a manager who supervised other employees and implemented the
    respondents policies puts him in a different position from non-managerial
    employees. While the employers policies and practices are a relevant factor
    under the three-part test set out in
Dowling
, the treatment of other
    employees must not overwhelm the analysis and cannot be determinative. Each
    case turns on its facts.

[69]

I see no error in the trial judges approach or
    analysis. He considered and weighed all of the relevant factors. His conclusion
    is entitled to deference.

[70]

I would also add that this was a most
    unfortunate situation that arose out of an overly familiar and, as a result,
    inappropriate workplace atmosphere that was allowed to get out of hand. As this
    court said in
Bannister
almost 25 years ago, it is a workplace
    atmosphere that can no longer be tolerated. Although some may perceive it to be
    benign and all in good fun, those on the receiving end of personal jokes do
    not view it that way. And when things go too far, as they did in this case, the
    legal consequences can be severe. Every workplace should be based on mutual
    respect among co-workers. An atmosphere of mutual respect will naturally generate
    the boundaries of behaviour that should not be crossed.
[1]

(3)

Did the trial judge err by failing to award the
    appellant his entitlements under the
ESA
?

[71]

The appellant submits that he should have been
    awarded his statutory
ESA
entitlements and that the trial judge erred
    by failing to do so.

[72]

Under the
ESA
, employees who have been employed
    for eight years or more are entitled to eight weeks of termination pay, unless
    they are disentitled to such pay under the statute:

55
Prescribed employees are not entitled to notice of termination or termination
    pay under this Part.

57
The notice of termination under s. 54 shall be given,



(h) at least eight weeks before
    the termination, if the employees period of employment is eight years or more.

61
(1) An employer may terminate the employment of an employee without notice or
    with less notice than is required under section 57 or 58 if the employer,

(a) pays to the employee
    termination pay in a lump sum equal to the amount the employee would have been
    entitled to receive under section 60 had notice been given in accordance with
    that section; and

(b) continues to make whatever
    benefit plan contributions would be required to be made in order to maintain
    the benefits to which the employee would have been entitled had he or she
    continued to be employed during the period of notice that he or she would
    otherwise have been entitled to receive.

[73]

The
ESA
also provides for severance pay
    under the following provisions:

64
(1) An employer who severs an employment relationship with an employee shall
    pay severance pay to the employee if the employee was employed by the employer
    for five years or more and

(b) the employer has a payroll of
    $2.5 million or more.

(3) Prescribed employees are not
    entitled to severance pay under this section.

65
(1)
    Severance pay under this section shall be calculated by multiplying the
    employees regular wages for a regular work week by the sum of,

(a) the number of years of employment
    the employee has completed; and

(b) the number of months of
    employment not included in clause (a) that the employee has completed, divided
    by 12.

(5)

An employees severance pay entitlement under this section shall not
    exceed an amount equal to the employees regular wages for a regular work week
    for 26 weeks.

[74]

However, as stated in ss. 55 and 64(3) of the
ESA
,
    certain prescribed employees are disentitled to termination and severance pay.
    The disentitlement provisions are found in the
Termination and Severance of
    Employment
, O. Reg. 288/01 (the Regulation), a regulation to the
ESA
,
    which provides in relevant part:

2.
(1)
    The following employees are prescribed for the purposes of section 55 of the
    Act as employees who are not entitled to notice of termination or termination
    pay under Part XV of the Act:



3. An employee who has been
    guilty of wilful misconduct, disobedience or wilful neglect of duty that is not
    trivial and has not been condoned by the employer.

9.
(1) The following employees are prescribed for the purposes of subsection 64
    (3) of the Act as employees who are not entitled to severance pay under section
    64 of the Act:



6. An employee who has been
    guilty of wilful misconduct, disobedience or wilful neglect of duty that is not
    trivial and has not been condoned by the employer.

[75]

The respondent says that the appellant did not
    ask for these benefits either in his pleadings or at trial, and therefore
    cannot ask for them now. It also argues that having been dismissed for cause,
    he is not entitled to any benefits in accordance with ss. 2(1)3 and 9(1)6 of
    the Regulation.

[76]

The respondent is correct that the appellants
    pleadings do not contain a reference to the
ESA
or the Regulation, nor
    did counsel make any submission about it in his closing. However, counsel for
    the appellant did refer to the
ESA
in his opening statement at trial
    in the following passage:

Why this employer entirely and utterly rushed
    to judgment, summarily terminated the employee without any offer of
    compensation, even compensation under the minimums of the
Employment
    Standards Act
, suggesting that the act, the incident that were talking
    about, was both serious in nature, in compliance with their own policies and
    procedures and

wilful.

[77]

The evidentiary basis for the
ESA
entitlement
    claim was also established at trial, where the appellant testified that he
    received no compensation or severance when his employment was terminated.

[78]

In my view, the appellant is entitled to receive
    his proved statutory benefits unless that entitlement is precluded by the
    wording of ss. 2(1)3 and 9(1)6.
ESA
entitlements are statutory and disentitlement
    cannot be achieved by agreement, unless to provide for a greater benefit to the
    employee:
ESA
, s. 5(1). In this case, the issue was raised, at least
    indirectly, at the trial. I acknowledge that the better approach would have
    been to raise the entitlement issue directly so that the trial judge could decide
    at first instance whether the impugned conduct fell within the statutory disentitlement
    sections. However, in the circumstances of this case, where non-compliance with
    the statute was raised in the opening statement and the relevant evidence is in
    the record, I would not prevent the appellant from asserting the claim on
    appeal.

[79]

The law on the interpretation of the prohibition
    sections has been consistently stated to require more than what is required for
    just cause for dismissal at common law. In
Plester v. Polyone Canada Inc.
,
    2011 ONSC 6068, 2012 C.L.L.C. 210-022, affd 2013 ONCA 47, 2013 C.L.L.C.
    210-015 (the reasons on appeal found it unnecessary to address this point), Wein
    J. explained that in order to be disentitled from the
ESA
entitlements
    under the wilful misconduct standard in the Regulation, the employee must do something
    deliberately, knowing they are doing something wrong. In the case before Wein
    J., the conduct was not preplanned and not wilful in the sense required under
    the test, which she described as follows at paras. 55-57:

The test is higher than the test for just
    cause.

In addition to providing that the
    misconduct is serious, the employer must demonstrate, and this is the aspect of
    the standard which distinguishes it from just cause, that the conduct
    complained of is wilful.
Careless, thoughtless, heedless, or inadvertent
    conduct, no matter how serious, does not meet the standard. Rather, the
    employer must show that the misconduct was intentional or deliberate. The
    employer must show that the employee purposefully engaged in conduct that he or
    she knew to be serious misconduct. It is, to put it colloquially, being bad on
    purpose.

Both counsel seemed to be slightly bemused by
    the recent authorities that distinguish between the definition of just cause
    and wilful misconduct. In my view, however, the distinction is quite obvious:
    Just cause involves a more objective test, albeit one that takes into account a
    contextual analysis and therefore has subjective elements.
Wilful misconduct
    involves an assessment of subjective intent, almost akin to a special intent in
    criminal law. It will be found in a narrower cadre of cases: cases of wilful
    misconduct will almost inevitably meet the test for just cause but the reverse
    is not the case.

The conduct of Mr. Plester was serious, and
    his failure to report deliberate. However, it did not rise to the very high
    test set for disentitlement to the statutory notice benefit.
It was not
    preplanned and not wilful in the sense required under this test
. There was
    an element of spontaneity in the act itself and at most a deer in the
    headlights freezing of intellect in the delay in reporting. On these facts
    willful misconduct should not be found. [Emphasis added.]

[80]

The differing standards at common law and under the
ESA
are
    further discussed in a number of cases, as well as in the Ministry of Labours
Employment
    Standards Act
Policy and Interpretation Manual (2020). The Manual states:
    this exemption is narrower than the just cause concept applied in the common
    law and in collective agreement disputes. In other words, an arbitrator or a
    judge may find that there was just cause to dismiss an employee, but this does
    not necessarily mean that the exemption in paragraph 3 of s. 2(1) applies.
    This principle has also been followed in a number of other authorities: see, e.g.,
Lamontagne v. J.L. Richards & Associates Limited
,

2021
    ONSC 8049, 75 C.C.E.L. (4th) 86, at paras. 16, 19, leave to appeal to Ont. C.A.
    requested, M53078;
Cummings v. Quantum Automotive Group
    Inc.
,

2017 ONSC 1785, at para. 73;
Ojo
    v. Crystal Claire Cosmetics Inc.
,

2021 ONSC 1428, 60
    C.C.P.B. (2nd) 200, at para. 14; and
Khashaba v. Procom
    Consultants Group Ltd.
,

2018 ONSC 7617, 52 C.C.E.L. (4th)
    89, at para. 53.

[81]

In my view, the appellants conduct does not
    rise to the level of wilful misconduct required under the Regulation. While the
    trial judge found that the touching was not accidental, he made no finding that
    the conduct was preplanned. Indeed, his findings with respect to the
    circumstances of the touching are consistent with the fact that the appellants
    conduct was done in the heat of the moment in reaction to a slight. Although his
    conduct warranted dismissal for cause, it was not the type of conduct in the circumstances
    in which it occurred that was intended by the legislature to deprive an employee
    of his statutory benefits.

[82]

The appellant proved his entitlement to eight
    weeks of termination pay. However, as we were not directed to anywhere in the
    record of evidence that the respondent has a $2.5 million payroll, as required
    under s. 64(1)(b), the court is not in a position to award the requested 26
    weeks of severance pay.

(4)

Did the trial judge err by failing to award
    punitive damages for litigation misconduct?

(5)

Did the trial judge err in his award of costs?

[83]

As these issues are linked, I propose to deal
    with them together.

[84]

The appellant asked the trial judge to award punitive
    damages against the respondent for trial misconduct. The misconduct arose as a
    result of the finding that the respondent retained a trial publicist who facilitated
    the breach of the witness exclusion order, thereby tainting the evidence of a
    number of witnesses, and whose inflammatory and sensationalist press release contained
    unproved allegations and was intended to possibly pressure the appellant and
    influence the trial judge. The trial judge made a specific finding that the
    respondent was responsible for the actions of the media consultant. He rejected
    the respondents submission that hiring a media consultant facilitated the open
    courts principle. He stated: I do not accept that the principle extends so far
    as to justify the preparation and wide distribution of an inflammatory and
    sensationalist press release on the eve of trial. In this case, the press
    release was not a balanced communication designed to educate the press with
    respect to the issues in the action.

[85]

The trial judge declined to order punitive
    damages, electing to address the issue in the costs award. After making the
    findings of misconduct, he declined to order no costs, but treated the
    misconduct as a factor in determining the amount of costs. In the result, he
    reduced the respondents costs entitlement by 50%, and awarded $73,696.66 in
    costs payable by the appellant.

(1)

Punitive Damages

[86]

In
McCabe v. Roman Catholic Episcopal
    Corp.
, 2019 ONCA 213, 146 O.R. (3d) 607, this court confirmed that
    litigation misconduct can be an independent actionable wrong that can give rise
    to an award of punitive damages: at para. 48. The trial judge declined to deal
    with the issue in that way, and instead determined that the respondents
    litigation misconduct could be addressed in the context of entitlement to
    costs. He was entitled to take that approach and his decision on this point is
    entitled to deference. As this court affirmed in
McCabe
, punitive
    damages remain the exception rather than the norm: at para. 48.

(2)

Costs of the Trial

[87]

In deciding to award the respondent its
    costs, one factor the trial judge took into account was that the respondent was
    fully successful in the action. However, that was because the court did not
    deal with the
ESA
entitlement. Although I would dismiss the appeal on
    the main ground, the appellant has now been awarded eight weeks termination
    pay, and as a result, the respondent is not fully successful. Leave to appeal
    from the costs order is therefore not necessary:
Tadayon v. Mohtashami
,

2015 ONCA 777, 341 O.A.C. 153, at para. 70;
Courts of Justice Act
,
    R.S.O. 1990, c. C.43, s. 133(b).

[88]

I add, however, that I would have granted
    leave to appeal the costs award in any event. In my view, there are strong
    grounds upon which the appellate court could find that the judge erred in
    exercising his discretion:
Brad-Jay Investments Ltd. v. Szijjarto
(2006), 218 O.A.C. 315, at para. 21 (C.A.), leave to appeal refused, [2007]
    S.C.C.A. No. 92;
Hobbs v. Hobbs
, 2008 ONCA 598, 240 O.A.C. 202, at
    para. 32;
Pinder Estate v. Farmers Mutual Insurance Company (Lindsay)
,
    2020 ONCA 413, 3 C.C.L.I. (6th) 8, at para. 128.

[89]

I would allow the appeal with respect to the
    costs awarded below. In my view, the litigation misconduct by the respondent disentitled
    the respondent to its costs of the trial. In
Georg v. Hassanali
(1989),

18 R.F.L. (3d) 225 (Ont. S.C.), one party delivered a news release during
    the trial. The court found that the purpose was to improperly apply pressure on
    the opposite party. The trial judge quoted the following from Houlden J.A. in
Andrews
    v. Andrews
(1980), 32 O.R. (2d) 29 (C.A.): [t]he conduct of the parties
    during the litigation is a most important factor to be taken into account by a
    judge in the exercise of his discretion as to costs. The court in
Georg
declined to order any costs on the basis that the conduct could not be condoned
    or tolerated.

[90]

That result applies in this case. The
    litigation misconduct at this trial was particularly egregious, as described by
    the trial judge. It interfered with trial fairness by tainting the evidence of
    witnesses and may have been intended to influence the court and pressure the
    appellant. Such conduct undermines the fairness and integrity of the judicial system.
    It cannot be tolerated or condoned.

[91]

In my view, the trial misconduct disentitled
    the respondent to its costs of the trial.

Conclusion

[92]

I would dismiss the appeal regarding the dismissal for cause and the
    refusal to award punitive damages; I would allow the appeal regarding the
    appellants entitlement to eight weeks statutory termination pay; and I would allow
    the appeal of the award of costs, set aside the award, and order no costs of
    the trial. As there was divided success on the appeal, I would not order costs of
    the appeal to either side.

Released: April 20, 2022 K.F.

K. Feldman J.A.

I agree. S.E. Pepall J.A.

I agree. M. Tulloch J.A.





[1]

In
    this case, there were also allegations of anti-Semitic comments. While those
    allegations are not before this court, nothing in these reasons should be taken
    to condone such comments. To be clear, anti-Semitic comments cannot be
    tolerated in a workplace.


