Corporate director, 69, not allowed to pursue human rights claim because he isn’t employee

March 05, 2017 - by: Cindy Switzer 0 COMMENTS

by Cindy Switzer

In a recent decision – Peterson v. The Mutual Fire Insurance Company of BC, 2017 BCHRT 21 (CanLII) – the British Columbia Human Rights Tribunal considered whether a corporate director who was told he could not serve a second term on the company’s board because he was over 69 years old, ought to be protected by human rights legislation.

The tribunal concluded that the applicant, a director on the board of an insurance company, was not entitled to protection from age discrimination under the British Columbia Human Rights Code because he was not in an employment relationship with the company.

Facts

When a director on the board of an insurance company was told that he was not eligible to run for a second term because he was over the age of 69, he filed a complaint with the B.C. Human Rights Tribunal alleging discrimination on the basis of age.

The board member (JP) was one of eight directors elected to the board of directors of the Mutual Fire Insurance Company of British Columbia. Directors are elected by member policyholders for a three-year term.

JP was elected as a director at large, paid an honorarium of $9,000 per year and a per diem of $75 for attendance at board meetings. Directors on Mutual Fire’s board are responsible for considering and approving matters of policy, objectives, plans, programs, investments, purchases, disposals, and transfers of assets. As a director, JP was not directed by or accountable to management of Mutual Fire, and he conducted no operation-level work.

According to Mutual Fire, its bylaws provide that individuals over the age of 69 are not eligible to run as director. However, a director who turns 70 during the term of office is permitted to serve out the term. JP was 68 when he was first elected, and he was advised of the bylaw restriction prior to standing for election. He was specifically informed that because of his age, he would be able to serve as a director for only one term.

Nevertheless, when his three-year term was coming to an end, JP informed Mutual Fire that he wanted to stand for re-election at the next annual general meeting. He was advised that he was not eligible and that the board did not have discretion not to follow the bylaws. JP complained about the bylaws in a letter to the board as well as at the next board meeting, but he was not permitted to stand for re-election.

Decision

The B.C. Human Rights Tribunal held that JP was not entitled to protection from age discrimination under B.C.’s Human Rights Code because, as a director, he was not in an employment relationship with the company.

The tribunal acknowledged that a traditional employer-employee relationship is not required in order to invoke protection of the code. Instead, applying the “control and dependency test” articulated by the Supreme Court of Canada in McCormick v. Fasken Martineau Dumoulin (No. 2), 2014 SCC 39 (CanLII), (which held that an equity partner in a large national law firm was not protected by the code’s prohibition on age discrimination in employment), the tribunal concluded that JP was not in an employment relationship with the board.

The tribunal found that JP was “part of the group providing broad direction to the company, rather than an employee that was vulnerable to the company’s direction and control.” Accordingly, the tribunal dismissed JP’s complaint of age discrimination, as it was not related to employment.

Conclusion

This case is significant because it was the first case to address whether a corporate director is covered by the B.C. Human Rights Code. However, this issue has been addressed elsewhere in Canada with consistent findings.

The Ontario Human Rights Tribunal, in Wing v. Niagara Falls Hydro Holding Corp., 2014 HRTO 1472 (CanLII), dismissed the complaint of a corporate director who alleged that she had been subjected to discrimination based on family status because she was not in an employment relationship with the company.

Similarly, the Ontario Human Rights Tribunal recently dismissed a city councillor’s complaint of gender discrimination and harassment, holding that it was outside of the protections of Ontario’s Human Rights Code because, as an elected official, she was not an employee, and her complaint was not “with respect to employment.” Di Muccio v. Newmarket (Town), 2016 HRTO 406 (CanLII).

These cases demonstrate that human rights legislation is to be interpreted liberally and purposively. There are limits to the scope of protection and the jurisdiction of human rights tribunals.

The Supreme Court of Canada will soon be addressing this issue once again, when it hears the appeal of Schrenk v. British Columbia (Human Rights Tribunal) to determine whether the B.C Human Rights Tribunal had jurisdiction over a complaint of alleged discrimination involving individuals from different workplaces/separate employers. The Supreme Court of Canada’s decision is expected to clarify the law regarding the scope of discrimination in employment and will set an important precedent for workplaces across Canada. The hearing is scheduled for March 28.

About Cindy Switzer:
Cindy Switzer is a member of Fasken Martineau’s Labour, Employment, & Human Rights Group. Cindy’s practice is focused on the representation of management in wide range of workplace-related matters, as well as business immigration.
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