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Constructively Dismissed Due to Workplace Mental Distress? You May Need to Go to the WSIB, not Courts

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The Ontario Workplace Safety and Insurance Appeals Tribunal has ordered that an employee’s constructive dismissal lawsuit was barred because it was based on workplace mental distress, which was a matter for the WSIB and not the courts.

The employee worked in housekeeping in a hotel.  She resigned from her job. She then started a constructive dismissal lawsuit in the courts.  In the lawsuit, she claimed that she was forced to resign from her job due to harassment, bullying and abuse and the resulting mental distress.  She also claimed that the lawsuit “relates to the harassment and bullying that [she] experienced as a result of a toxic work environment created by [the employer’s] employees and management and her subsequent constructive dismissal.”  In particular, the employee claimed that housekeeping employees sprayed the employee with Lysol claiming that she “smelled”; that employees continued to complain that she smelled; and that the housekeeping manager asked her if she showered every day and washed her uniform.

The employer asked the WSIAT to order that the employee’s right to sue for constructive dismissal was taken away by the Workplace Safety and Insurance Act. That Act provides for WSIB benefits for employees who are injured at work, including employees who have experienced “chronic or traumatic mental stress arising out of and in the course of the worker’s employment”. As such, the employer argued that the employee’s lawsuit was barred because it was based on workplace mental distress which was a matter for the WSIB and not the courts. The employer relied on subsection 28(1) of the Workplace Safety and Insurance Act which provides that “A worker employed by a Schedule 1 employer . . . [is] not entitled to commence an action” in the courts against the worker’s employer or any other Schedule 1 employer under the Workplace Safety and Insurance Act for any workplace injury.

The WSIAT decided that the employee’s constructive dismissal lawsuit was essentially a claim for “personal injury” arising from a “work accident” consisting of alleged harassment and the employer’s failure to stop it.  As such, her claim fell within the jurisdiction of the Workplace Safety and Insurance Act and thus her constructive dismissal lawsuit was prohibited.

This case illustrates the historic “trade-off” in workers’ compensation legislation: employees get access to “no-fault” workers’ compensation benefits from the provincial workers’ compensation board if injured at work, but are barred from suing their employer in the courts in relation to such an injury. Given the addition in 2018 of mental stress to the types of workplace injuries for which the WSIB may pay an employee benefits, employers and employees should be aware that court lawsuits – even some constructive dismissal lawsuits – relating to workplace mental stress may now be barred by the Workplace Safety and Insurance Act, but only if the employer raises the issue.

The WSIAT’s decision may be accessed here: Decision No. 1227/19, 2019 ONWSIAT 2324 (CanLII)