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Court prohibits “forum shopping” by terminated employee, dismisses wrongful dismissal claim

The Employment Standards Act, 2000 (the “Act”) provides a mechanism through which employees may file employment standards complaints with the Ministry of Labour, including complaints for the recovery of wages, benefits, termination pay and severance pay. To ensure that employees could not file a civil claim based on the same facts following the processing of a complaint under the Act, section 97 prohibits employees from commencing a civil action once a complaint was filed, unless the complaint is withdrawn within two weeks after it is filed.

Anne Marie Frith’s employment was terminated by Cable Bridge Enterprises Limited (“Cable”). She was provided with termination and severance pay. Ms. Frith disputed the amounts paid, and filed a complaint under the Act in respect of the amounts paid to her. Following the receipt of Ms. Frith’s complaint, the Ministry conducted an investigation, made certain findings and scheduled a meeting with the parties. Shortly before the scheduled meeting, and more than seven (7) months following the filing of her complaint, Ms. Frith withdrew her complaint and commenced an action in Small Claims Court raising the same matters raised in the complaint.

At trial Cable objected to Ms. Frith being allowed to proceed with her action, relying on section 97 of the Act. Ms. Frith’s evidence was that she did not remember submitting a complaint to the Ministry of Labour, she did not sign anything, she did not give the Ministry any verbal instructions, and no hearing was held.  Despite extensive evidence that Ms. Frith did submit an online complaint to the Ministry and sent correspondence to the Ministry where she stated that “I am aware that if I go this route, I cannot resubmit a claim with the Ministry of Labour”, the Small Claims Court judge concluded that there was no evidence of a claim being filed under the Act, and allowed Ms. Frith to proceed with her civil claim.

On appeal, the Divisional Court found that the Small Claims Court judge made a “palpable and overriding error of fact in circumstances where there was sufficient evidence on the record for him to find that Ms. Frith had filed a complaint/claim with the Ministry of Labour”. Ms. Frith submitted that the Court should exercise its inherent jurisdiction to extend the two week period for withdrawal set out in the Act. The Court held that courts will do so infrequently, and only in special circumstances that include the absence of legal representation for the employee, the absence of any work done by the Ministry on the employee’s complaint and the absence of prejudice to the employer. In this case, Ms. Frith had access to and received legal advice relating to her claim, the Ministry undertook an investigation, made findings and scheduled a hearing, Cable suffered prejudice by engaging significant staff time and resources responding to Ms. Frith’s complaint under the Act, and Ms. Frith’s complaint was not withdrawn within a short period of time. The Divisional Court found that Ms. Frith’s civil claim was statute barred, and she was estopped from continuing her action.

This decision is the latest in a number of decisions where courts are moving toward putting an end to forum shopping. As we previously blogged, both the Divisional Court and the Supreme Court of Canada have held that re-litigation of the same issues is to be discouraged. This particular decision is good news for employers, reinforcing the fact that once employees choose their forum of litigation, they only have a small window of opportunity to change their mind, and will not be permitted to change forums after a claim had already been fully or even partially processed.