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26 February 2020
A fundamental term of employment relationships is that employees are treated with dignity and respect. Accordingly, employers may breach an employment contract by condoning harassment in the workplace and creating a hostile work environment, which – in turn – may give rise to a constructive dismissal claim.
Recent legislative changes in some provinces have included work-related mental stress injuries within workers' compensation regimes. In some cases, this has resulted in employees being barred from bringing claims for damages resulting from constructive dismissal and limited them to claiming compensation under workers' compensation regimes.
Effective 1 January 2018, the Ontario government amended Section 13 of the Workplace Safety and Insurance Act to expressly allow claims arising from mental stress injuries. A perhaps unanticipated consequence arising from this amendment was demonstrated in the recent decision ofthe Ontario Workplace Safety and Insurance Appeals Tribunal in Morningstar v Hospitality Fallsview Holdings Inc (Decision 1227/19, 2019 ONWSIAT 2324 (CanLII)).
The employee was employed by Hospitality Fallsview Holdings Inc (the applicant) from May 2015. She resigned in February 2018, claiming constructive dismissal as a result of harassment and bullying. In April 2018 she commenced a claim in the Ontario Superior Court of Justice seeking damages for constructive dismissal, bullying, harassment and a poisoned work environment under the Occupational Health and Safety Act, the tort of harassment and punitive, aggravated and moral damages.
Following the filing of the statement of claim, the employer brought an application under Section 31 of the Workplace Safety and Insurance Act, seeking an order that the employee's civil suit was statute barred as a claim for a chronic mental stress injury arising from her employment, which was compensable under the act.
The Workplace Safety and Insurance Act Tribunal agreed with the employer, concluding that the civil action was, in essence, a workplace chronic mental stress claim. The tribunal held that the manner in which an action is framed is not determinative. Instead, the analysis should focus on the fundamental nature of the action and whether the circumstances of the wrongful dismissal claim are inextricably linked to the work injury.
The tribunal concluded that the fundamental nature of the action was a claim for workplace harassment and bullying that fell within the jurisdiction of the Workplace Safety and Insurance Act. Therefore, the employee's action against the employer was statute barred.
Section 5.1(1)(a)(ii) of the British Columbia Workers Compensation Act entitles workers to compensation for a mental disorder predominantly caused by a significant work-related stressor, which explicitly includes bullying and harassment.
To date, no decisions have been published considering whether former employees may still bring a claim for constructive dismissal. However, given the specific inclusion of bullying or harassment, claims for constructive dismissal arising from harassment may be similarly barred by British Columbia workers' compensation legislation.
Although Alberta has updated its Occupational Health and Safety Act to address workplace harassment and violence, employees can bring a claim for damages incurred as a result of an accident under the Alberta Workers' Compensation Act, which may include mental injuries arising from bullying or harassment.
As such, jurisprudence from Alberta indicates a different treatment of claims of constructive dismissal relating to workplace harassment, as evidenced in Ashraf v SNC Lavalin ATP Inc (2015 ABCA 78).
In that case, the employee worked for the employer until he became disabled due to a number of stress-related illnesses. He commenced an action against his employer for stress and related disabling physical injuries, which he claimed had resulted from the harassment and bullying that had led him to leave employment. The employee did not claim constructive dismissal.
In response, SNC applied to strike out the claim on the basis that the court had no jurisdiction to hear the matter as it was exclusively within the jurisdiction of the Workers' Compensation Board. The master of the board held that the action was barred by Section 21 of the Workers' Compensation Act.
On appeal, the employee applied to amend his statement of claim to include a claim for constructive dismissal and have the master's order set aside. The chambers judge permitted the amendment but concluded that:
The chambers judge struck out the claim for constructive dismissal.
The matter was appealed to the Alberta Court of Appeal, which characterised the appellant's claim as:
The court restored the claim for constructive dismissal, suggesting that employees may bring civil claims for constructive dismissal arising from hostile work environments.
Employers facing a constructive dismissal claim resulting from workplace harassment should seek legal advice as to whether the claim falls within the jurisdiction of workers' compensation legislation, rather than the civil courts. If so, alternate strategies may be available, such as bringing an application for a stay or summary judgment to limit the employee to the workers' compensation regime.
For further information on this topic please contact Claire Himsl or Rachel Kardal at Fasken by telephone (+1 403 837 0610) or email (firstname.lastname@example.org or email@example.com). The Fasken website can be accessed at www.fasken.com.
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