Williams HR Law LLP


November 29, 2023

Employers who fail to appropriately address workplace sexual harassment can face significant liability. In the recent decision of Milligan v Maczak Holdings Ltd. [Milligan], an employee was awarded $15,000 in damages for successfully arguing that her employer discriminated against her by not responding to her repeated complaints of sexual harassment at work. Notably, the harassment spanned several months, involved several colleagues, and even a customer before the complainant employee was dismissed by the employer.


The employee worked as a server in the employer’s restaurant and alleged that she was subject to sexual harassment at work over the course of several months. Due to the impact of the sexual harassment on the employee’s mental and physical health, she took a medical leave of absence for three months. The employer dismissed the employee on the day she returned to work from her leave and said it was due to a work shortage.

The employee filed a discrimination complaint against her employer which was referred to the Prince Edward Island Human Rights Panel (the “Panel”). The employee alleged that she was discriminated against because 1) she was sexually harassed at work and 2) because she was dismissed after complaining to management. The employer denied that the employee was sexually harassed, that they knew about any sexual harassment in the workplace, and that they discriminated against the employee.

Panel Decision

Sexual Harassment

The Panel found that, on a balance of probabilities, the employee suffered an adverse impact during her employment. Specifically, the employee was sexually harassed by colleagues and managers at work and was subject to a workplace which fostered unwelcome sexual conduct. Further, the Panel held that this amounted to discrimination in her employment on the protected ground of sex. As the employer denied that the harassment happened, they did not offer evidence in response.

The Panel highlighted a few examples of conduct to which the employee was subjected, including:

  • her colleagues’ daily sexual comments;
  • six incidents where she was grabbed in a sexual manner by a colleague in a walk-in freezer;
  • frequent pressure to accede to a customer’s request for a hug; and
  • being a witness to her colleagues sexually harassing and assaulting another female employee, who was her daughter, at and outside of work.

The Panel found that the employer failed to appropriately act or respond to the harassment complaints. Further, the Panel held that the employer’s responses and their failure to implement harassment policies or training allowed sexual harassment to be normalized and part of the workplace culture. The toxic work environment was, in the Panel’s view, at least partially responsible for the employee experiencing stress in her life and for her going on medical leave.

While the employee said she did not always report the sexual harassment to management, this was because management witnessed some incidents firsthand. When the employee did complain, management was either unresponsive or responded to complaints by:

  • saying there was nothing they could do because it was a “he said, she said” situation when the employee reported that her colleague sexually touched her;
  • telling the employee she could quit if she was unsatisfied with their response to her complaints;
  • leaving the employee and her colleagues to reject the customer’s unwanted advances despite management’s knowledge that several employees were uncomfortable with the customer’s request for hugs; and
  • saying there was “not much they could do with that” when they were informed that one of their workers sexually assaulted another employee outside of work. Management continued to schedule the two parties together, albeit not alone.

Sexual Harassment

The Panel characterized the employee’s return and the timing of her layoff as “suspicious”. However, due to a lack of evidence connecting the employer’s dismissal to the workplace sexual harassment complaint, the Panel did not find that the employer’s decision was discriminatory. The Panel referenced the nature of the restaurant industry and the employee’s specific employment history with the employer as evidence of the trend that staff often work “on and off” with the same employer over several years.


To assess the appropriate remedy, the Panel considered several factors, including: the physical and verbal nature of the harassment; the fact that the harassment occurred repeatedly, over several months; and the continued psychological impact of the harassment, which had required the employee to take a three-month medical leave.

In finding that the employee suffered “profound” adverse impacts and that the employer discriminated against her, the Panel ordered the employer to:

  • pay the employee $15,000 in general damages for mental anguish, humiliation, affront to dignity and/or emotional injury;
  • implement a Harassment Policy and provide it to the Human Rights Commission for recommended changes;
  • provide sexual harassment training to all staff within four months; and
  • provide managers and assist manager with annual sexual harassment training for three years.

Takeaways for Employers

To proactively avoid the outcome in Milligan, employers should implement policies and provide training on workplace sexual harassment. For employers in Ontario and other jurisdictions where there is a legislative requirement to investigate incidents and complaints of workplace harassment, policies should reflect this requirement and set out specific details regarding the investigation process, as may be required by the applicable legislation.

Employers should not be afraid to investigate sexual harassment complaints made by one employee against another, regardless of where an incident was alleged to have taken place. Sexual harassment by employees that occurs off-duty may spill into the workplace, such as by impacting an employee’s ability to work with their harasser or causing harm to the employer’s reputation. Where this is the case, the employee’s misconduct will not be immune from discipline, up to and including dismissal. Conducting a thorough investigation will aid the employer in assessing the details, severity, and impact of the misconduct, and determining the disciplinary action that should follow (if any).

While the employer in Milligan knowingly failed to respond to a customer’s unwanted course of conduct towards staff, prudent employers should not let their employees handle these situations alone. As the Panel in Milligan said, “employers are responsible for what happens in their business”. Accordingly, employers must protect their employees from sexual harassment, regardless of the harasser’s status as a customer or employee.

Lastly, employers should be cognizant that their failure to appropriately address sexual harassment in the workplace can attract significant liability. While the Prince Edward Island-based employer in Milligan was ordered to pay $15,000 in general damages, damage awards have reached $200,000 and continue to rise across Canada. For more information on rising damage awards in workplace harassment and discrimination cases, please read our blogs on NK v Botuik and Francis v BC Ministry of Justice (No. 5), which saw human rights tribunals in Ontario and BC award approximately $170,000 and $964,000, respectively, to the applicant employees.


This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.