Legislative Changes

Amendments to the Workers Compensation Act came into force on July 1, 2012 that greatly expand the scope of coverage available for workplace-related mental disorders.

Previously, a worker was only entitled to compensation for “mental stress” if it occurred as an acute reaction to a sudden and unexpected traumatic event arising out of and in the course of employment.

Under the new provisions a worker is now entitled to compensation for a mental disorder if it is either:

  • A reaction to one or more traumatic events arising out of and in the course of the worker’s employment, OR
  • predominantly caused by a significant work-related stressor, including bullying and harassment, or a cumulative series of significant work-related stressors, arising out of and in the course of the worker’s employment.

Mental stress resulting from employment decisions like discipline, termination or a change in working conditions are excluded from coverage.  Additionally, to qualify for coverage, a mental disorder must be diagnosed as a recognized mental condition by a psychologist or psychiatrist.

WorkSafe BC is expected to develop a policy on when mental stress will be eligible for compensation.

Implications for Employers

WorkSafe has not clearly indicated how compensation claims for mental disorders under these new provisions will be adjudicated.  Consequently, there is a great deal of uncertainty about what mental disorder claims will fall within the legislated amendments, including:

  1. How will WorkSafe interpret “predominantly”?  The new provisions appear to make compensation available for other than work-related causes.  Thus far, there is no guidance with respect to the meaning of “predominantly”.  It remains to be seen where WorkSafe will draw the line regarding mental disorders with multiple causative factors unrelated to the workplace.
  2. How will WorkSafe adjudicate claims for mental disorders caused by “bullying and harassment”?  The distinction between the legitimate exercise of management authority and workplace bullying or harassment is not always clear. Harassment complaints are frequently launched by employees against managers following performance management or disciplinary action.  Although the legislation excludes mental disorders caused by decisions related to the worker’s employment, including disciplinary decisions, the door may now be open for these claims if the claims officer determines that the manner in which the employment decision was made was bullying or harassing in nature. Previously, claims for harassment or bullying could only be adjudicated through either the Human Rights Tribunal (if the conduct was related to a protected ground) or the Courts via constructive dismissal claims.
  3. How will these amendments affect return to work planning?  WorkSafe already requires employers to modify work environments to accommodate employees coping with mental disorders.  Return to work plans usually address the “traumatic event” that led to the mental disorder, and involve modifying the employee’s duties, work location or work schedule to avoid placing that employee in a position that exacerbates the employee’s mental disorder or hinders the employee’s recovery.  If the cause of a mental disorder is cumulative, or involves a person in the workplace as opposed to an event, return to work plans could become much more complex for employers.  It may be more difficult to create a return to work plan that effectively addresses the underlying cause of an employee’s mental disorder if that underlying cause is the employee’s supervisor or a co-worker, or if the mental disorder was caused cumulatively by a series of stressors unrelated to the workplace.
  4. How will these amendments affect an employer’s obligation to ensure that its workplace is free from unsafe working conditions?  Now that mental disorders caused by harassment or bullying in the workplace is a recognized workplace injury, WorkSafe may expect employers to be more vigilant in addressing and preventing workplace bulling and harassment, and may also impose penalties against employers for failing to meet this requirement.

While these questions are speculative, the most obvious concern for employers today is an increase in compensation claims amongst their employees.  An increase in the number of claims is likely inevitable but the number of approved claims remains to be seen.