September 29, 2010

Employer Liability for Mental Distress in the Workplace

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Employers can rest a little easier following the decision in Piresferreira v. Ayotte. , a case in which the Ontario Court of Appeal held that the common law tort of “negligent infliction of mental suffering” does not exist in the employment context and, further, that employers do not have a duty of care to shield employees throughout the course of their employment from acts that might cause them mental distress.

This case involved the constructive dismissal of a Bell Mobility employee who was shoved by her supervisor and then presented with a Performance Improvement Plan regarding her work instead of an apology. The employee made a complaint to Human Resources which resulted in the manager being given a written warning. The employee was unsatisfied by this result and provided medical documentation that she was unable to return to work because of the stress the incident had caused her.

The Ontario Court of Appeal examined whether there exists a duty of care between employers and employees, such that an employer is required to protect employees from incidents in the workplace that might cause them mental distress. Notwithstanding its findings that the parties had a relationship of proximity and that the damages suffered by the employee were reasonably foreseeable, the court found that the following policy considerations foreclosed the recognition of a duty of care:

  • the recognition of such a tort is better left to the legislature;
  • imposing a duty to protect employees from the variety of workplace incidents that  may cause mental suffering too greatly expanded the scope of liability of employers; and
  • in a case in which the employer's allegedly tortious behaviour includes the termination of the employee, compensation for mental distress is available under the framework the Supreme Court has set out in Honda Canada v. Keays . In other words, in the dismissal context, the law already provides a remedy and therefore recognition of the tort of “negligent infliction of mental suffering” is not necessary.

What this means for employers As a result of this decision, employers in the non-unionized setting are not liable for the mental distress of their employees caused by conduct in the workplace, unless that mental distress results from bad faith firing as contemplated by the Supreme Court in Honda Canada v. Keays.

Expanded Remedial Powers for Administrative Tribunals The Supreme Court of Canada decision of R. v. Conway has expanded the powers of many tribunals to grant Charter remedies, once thought to be beyond the scope of an administrative tribunal.

The issue in this case was whether the Ontario Review Board (“ORB”) had the authority to grant remedies under s. 24(1) of the Charter. Conway, a man found not guilty of a criminal offence by reason of insanity and held in a mental health centre, applied for an absolute discharge under s. 24(1) of the Charter on the basis that the mental health center had breached his Charter rights.

Section 672.54(a) of the Criminal Code provides that an absolute discharge is unavailable to any patient who is a “significant threat to the safety of the public.” Because the ORB concluded that Conway was a threat to public safety, which made him an unsuitable candidate for an absolute discharge, he was ordered to remain in the mental health centre.

The case provided the Supreme Court of Canada with an opportunity to examine the relationship between the Charter, its remedial provisions and administrative tribunals. The Court held that the new approach of determining whether a court or tribunal had jurisdiction to grant Charter remedies is a two-step process to determine:

  1. if the particular tribunal has the jurisdiction to grant Charter remedies in general (which need only be decided once); and
  2. if the tribunal can grant the particular remedy sought based on its statutory mandate.

What this means for employers As employees may be able to use the Charter to obtain remedies from administrative boards and tribunals that are not expressly barred by the relevant statutory schemes, Charter claims before administrative tribunals may be more frequent. Only time will tell how generous administrative tribunals will be in interpreting whether their enabling statutes permits them to grant constitutional remedies.

Legislative Update

Small Claims Act (New Brunswick) The New Brunswick Small Claims Act was repealed on July 15, 2010. The Small Claims Court no longer exists and all proceedings are now dealt with in the Court of Queen’s Bench. As a result, the Rules of Court were amended to add Rule 80. This Rule addresses all claims under $30,000, which marks a significant increase from the $6,000 cap found in the former Small Claims Act.

New amendments to the Rules of Court also include an increase in the amount of claims permitted under Rule 79, the Simplified Procedure Rule, from $50,000 to $75,000.

Human Rights Act (Newfoundland and Labrador) On June 24, 2010 a new Human Rights Act (the “Act”) came into force in Newfoundland and Labrador, replacing the Human Rights Code (the “Code”). While much of the Act mirrors the former Code, there are a number of significant changes. “Marital status” is now defined, the definition of “family status” has been broadened and “source of income” and “disfigurement” have been added as prohibited grounds of discrimination. Employers are also now prohibited from discriminating against individuals because of conviction for a criminal offence that is unrelated to the employment. The former categories of physical disability and mental disability are now combined as “disability” and there is a new express provision in the Act that prohibits discrimination on the basis of “perceived disability” (codifying the common law). As well, people under the age of 19 years are no longer restricted from filing age-based discrimination complaints and the Act extends human rights protection to pregnant women. There have also been amendments to the complaints process, including the Executive Director’s discretion to defer or dismiss a complaint in certain circumstances, as well as an increase in the amount of allowable fines.

Small Claims Act (Newfoundland and Labrador) On June 24, 2010 amendments to the Newfoundland and Labrador Small Claims Act came into force, as well as an amendment to the regulations (filed June 28, 2010) increasing the maximum allowable claim that can be brought in Small Claims Court from $5,000.00 to $25,000.00. Employers in Newfoundland and Labrador may begin to see an increase in the number of wrongful dismissal Court actions since an employee now has the option of bringing an action in Small Claims Court that might have been uneconomical to pursue in the Supreme Court, Trial Division.

Trade Union Act; Labour Standards Code; and Pension Benefits Act (Nova Scotia) In the past year, the Nova Scotia government has made substantive amendments to three employment related Acts. First, Bill 7 amended the Trade Union Act to further limit parties' abilities to subpoena mediators and arbitrators to testify about the mediation or arbitration they conducted. Bill 7 also amended the Trade Union Act to include a new, optional mediation-arbitration process to resolve grievances. Second, Bill 40 amended the Labour Standards Code to entitle employees to an unpaid emergency leave in cases of public health or other declared emergencies. Third, although not yet proclaimed in force, Bill 48 will amend the Pension Benefits Act to permit a pension plan to offer phased retirement to members of the pan by permitting payments of up to 60% of an accrued pension to be paid to eligible members without requiring the members to retire or reduce their work hours.

Inquiries may be directed to:

New Brunswick- Trisha Gallant-LeBlanc at 506.462.4764
Newfoundland & Labrador - Chris Peddigrew at 709.570.5338
Nova Scotia - Tom Groves at 902.491.4104
Prince Edward Island - Karen Campbell, QC at 902.629.3911

Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.