On March 31, 2014 the NS Workers’ Compensation Board (WCB) issued a new policy applicable to its adjudication of psychological injury claims under the NS Workers’ Compensation Act.  The new policy clarifies the WCB’s approach to compensation for stress resulting from an “acute reaction to a traumatic event”:

  • Criteria. Claimants must satisfy four criteria – including the occurrence of a “traumatic event” as defined in the new policy – to be eligible.
  • Test. The WCB will apply an “objective” test.
  • Effective Date. The new policy took effect on March 25, 2014.
  • Employer Costs. There is a risk the new policy could, ultimately, lead to increased employer costs.

The Act defines “accident” as including stress that results from an “acute reaction to a traumatic event”. However, the WCB had no clearly defined approach to deal with such a claim when it did not arise from a compensable physical injury. This new policy clarifies the entitlement of workers covered by the provincial Act to compensation for stress resulting from an “acute reaction to a traumatic event”:

Criteria. A claimant must satisfy four criteria to be eligible for compensation for “psychological injury”:

  1. there must be a “traumatic event”; psychological conditions arising out of the usual workplace issues, such as a change in working conditions or disciplinary decisions, are not compensable;
  2. the event must arise in the course of employment;
  3. the response to the event must cause the worker to suffer from a recognized mental or physical condition described in the Diagnostic and Statistical Manual of Mental Disorders (DSM); and
  4. the condition must be diagnosed in accordance with the DSM by a health care provider (i.e. psychiatrist or clinically trained registered psychologist).

“Traumatic Event”.  A “traumatic event” is defined as a direct personal experience of an event that is sudden, frightening or shocking, with a specific time and place and involving actual or threatened death or serious injury to oneself or others, or a threat to one’s physical integrity. Examples include:

  • witnessing a horrific accident;
  • being involved in a hostage taking; or
  • witnessing an armed robbery.

Harassment and Bullying. The WCB opted not to include harassment and bullying as examples of traumatic events – but the report indicates that extreme workplace harassment could be compensable if it meets the definition of a “traumatic event”.

Test. The WCB will assess whether an event is a “traumatic event(s)” objectively: would a reasonable person have reacted to the event in the same way as the claimant?

No Change. The updated policy does not change the WCB’s approach to:

  • “Acute” Reaction. A “cumulative response” to traumatic events is not compensable; an “acute reaction” is still required though the acute reaction may arise from exposure to multiple “traumatic events”.
  • “Gradual Onset Stress”. Provincial workers are still not entitled to compensation for “gradual onset stress” under the Act.

Federal Workers. There is also no change to the existing policy regarding the adjudication of stress claims made by federal workers under the Government Employees Compensation Act

Effective Date. The new policy is effective March 25, 2014 so it will apply to all decisions the WCB makes on or after March 25th.

Employer Costs. It’s difficult to predict whether the new policy will lead to increased costs for employers – but the WCB acknowledges in its report the risk that appeal and legislative decisions could significantly expand the scope of coverage beyond the original intent of its policy. This could, in turn, increase employer costs by increasing assessments, increasing the number of appeals and the related costs to do so, or both.

The WCB issued the new policy after a period of public consultation – and interestingly, on the heels of the Supreme Court of Canada’s March 28, 2014 decision clarifying workers’ compensation criteria for federal government employees covered under the Government Employees Compensation ActClick here to read McInnes Cooper’s March 31, 2014 Legal Update: SCC Clarifies Workers’ Compensation Criteria For Federal Employees.

Click here to read the NS WSB’s new policy: Policy 1.3.9 – Psychological Injury

Click here to read the NS WSB’s report, “Psychological Injuries: Final Program Policy Decision and Supporting Rationale”.