HRTO finds paying newcomer less than minimum wage is citizenship-based discrimination

Second largest damages award in Tribunal's history

HRTO finds paying newcomer less than minimum wage is citizenship-based discrimination
Richa Sandill, Don Valley Community Legal Services

In a decision ordering the second highest damages award in its history, the Ontario Human Rights Tribunal found that paying a non-citizen worker less than the minimum wage is a form of citizenship-based discrimination.

The Tribunal’s pronouncement will arm vulnerable newcomer workers with another tool to confront exploitation that would previously have been only an Employment Standards Act violation, says Richa Sandill, counsel for the applicant. Sandill is an employment and human rights lawyer at Don Valley Community Legal Services. She has seen in her work on low-income employment law cases across the east end of Toronto that many racialized newcomers work for cash and are taken advantage of while they try to establish themselves in Canada.

The decision “gives workers another angle to pursue this,” she says. “If you can reasonably tie the payment to their ground of citizenship, then that might be another way to go after employers who take advantage of vulnerable newcomer employees in this way,” she says.

In L.N. v. Ray Daniel Salon & Spa, 2024 HRTO 179, adjudicator Caroline Sand found that Ray Daniel Salon & Spa and its operator, Reza Khosravi, violated the applicant, L.N.’s rights under ss. 5(1), 5(2), 7(2), 7(3)(a) of the Human Rights Code, for gender-based employment discrimination, sexual harassment by an employer, “egregious sexual assaults,” and citizenship-based wage discrimination. Sand also found that Khosravi reprised against L.N. in violation of s. 8.

Sand ordered Khosravi and Ray Daniel Salon & Spa to pay the applicant $180,000 jointly and severally.

The applicant, L.N., is a refugee who fled Iran and arrived in Canada in 2019. She had been forced into marriage at 13 to an abusive man. She later divorced, remarried, had a child, and was forced to leave the marriage when her new husband declared the marriage invalid. She converted to Christianity, lost the support of her family, and was stalked and sexually harassed by a government employee while she lived on her own.

L.N. began working at Ray Daniel Salon & Spa in 2019. Khosravi was the sole person responsible for the spa’s operations and, as a Farsi speaker, could communicate with her in her primary language. L.N. made $5 per hour and did not know initially that Canada had a minimum wage.

Khosravi, who is much older than L.N., often dropped her off at home after work and learned that she was divorced and living alone. L.N. testified that near the beginning of her employment, Khosravi groped her and frequently made sexually suggestive comments during work. She said he sexually assaulted her three times, raped her twice, and assaulted her by burning her neck with bleach while coercing her to have a haircut as a “sample” to show customers. L.N. was waiting for her work permit and worried that if she reported the incidents, she would be deported for working without one. L.N. testified that Khosravi repeatedly told her that if she reported him to the police, he would get her deported from Canada and that he threatened to kill her. She said that after working at the spa for two months, Khosravi fired her while she was still owed a month’s wages, which she never received.

Khosravi was not present at the hearing, but the HRTO adjudicator, Caroline Sand, said that she and Sandill asked L.N. “probing questions” about her allegations and found her testimony “consistent and forthright.” Sand found L.N.’s reasons for her actions and inactions and her description of the impact “honest and credible.”

“It is not controversial to acknowledge that women who experience sexual assault do not always find justice through the criminal justice system,” said Sand. “I find it credible that she would avoid reporting to the police, particularly in her circumstances.”

The Tribunal also heard testimony from L.N.’s friend, who confirmed various aspects of her story. L.N.’s psychologist also testified that she shared the details of her ordeal later on when mental health issues such as increased anxiety and disturbed sleep emerged.  

In August 2023, Khosravi filed a $35,000 claim against L.N. in Small Claims Court, alleging her HRTO complaint damaged his personal and business reputations. The timing and content of the claim led Sand to find that it was not a bona fide civil action but a “camouflaged retaliatory action.”

Khosravi also contacted L.N.’s psychologist in Iran, which L.N. and the psychologist viewed as an attempt to intimidate. Sand said it was clear that Khosravi was attempting to undermine L.N.’s case. 

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