Ontario Employees Have a Right to Pursue Workplace Harassment-Related Constructive Dismissal Claims

Written on behalf of Peter McSherry

Psychological injuries in the workplace have been an increasingly common problem in Canadian workplaces. These mental health-related issues include harm caused by workplace harassment, chronic stress, and post-traumatic stress disorder.

It can be difficult for employees to know whether to pursue workplace-related mental health injuries through the Workplace Safety and Insurance Board (WSIB) or through the courts. This issue was considered by the Ontario Superior Court of Justice in Morningstar v. Workplace Safety and Insurance Appeals Tribunal, et al.

Cancer Survivor Alleged Severe Workplace Harassment by Management and Colleagues

The employee was a 60-year-old supervisor in the housekeeping team at a hotel. She had previously survived uterine cancer and felt her symptoms were used against her in the workplace.

She worked for the employer for almost three years, and for the last two years, she said she experienced workplace harassment by both management and colleagues related to their perception of her disability (they believed she suffered from incontinence). She described “devastating and humiliating” treatment including being:

• Teased for incontinence and “having an unpleasant odour”;
• Sprayed by colleagues with Lysol; and,
• Asked by managers if she considered using “douches, sprays, pads or baby powder”.

Employee Stated Employer Failed to Address Workplace Harassment

The employee alleges she reported the workplace harassment several times. An initial finding by the employer was that no workplace harassment had taken place. However, in a later independent investigation, the employer determined there had, in fact, been workplace harassment. The employer put in place sensitivity training as a remedy but continued to have the employee reporting to the same manager who had harassed her.

The employee went on a medical leave of absence and eventually felt that the employer would not take the workplace harassment seriously and resigned from her employment.

Employee Sued Ex-Employer for Constructive Dismissal and Additional Damages

The employee filed a constructive dismissal claim. A constructive dismissal claim is essentially a wrongful dismissal claim where your employer has not directly terminated the employment relationship but instead has made a fundamental and unilateral change to the employment relationship such that it can no longer continue. This can be in the form of harassment, unilateral decrease in pay or change in responsibilities.

In addition to her claim for constructive dismissal, the employee sought punitive, aggravated, and moral damages related to the manner of her dismissal. These additional damages are reserved for cases where the manner of dismissal is so egregious additional damages are required to compensate the employee or punish the employer.

Workplace Safety and Insurance Appeals Tribunal Found Dispute was Workplace Injury Claim

The employer brought an application to the Workplace Safety and Insurance Appeals Tribunal (the “Tribunal”) in an attempt to block the constructive dismissal claim. The employer argued the claim was statute-barred as the claim was really a workplace injury claim and should have been pursued through the Workplace Safety and Insurance Board (the “Board”).

The Tribunal had two separate Vice-Chairs review the facts of this case. In both decisions, the Vice-Chairs ruled that the underlying facts supporting the constructive dismissal claim – the harassing conduct and resulting injuries – were essentially workplace injuries. It found that as the legislation does not distinguish between mental and physical injuries, the claim should have gone through the Board process.

Employee Applied for Judicial Review of Tribunal’s Decision

The employee brought an application for review by the Ontario Superior Court of Justice.

The court reviewed the history of the Workplace Safety and Insurance Act (the “Act”), which governs workplace accident claims and is the governing legislation for the Board and Tribunal. Under the Act, the Board administers a no-fault workplace accident insurance program where employees don’t have to prove their employers are at fault to claim benefits, only that the accident took place at work. In exchange, employers are protected from litigation.

Court Overturned Tribunal Decision, Held Workplace Harassment-Related Constructive Dismissal Can be Heard by Court

The court concluded that the Tribunal erred in how it applied the Act to the facts of the Morningstar case. It found the purpose of the Act is to bar claims related to the injuries themselves. It would not make sense to have this compromise no-fault insurance regime for workplace accidents if employees could also pursue tort or personal injury claims for the same accidents.

The court determined it is unreasonable to bar contract-related claims like constructive dismissals even where they rely on many of the same facts as a tort claim. A constructive dismissal claim is a true contractual or employment law claim, not a personal injury claim pretending to be a contract claim.

As a result, the court ordered that the employer’s application to the Tribunal be quashed. It held the employee’s claim for constructive dismissal damages as well as aggravated, punitive and moral damages for the manner of dismissal be allowed to proceed. The employee was also granted costs in the amount of $12,500.

Contact Peter A. McSherry in Guelph or Experienced Advice on Workplace Harassment and Constructive Dismissal Matters

Workplace harassment creates a number of legal issues, including actions for wrongful or constructive dismissal, disability insurance claims, and human rights disputes. Peter A. McSherry is an experienced employment lawyer and is dedicated to ensuring employees’ rights are protected under the law. To schedule a consultation on your employment matter, reach out online or call 519-821-5465.