Insight Blog

Worker’s Compensation Enrolled Employer Avoids Court Action for Workplace Harassment

By Paul Martin

A new decision from the Workplace Safety and Insurance Appeals Tribunal suggests that some employers may want to opt into worker’s compensation insurance, even where they are not required to do so.

The Workplace Safety and Insurance System

Not all employers are required to maintain insurance under the Workplace Safety and Insurance Act (“WSIA”), colloquially known as worker’s compensation.  While many workplaces are required to participate in WSIA insurance, others (usually in industries with smaller risks of injuries) are not mandated to maintain coverage under the Workplace Safety and Insurance Act (“WSIA”).  In particular, most employers with office operations, including many types of health care clinics, are not required to maintain such coverage.

However, even if not required to by law, any employer is permitted to opt in to WSIA coverage.  Practically, however, few do.  If employers do not opt into WSIA coverage, then compensation for employee injuries are dealt with in the same manner as any other injury claim, through private legal (usually Court) proceedings.

WSIA coverage, like any insurance, pays benefits to injured workers through a central fund into which all employers pay.  While employers may see their rates impacted by their rates of injuries, in general employers prefer to see injuries dealt with in the WSIA system, where their direct liability is generally more limited.  In addition, WSIA’s ability to award damages is much more circumscribed than the Courts.

If a party believes an action before the Courts should properly be brought under the WSIA because it deals with a workplace injury that is covered by WSIA, they can bring a “right to sue” application before the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”).  WSIAT will then determine whether the matter should be heard by the Courts or is instead properly dealt with within the WSIA framework.  If the latter, the Court action is stayed and the worker is given six months to bring a WSIA claim.

Since a landmark 2014 decision, workers with mental health conditions that can be connected to the workplace have increasingly been able to access the worker’s compensation system for benefits.  Increasingly, workers who have suffered from mental health conditions caused by workplace harassment have been able to access WSIB benefits.  Of course, this also means that these claims are now recognized as falling within the jurisdiction of the WSIA.

A recent decision from WSIAT suggests that some civil claims brought in the Courts related to workplace bullying and harassment that result in mental health harms to an employee may be defeated by a right to sue application.

No Right to Sue for Workplace Harassment Injuries

The jurisdiction over the WSIA over mental stress claims and its interaction with the Courts came to a head in a recent WSIAT decision.  In Decision No. 1227/19, 2019 ONWSIAT 2324 (CanLII), WSIAT dealt with the question of whether a claim for wrongful dismissal in the Courts can proceed in respected of an employee insured under the WSIA who suffers mental stress injuries.

In that case, the employee claimed that she had been bullied and harassed and had suffered mental stress injuries.  She claimed that the effect of this behavior was to constructively dismiss her.  She brought a wrongful dismissal action, claiming damages for reasonable notice, as well as various damages related to the mental harms and medical issues she claimed to have suffered as a result of mistreatment.

The employer then brought a right to sue application, arguing that because the constructive dismissal claim was focused on alleged mental stress injuries suffered in the workplace, it was properly a claim under WSIA and that the employee had no right to bring a legal action in the courts.

WSIAT’s determination was focused on the “foundational facts” or core issues of the case.  The question ultimately was whether the case was about recovering losses for breach of contract (a constructive dismissal) or whether it was about a personal injury.  If the foundational facts of the case were related to the latter, then regardless of how the action was framed, there was no right to sue for those damages.

WSIAT found that, though the damages claimed fell under various heads of damages and legal theories, all of the damages flowed directly from the harassment and bullying in the workplace, the employer’s response (which was alleged to be inadequate and contributed to the injuries) and the resulting mental stress.  As a result, WSIAT found that the foundational facts for the cause of action were inextricably linked to workplace harassment, an injury that is compensated under the WSIA, and thus the employee had no right to sue.  It issued an order which had the practical impact of staying the court action, and requiring the employee to access the WSIA system for compensation.

It should be noted that WSIA is a “no fault” system.  That means that it covers injuries without determining negligence on the part of the employer.  With respect to mental stress claims, it involves all mental health injuries, even if the employer was not part of the root cause of them (such as if they were the result of harassment by a co-worker, as opposed to a member of management.)  As a result, the theory followed by WSIAT could potentially capture a sizable number of court claims.

It is important to note that many of the largest awards given by Courts to employees arise out of mental suffering and distress that employees suffer in harassment situations.  As a result, this decision could redirect some of the largest liability claims from the courts into the workers’ compensation system.

Although WSIAT’s decision is focused on the nature of the claim asserted by the employee, and to some extent, its framing, if the rationale behind Decision No. 1227/19 is widely adopted, it could remove many significant and sizable harassment and bullying claims from the civil litigation stream, which could lead to the reduction of a significant liability for WSIA-insured employers.  For some employers, the reduction of that risk could well be worth the cost associated with enrolling in the WSIA plan.

If you have questions about Decision No. 1227/19, or any matter related to the workplace, contact the team at Wilton Martin Litigation Lawyers.


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