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The Divisional Court recently dismissed an application for judicial review of a decision of the Human Rights Tribunal of Ontario (“HRTO“) that held that a purchaser in an asset transaction discriminated against an employee who was on a leave of absence because the purchaser did not consider her for potential employment as part of the transaction.
Key Background Facts
Ms. Morasse was employed by Nortrax Canada Inc. (“Nortrax“). She was on maternity leave when Nortrax sold its assets to Brandt Tractors Ltd. (“Brandt“). Brandt hired all but 30 of the 650 employees of Nortrax. None of the employees who were on leave during the time of the asset transfer were contacted, interviewed or offered positions. The HRTO found that Brandt discriminated against Ms. Morasse based on sex and family status when it did not consider her for employment with Brandt.
Brandt argued that (i) it was never Ms. Morasse’s employer nor a successor employer under the Code, (ii) it had no knowledge of Ms. Morasse’s protected status so it could not have been a factor in the adverse impact; and (iii) its hiring process was driven by business considerations, with all employees on leave being treated the same (they were all not considered).
The Decision
The Divisional Court dismissed the application for judicial review and highlighted the following points in its decision:
- ss. 5(1) of the Code guarantees “equal treatment with respect to employment” and does not only apply to employers;
- Brandt knew or ought to have known that its policy not to interview anyone on leave would affect persons away on protected leaves;
- Brandt had Nortrax’s HR files, consulted with Nortrax’s local managers and engaged in a heavily cooperative process when they decided who to consider for employment;
- Brandt could not maintain that it had no knowledge of Ms. Morasse’s protected status by turning a blind eye;
- Identical treatment may result in inequality. The fact the hiring policy was applied equally to all persons on leave did not render it non-discriminatory;
- Brandt admitted that it had decided not to interview Ms. Morasse because she was on leave, which meant there was a nexus between Ms. Morasse’s protected characteristic and the fact she was not considered for employment; and
- Her maternity leave was thus a factor in the decision not to consider her for employment.
Takeaways for Purchasers
- Purchasers of a business should meaningfully consider employees on leave when deciding who to consider to hire.
- Excluding individuals on leaves, even if for legitimate business reasons, creates significant human rights exposure, regardless of intent.
- Policies applied equally to all can still be discriminatory.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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