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Employer’s Response to ESA Claim Cannot Form Basis for Defamation Action: Ontario Court

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Employers faced with an Employment Standards Act complaint may air the employee’s dirty laundry, so to speak, in that proceeding without fearing a defamation lawsuit, an Ontario court decision suggests.

Justice E.M. Morgan of the Ontario Superior Court decided that allegations made by an employer to an Employment Standards Officer in response to an employee’s Employment Standards Act complaint were protected by “absolute privilege”, so that the employee’s defamation suit was dismissed.

The employee had filed a complaint with the Ontario Ministry of Labour claiming that the employer failed to pay public holiday pay and overtime pay.  The Employment Standards Officer ordered that the employer pay compensation, which the employer did.

The employee had then filed a defamation suit in the courts, claiming that allegations of fraud and dishonesty were made by the employer to the Employment Standards Officer during the ESA proceeding which were injurious to the employee’s emotional and psychological health.

Justice Morgan noted that statements made in the course of a proceeding in court or before a board or tribunal (including before an Employment Standards Officer), were absolutely privileged, meaning that those statements cannot be the basis for a defamation lawsuit.

Employers, when faced with a legal claim by an employee before the courts or a tribunal, may state their position – and the employee’s shortcomings – frankly and directly in that proceeding, without attracting liability for defamation.  Statements made outside such proceedings, however, may attract liability.

Satkunan v. Gnanatheepam et al., 2012 ONSC 4654 (CanLII)

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