Employers warned about liability for mental health

Most employers have learned to guard against litigation by ensuring the physical safety of their workers, but more of them must now add protections for psychological well-being, says a leading expert in workplace mental health.

Martin Shain, a professor at the Dalla Lana School of Public Health at the University of Toronto who also has legal training, first identified the trend in a June 2009 report to the Mental Health Commission of Canada.

In the report titled “Stress at Work, Mental Injury and the Law in Canada,” he observed that the employee-employer relationship is rapidly changing thanks to a flood of case law precedents, new legislation, and tribunal rulings.

Those authorities have forced employers to not only protect workers’ physical well-being but also their psychological safety, he argues. Shain describes a psychologically safe workplace as one that “permits no harm to mental health through negligence, recklessness or intention.”

An updated report on the issue, “Tracking the Perfect Legal Storm,” was issued in April. In it, Shain contrasts the current remedies available to employees with those on offer not long ago: “From a time no more than 10 years ago, when only egregious acts of harassment and bullying resulting in catastrophic psychological harm could give rise to legal actions for mental injury, we have arrived at a point where even the negligent and chronic infliction of excessive work demands can be the subject of such claims under certain conditions.”

Employees’ mental health has an unmistakable impact on companies across Canada. A recent study indicates that 82 per cent of responding organizations said mental-health conditions were among their top three causes of short-term disability.

The study also highlights how the issue is increasingly affecting the bottom line given that financial awards for damages caused by mental injury or harm have risen by a whopping 700 per cent over the past five years.

These striking numbers have prompted Shain to argue that companies can gain a competitive edge by prioritizing the mental health of employees since it encourages greater productivity and stronger recruitment and retention results, cuts costs for disability issues and absenteeism, and reduces conflicts at work.

While the stars seem to be aligning towards greater legal recognition for the infliction of psychological suffering in the workplace, the courts continue to juggle the issue.

The Ontario Court of Appeal’s recent decision in Piresferreira v. Ayotte, for example, suggests the courts remain reluctant to put mental injury on equal footing with physical harm.

The case involves former Bell Mobility account manager Marta Piresferreira, who sued the company and her former manager, Richard Ayotte, for mental suffering.

The lawsuit included references to an alleged incident in May 2005 in which the manager is claimed to have yelled and swore at Piresferreira for failing to set up a meeting with a client. At one point, Ayotte is alleged to have pushed Piresferreira’s shoulder.

Bell later issued Ayotte a warning and forced him to take conflict-resolution courses. Meanwhile, Piresferreira took a leave of absence due to stress and proceeded to sue the company for wrongful dismissal and tort damages.

The case ended up at the province’s top court, where a panel led by Justice Russell Juriansz ruled that the tort of negligent infliction of mental suffering is unavailable in the context of employment relationships.

The appeal court suggested such a provision would prove too cumbersome for the judiciary to enforce as it would involve an appraisal of work performance and the nature of worker-manager relationships.

“It is unnecessary and undesirable to expand the court’s involvement in such questions,” wrote Juriansz. “It is undesirable because it would be a considerable intrusion by the courts into the workplace, it has a real potential to constrain efforts to achieve increased efficiencies, and the postulated duty of care is so general and broad it could apply indeterminately.”

The court also emphasized that if employees feel sufficiently aggrieved, they can resign, sue for constructive dismissal or wrongful dismissal, and seek damages under breach of contract.

Piresferreira is seeking leave to appeal the decision at the Supreme Court of Canada.
While the ruling from Ontario’s top court seems to be a setback for the reforms Shain envisions, he believes wise employment law practitioners will look more closely at what the court said in its decision.

“A lot of legal blogs on that case have said, ‘Oh, the green light to employers - we can go out and do negligent infliction of mental suffering and not worry,’” says Shain, who has offered to intervene in the case at the Supreme Court on behalf of the Canadian Mental Health Association. “Word to the wise there is that would be a pretty naive interpretation of that decision.”

John Yach of Ottawa’s Shields & Hunt would agree. Yach, who represents Piresferreira, suggests the Ontario Court of Appeal’s findings rely heavily on jurisprudence relating to dismissals.

Yach hopes the top court will be persuaded by his argument that the case hinges on a fundamentally different fact scenario and that employees should not be forced to resign in order to seek damages.

“It’s really no different, in our mind, than discrimination in the workplace,” says Yach. “If someone feels they are being discriminated against on the basis of race or disability, they’re not required to quit their job to seek a remedy . . . and that’s the whole purpose of the law - to provide remedies to people.”

Shain’s litigation trend certainly resonates in Ontario, where employers scrambled in June to comply with Bill 168 amendments to the Occupational Health and Safety Act.

The changes forced all employers in the province to perform a risk assessment for violence and harassment in the workplace, follow up on it with the development of policies that target identified areas, and train staff accordingly. Considering that the act permits fines of up to $500,000 against companies, wise employers and their legal counsel didn’t take the changes lightly.

However, Osler Hoskin & Harcourt LLP associate Rebecca Reasner says it remains unclear just how much the new law will shift the courts’ approach to allegations of mental abuse in the workplace.

“It might affect how they view public policy arguments or how they view the issue in general, but I don’t know that it would change the legal analysis,” she says.

So while remedies for employees facing mental abuse on the job are unclear, Shain maintains society will continue to pay for the damages regardless.

“The harm that’s created in the workplace doesn’t stay in the workplace,” he says. “Even the people that have won cases - while, true, they’ve had some compensation - they’re unemployable.

They’re basically mentally ruined in many senses. . . . So I hope we have a chance to look at some of the broader policy issues.”

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