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File #1001-99
The Prince Edward Island Human Rights Commission

Between:

Mary Taylor

Complainant

and:

Testori Americas Corporation

Respondents




DECISION


Hearing Date: March 10, 2000

Panel Member
Louise Comeau - Commissioner
Prince Edward Island Human Rights Commission
PO Box 2000
Charlottetown PE C1A 7N8
(902)368-4180


THE COMPLAINT

  1. This is an inquiry into the complaint of Mary Taylor who alleges that she was discriminated against in the matter of employment on the basis of sex with regards to pregnancy, contrary to Section 6(1) and 1(1)(d) of the Human Rights Act R.S.P.E.I. 1988, Cap. H-12, as amended. Ms. Taylor alleges that she was laid off from her employment during her maternity leave and she was denied health benefits during maternity leave.

  2. Section 6(1) of the Human Rights Act states:

    No person shall refuse to employ or to continue to employ any individual
    (a) on a discriminatory basis, including discrimination in any term or condition of employment.

  3. Section 1(d) of the Human Rights Act states:

    "discrimination" means discrimination in relation to age, colour, creed, ethnic or national origin, family status, marital status, physical or mental handicap, political belief, race, religion, sex, sexual orientation, or source of income of any individual or class of individuals;

  4. The Respondent in this inquiry is Testori Americas Corporation, a company that manufactures components for mass public transit vehicles. The Respondent denies the allegations of discrimination.

PRELIMINARY MATTERS

  1. During a telephone conference with counsel on March 8, 2000, the Complainant requested that the complaint include a further incident of discrimination: the Respondent's failure to provide her with health benefits during her pregnancy. The Respondent objected, stating that the issue should not be admitted as it was not raised in the original complaint.

  2. The Complainant referred me to the Ontario Board of Inquiry decision of Entrop v. Imperial Oil Ltd. (No.3) (1994), 23 C.H.R.R. D/186. The Board of Inquiry, Constance Backhouse, found that it was unnecessary to amend a complaint if the matters sought to be introduced flow from the first complaint:

    Where the parties to the case remain in a continuing relationship, events will continue to unfold. The questions concerning the process of reinstatement fall squarely within the original ground of employment discrimination alleged by the Complainant. The information sought to be adduced is in the nature of a "continuum" of the matters raised in the first instance. The issue of reinstatement is not severable from the issue of job loss. The evidence simply related to a single issue over a continuing time. There is no need to obtain an amendment to the Complaint on these issues (at page D/187).

    I found that the allegation of the discontinuance of health benefits is a further incident, if proven, of the alleged discrimination in employment on the basis of sex (pregnancy).

  3. The Respondent did not request an adjournment to prepare to address the further incident, and I did not find any prejudice to the Respondent in allowing the presentation of evidence on this issue at the hearing. The Respondent has had adequate notice of the Complainant's intention to address the issue of discontinuance of health benefits.

  4. At the pre-hearing telephone conference, the Parties also addressed the inclusion of "without prejudice" correspondence from the Complainant to the Respondent in the Respondent's Book of Documents. The Respondent sought to use the correspondence to show the date, January 26, 2000, the Complainant first gave notice of the claim of discontinuance of health benefits. The Complainant agreed that that date was the first Notice. It is therefore not necessary for me to consider or view the content of the January 26, 2000, correspondence.

EVIDENCE AT THE HEARING

COMPLAINANT'S WITNESSES

  1. Mary Taylor, the Complainant, testified that she was hired by Mr. Steve MacDonald as a Quality Assurance Inspector. She commenced employment on February 2, 1998, but fulfilled a number of tasks during her employment, including technical librarian.

  2. She stated that she became aware of being pregnant in May 1998. She advised Lindo Lapegna, the President of the Company, of her pregnancy in July 1998. She had complications with her pregnancy in October and informed the Respondent that she had been admitted to hospital. The Company issued a Record of Employment on October 16, 1998, showing that the last day for which she was paid by the Company was October 25, 1998.

  3. On November 2, 1998, she states she called the Respondent company to find out about her health benefits. Michelle Campbell, the Payroll Clerk, who took her call, asked her to call Glen MacKinnon, Financial Officer/Personnel Manager. She spoke to Mr. MacKinnon on November 5, 1998, and was told she was being laid off and that it could either be then, with four weeks pay, or after her maternity leave, so she could continue receiving maternity benefits. She also gave evidence that she did not get back to the employer, and did not get severance pay. She also stated that she did not receive a letter advising her she was laid off.

  4. She stated she was required to pay $416.12 out of her own pocket for medical expenses that would have been covered by the Company medical plan.

  5. On cross examination Mary Taylor acknowledged she was junior in Quality Assurance, and she was not aware of the termination of the contract with Testori Interiors and that engineering people were let go. Responding to whether she was aware of other lay offs at the same time as hers, she stated, "I was never laid off". She admitted that Mr. MacKinnon advised she was being laid off but that he suggested a maternity leave, that she did not contact Testori again.

  6. Glen MacKinnon, formerly the Personnel/Financial Manager with Testori, testified to his position and responsibilities with Testori while there and that he left for a new position. He stated he did not send Mary's letter of lay off with the others, as he preferred speaking to her first. He advised her that her position would be eliminated because of cutbacks. He offered her the possibility of being laid off then, or to wait until after her maternity leave was over.

  7. Mr. MacKinnon was not certain if she accepted one or the other but got the impression she chose to wait until after her maternity leave so she would still be an employee and get health benefits. He further testified that her benefits ended at the end of November because it was "a blunder" on his part. She was included in the group that was laid off by mistake.

  8. On cross examination Mr. MacKinnon testified he now has no connection with Testori. He outlined his duties as financial and personnel manager when he was there. He was second in command after Mr. Lapegna and answered directly to him. He also stated that a large contract was pulled from Testori in 1998, leaving a great number of receivables, which left the Company with hundreds of thousands of dollars in losses.

  9. He testified to discussing ways to cut costs with Mr. Lapegna and that lay offs were one of the options he was instructed to take. They had discussed the delicate issue of laying off a pregnant employee and they were concerned with the possibility of "a backlash". He states Mr. Lapegna told him he would think about it.

  10. Mr. MacKinnon also testified that a replacement for the Complainant was not discussed. He states the lay off was not due to Mrs. Taylor's pregnancy, that the lay off was a necessary economic measure. There were no new hires from outside and the duties of Quality Assurance were divided among existing staff.

  11. On being re-examined by the Complainant, Mr. MacKinnon testified he was advised Mary Taylor would be laid off after September-beginning October. Her layoff was debated because of her pregnancy and the final decision was Mr. Lapegna's.

DEFENDANT'S WITNESSES

  1. Lindo Lapegna testified that Steve MacDonald was Mary Taylor's immediate supervisor while he was Quality Assurance Manager. However, Mr. MacDonald moved to Production Manager when Ms. Taylor left the Company due to her pregnancy. He testified about the structure of the company, its partners in Europe, the difficulties when the 1998 contract was terminated.

  2. He spoke about the expense of training staff because of the nature of the training which has to be done in Italy and the option to lay off which was one of the only ones available. He testified that discrimination would have been a stupid move.

  3. He stated the importance of the librarian's position because of the field the company is in and that Tammy Graves, who relocated to Quality Assurance, had been in the aviation environment and related work for 7-8 years, and was, therefore, a suitable person to do Mary Taylor's work. He emphasized that to retrain would have been too costly. He testified that he discussed lay offs with Glen MacKinnon on a regular basis. He stated that all managers were aware of the financial difficulties and that after the lay off, four people did twice the work and that from a business point of view the lay off made good business sense.

  4. He testified he felt bad laying Ms. Taylor off while she was pregnant. He did not tell Glen MacKinnon to give her four weeks severance because it is never done except for top management or for the people from away (Europe). He stated that if had he known the consequences he would not have made Mary the offer of finishing her maternity leave but she would have just been fired with the rest.

  5. When the Complainant questioned Mr. Lapegna about the consistency in numbers of staff in Quality Assurance even with lay offs, Mr. Lapegna testified that staffing needs depend on trends and on trade needs. Quality Control could be down while production would be up, especially if there is already a lot of inventory in stock and nothing coming in. Another example Mr. Lapegna gave was that in a quarter at a given time, there might be less production but more need for engineers.

  6. When questioned about the 31 new employees on the 1999 list, Mr. Lapegna testified that it all depends on the needs. If production is cut in half it does not mean staff is cut in half.

  7. He testified he was not required by law to offer health benefits but it was the right thing to do. When asked if it would have been more expensive to keep her on during maternity leave or to let her go after maternity leave he could not answer.

  8. When questioned whether the Complainant would have been rehired like others often are after being laid off, he answered yes. He also added that he had no idea what the situation was going to be when she came back from maternity leave. He also testified that Quality Assurance was working out fine with four people rather than seven.

  9. Rob MacPhail, Quality Manager at the time the Complainant took leave, testified to his duties with the company. He was aware of financial difficulties and that he was aware of 4-5 lay offs due to a slowdown in the company. He testified to his conversation with Mary Taylor stating she told him she was pregnant, that he did not know she was being laid off and would have to look into it, that he was not looking for a replacement and that he maintained the position with he and Tammy Graves sharing the responsibilities.

  10. Mr. MacPhail stated that George Wedge was never recruited to replace Mary Taylor and that he is a graphic engineer. Mr. MacPhail testified that due to Mary's absence he and Tammy Graves would do the work with Mary coaching Tammy over the phone and with himself assisting her. He stated Tammy evolved into the position during this period but everybody had to consult Lindo before hiring or firing, therefore, he was not looking to fill her position while she was on maternity leave. He also testified to his qualifications and that he originally was hired as an inspector and through time adapted and trained to get up to manager. As well, he stated that George Wedge was inspector in Quality Assurance and that he did not know George was leaving when Mary was hired. He also testified that Mary's work consisted of 75% to 80% laying hard copies and 20% certification and inspection.

  11. He went on to state that Beverly Arsenault did not start as an inspector but is now an inspector, does certification, filing, logging, and drawing. He stated, "You do not require a University Degree to preform these duties".

  12. On cross examination, Mr. MacPhail testified that before his conversations with Mary he was not aware that she was being laid off. He stated that when Mary left, some of the inspection was done by Tammy Graves. He further testified that during a conversation with Mary he told her he was attempting to get Brian MacEwen to do Mary's duties. Mr. MacEwen was from another department and was being laid off.

  13. When re-examined by the Respondent, Mr. MacPhail testified he did not need anybody else to replace Mary Taylor, that he could absorb the work load. It was not generally part of his job but that through overtime they adjusted.

  14. Michelle Campbell, financial manager and witness for the Respondent, testified that she was aware of Testori's cash flow problem. She was continuously calling clients for payments and that they had to write off 1 or 2 receivables a month. She also testified that the lay offs offered savings of $24,000.00 a month. She stated that Mary had not gotten an evaluation yet as she had not been there a year. When she received a call from Mary in hospital about health benefits she referred it to Glen because she knew Mary was being laid off. She also stated that Mary's health premiums would be her own responsibility if she was on maternity leave. She testified that she was not comptroller when Mary was laid off and did not know Mary was going to be laid off until she had to prepare the letter and was told to issue a Record of Employment for sick leave. Then she had to issue another ROE because there were missing hours. She also said that the procedure is that someone on pregnancy leave may stay on company benefits but is responsible for paying 100% of the premiums.

  15. On cross examination she stated she did not visit Mary in the hospital where there had allegedly been a conversation between Mary and herself about Mary's status. She mailed a second ROE and was not aware Mary was offered options to be laid off in October or later, and she was unaware the letter had not been sent to Mary. She also testified that she believes that the premiums for health insurance are the employees' responsibility when they are on sick leave.

LAW

  1. Counsel for the Respondent referred to a number of authorities decided under Ontario Employment Standards legislation. The thrust of the cases is that there may be legitimate economic reasons to lay off a pregnant employee, untainted by improper motives.

  2. Human rights law has established that the initial burden of proof is on the Complainant to establish a prima facie case of discrimination. Once that is done, the burden then shifts to the Respondent to provide a reasonable explanation for the conduct in issue (O Malley v. Simpson Sears Limited, [1985] 2 S.C.R. 536 at 558).

  3. A prima facie case is one which covers the allegations made, and which, if believed, is complete and sufficient to justify a verdict in the Complainant's favour in the absence of an answer from the Respondent (O Malley, p. 558).

  4. If the Respondent does provide a reasonable explanation for the otherwise discriminatory behaviour, the Complainant then has the burden of demonstrating that the explanation was a pretext, and that the true motivation behind the employer's actions was, in fact, discriminatory (Israeli v. Canadian Human Rights Commission (1983) 4 C.H.R.R. D/1616 at p. 1617, aff'd 5 C.H.R.R.D/2147)

  5. In the context of employment, it is well established now that only one of the reasons for the dismissal need be discriminatory to establish a violation of the Act.

  6. I have identified the issues and the burdens of proof on the Complainant and Respondent as follows:

    1. Discrimination in the layoff of the Complainant as a result of her pregnancy:
      The Complainant must initially show that she was laid off because she was pregnant, or that her pregnancy was one of the factors that resulted in her lay off. If the Complainant meets that initial hurdle, the burden shifts to the Respondent to provide a reasonable explanation for the lay off and to demonstrate on a balance of probabilities that its actions were not discriminatory.

    2. Discrimination in the cancellation of the Complainant's health benefits during her pregnancy leave:
      The Complainant has the initial burden to show that because of her pregnancy leave the Respondent terminated health benefits that were generally available to employees. The burden then shifts to the Respondent to offer a reasonable explanation for its actions.

    The Complainant argues that the evidence of discrimination in the lay off is circumstantial but, nevertheless, is sufficient to establish discrimination on a balance of probabilities.

  7. The Complainant offered authorities that circumstantial evidence may be accepted by human rights decision makers to show discrimination (Machata v. Stewart's Drugs Ltd. (1998), C.H.R.R. NP/98-77). She states that the circumstances of the termination of her employment suggest that her pregnancy made it convenient for the employer to lay her off and replace her within Quality Assurance.

  8. On the discontinuance of health benefits, the Complainant submits that Respondent should have continued to provide her with health coverage during her maternity leave, just as other employees were provided with coverage during health-related absences. The Complainant referred to Brooks v. Canada Safeway Ltd., (1989) 10 C.H.R.R. D/6183 where the Supreme Court of Canada stated at para. 44383:

    I agree entirely that pregnancy is not characterized properly as a sickness or an accident. It is, however, a valid health-related reason for absence from the workplace... To equate pregnancy with, for instance, a decision to undergo medical treatment for cosmetic surgery... is fallacious. If the medical condition associated with procreation does not provide a legitimate reason for absence from the workplace, it is hard to imagine what would provide a such a reason ... pregnancy is no different from any other health-related reason for absence from the workplace.

  9. The Complainant submits that an employer bears full responsibility for any group insurance plan it negotiates with an insurance provider. As Dickson J. states in Brooks:

    Increasingly, employee benefit plans have become part of the terms and conditions of employment. Once an employer decides to provide an employee benefit package, exclusions from such schemes may not be made in a discriminatory fashion...Benefits available through employment must be disbursed in a non-discriminatory manner.

    The Complainant submits that she should have been provided with benefits during her absence for pre-delivery complications, childbirth, and recovery. In Parcels v. Red Deer General and Auxiliary Hospital (1992), 15 C.H.R.R. D/257, the Alberta Board of Inquiry held that when pregnant employees are absent for health-related reasons, employers are required to compensate them in the same way and at the same level as other employees absent on sick leave.

  10. The Board of Inquiry in Parcels found that:

    The benefits plan must pay pregnant employees for the entire period of their health-related absence whether it occurs during the pre-delivery, childbirth, and recovery from childbirth.

    There is no presumptive period for the beginning or ending of the health-related portion of the absence. A pregnant employee must follow current proof of claim procedures to establish that the health-related absence is valid.

    The benefits for the health-related absence portion of a maternity leave are payable whether or not this portion occurs before, during or after a period of unpaid voluntary maternity leave. In particular, the benefits must be paid not withstanding current insurance principles, which in other cases would prevent payment of benefits when a health-related reason for absence occurs during a voluntary leave. The foreseeability of a health-related absence due to pregnancy in the course of a maternity leave distinguishes the present case from other circumstances in which the indemnity principle of insurance operates to prevent payment. (D/310)

    The Complainant states that a company policy of discontinuing health benefits during pregnancy or providing a benefit plan that excludes pregnant employees from coverage is discriminatory.

FINDINGS

After hearing the evidence of the witnesses for the parties, and hearing arguments on fact and law, I make the following findings:

  1. Mary Taylor, the Complainant, commenced employment with Testori on February 2, 1998, where she worked in various capacities in the Respondent's Quality Assurance Department.

  2. The Complainant went on sick leave on October 13, 1998 and commenced maternity leave on November 5, 1998, when she spoke with the Financial Officer of the Company about her status.

  3. On October 25, 1998, Ms. Taylor was issued a Record of Employment for the purposes of commencing her maternity leave and qualifying for Employment Insurance Maternity Benefits

  4. There is some conflict in the evidence about whether Ms. Taylor was given a notice of layoff after she commenced her maternity leave. Glen MacKinnon stated that he delayed sending the layoff notice until he spoke with her. He stated that the final decision was to have been Mr. Lapegna's. Mr. Lapegna's testimony does not reveal that he ever gave instructions. Ms. Taylor states that she did not receive the lay off notice. I can find no evidence that Mr. Lapegna, Company President, confirmed or gave instructions on the timing of the Complainant's layoff. I find it reasonable for Ms. Taylor to have concluded that she was still employed by Testori during her pregnancy leave. I do not place much weight on the evidence that Ms. Taylor did not contact Testori to advise of her decision when she wished to be laid off. It was the responsibility of Testori to advise in writing when she was to cease employment. I accept that she did not receive notice of the date of her layoff.

  5. Having found that Ms. Taylor was and continued to be employed by Testori during her maternity leave, I find that the Complainant cannot sustain her claim of discrimination in employment on the basis of sex (pregnancy) in relation to an alleged lay off due to her pregnancy. I accept the evidence before me that the Company had unforseen financial reversals. The Company's efforts to rationalize its operation included layoffs. It is uncertain when, if ever, the Complainant was laid off. She has assumed that she did not have a job to go back to and obtained other work on May 10, 1999, after her maternity leave.

  6. While I find that there was no discrimination in the lay off, I find that the employer's failure to provide health benefits to the Complainant during her maternity leave was discrimination contrary to section 6(1) and 1(d) of the Human Rights Act. The evidence before me shows that the Respondent has defined employee, for the purpose of qualifying for health benefits, to be "Actively at Work". I accept that the policy of the Respondent was to exclude pregnant employees on maternity leave from the group insurance plan with Blue Cross. The policy of excluding pregnant employees on leave from the members of the group who qualify for insurance benefits discriminated against the Complainant on the basis of sex.

REMEDY

  1. I order the Complainant be reimbursed for medical expenses that would have been paid under the Respondent's group policy of insurance. I fix that amount at $ 375.86 as expenses proven between November 5, 1998, and May 10, 1999.

  2. I order that the Respondent cease its practice of excluding pregnant employees on maternity leave from the group insurance policy.

  3. I order that the Respondent pay to the Complainant the amount of $1,200.00 for hurt and humiliation.

Dated this 2nd day of May, 2000.


Louise Comeau
Human Rights Commissioner


TO:Brendan Hubley, Counsel for the Respondent
Key McKnight & Peacock
494 Granville Street
PO Box 1570
Summerside PE C1N 4K4

AND TO:Janet Christian-Campbell, Executive Director's Delegate
PEI Human Rights Commission
PO Box 2000
Charlottetown PE C1A 7N8

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