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March 27, 2014

Caution: This Workplace May Contain a Poisonous Environment

Author Todd Weisberg

By now, every Human Resources professional has heard of, or dealt with, an employee claiming that he or she is working in a “poisonous” or “toxic” work environment. However, determining whether a poisonous work environment actually exists, and the consequences of such a finding, has been a matter of confusion for employers and HR professionals alike. The Ontario Court of Appeal has recently provided clarification and guidance on this issue and has answered important questions such as: what a poisonous environment is, when it occurs, what its effect is and, most importantly, how it can be avoided.
In General Motors of Canada Ltd. v. Johnson, 2013 ONCA 502, Yohann Johnson worked for General Motors (“GM”) between 1997 and 2005 as a Production Supervisor in the Body Shop.  In 2005, Mr. Johnson took medical leave for stress, claiming he was disabled as a result of racial discrimination. Mr. Johnson alleged that Alex Markov, a fellow employee, refused to undergo training with him because he was black. GM investigators undertook three investigations and each time concluded that Mr. Markov’s conduct was not racially motivated.
After two years of medical leave, Mr. Johnson attempted to return to GM. Mr. Johnson informed GM that he did not want to return to his position in the Body Shop and requested that GM offer him a different position. GM offered him a Production Supervisor position, as he held before, but in the Paint Shop instead of the Body Shop. Mr. Johnson refused to return to work on the basis that this position, in his view, would continue to render him open and vulnerable to occasions of racial discrimination by Mr. Markov and other employees from the Body Shop. GM took Mr. Johnson’s refusal to return to work as a voluntary resignation. Subsequently, Mr. Johnson commenced an action against GM for constructive dismissal on the basis of the creation and perpetuation of a racially poisoned environment.
At trial, the judge found that Mr. Johnson was a victim of racism which had poisoned his workplace and resulted in his eventual constructive dismissal.  The judge held that GM did not take Mr. Johnson’s complaint seriously and failed to conduct a reasonable and comprehensive investigation. The judge further held that GM had ignored an agreed-upon resolution by failing to enforce the voluntary demotion of Mr. Markov. Finally, the judge found that GM’s offer to return Mr. Johnson to virtually the same work environment was not a reasonable resolution, and that these circumstances amounted to Mr. Johnson’s constructive dismissal. Accordingly, Mr. Johnson was awarded damages in the amount of $160,000. GM appealed.
The Court of Appeal allowed GM’s appeal, finding that the trial judge’s conclusions of racially motivated conduct were unreasonable and unsupported by the evidence. The Court of Appeal found that there was no direct evidence of racism towards Mr. Johnson by anyone at GM.
However, more important than the conclusion that there was no racially-motivated conduct, was the Court of Appeal’s conclusion that even if Mr. Markov’s refusal to receive training by Johnson was based on racism, this would not have led to a finding of a poisoned work environment. The Court of Appeal stated that the offending conduct must be persistent and repeated, unless the incident in question is egregious enough, standing alone, to taint the entire workplace. This was not the case here. This was an isolated incident arising from a single employee’s failure to attend a single training session and it was the first incident over the course of an eight year working relationship. Mr. Markov’s conduct fell short of the type of egregious behaviour manifested in those cases involving a poisoned work environment and it was not sufficient to establish systemic or institutional racist conduct.
The Court of Appeal further concluded that the evidence did not support the notion that GM had repudiated the employment contract or acted unreasonably in treating Mr. Johnson’s refusal to return to work as a voluntary resignation. GM offered Mr. Johnson two jobs outside of the Body Shop.  These offers were inconsistent with the notion that GM was resiling from its employment relationship with him. In fact, GM did not accept Mr. Johnson’s refusal to return to work as a voluntary resignation until after he declined to accept the employment positions offered by GM, failed to return to work for another two months, and failed to provide GM with current medical evidence to support his claim for continuing disability. As a result, the Court of Appeal found that the trial judge’s findings demonstrated a fundamental misapprehension of the evidence, and the action was dismissed against GM.
From a Human Resources perspective, this case provides the following points which are helpful in identifying a poisoned work environment:

 1.  Serious wrongful behaviour is necessary – In order for a workplace to become poisoned for the purpose of constructive dismissal, the employee must demonstrate “serious wrongful behaviour”. This behaviour could include: discrimination, bullying, threats or harassment (sexual or otherwise).
2.  Persistent or repeated conduct necessary – Except for particularly egregious stand-alone incidents, a poisoned workplace is not created as a matter of law unless the “serious wrongful behaviour” is persistent or repeated. If the initial “serious wrongful behaviour” is not handled or addressed properly by the employer, this could be seen as condoning or repeating the behaviour and, in turn, yield a finding of a poisonous work environment.
3.  Objective test applied – The employee’s subjective feelings or genuinely held beliefs are insufficient to discharge the onus of proving a poisoned workplace.  There must be evidence to an objective reasonable bystander that would support the conclusion that a poisoned work environment had been created. This means that an employee’s personal sensitivity to a particular event is not the determinative factor. Finding a poisonous work environment in each particular case depends on how the average, reasonable person would feel in the circumstances.
4.  The test for establishing constructive dismissal still needs to be applied – The objective test for constructive dismissal still governs, which requires the Court to address whether “a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed”. An implied and essential term of every employment contract is the right to be free from discrimination. If the court makes a finding that an employee is being subjected to a poisonous work environment, and that it has made continued employment intolerable, this will amount to constructive dismissal.
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