Worrisome decision seen as “Another Honda” overturned and SCC will not hear appeal

Ontario employers cannot be liable for negligent infliction of emotional distress, the Ontario Court of Appeal has ruled, setting aside a damage award that included lost wages until retirement. The Supreme Court of Canada has declined to hear the matter.

Another Honda. The case, Piresferreira v. Ayotte and Bell Mobility, was seen as another “Keays v. Honda” after the employer was hit with a huge damage award that surprised lawyers and caused anxiety for HR professionals.

Facts. To boil down the facts, the employee, Piresferreira, was accused by her manager, Ayotte, of not doing her job. Piresferreira tried to show Ayotte an e‐mail on her BlackBerry to prove that she had done what she was supposed to have done. Ayotte shoved her, subsequently telling her “to get the hell out of his office.” When she returned to the office a few days later, she was given a Performance Improvement Plan that she refused to sign. She lodged a formal complaint with the human resources department. After an investigation, Human Resources disciplined Ayotte and ordered that he receive counselling on communication and conflict management. Piresferreira was subsequently diagnosed with post‐traumatic stress disorder; she went on sick leave and never returned to work. Approximately 16 months after the shoving incident, Bell Mobility sent her a letter saying that she was deemed to have resigned from her position.

Surprising Trial Award. The trial judge ordered Bell Mobility to pay damages for constructive dismissal, assault and battery, intentional and negligent infliction of emotional distress and mental suffering, failing to provide employees with a safe and harassment‐free working environment, failing to sufficiently investigate the incident, and imposing disciplinary measures on Ayotte that were “inappropriately mild.” The damages included lost wages up to retirement and amounted to more than $700,000.00 including legal costs.  

Appeal Decision Rolls Back Damages. On appeal, the Court of Appeal ruled that employers cannot be liable for negligent infliction of mental suffering, noting that such a duty would be a “considerable intrusion by the courts into the workplace.” There was also no basis to support a finding of intentional infliction of mental suffering. While egregious, Ayotte’s conduct did not reach the necessary legal threshold, that is, it was not “calculated to produce harm.” Finally, the damages for assault and battery were too remote: “Piresferreira’s psychological disabilities and her inability to work in any employment were largely caused by matters other than the battery itself.”

Final Result. In the end, the appeal court awarded Piresferreira 12 months’ pay in lieu of notice for constructive dismissal, plus $15,000 in damages for the battery, and $45,000 for the mental suffering related to the manner of her dismissal – a total of approximately $147,855– plus $120,000 net in costs.

Costs of Harassment. This saga, which resulted in years of effort and legal costs, demonstrates the cost of harassment in the workplace. Even though the damages were significantly reduced on appeal, the legal and reputational costs to the employer were no doubt significant.

Piresferreira v. Ayotte and Bell Mobility (Ontario Court of Appeal)

(http://www.canlii.org/en/on/onca/doc/2010/2010onca384/2010onca384.pdf)