Why RBC doesn’t rush to settle dismissal cases

Why RBC doesn’t rush to settle dismissal cases
Alison Burton of RBC says the bank is reluctant to settle some employment cases.
BOSTON — When it comes to the option of settling a constructive dismissal case or going to court, the Royal Bank of Canada says it opts to choose litigation first as plaintiffs often see “deep pockets” and the possibility of a settlement.

Speaking on a panel at the Association of Corporate Counsel annual meeting in Boston last week, in-house counsel Alison Burton, assistant general counsel at RBC, and Kim Madigan, vice president for human resources at Canadian National Railway Co., teamed up with Norton Rose Fulbright Canada LLP partner William Hlibchuk to discuss some of the hot topics in Canadian employment law.

Constructive dismissal commonly comes up when changes are made to an employee’s contract or working conditions, when people are disgruntled or feel they have been discriminated against or unfairly treated by a manager.

While Hlibchuk said constructive dismissal cases are settled “90 per cent of the time,” Burton said that for large employers such as the bank, “we don’t settle 90 per cent of the files.”

“It’s a small bar in Canada, and we see the same plaintiff counsel over and over and so you have to be mindful, especially if you’re a big employer where they know who you are and they think of you as a deep pocket,” she said.

“You have to be thoughtful about it because if you settle a file this time, you’re going to see the same guy in four months’ time looking for something similar. We just don’t settle a lot of our files.”

One of the reasons for that, she said, is that litigation in Canada is not as cost-prohibitive as in the United States.

“There is the ability to get costs back from the plaintiff,” she said. “So litigation is very different in Canada, and you have to turn your mind to that. I would suggest if you fire someone and get a demand letter out of the gate, maybe settling is not the first thing you want to do.”

Instead, Burton suggested being “thoughtful and fair on the front end” so you’re not looking at costs on the back end.

Burton said the next wave of cases she sees coming is in the realm of human rights complaints along with increasing numbers in the already-active area of mental and physical disabilities and family status.

“The complaints we see are not based on race but more on disability,” she said, noting that she thinks age discrimination will be the next big wave of human rights complaints given there’s no longer mandatory retirement in Canada.

“Attitudes and [workplace] plans have not really caught up,” she said. “When you have a manager saying, ‘Hey, you’re going to be 65 next year — are you thinking about retiring?’ that’s where you get into some trouble.”

Because a lot of retirement and benefit plans end at 65 and haven’t been amended, Burton said she thinks that will be the next wave of concern.

“Especially as you see baby boomers sticking around the workplace and you can’t promote your middle management and succession problems unfold, that’s going to be the next big area,” she said.

Hlibchuk said the powers of human rights tribunals are “quite broad” and damages are compensatory but “reinstatement is the biggest piece.”

“Don’t think you can just pay the money because the tribunal can reinstate,” he said.

The “most challenging area,” said Burton, is in the area of accommodation around people with disabilities, religion, and age.

“Where we see most of the problems are around disabilities where you have managers who don’t want to have that awkward conversation. They don’t want to ask an employee what their disability is, but our response is to sit down and have the discussion,” said Hlibchuk.

Another area is family status where, for example, a single parent needs to pick up a child at 4 p.m. but working hours end at 5 p.m. and the mother is asking to leave early three days a week.

“That’s family status. You have an obligation to accommodate,” said Burton. “You have to accommodate to the point of undue hardship. There’s been some guidance but not very much and the larger an employer you are, you’re just never going to get to undue hardship. You have to accommodate and do what you can.”

Madigan spoke about a CN freight train conductor living in Jasper, Alta., who had been laid off between 1997 and 2005. In 2005, she was asked to return to cover a shortage of conductors in Vancouver. Under the collective agreement, Denise Seeley had 15 days to return to service but couldn’t due to childcare issues. She asked for an extension, and CN gave her up to four months to find an alternative solution. At the end of that period, she didn’t appear for work and she was fired in July 2005.

She filed a complaint with the Canadian Human Rights Tribunal alleging discrimination based on family status and it was decided CN had to accommodate the woman.

In 2013, the Federal Court upheld the Canadian Human Rights Tribunal decision awarding the CN employee $35,000 for discrimination based on family status. She was reinstated to her job in 2007 with uninterrupted seniority.

Burton said the bank has also had to deal with employees on sick leave who return to work but their job no longer exists and the bank has to look for other opportunities and give preference to them over other candidates.

Burton noted that gambling addictions are recognized as a disability and can be particularly tough to accommodate when an employee returns to work.

“We have gone so far as to say they can’t have access to money. It is an uphill battle,” she said.

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