While federally regulated employers may not have been waiting
with bated breath for the long-coming outcome of Canada
(Canadian Human Rights Commission) and Mowat v Canada
(AG)1 ("Mowat"), it will permit
them to breathe a little easier. In Mowat, the Supreme
Court of Canada ruled that the Canadian Human Rights Tribunal does
not have the ability to award costs to a successful complainant
under the Canadian Human Rights Act. More importantly, it
also held that the Tribunal's decision was subject to review on
a standard of reasonableness, but that its decision was
SCC on costs
Mowat was a member of the Canadian Forces who filed a
varied complaint about her treatment as a female. Ultimately she
was awarded $4,000 for sexual harassment to compensate for
"suffering in respect of feelings or self respect." The
Tribunal proceeded to consider her claim for legal costs. It
awarded her $47,000 for costs, a decision that was upheld by the
Federal Court but overturned by the Federal Court of Appeal. The
SCC upheld the Court of Appeal's decision on the issue of
The Act provides that the Tribunal can "compensate the
victim for ... any expenses incurred by the victim as a result of
the discriminatory practice." The SCC found that
"expenses" do not include legal costs. The SCC held that
if Parliament had intended for costs to be awarded, it would have
included the familiar and widely accepted legal term
"costs" in the Act. This position was supported by the
fact that there had been numerous unsuccessful attempts to amend
the Act to include the ability to award costs and that costs are
specifically referenced in provincial and territorial human rights
Standard of review
A second issue before the SCC in Mowat was what
standard of review should be applied to a decision of the Tribunal.
Must the decision be correct or would the Court defer to a standard
The SCC held that the Tribunal's decision to award costs was
reviewable on a standard of reasonableness. It held that not all
questions of general law before the Tribunal are issues of
"central importance to the legal system" or fall outside
an adjudicator's "specialized area of expertise."
Cost awards are "inextricably intertwined" with the
Tribunal's mandate and expertise to make factual findings
relating to discrimination. The Tribunal was interpreting its
enabling statute when deciding to award costs, and simply had to do
so in a reasonable fashion. The SCC held that decision was not
Administrative law consequences
The reasons in Mowat will interest those who advise or
appear before administrative tribunals. Although the SCC ultimately
overturned the Tribunal's award of costs, some parties will be
comforted by the fact that the SCC applied the more deferential
standard of reasonableness to the Tribunal's decision. Those
challenging a tribunal decision related to process, such as costs,
should be prepared to show that the decision was not in a range of
reasonable outcomes based on the relevant statute.
What Mowat means for employers
It should be noted that the majority of complaints with respect
to human rights matters are against provincially regulated
employers. Each province has unique legislation. Some –
such as Alberta, Quebec, P.E.I. and Newfoundland –
specifically allow costs to be awarded in any human rights case.
Others such as – Manitoba, Saskatchewan and British
Columbia – permit awarding costs in specific
circumstances. Costs awards are not provided for in human rights
legislation in Ontario, New Brunswick and Nova Scotia.
The inability to award costs in Ontario is a double-edged sword
for provincially regulated employers. On the one hand they need not
fear large cost awards against them in losing applications. On the
other, the legislation has been amended so that there is no longer
any ability to weed out frivolous and vexatious claims at an early
stage without an oral hearing. Further, free resources such as the
Human Rights Legal Support Centre are available to complainants.
Employers are forced to spend substantial legal fees which are not
recoverable, defending complaints regardless of their merit.
Accordingly, there are little to no repercussions for complainants
commencing frivolous claims.
The Mowat decision will provide some peace of mind for
federally regulated employers who are often the target of
disgruntled employees. Employers will not be forced to pay costs
for complaints that make it to a hearing, even if the complaint is
sustained. It may be that federally regulated employers witness
some screening out of tenuous claims on the basis of the SCC's
decision and complainants will be encouraged to settle matters
early knowing they will not be reimbursed for any costs
1 2011 SCC 53.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).