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The Legalities of Diversity & Inclusion

Growing and encouraging a diverse and inclusive workforce can make a more productive workplace environment, attract top-talent, and bring reputational and financial advantages to a company.

Many top candidates consider factors such as the diversity of executive and management leaders or a commitment to environmental, corporate and social governance (ESG), and corporate social responsibility (CSR) ideals when choosing a job. Investors are also looking for ESG and CSR commitments when making investment decisions. Human rights legislation and requirements are minimum means through which baseline diversity and inclusion is enforced in the workplace. That said, to benefit from true inclusion, organizations need to champion the authentic welcoming of diverse viewpoints, personalities, life experiences, and strengths. Failing to do so can be costly, from a reputational and financial perspective.

Q:  What are an employer’s responsibilities towards hiring a diverse workforce?

There are few specific legal requirements that set out employer responsibilities towards employment equity in the private sector. There are requirements for employers under federal jurisdiction, or who have secured contract services with the federal government, to engage in proactive employment to increase representation of women, people with disabilities, Aboriginal peoples, and visible minorities.

Canadian law has not evolved in the same manner as the US, where diversity and inclusion has historically been promoted through more prescriptive affirmative action policies.

In Canada, public companies may have reporting requirements under securities legislation to provide disclosure on certain ESG issues, such as the representation of women on boards and in senior management positions.

In addition, provincial and federal human rights and accommodation legislation act as a minimum driver for diversity and inclusion, as they prohibit discrimination based on protected grounds such as race, gender or gender expression, age, disability, family or marital status, etc. Employers must comply with applicable human rights legislation in all phases of the employment relationship, including recruitment, promotions, dismissals, and terminations.

Q:  How Does Human Rights Legislation Protect Employees?

During recruitment, all job requirements set out in advertisements or postings must be reasonable and for a bona fide purpose. Employers must also ensure a fair hiring process. Human rights legislation prohibits employers from asking questions that directly or indirectly classify or indicate qualifications based on a protected ground, other than for special programs. Recently, the Ontario Human Rights  Tribunal ordered Imperial Oil to pay nearly $125,000 in damages to a prospective employee (who was never hired by the company) because of a requirement that he be able to “work in Canada on a permanent basis”, and prove his status through a Canadian birth certificate, citizenship certificate, or permanent residence card. The individual lied on his application about his ability to work permanently in Canada, which the employer relied upon as a basis for not proceeding with the employment relationship. The Tribunal found that the applicant’s lie was negated due to the illegality of the Company’s stated job requirement, as it unfairly disqualified applicants based on citizenship. Although the applicant found alternative employment, the Tribunal awarded him with $101,363.16, equivalent to 4 years of wages with Imperial Oil. An additional $15,000 was awarded for compensation to dignity, injury, and self-respect.

During the employment relationship, employers are required to accommodate employees with disabilities (whether physical, mental, or psychological) to the point of undue hardship to the employer because of significant costs of the accommodation or health and safety concerns that may arise. Some provinces, including Ontario, have accessibility legislation, which establish additional accommodation requirements. Accommodation can range from modified job duties, providing more breaks during the workday, or providing alternative work. Employers are also required to ensure their employees are protected from discrimination during the employment relationship. For example, in 2013, a downtown Toronto restaurant was held liable for $100,000 in damages due to discrimination against Muslim employees, who were forced to eat pork by the restaurant owners despite being forbidden to do so by their religion. Similarly, an employer was fined around $250,000 in damages in a civil action for poor treatment of a deaf employee.

Q:  How Can You Build True Diversity and Inclusion?

As seen above, human rights laws act as a base-level deterrent force for the protection of employees made vulnerable due to their protected grounds. However, to benefit from what diversity and inclusion can bring to a workplace, employers need to move beyond merely protecting employees against discrimination. Instead of paying lip service to diversity goals, employers need to craft inclusive workplaces, which allow their employees to be their full and authentic selves in the workplace. This allows employers to benefit from diverse viewpoints and experiences. Specific training should also occur on key concepts, such as what “diversity” and “inclusion” mean, and how to identify or evaluate one’s own unspoken bias(es). Employers should maintain safe spaces for real questions and conversations, which helps promote trust, unity, and a cohesive culture with buy-in from all levels of the organization. Employers may also need to question what exactly ‘fit’ and ‘culture’ mean for their workplace, determining whether they may unintentionally be excluding individuals from being authentically themselves. Human rights laws act as a base-level protection for employees. Other than the fact that it is the right thing to do, moving beyond the bare minimum can be extremely advantageous for employers in all facets of their business.

Sara Parchello is a Partner at Bennett Jones LLP. She has an employment and labour-focused legal practice, with considerable understanding of the retail, hospitality, and mining industries.