Constructive Dismissal Update: Employee Alleging Workplace Harassment Barred from Pursuing a Civil Claim

Feb 25, 2020

An employee quit her employment because of workplace harassment and filed a constructive dismissal action. 

The Employer brought an application under the Workplace Safety and Insurance Act (the “WSIA”)  and convinced an adjudicator that the action was statute barred. However, the adjudicator concluded that the employee could claim for benefits under WSIA. 

If this case is upheld on appeal, this decision suggests that if an employee quits because of workplace harassment then the employee may not be able to bring a constructive dismissal in the courts.  

If workers compensation benefits are likely going to be less than court ordered damages in this kind of case then an employer should keep this decision in mind.

This blog summarizes this decision.

The Facts

Ms. Morningstar claimed that her co-workers subjected her to abusive, humiliating and cruel conduct over the course of 17 months and that this conduct was supported and reinforced by her employer’s management. She filed a harassment complaint. She was told there would be an investigation. She claimed that as a result of the employer’s delay in investigating her complaint, the harassment and bullying conduct continued. An internal investigation was conducted and an independent investigation was ordered by the Ministry of Labour. 

Ms. Morningstar claimed that because of the stress of the internal investigation, the recommendations, and the continuing harassment and bullying she experienced by co-workers and management, she had to take a medical leave. In consultation with her doctors, she claimed she was unable to return to work due to the harassment, and her fragile mental state resulting from the workplace harassment and bullying. 

Ms. Morningstar then filed an action in Ontario’s Superior Court for constructive dismissal, and claimed damages for, among other things, 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. 

The Law

Section 26 of the WSIA states that entitlement to benefits under the WSIA are in lieu of all other rights of action in respect of a work accident:

26(1) No action lies to obtain benefits under the insurance plan, but all claims for benefits shall be heard and determined by the Board.

(2) Entitlement to benefits under the insurance plan is in lieu of all rights of action (statutory or otherwise) that a worker, a worker’s survivor or a worker’s spouse, child or dependant has or may have against the worker’s employer or an executive officer of the employer for or by reason of an accident happening to the worker or an occupational disease contracted by the worker while in the employment of the employer.

Section 13(4) provides for benefit entitlement under the insurance plan for chronic and traumatic mental stress, as follows:

13(4) Subject to subsection (5), a worker is entitled to benefits under the insurance plan for chronic or traumatic mental stress arising out of and in the course of the worker’s employment.

13(4.1) The worker is entitled to benefits under the insurance plan as if the mental stress were a personal injury by accident.

The Issue

Was Ms. Morningstar precluded from bringing a constructive dismissal action under section 26 of the WSIA and, if so, could she claim for benefits under section 13 of the the WSIA?

The Decision

The adjudicator noted that the Statement of Claim alleged, “in a number of ways and in a number of places, that the injury warranting all damages claimed is the harassment, bullying, abuse, and the resulting poisoned work environment to which she claims she was exposed in the course of her employment”. 

In addition, he noted that Ms. Morningstar, her co-workers, and the managers named in the action were in the course of their employment when the alleged incidents of harassment and bullying took place. 

Therefore he concluded,  “the personal injury for which the worker claims remedies, under all heads of damage, flows from workplace harassment and bullying. As such, her right to sue is removed by the WSIA.”

The adjudicator also concluded that “damages flowing from a work injury are statute barred even when the remedies sought are different from those compensated in the WSIA, when those damages flow from a work injury falling within the scope of the WSIA.”

Furthermore, the adjudicator concluded that Ms. Morningstar’s “Statement of Claim was, in essence, a claim for injury resulting from alleged workplace harassment and bullying and thus is within the scope of section 13(4) … to provide for entitlement for chronic mental stress arising out of, and in the course of, [Ms. Morningstar’s] employment.”

Lessons to Be Learned

1. Workplace harassment can result in a claim for benefits under the WSIA. Having a workplace harassment policy and an internal workplace harassment investigation policy in place is a good way to reduce the risk of such a claim.

2. Taking workplace harassment complaints seriously and investigating them quickly is another way to reduce the risk of such a claim.

3. If an employee commences a constructive dismissal action because of workplace harassment then consider whether or not to ask the Workplace Safety and Insurance Board to have the case thrown out of court by bringing an application under the WSIA.

 

For over 30 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416-317-9894 or at [email protected]

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