Feb 24, 2020

Constructive dismissal action barred by the Ontario Workplace Safety and Insurance Act, 1997

Decision No. 1227/19, 2019 ONWSIAT 2324 (CanLII)

In Decision No. 1227/19, 2019 ONWSIAT 2324, the Ontario Workplace Safety and Insurance Appeals Tribunal (the “WSIAT”) determined that an employee’s action for constructive dismissal based on allegations of workplace harassment and mental distress was in essence a claim for chronic mental stress within the scope of the Ontario Workplace Safety and Insurance Act, 1997 (the “WSIA”). As a result, the employee’s action for constructive dismissal was barred by the WSIA.

2018 amendments to the WSIA

On January 1, 2018, the WSIA was amended to allow entitlement to benefits under the insurance plan established by the WSIA (the “Insurance Plan”) for claims relating to chronic or traumatic mental stress arising out of and in the course of a worker's employment.

Prior to these amendments, the WSIA did not allow entitlement to benefits under the Insurance Plan for claims relating to mental stress, unless the mental stress was an acute reaction to a sudden and unexpected traumatic workplace event.

One of the objectives of the 2018 amendments to the WSIA was to allow entitlement to benefits under the Insurance Plan for mental stress caused by workplace harassment. In this regard, the Ontario Workplace Safety and Insurance Board’s (the “WSIB”) Operational Policy Manual, Document Number 15-03-14, Chronic Mental Stress, states:

"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 arising out of and in the course of the worker’s employment…

...

A work-related stressor will generally be considered substantial if it is excessive in ‎intensity and/or duration in comparison to the normal pressures and tensions ‎experienced by workers in similar circumstances.‎

Workplace harassment will generally be considered a substantial work-related ‎stressor.‎"

Decision No. 1227/19, 2019 ONWSIAT 2324

‎In Decision No. 1227/19, ‎an employer brought an application to the WSIAT for a determination that a former employee’s ‎action for constructive dismissal was barred by the WSIA as a result of the 2018 amendments to the WSIA. ‎

The former employee resigned from her employment claiming constructive dismissal as a ‎result of harassment and bullying in the workplace. The former employee subsequently filed a Statement of Claim in the Ontario Superior Court of Justice ‎claiming, among other things:‎

  • damages for constructive dismissal;‎
  • damages for mental stress, moral, aggravated and punitive damages; ‎
  • damages for bullying, harassment and the creation of a poisoned work ‎environment and/or the tort of harassment; ‎
  • that she was forced to resign from her employment due to ‎the “harassment, bullying and abuse” she endured during her ‎employment and the resulting “mental distress she experienced and ‎continues to experience”; and
  • that the claim related to the “harassment and bullying” she experienced as ‎a result of a “toxic work environment” created by ‎employees and management.‎

Finding in favour of the employer, the WSIAT determined that the action for constructive dismissal was barred by the WSIA:

The Respondent’s action against the Applicant is … for constructive dismissal, meaning her ‎employment was effectively terminated by the harassing and bullying ‎conduct of co-workers and management which caused her mental distress ‎to such a degree that she was forced to take sick leave and ultimately to ‎resign. I find that these facts, if proven, are inextricably linked to a claim for ‎injury governed by the terms of [the Ontario Workplace Safety and Insurance Act, 1997]. In ‎other words, I find that the worker’s Statement of Claim is, in essence, a ‎claim for injury resulting from alleged workplace harassment and bullying ‎and thus is within the scope of [the Ontario Workplace Safety and Insurance Act, 1997] to provide for ‎entitlement for chronic mental stress arising out of, and in the course of, the ‎Respondent’s employment. Moreover, I find that the other remedies sought ‎by the Respondent are also claimed on the same facts, of harassment and ‎bullying in the workplace. Accordingly, I find the worker’s right of action is ‎taken away by [the Ontario Workplace Safety and Insurance Act, 1997].‎

[Emphasis Added]

The WSIAT further determined that the action for constructive dismissal was ‎barred by the WSIA even though the remedies sought in the action for constructive dismissal were different than the remedies compensable under the‎ WSIA because:‎

  • the remedies sought in the action for constructive dismissal all ‎flowed directly from the alleged workplace harassment; and
  • the fundamental nature of the action for constructive dismissal was a ‎claim for injury resulting from the alleged workplace harassment and bullying.‎

The WSIAT rejected the argument that the action for constructive dismissal should not be barred on the basis that claims in the action for constructive dismissal would exist even if the former ‎employee had not suffered mental harm because:‎

  • the argument was speculative given that the former employee had claimed that ‎she did suffer mental stress injuries as a result of the ‎workplace harassment and bullying;
  • in the action for constructive dismissal, the former employee’s ‎injury was the harm sustained as a result of the alleged workplace ‎harassment, which included damages for mental stress, constructive ‎dismissal and the other heads of damage claimed; and
  • as the alleged workplace harassment was the former employee’s work injury ‎underpinning the action for constructive dismissal, the action for constructive dismissal was barred by the‎ WSIA. ‎
Takeaways

The WSIAT has established an important precedent in Decision No. 1227/19, which may reduce the number of successful civil claims for damages arising from workplace harassment.

When faced with litigation involving allegations of workplace harassment and mental distress, ‎employers covered by the WSIA should consider bringing an application to the WSIAT for a ‎determination that the litigation is barred by the WSIA.‎

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