Gonsalves v. Catholic Church Extension Society of Canada

Gonsalves v. Catholic Church Extension Society of Canada Collection Decisions of the Court of Appeal Date 1998-08-27 Docket numbers C24570 Judges Finlayson, George Duncan; Carthy, James Joseph; Then, Edward F. Subject Civil Decision Content Date: 19980827 Docket:C24570 COURT OF APPEAL FOR ONTARIO FINLAYSON and CARTHY JJ.A. and THEN J. (ad hoc) BETWEEN: PETER GONSALVES Plaintiff (Respondent) -and- THE CATHOLIC CHURCH EXTENSION SOCIETY OF CANADA Defendant (Appellant) Susan Adam Metzler for the appellant M. Norman Grosman for the respondent Heard: May 20, 1998 CARTHY J.A.: [1] The appellant, The Catholic Church Extension Society of Canada ("C.C.E.S."), is a small charitable foundation which employed the respondent as its financial director and office manager until he was dismissed from his employment on the grounds of sexual harassment of a subordinate employee, Ms. N. The respondent brought an action for wrongful dismissal and, after a trial before McCombs J. (the reasons reported at (1996), 20 C.C.E.L. (2d) 106), the respondent was successful in recovering a judgment for an amount in excess of $200,000 plus pre-judgment interest. The appellant appeals against the finding of liability and says that the termination was justified. [2] The foundation operated out of modest premises, with eight full-time and two part-time female employees under the supervision of the respondent, Mr. Gonsalves, who reported to the president. In 1994, the president was Father Coughlan, who was for the most part absent from the office visiting missions. The respondent did the hiring and firing, made pay recommendations, and supervised the day-to-day operations. In 1981, Mr. Gonsalves hired Ms. N to work for him in a clerical position. [3] In January of 1992, Ms. N's longstanding relationship with a man ended and this was the beginning of a change in the respondent's behaviour to her. Although none of this was reported to Father Coughlan at the time, the trial judge made these findings as to what was occurring, at p. 110 of his reasons: It is not necessary to detail the competing allegations of the various parties. I am satisfied on the evidence that Mr. Gonsalves would occasionally tell staff members inappropriate sexual jokes. I am also satisfied that he became infatuated with Ms. N, and began to make inappropriate comments to her both privately and in front of co-workers. He made it clear to her that he was attracted to her and that he found her beautiful and "sexy". Although he told her that he just wanted to be friends, his behaviour suggested that in fact he wanted to have a sexual relationship with her. He suggested that they go away together, and occasionally gave her gifts. On more than one occasion, he hugged her, and once, he caressed her breast. I accept the testimony of Ms. N that although she considered Mr. Gonsalves a friend, she was intimidated by him, and had no idea how to deal with his unwanted advances. She lacked confidence both in herself, and in her job security. Mr. Gonsalves was her boss, and she felt trapped and isolated, not knowing where to turn. For those reasons, she did not report her concerns to anyone, nor did she make it clear to Mr. Gonsalves that his attentions were unwelcome. Instead, she attempted to deflect them by gently reminding him that he was a married man, or by behaving as if she thought he was joking, or by saying that he should not behave this way because the others in the office might find out. As Ms. N testified: ... outwardly, I pretended. I took it as a joke from the very beginning. I tried everything not to show that I understood what he means. I laughed it off and I'd say "Peter you're kidding". When Peter was saying these things, I'd say don't talk like that, you're kidding. He'd say no, I'm serious. [4] In November of 1992, the foundation hired Brad Clark as the new director of development. He reported directly to Father Coughlan, as did Mr. Gonsalves, but the other employees continued to report to the respondent. Mr. Clark noticed that Mr. Gonsalves seemed to be overly critical of Ms. N's competence and, about two months after joining the foundation, Mr. Clark was shocked to overhear an exchange in which Mr. Gonsalves criticized Ms. N about a work-related matter, and, when she replied that no one had told her about it, Mr. Gonsalves said, "No one told you about sex either but you know how to do it." The next day, Mr. Clark spoke to both parties about the remark and Mr. Gonsalves said that he realized it had been inappropriate and that he had already apologized. Mr. Clark reported the incident to Father Coughlan, who asked him to continue to monitor the situation. [5] The trial judge continues the narrative, at p. 111 of his reasons, as follows: In March of 1993, Mr. Clark again met with Father Coughlan and conveyed concerns which had been privately conveyed to him by other office staff to the effect that Mr. Gonsalves was tyrannical, sexist and disrespectful, not only towards Ms. N but other women in the office as well. Father Coughlan responded a week later with further changes in the administrative hierarchy. He produced a new organizational chart in which Ms. N and another staff member would no longer report to Mr. Gonsalves, but to Mr. Clark. Although Mr. Gonsalves was never advised of the reasons for the change, the administrative shake-up had the desired effect. It clearly brought home to him that his power base was eroding, and that Mr. Clark was gaining further authority. I am satisfied on all the evidence that the organizational changes effected by Father Coughlan brought an end to Mr. Gonsalves' inappropriate conduct toward Ms. N. I find that his inappropriate behaviour stopped in March, 1993, seven months before he was fired for sexual harassment. [6] The reasons of the trial judge recount the succeeding events. For the purposes of this appeal, it is sufficient to jump to a luncheon meeting arranged by Mr. Clark on October 7, 1993, between Mr. Clark, Ms. N and another staff member. The purpose of the meeting was to seek to ease the tension that appeared to have developed within the office and was thought to flow from a recent special audit that had been conducted at Father Coughlan's direction. Apparently, the source of the tension was, in fact, the conduct of Mr. Gonsalves because it was at this meeting that Ms. N poured out the history of her complaints. These included the respondent: · making remarks to the effect that she looked sexy, · asking her if she had someone for sex after breaking up with her friend, · suggesting that she should get an older, married man for sex, · saying that he could not remember how many women he had gone to bed with, even after he had married, · remarking that he had better leave the room before he did something, because she was so sexy, · asking to go to her home to have coffee so they could be cozy, · suggesting that he wanted to go on a cruise and he would introduce her as his wife, · saying that he wanted to massage her in bed, · telling inappropriate stories and making embarrassing sexual remarks, both privately and in the presence of others. · physically assaulting her, on one occasion, by coming up behind her and grabbing her in a hug while he fondled her breasts, and on another occasion rubbing up against her leg on the subway. [7] Ms. N's description of the hug, as given in her evidence, was: A. --- gave me a really tight, big hug and then suddenly I feel this -- his hand all over my breast, went back and forth, back and forth and I tried to get away but for me, it was ages. It wasn't long but for me it was ages and when I -- when I got away, I say, "Peter, how can you go home and face your wife? How can you -- how can you do such a thing to your wife and to your family? You are a married man. That's what I kept on reminding him all this time about his wife. I know his wife. She is a very nice person. I really like her and I felt so sorry for her. He say, "But can you blame me?" I said, "Blame you for what? You're so beautiful." I say, "I am not but that is not the point. The world is full of beautiful women and it doesn't mean that men can touch them and " --- [8] When all of this was reported to Father Coughlan, a meeting was held. Mr. Gonsalves was confronted with the allegations, and was told that the foundation had no choice but to terminate his employment. He was told that, on the basis of compassion, he would be given one year's salary. Mr. Gonsalves refused this offer and, essentially, denied the allegations. [9] At the time of Mr. Gonsalves' dismissal, the C.C.E.S. did not have a formal policy in place dealing with sexual harassment. However, Mr. Gonsalves took the position at trial that the allegations were untrue and that nothing even remotely close had occurred. Moreover, he acknowledged that the things complained of were serious and very wrong, and he acknowledged that no warning or instruction not to do such things would have been necessary. These significant admissions are not mentioned by the trial judge in his reasons, although they certainly bear upon the need for a warning and the lack of a sexual harassment policy within the office. They also confirm the seriousness of the offence in the eyes of the perpetrator. [10] Nor does the trial judge refer to the evidence of Ms. N as to the impact of this abuse upon her. She testified that through to, and beyond the date of the termination, she suffered from migraine headaches, stomach pains, and nightmares about Mr. Gonsalves. She was living in constant fear of embarrassment, and was terrified that she would lose her job if she spoke up. The trial judge basically accepted Ms. N's complaints as to the incidents of harassment and there is no apparent reason that he would disbelieve her evidence as to the symptoms she was suffering, even after the overt conduct had ceased. This evidence has obvious significance to the alternatives available to the employer when faced with a denial of apparently credible complaints. The employer has a duty to all the employees both to end the abuse and to alleviate its impact upon the employment environment. On the face of this evidence continued employment would have perpetuated Ms. N's distress. [11] In his reasons, the trial judge lists a number of factors that are to be considered in determining whether an employee has been properly dismissed for cause and concludes, at p. 114: No single factor is determinative in deciding whether an employee has been properly dismissed for cause. Instead, all of the relevant factors must be weighed in arriving at the ultimate conclusion. There can be no doubt that the plaintiff's behaviour towards Ms. N was offensive, and that she was deprived of her right to work in a dignified environment, free from harassment. Given that Mr. Gonsalves was in a position of authority over her, it is understandable that she did not report his behaviour to others, or clearly advise him that his behaviour was unwelcome. Mr. Gonsalves had been a valued employee of the C.C.E.S. for twenty-two years. He was fifty-nine years old at the time of his dismissal, and his prospects for future employment are negligible. He had stopped his offensive conduct seven months before his behaviour came to light. Having regard to all of the circumstances of this case, I conclude that he was entitled to a warning that his conduct was completely unacceptable and that any re-occurrence of the behaviour would not be tolerated. In my view, the defendant has not discharged the onus upon it to establish that Mr. Gonsalves was properly dismissed for cause. He is accordingly entitled to compensation for the lack of notice. [12] In my view, the trial judge erred by isolating the circumstances of Mr. Gonsalves and the seven month period during which no offensive conduct had occurred as justifying a warning. In doing so he failed to consider all of the circumstances facing the employer when these transgressions were revealed. [13] Mr. Gonsalves' long employment record, his age, and other employment opportunities are relevant considerations if a suitable alternative to termination is available. But the circumstances must justify that alternative -- here, a warning. [14] In Tse v. Trow, [1995] O.J. No. 2529, Cumming J. spoke of the relationship between a warning and the seriousness of the offence in these terms at para. 42 and 43: I emphasize that sexual harassment is a serious problem in the workplace and is unacceptable in any form. All instances of sexual harassment are serious and deserving of censure. However, in a relative sense some instances of sexual harassment are less serious than others. For less serious instances of sexual harassment, a warning that such misconduct may result in dismissal is required before termination is justified: MacDonald v. Valley Credits Ltd. (1988), 13 A.C.W.S. (3d) 358 (B.C. S.C.). In these less serious situations, for sexual harassment to constitute cause for dismissal it must be made known to the plaintiff by the employer that it is unwelcome and that dismissal will be the consequence. [15] The allegations against Mr. Gonsalves were very serious, including the criminal act of sexual assault. As a generality, it seems no more appropriate to address sexual assault by a warning than to issue a warning to an employee caught stealing money, even if seven months ago. And here, the employee was a supervisor who by his own admission knew the conduct complained of was unacceptable and conceded that he didn't need to be told so. [16] The following trial judgements uphold dismissals without warnings based upon fondling of breasts or something equally serious by supervisors. Tellier v. Bank of Montreal et al. (1987), 17 C.C.E.L. 1 (Ont. D.C.); Himmelman v. King's-Edgehill School (1985), 7 C.C.E.L. 16 (N.S. T.D.); William R. Mackie v. Genesco Canada Ltd. (unreported decision of the Ontario Court of Justice, General Division, released March 12, 1991); and Bernard Neigum v. Wilkie Co-operative Association Ltd., [1987] S.J. No. 152 (Sask. Q.B.). [17] The sense of the reasoning in these cases is that that serious misconduct, which is manifestly inexcusable, may make a warning totally inappropriate to an employer who is satisfied that the misconduct has occurred. [18] Here, as noted earlier, the trial judge failed to consider the impact upon Ms. N of a continuation of Mr. Gonsalves' employment under a warning. It should be noted that Ms. N testified that, while the physical assaults stopped in March of 1993, the verbal intimidation continued, including the veiled threats against speaking to anyone of her personal life. Perpetuating his employment would likely have perpetuated her symptoms of intimidation. [19] Yet another feature of the circumstances of this case which the trial judge ignored is the difficulty presented to the employer by a flat denial of complaints. The initial reaction to a denial should be a careful investigation and analysis of the complaints to be assured that they are not false complaints motivated by some collateral grudge. Here, Father Coughlan conducted a very limited investigation but, as it turned out at trial, his assessment was correct — the complaints were valid and the denial was false. Once the employer is satisfied that the complaints are well-founded, the denial has a significance in limiting suitable choices open to the employer. There is no opening for an apology to clear the air if employment is to be continued. Further, in this case, the pattern of behaviour was inconsistent with responsible management and suggests a profile that might benefit from treatment if employment was to be continued. That alternative was eliminated by the denial. Without some acknowledgement of fault and steps taken to reassure staff it is my view that Father Coughlan could not responsibly have left this small group of female employees in the charge of Mr. Gonsalves, subject only to a warning. [20] It is a very sad and difficult task to tell an employee, with a long service record that was previously unblemished, that he must be dismissed at an age when his re-employment potential is questionable. However, persons in a supervisory capacity must not, over time, permit their position of power to supplant good judgment and responsibility. When credible evidence stands against denial, the employer's options may be limited and its obligations to the work force may have to supervene over the interests of an otherwise valued employee. [21] It is my conclusion that the trial judge erred in failing to appreciate that the conduct of the respondent was so serious, and the impact upon Ms. N so manifest, that the employer had no option in all the circumstances but to terminate the employment. [22] I would therefore allow the appeal and dismiss the action, with costs throughout. Released: August 27, 1998