Speaker's Corner: Employment lawyers should prepare for new world following mental-distress ruling

The recent decision of the Workplace Safety and Insurance Appeals Tribunal on claims for mental distress is significant for employment lawyers.

In decision No. 2157/09, the tribunal has declared the statute’s provision limiting entitlement to benefits due to mental distress to be contrary to the equality section of the Charter of Rights and Freedoms and hence unconstitutional.

The statute presently denies an applicant benefits due to a claim for mental distress under s. 13(4).

Section 13(5) then allows for an exception in a circumstance where the mental stress is due to “an acute reaction to a sudden and unexpected traumatic event.”

The section continues to describe an exception to the exception with respect to the employer’s decisions relating to the person’s employment or discipline. This latter provision was not in debate in this case.

The facts of the case dealt with a nurse employed in a hospital setting who had alleged abuse and ill treatment over a 12-year period by a physician. She had been diagnosed with an adjustment disorder, anxiety, and depression brought on by workplace stressors.

The worker’s initial application for benefits and subsequent first review failed. On the latter appeal, the panel concluded that, but for the wording of the statute, her application would have succeeded.

The most recent appeal decision concluded the statute treated people suffering from a mental disability in a substantively discriminatory manner, one that could be not be justified under the s. 1 reasonable-limits qualifier. As a result, the tribunal allowed the worker’s appeal.

This decision, apart from allowing for immediate claims for compensation benefits based on work-related emotional distress claims, also has a tremendous impact on civil claims if an employee is directly claiming damages for emotional distress or, alternatively, is using a fact situation of emotional abuse to buttress a constructive dismissal claim.

The case may also affect human rights employment claims in which the applicant seeks damages for injured feelings or a lost-income claim based on a poisoned work environment.

When it comes to civil claims in employment law, in the March 2013 decision of Ashraf v. SNC Lavalin ATP Inc., Master K.R. Laycock of the Alberta Court of Queen’s Bench dismissed the plaintiff’s claim for mental distress damages due to workplace emotional abuse. The plaintiff qualified for but did not apply for workers’ compensation benefits.

Alberta’s statute allowed for workers’ compensation claims based on emotional distress. The court also noted that whether the plaintiff brought the action in contract or tort was of no moment as the legislation forbade any civil claim.

The motion succeeded and the court dismissed the claim.

On appeal from the master’s decision, the employee successfully moved to amend the claim to include relief by way of constructive dismissal based on the same abusive conduct. This was of no moment, however, as the court determined the employee’s sole remedy was to apply for workers’ compensation benefits.

Most statutes governing such benefits, including that of Ontario, use a similar definition of “accident” to include wilful and intentional conduct.

The consequences of the latest decision may be dramatic. Rulings such as the Ontario case of Prinzo v. Baycrest Centre for Geriatric Care and indeed the moral or aggravated damage claim as set out in Honda Canada Inc. v. Keays may be of historical value only where the legislation covers the employee.

There remains a further argument that the workers’ compensation statutes may deprive the relevant human rights commission of jurisdiction to award a damage claim for such a violation given appropriate coverage.

Generally, human rights laws are quasi-constitutional and, as such, supersede any conflicting statute unless the enabling legislation specifically states to the contrary.

Two consequences may follow. The first is that the latest tribunal decision may have no impact on human rights claims. The second is that it may at least affect a claim for compensatory damages or lost income based on a workplace human rights offence.

The Supreme Court of Canada, in its 1996 decision in Béliveau St-Jacques v. Fédération des employées et employés de services publics inc., considered a similar conflict between the Quebec Charter of Rights and Freedoms and the workers’ compensation regime of that province.

The plaintiff’s civil claim for punitive damages for sexual harassment as allowed under the Quebec charter failed as she had covered under the workers’ compensation regime.

Barry Fisher, a well-known Toronto mediator, describes the latest appeal decision setting aside the Ontario statute’s limitation as one that raises compelling legal issues, not the least of which is the status of present civil claims seeking such relief. Must a plaintiff now apply to the Workplace Safety & Insurance Board retroactively?

Peter Israel, partner of the employment and labour law firm of Israel Foulon, calls the decision overdue and says it corrects an inherent unfairness in the legislation.

The future impact of this decision on human rights remedies remains idle speculation for the present moment. Presuming the decision of the tribunal remains good law following an inevitable review, employment and human rights practitioners should prepare for a new world.

For more, see "Lawyers divided on WSIB stress-claim ruling."


David Harris, a former lawyer, is one of the authors of the new book Disability Issues in Employment Law.

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