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Introduction
In a recent case, Amer v Shaw Communications Canada Inc., 2023 FCA 237, Justice Gleason made a noteworthy decision to uphold the Adjudicator’s award of substantial indemnity costs. Indemnity costs are awarded as compensation for costs incurred by a party during legal proceedings. What makes this ruling stand out is that contrary to the traditional requirement of reprehensible or outrageous conduct by one of the parties for awarding indemnity costs, the court embraced a perspective favoring the rights of employees. This case emphasizes the importance of ensuring that innocent employees are not penalized for asserting their legal rights.
Issue
The employee was an individual of limited means. Despite the relatively modest damages awarded, covering out-of-pocket losses and a small severance pay, the employee faced the prospect of legal fees to fight an unjust dismissal claim that would surpass the damages awarded. This raised the concern that pursuing a complaint could leave the employee worse off than if she had not filed one.
Parties
Justice Gleason’s discussion reflects the power dynamics at play. On one side was the employee—an individual of limited means, a single parent earning just under 40,000 annually facing financial detriment from legal costs. On the other side, Shaw Communications Canada Inc., a national, billion dollar corporation with significant financial resources and the capacity to retain experienced counsel.
Key Points & Decision
Limited Means of the Appellant
- The court highlighted the employee’s financial vulnerability, earning a modest income and being a single parent. This emphasized the injustice of burdening the employee with excessive legal costs.
Risk of Disincentivizing Complaints
- Justice Gleason expressed concern that if pursuing a complaint resulted in financial loss for the employee, it would undermine the remedial purpose of unjust dismissal provisions. The court sought to avoid a scenario where employees are discouraged from asserting their rights due to financial repercussions.
Power Imbalance
- The decision acknowledged the substantial power imbalance between the employee and the employer. This factor played a role in the court’s determination to uphold substantial indemnity costs.
Takeaways for Employees
This case sends a strong message in favor of protecting the rights of employees, particularly those with limited means. By upholding substantial indemnity costs, even in the absence of reprehensible conduct, the court recognizes the need to level the playing field and prevent financial disincentives for employees seeking justice under unjust dismissal provisions. This case serves as a reminder that the pursuit of legal rights should not come at the cost of financial hardship for individuals seeking justice in the workplace.
Takeaways for Employers
The decision also serves as a cautionary note for employers who may adopt a draconian approach, using the prospect of trial to overwhelm employees in litigation. Employers are urged to consider potential imbalances in power, resources, and legal representation during employment or labor disputes. In case of an escalation, it is encouraged employers seek to prioritize settlement methods or alternative dispute resolution, steering away from court where they be held liable for indemnity costs.
How Can We Assist?
At Labour Rights Law, we seek to promote access to justice. We understand the intricacies of legal trials, weighing the costs, benefits, and drawbacks based on your unique personal circumstances. We understand the distress an employee encounters when facing an unjust termination, discrimination, or bulling and harassment. We are available to provide you with legal advice and representation specifically tailored to the circumstances of your case. Contact us today!
Note : This information is for general information purposes only and does not constitute legal advice.
