Workplace harassment ruling

by Carole McAfee Wallace

Employers who ignore or tolerate workplace harassment do so at their peril.

An employer must provide a safe work environment — including one free from workplace harassment — as required by occupational health and safety legislation. A breach of this duty can lead to a complaint with the applicable Ministry of Labour or, for federally regulated employers, Employment and Social Development Canada.

If a complaint is made, an employer can be ordered to conduct a workplace investigation at its own expense if such an investigation was not conducted or not appropriate under the circumstances. There may also be fines for breaching occupational health and safety legislation.

Human rights complaints

Where workplace harassment is sexual or based on prohibited grounds under human rights legislation, an employer can also be named in a human rights complaint. Successful employees in these cases are entitled to lost income arising from their breached rights; damages for injured dignity, feelings and self-respect; and potential reinstatement if they were constructively or wrongfully terminated.

An employer’s failure to address workplace harassment may be viewed as a breach of the employment relationship, bringing employment to an end and providing the basis for a civil action for constructive dismissal. Here, the employee can seek damages equal to those seen in a wrongful dismissal action, as well as punitive, moral or aggravated damages.

But for workplaces covered by the Ontario Workplace Safety and Insurance Act (WSIA) — or those who are required to have such coverage — an employee may not have the right to sue the employer in a civil action for constructive dismissal. This is because workplace harassment that causes chronic mental stress is considered a workplace injury for which WSIA benefits are available.

The barred claim

The Ontario Workplace Safety and Insurance Appeals Tribunal recently barred an employee’s civil action for constructive dismissal because her claim was based on mental stress caused by workplace harassment. In 2018, the WSIA was amended to extend benefits to a worker for chronic or traumatic mental stress linked to their job. The worker is entitled to benefits as if the mental stress was an accident-related personal injury.

The tribunal’s decision referred to the Workplace Safety and Insurance Board Operational Policy Manual for guidance. The board policy states that workplace harassment occurs when someone, while in the course of employment, engages in conduct such as bullying or another unwelcome action against a coworker.

The policy goes on to say that a worker will generally be entitled to benefits for chronic mental stress if an appropriately diagnosed mental stress injury is caused by a substantial work-related stressor linked to the worker’s employment.  A work-related stressor is considered substantial if it is excessive in intensity or duration compared to the normal pressures and tensions experienced by workers in similar circumstances.

Workplace harassment will generally be considered a substantial work-related stressor. And a worker is not entitled to benefits for chronic mental stress caused by the employer’s job-related decisions or actions such as changing the work to be performed, altering the working conditions, disciplining the worker, or terminating employment.

In the recent Ontario decision, the employee sued her employer for constructive dismissal, alleging that she was forced to resign due to harassment, bullying and abuse that resulted in mental distress. She sued for not only wrongful dismissal damages but also for aggravated, moral and punitive damages.

The Schedule 1 employer (which is required to pay WSIB premiums) asked the tribunal to determine that her right to sue was barred because the civil action was essentially an allegation of chronic mental stress under the WSIA.

The tribunal held that, where the wrongful dismissal claim is “inextricably linked to the work injury”, the right to bring a court action is removed by the WSIA. It went on to say that the employee’s claim was not for wrongful dismissal in the usual sense, but for constructive dismissal. It’s because her employment was effectively terminated by the harassing and bullying that caused her mental distress.

At first blush, this decision is good news for Schedule 1 employers. They may be able to avoid expensive litigation and exposure to constructive dismissal damages in the context of workplace harassment, as well as punitive, moral and aggravated damages. However, WSIB claims based on chronic mental stress arising from workplace harassment, like any other claim, may have a negative impact on an employer’s rating.

Carriers that adopt a Driver Inc. business model (misidentifying employees as independent contractors), and fail to provide coverage for their workers, could also be exposed through the process and face consequences for their non-compliance.

  • Carole McAfee Wallace is a partner at Fernandes Hearn LLP, and can be reached at 416-203-9551. This column is intended for information purposes only and does not constitute legal advice.



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