Saturday 12 May 2012

Tort Damages Place in Wrongful Dismissal Cases

In November of 2010 I was asked to present at the annual Carleton County Law Association's annual civil litigators conference on the topic of workplace burnout.  Although my full paper can be found here, this post will focus on the issue of adding tort damages to a claim for wrongful dismissal in Ontario.

The most exciting, some have said “sexy”, but no doubt controversial part of employment law as of late has been whether or not significant tort damages can result from wrongful dismissal.  An excellent summary of the law is found in Elgert v. Home Hardware Stores Limited, 2010 ABQB 65.

Wrongful Dismissal Damages

Wrongful dismissal is, at law, essentially a breach of contract matter.  Damages therefore should be calculated using contract law principles. The question that has emerged is what to do when the conduct leading to the breach, whether actual or constructive, is so egregious as to warrant court intervention?

The decision of the Ontario Court of Appeal in Piresferreira v. Ayotte, 2010 ONCA 384 holds that there is no such cause of action as “negligent infliction of mental suffering” for employer conduct during the course of employment.  In my opinion, the Court of Appeal’s decision chopped Justice Aitken’s well-reasoned decision at its knees and stands in contrast to other appellate-level decisions, specifically Sulz v. Canada, 2006 BCCA 582.  Leave to appeal Piresferreira was denied by the Supreme Court of Canada.

Making Sense of Where we Stand Today

As of today, the current state of the law in Ontario says that unless the employer conduct meets the test for intentional infliction of mental suffering during the course of employment, or meets the Keays v. Honda Canada Inc., 2008 SCC 39 test for moral damages at the time of dismissal, claims for tort damages do not belong in a case for wrongful dismissal.

The problem with Keays, I would submit, is that the focus of the inquiry is too narrow.  By focusing on the conduct at the time of dismissal, rather than the conduct leading to dismissal, the test of whether damages are available fails to provide any realistic remedy to bullied or harassed employees.  It also fails to observe the thoughtful observation of Justice Little, in the case of Colwell v. Cornerstone Properties Inc., 2008 CanLII 66139 (Ont. S.C.J.) who held that the employee’s employment contract:

Contained an implied term at the time the contract was entered into, that each party would treat the other in good faith and fairly, throughout the existence of the contract, as well as during termination.

In reversing Justice Aitken’s decision and ignoring Justice Little’s observations, the Court of Appeal in Piresferreira solidified the problem when it held that:

In a case in which the employer does not terminate the employee, the employee who is caused mental distress by the employer’s abusive conduct can claim constructive dismissal and still have recourse to damages under the Honda framework.  Recognizing the tort [of negligent infliction of mental suffering] in the employment relationship would overtake and supplant that framework and all of the employment law jurisprudence from which it evolved.  In other words, in the dismissal context, the law already provides a remedy in respect of the loss complained of here.  The recognition of the tort is not necessary.

It is very respectfully submitted that the Ontario Court of Appeal got it wrong.  The focus of analysis under Keays is too narrow, such that confining employees to that analysis misses far too much culpable conduct.

Intentional Infliction of Mental Suffering: Available

For whatever it is worth, the tort of intentional infliction of mental suffering remains available in the employment law context. 

Before the Court of Appeal’s decision in Piresferreira, the test for intentional infliction of mental suffering came from Prinzo v. Baycrest Centre for Geriatric Care (2002), 60 O.R. (3d) 474 (C.A.)  The elements of the tort were known to be:

(1)       flagrant or outrageous conduct;
(2)       which was calculated to produce harm; and
(3)       resulting in a visible and provable illness.

In her reasons for decision following the trial in Piresferreira, Justice Aitken held that the defendant supervisor’s conduct satisfied the second element of the test given that he “showed reckless disregard for Piresferreira’s emotional well-being.”  The Court of Appeal rejected that reasoning and held that in order to satisfy the second criterion, “it must be shown that the defendant desired to produce the kind of harm that was suffered or knew that it was substantially certain to follow.”

As it stands, it would appear that in order to successfully make out a case for intentional infliction of mental suffering the employee will have to demonstrate that the supervisor had actual knowledge of the employee’s condition and then exploited it.

This heightened standard might be palpable for the purposes of “intentional” torts; however, without a lessened standard, such as “negligent infliction of mental suffering,” this standard places too high a burden on bullied or harassed employees. 

Negligent Infliction of Mental Suffering: Not Available

In Piresferreira, Justice Juriansz, writing for the Ontario Court of Appeal, held that the tort of negligent infliction of mental suffering was not actionable in the employment law context. 

Justice Juriansz held that “since no Canadian appellate court has recognized a free standing cause of action in tort against an employer for negligent infliction of mental suffering by an employee,” itself an error, (see Sulz v. British Columbia, supra) it was necessary to apply the Anns test.

Applying Anns, Justice Juriansz found that both proximity and foreseeability had been established.  However, in finding that there were residual policy reasons to reject such a duty Justice Juriansz wrote that:

A general duty to take care to shield an employee during the entire course of his or her employment from acts in the workplace that might cause mental suffering strikes me as far more expansive than a duty to act fairly and in good faith during just the termination process…  The duty put forward in this case would apply in the course of employment as well as to its termination.  The general duty postulated would require employers to take care to shield employees from the acts of other employees that might cause mental suffering.

Although Justice Juriansz presents a valid argument, it is respectfully submitted that it is a duty worth having and enforcing.  The Ontario legislature appears to agree. 

In November of 2010 I wrote, “given the passage of Bill 168, considered below, Piresferreira may become an anomoly; the last of the cases to fail to recognize this duty.”  As much is yet to be seen.

Impact of Bill 168

On June 15, 2010, the Ontario government enacted “Bill 168”, which amended Ontario’s Occupational Health and Safety Act.  The Bill provided definitions of “workplace violence” and “workplace harassment.”  “Workplace violence” is defined as:

(a) the exercise of physical force by a person against a worker, in a workplace, that causes or could cause physical injury to the worker,

(b) an attempt to exercise physical force against a worker, in a workplace, that could cause physical injury to the worker,

(c) a statement or behaviour that it is reasonable for a worker to interpret as a threat to exercise physical force against the worker, in a workplace, that could cause physical injury to the worker.

And “workplace harassment” is defined as:

engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome.

Aside from adding these definitions to the legislation, the only other truly operative part of Bill 168 was to require employers to develop a workplace harassment/violence program that includes a process to investigate and deal with incidents or complaints of workplace harassment and/or violence.

It remains unclear what, if anything, this legislation will truly mean for workplace harassment and bullying.  It is respectfully submitted that, it codifies the implicit duty that Justice Little observed in Colwell v. Cornerstone Properties Inc., to treat the other party in good faith and fairly, throughout the existence of the contract.

Why Tort Damages are Necessary and Why You Have to Prove Them

I would submit that tort damages in the employment context are necessary because they compensate beyond the usual contract remedy of notice.  The purpose of notice, as we know, is to permit the employee time to find new employment.  Yet what do employees, who are unable by reason of a disability to look for work, do?  By contrast, someone who is unable to work by reason of disability following a motor vehicle collision is entitled to sue the at-fault driver in negligence for her loss of income or competitive advantage.  Why then does it make any sense to deny someone who is injured to the point of being unable to work by reason of negligence in a different context the same set of damages?  As expressed in the following table, the situation makes even less sense.

Motor Vehicle Collision
Workplace Bullying
Pre-Incident Status
Intervening Event
Result of Event
Too injured to work
Too injured to work
Damages available
Loss of all income.

Starting from the presumption that the court will recognize this inconsistency, one recognizes the need to gather sufficient and compelling evidence to demonstrate an actual inability to work.  Doing so requires borrowing pages from our personal injury colleagues’ playbooks.

The failure to acquire and marshal that evidence can be fatal to any claim for damages.  For example, in Brien v. Niagara Motors Limited, 2009 ONCA 887 the Ontario Court of Appeal restricted the availability of mental distress damages by requiring that the employee seek medical attention:

While the respondent’s misconduct in this respect could have led to a proper award of mental distress damages as defined in Keays, the mental distress that the respondent suffered upon her termination and the manner of that termination was not of the nature and scope to qualify for compensatory damages in accordance with that decision, as the respondent did not seek any medical attention, professional assistance or undergo any therapy for her mental distress.

Similarly, in Qubti v. Reprodux Ltd., 2010 ONSC 837 where the employee was subjected to repeated name calling the court found that constructive dismissal had been made out, but the employee was not entitled to any other damages as he failed to demonstrate that it was his employer’s actions, and not something else, that caused his mental suffering.

Human Rights Complaints

Finally, an important consideration to make when an employee presents a case of harassment or disability is whether or not the harassment was made on a ground prohibited by the Ontario Human Rights Code, or whether the employer failed to accommodate a disability. 

If a claim for constructive dismissal is to be advanced one should also consider ‘piggy-backing’ a Human Rights complaint.  In Stokes v St. Clair College, 2010 ONSC 2133 Justice Hokin resolved that one could make a claim for “monetary compensation” as contemplated by section 46.1 of the Ontario Human Rights Code, in addition to a claim for constructive dismissal.  The claim for monetary compensation was for failing to accommodate a disability.  A similar decision was reached with respect to the Federal Canadian Human Rights Act, in Sulz.

The interesting question is whether or not illness due to an aversion to work can qualify as a “disability” within the meaning of the Ontario Human Rights Code.  At least one Labour Arbitrator’s decision has held that it can.

In University of Western Ontario v. University of Western Ontario Faculty Assn., [2008] O.L.A.A. No. 192 Arbitrator Paula Knopf held that:

Section 10(1)(a-b) of the Code defines "disability" as including, "any degree of physical disability, infirmity, .... or illness [and/or] a condition of mental impairment." For purposes of this case, this is similar in effect to the Quebec Charter of Human Rights and Freedoms, R.S.Q., c. C-12, ss. 10, 16, that uses the word "handicap".

Arbitrator Knopf accordingly relied on the Supreme Court of Canada’s decision in Quebec (Commission des droits de la personne et des droits de la jeunesse) v. MontrĂ©al (City), [2000] 1 S.C.R. 665 for consideration of whether or not the grievor’s condition rose to the level of “disability.”

In a balanced and well-reasoned decision Arbitrator Knopf observed that,

The [Human Rights] Code cannot automatically be used as a vehicle to achieve an "accommodation" of medical manifestations simply because one dislikes his/her job or working conditions to such an extent that it affects their health.

However, Arbitrator Knopf went on to observe that, “The cause of the stress does not disentitle him to accommodation[…] medically recognized stress that results in an inability to continue to work has been accepted as a form of disability.”  In the result, the decision was that the grievor was suffering from a “disability” as the term was defined.

As a consequence, one of my recommendations may be that if a client has been terminated, either actually or constructively, and she was stressed to the point of bona fide illness on account of an aversion to work that could have been accommodated but was not, in addition to a claim for wrongful dismissal, a claim for monetary compensation for failing to accommodate a disability should be advanced in the same Superior Court action.

As always, everyone’s situation is different.  The above is not intended to be legal advice for any particular situation and it is always prudent to seek professional legal advice before taking any decisions on one’s own case.

Sean Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer.  He tweets from @SeanBawden.

1 comment:

  1. I agree that you make reasonable arguments. An employer's actions up to termination can certainly make the work environment toxic. This can lead to a poisoness work environment where other employees no longer respect the employee's decisions until a complete disintigration of the employee's authority happens.
    This is both demoralizing and could cause a disability under Human Rights.
    Joy Vas, CHRP