It is a fundamental term of the employment relationship that employees be treated with dignity and respect. Accordingly, an employer 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.

However, 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 to compensation under workers compensation regimes.

Ontario

Effective January 1, 2018, the Ontario government amended s. 13 of the Workplace Safety and Insurance Act (“WSIA”) to expressly allow claims arising from mental stress injuries. A perhaps unanticipated consequence arising from this amendment is demonstrated in a recent decision from the Ontario Workplace Safety and Insurance Appeals Tribunal in Morningstar v. Hospitality Fallsview Holdings Inc. (Decision No. 1227/19), 2019 ONWSIAT 2324 (CanLII).

The employee was employed by Hospitality Fallsview Holdings Inc. (the Applicant) from May 2015. She resigned her position 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/or a poisoned work environment under the Occupational Health and Safety Act, the tort of harassment, and punitive, aggravated and/or moral damages.

Following the filing of the Statement of Claim, the employer brought an application under section 31 of the WSIA, seeking an order that the employee’s civil suit was statute-barred as a claim for a chronic mental stress injury arising out of her employment, which was compensable under the WSIA.

The Workplace Safety and Insurance Act Tribunal (“WSIAT”) agreed with the employer’s position concluding that the civil action was, in essence, a workplace chronic mental stress claim. The WSIAT 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 WSIAT concluded the fundamental nature of the action was a claim for workplace harassment and bullying that fell within the jurisdiction of the WSIA. Her action against the employer was therefore statute-barred.

British Columbia

Section 5.1(1)(a)(ii) of the British Columbia Workers Compensation Act entitles a worker to compensation for a mental disorder predominantly caused by a significant work-related stressor, which explicitly includes bullying or 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 similarly be barred by BC workers compensation legislation.

Alberta

Although Alberta has updated its Occupational Health and Safety Act to address workplace harassment and violence, an employee may nevertheless 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 from a number of stress related illnesses. He commenced an action against his employer for stress and related disabling physical injuries which he claimed resulted from the harassment and bullying that led him to leave employment. The employee did not claim constructive dismissal.

In response, SNC applied to strike the claim on the basis the court was without jurisdiction to hear the matter as it was exclusively within the jurisdiction of the Workers’ Compensation Board. The master held the action was barred by s.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 to set aside the master’s order. The chambers judge permitted the amendment but concluded that the “essential character” of the dispute arose from an “accident” as defined in the Workers’ Compensation Act and that the Workers’ Compensation Board had exclusive jurisdiction and struck the claim for constructive dismissal.

The matter was appealed to the Alberta Court of Appeal, where the court characterized the appellant’s claim as: i) a cause of action for physical and psychological injuries sustained in the workplace, and ii) constructive dismissal. The Court of Appeal restored the claim for constructive dismissal, suggesting that employees may bring civil claims for constructive dismissal arising from hostile work environments.

Lessons for employers

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.