Protection to WSIB Employers Against Constructive Dismissal Claims

Greg Dobney
Posted May 19, 2020 Category: Businesses
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The Workplace Safety Insurance Act, 1997 (“WSIA”) establishes an insurance plan for certain workplace-related illnesses and injuries. Benefits under the insurance plan replace an employee’s rights of action against insured employers, such that these employers cannot be sued in relation to the illnesses and injuries for which WSIA insurance benefits are available.  Effective January 1, 2018, the WSIA was amended to create an entitlement to insurance benefits for chronic mental stress arising out of and in the course of employment.  Employees would generally be entitled to benefits where chronic mental stress is predominantly caused by a substantial work-related stressor.  Notably, substantial stressors include things like bullying and harassment in the workplace.

OHSA and Workplace Harassment

There is an implied term in an employment relationship that the employer will provide a workplace that is free from harassment and bullying.  The Occupational Health and Safety Act (OHSA) requires employers to develop and maintain workplace harassment policies and programs to respond to and address harassment in the workplace.  If an employer fails to protect its employees from harassment, the work environment may become intolerable, “poisoned”, or “toxic” and an employee may be able to claim constructive dismissal based on a breach of the implied term to provide a harassment-free work environment.

However, a recent decision has changed the landscape when it comes to constructive dismissal claims based on claims of harassment and bullying.

Employers May Consider a WSIAT Application

In a November 2019 Workplace Safety and Insurance Appeals Tribunal (WSIAT) decision (No. 1227/19, 2019 ONWSIAT 2324), the WSIAT found that an employee was barred from continuing her civil action against her employer.

In this action, she alleged constructive dismissal due to “ harassment, bullying and abuse she endured during the course of her employment and the resulting mental distress she experienced and continues to experience”. The employee claimed to have been subjected to harassing behaviour for a period of 17 months before she went on medical leave.  She did not return to work, claiming that she was unable to do so because of the harassment and bullying, and her resulting fragile mental state.  When she resigned and sued for constructive dismissal, the employer applied to the WSIAT for a determination that the employee was not able to sue.

The employer was arguing that the employee’s claim was effectively for chronic mental stress, a condition for which benefits were available under the WSIA insurance plan instead.

WSIAT Determination

The WSIAT reasoned that the worker’s constructive dismissal claim was, in essence, a claim for injury resulting from alleged workplace harassment and bullying, which is within the scope of the benefits available for chronic mental stress under the WSIA

Although additional damages and remedies were sought in the civil claim beyond what would be available under the WSIA, these claims were found to flow from the workplace harassment and the employee’s claim of injury resulting from this harassment.  Since the employee could have applied for benefits for chronic mental stress arising from the harassment she claimed, she was unable to sue the employer based on these same claims.

This decision is an important precedent for employers that are faced with constructive dismissal claims based on alleged harassment in the workplace.  Although cases will likely be fact-specific and depend on the framing of the claim in the civil action, employers facing such a civil claim should consider whether an application to the WSIAT is worthwhile to seek a determination that the right of action is taken away.

For support in these matters, please do not hesitate to reach out to our Labour and Employment team at jtarle@cswan.com or 613-544-0211, x 8057.

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Greg Dobney
Posted May 19, 2020 Category: Businesses

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