Employers operating in Canada are familiar with workers’ compensation (WCB) laws, which provide no-fault, government-run insurance plans for workplace injuries. A recent Alberta court decision indicates that health problems arising from systemic harassment in the workplace can be covered by WCB insurance. This decision may have ramifications both in Alberta and elsewhere.

Background: Workers Compensation Legislation

Although Workers Compensation legislation varies by province, the general idea is the same across Canada. With several limited exceptions, employers are required to participate in the provincial workers’ compensation programs. Under these programs, when employees are injured at work they are covered by WCB, regardless of who was at fault. In exchange for this no-fault compensation, however, the employees lose their right to bring a claim in court directly against their employer. 

While chance physical accidents or injuries are likely what first comes to mind when thinking of a WCB claim, the kind of incident that can give rise to such a claim has been found to be much broader and more varied. 

Court Claim Against SNC Lavalin Struck

In 1993, Mr. Ashraf (“SA”) began working as an engineer with SNC Lavalin (“SNC”).  In January of 2010, SA went off work on a disability leave for psychological and physical health issues. He also sued SNC in court. In that law suit, he sought the difference between his long-term disability benefits and the salary and benefits he would have earned had he been able to continue working. He alleged that his health issues stemmed from the treatment he received from his supervisor and senior management team, which he described as “an escalating and systematic campaign of abuse, harassment and bullying.” 

SNC applied to strike out the law suit, on the basis that SA’s injuries were covered under Alberta’s WCB scheme. Thus a law suit against SNC was barred by the WCS legislation, SNC argued. The initial decision agreed with SNC (PDF).

Appeal

SA’s appeal of the initial decision was heard by the Alberta Court of Queen’s Bench (PDF). The Court considered whether the injuries suffered by SA were caught by the WCB legislation. It noted that the definition of “accident” in Alberta’s Workers’ Compensation Act is broad. It includes wilful and intentional acts and chance events. SA argued that his harassment while employed was not random but systematic, and thus not a chance event. 

The Court did not disagree with SA. It instead noted that there was no requirement that the “accident” be a chance event. Further, the Court noted an earlier case in which ongoing or continuous exposure to chemicals was found to be an “accident” under the Act. 

The Court found, therefore, in favour of the employer, SNC. It ruled that, “the systemic campaign of abuse in the workplace and resulting injuries suffered… fall under the definition of “accident” in the Workers Compensation Act.”  SA’s law suit against his employer was therefore barred from proceeding.

Lessons for Employers

The Court’s finding in this case can be seen as employer-friendly. By ruling that workplace “accidents” can include systemic workplace harassment, the Court has barred employees from bringing law suits seeking damages against their employers, on the same issue.

There are, however, several important distinctions that may differentiate this case from many of the claims usually faced by employers. 

It is important to note that SA brought his claim independently of any claim for damages for wrongful dismissal. The workers’ compensation legislation provides no bar to wrongful dismissal claims. This case does not change the way workplace harassment factors into damages awards in wrongful dismissal claims.

Further, although Alberta decisions are persuasive for courts in other jurisdictions, they are not binding. This is doubly so where the court is interpreting different provincial legislation, as in WCB cases. Although there are indications that other provinces are moving towards similarly broad interpretation on WCB matters (see http://www.fasken.com/en-US/the-hr-space-workers-compensation-mental-stress-claims-may-be-expanded/), the wording of the particular province’s WCB legislation will continue to remain the paramount consideration.

Finally, it must be remembered that employees can usually file WCB claims at no cost, and with no potential liability to themselves. In law suits, on the other hand, there are usually serious cost consequences to the loser of any case that is litigated in Canada.

Accordingly, while this case indicates that employers may be protected from harassment suits in certain circumstances, it should not be viewed as justification for employers to relax harassment-prevention and protection measures.