Blog

Applicants will typically name the franchisee and franchisor in an Application alleging discrimination under the Human Rights Tribunal even where the alleged incident giving rise to the discrimination took place at the franchised operation that was owned and operated by an independent company.  This often falls into the shotgun approach to litigation and is sometimes used to gain a tactical advantage.

A party to an Application can bring a motion for an order dismissing the Application against it on a variety of grounds.  There is a body of cases at the Tribunal dealing with such motions in the context of a franchise relationship.

Most recently is this case in which the franchisor sought an “order dismissing the Application as against it on the basis that the restaurant operates under an independent corporation pursuant to a franchise agreement and that [the franchisor] does not have any legal relationship with the employees of the restaurant.”

In dismissing the motion, the Tribunal reviewed or mentioned a number of prior Interim Decisions.  The Tribunal relied on the following comment in Philip v. Giant Tiger Stores:

It may be that the franchise agreement or [the franchisor’s] exercise of its obligations under that agreement was a factor in any discrimination experienced by the applicant or that the franchisor is in some other way legally responsible for any discrimination experienced by the applicant.  The question of the franchisor’s liability should be determined following evidence and argument at the hearing.

The Tribunal also cited Atkinson v. Three Degrees Restaurant in which the Tribunal also refused a motion to remove a franchisor on a preliminary basis on the basis that it was premature.  Such determination would only be made after hearing the evidence and argument of the parties.

A similar finding was reached in Wozenilek v. McDonald’s Restaurants of Canada where the Tribunal declined to remove the franchisor as a respondent as it was “not clear, at this juncture, whether [the franchisor] …. could be determined to be liable.”

Again, these cases are all Interim decisions.  It is important not to lose sight of the bigger picture. Simply because the Application is not dismissed at a preliminary stage does not mean that the Application will be succesful against the franchisor once all the evidence and argument are before the Tribunal.