Right to sue for Constructive Dismissal caused by Harassment taken away by Workplace Safety and Insurance Tribunal

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A key principle of the workers’ compensation regime in Ontario is that in exchange for insurance coverage in the event of an injury that arises at the workplace, injured workers are not entitled to sue his or her employer. In particular, section 26 of the Workplace Safety and Insurance Act, 1997 (WSIA) states that entitlement to benefits under the WSIA are in lieu of all other rights of action in respect of a workplace accident. Moreover, section 28 of the WSIA provides that any worker employed by a Schedule 1 employer (mandatory coverage) is not entitled to commence an action against a Schedule 1 employer.  Finally, it is important to note that the Workplace Safety and Insurance Tribunal (the “Tribunal”), by virtue of section 31 of the WSIA, is empowered to make determinations regarding whether a worker’s right of action bars any civil claims.

In 2018, section 13 of the WSIA was amended to allow employees to claim for benefits arising from “chronic mental stress”, which includes claims related to harassment in the workplace. the Workplace Safety and Insurance Board (WSIB) established policies for entitlement, which included the requirement to have a “substantial workplace stressor” which is defined as something that is “excessive in intensity and/or duration in comparison to normal pressures and tensions experienced by workers in similar circumstances.” Workplace harassment is generally considered a substantial workplace stressor.

On October 17, 2019, the WSIAT made a ruling that impacts whether an employee with a Schedule 1 employer can advance a civil claim in Superior Court for constructive dismissal where harassment is alleged. Decision No. 1227/19 involved an employee who was employed by Hospitality Fairview Holdings Inc. (HFH) in the housekeeping department as a supervisor. HFH is a Schedule 1 employer  with WSIB coverage. The employee resigned from her position with HFH claiming constructive dismissal as a result of harassment and bullying in the workplace. She filed a Statement of Claim in the Ontario Superior Court where she alleged constructive dismissal, bullying, harassment and a poisoned work environment, punitive, aggravated and moral damages.

She alleged that the other employees subjected her to abusive, humiliating and cruel conduct over a course of 17 months and that the conduct was supported by management. The issue commenced when a number of employees had sprayed the employee with Lysol claiming she smelled. This behaviour continued, and on some occasions the employee would find bath mats on her chairs. The housekeeping manager advised the employee that some employees had complained that she had a certain odour and again asked if she considered using feminine products.

The employee claimed that as a result of the continuing harassment and bullying she experienced by co-workers and management she went on medical leave. After consulting with her doctor she claimed she was unable to return to work due to the harassment and her fragile mental state resulting from the harassment in the workplace.  She filed a claim for constructive dismissal, damages for mental stress, self-worth, feelings of guilt and self-blame, moral, aggravated and punitive damages, damages for harassment and the creation of a poisoned work environment.

HFH applied to the Tribunal to determine whether or not the employee’s right to sue was taken away pursuant to section 31 of the WSIA. HFH’s argument was that the employee’s claim for damages in this case was taken away by the WSIA because the Statement of Claim was effectively a claim for chronic mental stress.

The Tribunal ruled that the claim fell within the jurisdiction of the WSIA and her right of action against HFH was statute barred. This was because:

  1. HFH was a Schedule 1 employer;
  2. The workers and managers were in the course of their employment when the incidents of harassment and bullying took place; and
  3. The constructive dismissal claim was inextricably linked to the harassing and bullying conduct of co-workers and management that caused her employment to be terminated and her mental distress that forced her to take sick leave.

The Tribunal noted that the Statement of Claim was essentially a claim for injury resulting from alleged workplace harassment and bullying that fell within 13(4) of the WSIA. It further noted that, even where remedies claimed by the employee are different than those compensated under the WSIA, actions for damages flowing from an injury are statute barred if they fall within the WSIA.  It should be noted that generally speaking that Tribunal has found that the right to bring an action for wrongful dismissal has not been removed by the WSIA, except in cases, as here, where the claim is inextricably linked to the work injury. In this case, the Tribunal found that the fundamental nature of the civil claim was for injury resulting from harassment and bullying in the workplace and was therefore statute barred.

The end result is that in certain circumstances where an employer is a Schedule 1 employer, and an employee claims constructive dismissal based on harassment, the employee may be barred from bringing a civil claim. Instead, the employee will have to pursue benefits through the WSIB process. Employers should seek legal counsel if faced with allegations of constructive dismissal, and in cases where benefits are available through the WSIB, a civil claim could be barred by statute.