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12. Corporate liability

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Organizations have a legal duty and ultimate responsibility to maintain an environment free from discrimination and harassment because of gender identity and expression. They must take steps to prevent and respond to violations of the Code or they may be held “liable” and face monetary penalties or other orders from a tribunal or court.

It is unacceptable to choose to remain unaware, ignore or fail to address potential or actual human rights violations, whether or not a complaint is made.[101]

Under section 46.3 of the Code, a corporation, trade union or occupational association, unincorporated association or employers’ organization will be held responsible for discrimination, including acts or omissions, committed by employees or agents in the course of their employment. This is known as “vicarious liability.”

Responsible parties violate the Code where they directly or indirectly, intentionally or unintentionally infringe the Code, or where they otherwise authorize, condone or adopt behaviour that is contrary to the Code.

Multiple organizations may be held jointly liable where they all contribute to discrimination. Tribunals and courts may also find organizations liable because they failed to respond appropriately to discrimination and harassment. Organizations may face higher damages as a result.[102]

Vicarious liability does not apply to the parts of the Code dealing with harassment. However, since a poisoned environment is a form of discrimination, when harassment amounts to or results in a poisoned environment, vicarious liability is restored. The “organic theory of corporate liability” may also apply. That is, an organization may be liable for acts of harassment carried out by its employees if it can be proven that management was aware of the harassment, or the harasser is part of the management or “directing mind” of the organization.[103]

Generally speaking, anybody with authority or significant responsibility for the guidance of others will be considered part of the “directing mind.”

[101] Re Dupont Canada Inc. and Kingston Independent Nylon Workers Union, [1993] O.L.A.A. No. 426 at para. 67; Alberta v. Alberta Union of Provincial Employees (Banack Grievance), [1999] A.G.A.A. No. 74
at para. 86.

[102] Smith v. Menzies Chrysler Incorporated, supra, note 58.

[103] Olarte v. DeFilippis and Commodore Business Machines Ltd. (No. 2) (1983), 4 C.H.R.R. D/1705 (Ont. Bd. Of Inq.), aff’d (1984), 14 D.L.R. [4th] 118 (Div. Ct.). 


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