Section 26 of the Ontario Human Rights Code states that
it is a "...condition of every contract entered into by or on
behalf of the Crown or any agency thereof and of every subcontract
entered into in the performance thereof that..." there be no
discrimination in employment (as prohibited by section 5
of the Code) "...in the course of performing the
Subsection 26(3) of the Code further sets
out the powers of the Tribunal as follows:
Where an infringement of a right under section 5 is found by
the Tribunal upon a complaint and constitutes a breach under this
section, the breach of condition is sufficient grounds for
cancellation of the contract, grant, contribution, loan or
guarantee and refusal to enter into any further contract with or
make any further grant, contribution, loan or guarantee to the same
By consequence, where a person (or company) has entered into any
contract with the Crown, or an agency of the Crown, (in Ontario
where the Code applies) a potential consequence of
employment discrimination could actually be the nullification of
the contract, and refusal by the Crown to enter into any future
contract, grant, contribution, loan or guarantee to that person (or
company) in the future.
Quite conceivably, such consequences could be staggeringly
costly for businesses that depend on the Ontario government
for financing or revenue generation.
Very few cases exist that have applied or interpreted this
section, which has existed since 1990 (with amendments in
2002). However, even the possibility of such
a consequence should make it evident that companies
interested in preserving their ability to contract with government
in Ontario must conduct effective due diligence in
respect of their employment related human rights management
and legal compliance, if their capacity to contract is to be
preserved. Where such contracts are in place, corporate
management must also recognize that employment related
human rights issues are of strategic importance to the
business. Potential consequences for failure to comply
with section 5 of the Code could potentially extend
far beyond orders for compliance or damages awards, and
include the nullification of existing contractual
relationships with the Ontario government, including those
related to financing or the provision of goods and
Sound corporate social responsibility management necessitates
taking a proactive approach to the issue of human rights in
employment, and should include processes of human rights related
due diligence when entering into business contracts as part of
effective corporate governance. Indeed, in the context of
these provisions of the Code such an approach
may in fact be essential, and could also provide companies
with a competitive advantage with respect to the establishment and
maintenance of contractual relationships with the Government of
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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.
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