Audit, Compliance and Risk Blog

Directors' Liability for Workplace Sexual Harassment in Canada Can Depend on Which Laws are Applied

Posted by Jon Elliott on Tue, Jan 22, 2019

BarristaSexual harassment in Canadian workplaces can trigger a variety of laws and regulations:

  • Human rights legislation prohibits employers from committing or condoning discrimination, including sex discrimination which includes sexual harassment

  • General labour statutes

  • Occupational health and safety legislation protects workers from workplace hazards, which increasingly include bullying and harassment

  • Workers compensation laws provide an insurance system to compensate workers for occupational injuries and illness.

Directors and officers may face personal liability under the first three sets of statutes – in addition to corporate liability – but may be able to avoid personal liability based on the fourth set of statutes.

Human Rights Statutes

Human rights legislation at all levels across Canada prohibits discrimination in employment to varying degrees.1 This includes prohibitions against sexual discrimination, including sexual harassment.

Where the term “harassment” is defined in human rights and worker safety laws, it is broadly defined. For example, the Ontario Human Rights Code provides the following definition (Ont. Human Rights Code (OHRC) § 10(1)):

“[H]arassment” means engaging in a course of vexatious comment or conduct that is known or ought reasonably to be known to be unwelcome.

A number of the laws supplement this general language with specific provisions directed against sexual harassment. For example, Ontario provides the following (ORHC § 7(2)-(3)):

7(2) Every person who is an employee has a right to freedom from harassment in the workplace because of sex, sexual orientation, gender identity or gender expression by his or her employer or agent of the employer or by another employee.
7(3) Every person has a right to be free from
(a) a sexual solicitation or advance made by a person in a position to confer, grant or deny a benefit or advancement to the person where the person making the solicitation or advance knows or ought reasonably to know that it is unwelcome; or
(b) a reprisal or a threat of reprisal for the rejection of a sexual solicitation or advance where the reprisal is made or threatened by a person in a position to confer, grant or deny a benefit or advancement to the person.

General Labour Statutes

Employees who are subject to harassment may also be able to sue their employers for constructive dismissal, or for tortious actions by supervisors. For example, in 2006 the Supreme Court of British Columbia found that a supervisor’s long-term harassment of a female subordinate amounted to negligent infliction of emotional distress that left her unable to work, and awarded $950,000 in damages (Sulz v. Attorney General, 2006 BCSC 99). In another case, in which a verbally abusive male supervisor eventually shoved a female employee, the trial court awarded $225,000 in damages without considering the harassment to be sex-based (later reduced by the Ontario Court of Appeal to $60,000). (Piresferreira v. Ayotte, 2010 ONCA 384) Directors and officers can be personally liable to pay for labour code violations if the corporation is unable to pay (because of bankruptcy, for example).

Occupational Health and Safety Statutes

A growing number of labour statues also address sexual harassment; for instance, the Canada Labour Code (CLC) defines “sexual harassment” as (CLC s. 247):

. . . any conduct, comment, gesture or contact of a sexual nature
a) that is likely to cause offence or humiliation to any employee; or
b) that might, on reasonable grounds, be perceived by that employee as placing a condition of a sexual nature on employment or on any opportunity for training or promotion.

When Bill C-65 comes into force (Royal Assent received October 25, 2018), CLC will also define “harassment and violence” as (CLC, s. 122(1), as amended by Bill C-65):

“…any action, conduct or comment, including of a sexual nature, that can reasonably be expected to cause offence, humiliation or other physical or psychological injury or illness to an employee, including any prescribed action, conduct or comment; (harcèlement et violence).”

If the Crown proceeds by indictment, a person is liable on conviction of a CLC violation to a fine of not more than $1 million or imprisonment for up to two years, or both. In summary conviction proceedings, the offender is liable to a fine of not more than $100,000. Directors can be liable personally if found to have committed or condoned violations.

Workers Compensation Statutes

Canadian jurisdictions also operate workers compensation systems, under which employers contribute to insurance funds used to compensate employees for injuries, in exchange for which they are immunized against suit by injured employees for the incidents or conditions that led to injury. The operation of these systems may serve to immunize employers – and directors and officers – from liability for workplace sexual harassment and assaults. An example of this situation is provided by the following case from 2018 (Workplace Safety and Insurance Appeals Tribunal Ontario) Decision No. 3096/17):

A woman identified as “L.E.L.” was an employee of a Subway Restaurant. She was subjected to repeated sexual harassment and assault by her supervisor H. Gajjar. She sued Subway, its owner and executive officer A. Patel, and Gajjar in civil court seeking compensation for her damages. (Gajjar was also prosecuted criminally) Subway and Patel applied under section 31 of the Ontario Workplace Safety and Insurance Act (WSIA) claiming that L.E.L.’s right of action against them is taken away because the incidents constituted “accidents” under WSIA for which she is due workers compensation but barred from separate suit.
The Tribunal reviewed the history of workers compensation and WSIA, which includes an historical tradeoff under which employees can receive compensation for workplace accidents (incorporated as WSIA s. 26), but cannot sue their employers. The WSIA definition of “accident” includes “a wilful [sic] and intentional act, not being the act of the worker,” which the Tribunal has held repeatedly to include sexual assault. Since L.E.L. made no claims of direct involvement by Patel or the corporation that would overturn such precedent, the Tribunal ruled that she could not sue them. However, the Tribunal also held that one alleged assault by Gajjar in his vehicle while driving L.E.L. home was outside the workplace and therefore not covered by the exclusion. L.E.L. remains eligible to make a claim for workers compensation.

In contrast with the first three sets of laws, operation of the workers compensation statutes may actually protect the company, and a director or officer individually, from liability.

What to Make of This?

Readers should know that many corporate and workplace situations are subject to a range of laws, which may overlap or conflict. Sexual harassment prohibitions are increasingly typical of this pattern. The best approach to sexual harassment prohibitions is obviously prevention, which can be pursued by organizational policy and procedures, diligently implemented. If you and your organization do find yourselves subject to complaints, you need to seek specialized professional advice.


1 The provincial and territorial human rights statutes are similar to the federal CHRA, though each jurisdiction differs in some respects: British Columbia: Human Rights Code, R.S.B.C. 1996, c. 210; Alberta: Human Rights, Citizenship and Multiculturalism Act, R.S.A. 2000, c. H-14; Saskatchewan: The Saskatchewan Human Rights Code, S.S. 1979, c. S-24.1; Manitoba: The Human Rights Code, C.C.S.M. 1987, c. H-175; Ontario: Human Rights Code, R.S.O. 1990, c. H-19; Quebec: Charter of Human Rights and Freedoms, R.S.Q. 1977, c. C-12.

In 2017, extensive public consultations and online survey responses to Employment and Social Development Canada revealed widespread workplace harassment and sexual violence. Employment and Social Development Canada, Harassment and sexual violence in the workplace Public consultations – What We Heard (2017). This report can be downloaded from https://www. health-safety/reports/workplace-harassment-sexual-violence.html. The Government responded with Bill C-65. CLC, ss. 122(1), 122.1 and 125(1) (z.16), as amended by SC 2018, c. 22 (An Act to amend the Canada Labour Code (harassment and violence), the Parliamentary Employment and Staff Relations Act and the Budget Implementation Act, 2017, No. 1) (Bill C-65) (royal assent October 25, 2018; to come into force on a date to be fixed by an order of the Governor in Council (still pending as of November 2018)).

Specialty Technical Publishers (STP) has just published an update to its publication Directors' Liability in Canada and provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements. These include:

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About the Author

Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 25 years. 

Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).

Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).

You may contact Mr. Elliott directly at:


Photo by Liam Martens on Unsplash

Tags: Business & Legal, Employer Best Practices, Employee Rights, Workplace violence, Canadian, directors, directors & officers