Understanding the legal risks around mental health

According to the Mental Health Commission of Canada, reports released in 2011 and 2012 indicate that mental health illnesses accounted for roughly 30% of short- and long-term disability claims and are rated one of the top three drivers of such claims by more than 80% of Canadian employers.

Consider, then, what impact a recent decision by Ontario’s Workplace Safety and Insurance Appeals Tribunal may have on this statistic. On April 29, 2014, the tribunal issued a decision regarding an employee’s entitlement to benefits as a result of chronic mental stress under the Workplace Safety and Insurance Act, 1997. The tribunal found that the provisions in the act that limit entitlement to benefits for mental stress that “arises from an acute reaction to a sudden and unexpected event” violate the equality guarantee of the Canadian Charter of Rights and Freedoms and are, therefore, unconstitutional. In short, the tribunal found the current definition to be discriminatory.

The decision was based on an employee’s assertion that she endured years of mistreatment by a physician with whom she worked, which led to her diagnosis of anxiety and depression. (The employee and her co-workers reported this mistreatment to management, but little or no action was taken.)

What does this mean for employers? It means that, prior to this ruling, only those claims that resulted from an acute reaction to a sudden and unexpected event—such as a bank employee’s mental illness as a result of a holdup—would prevail. The decision by the tribunal is a huge departure from this view, in that it held that the employee was entitled to benefits as a result of chronic mental stress. The ruling significantly expands the scope of entitlement for mental stress and will put increased pressure on employers to implement measures to reduce or eliminate actions that may cause psychological harm to employees. While this is not a change to the legislation, it will have an impact on future workers’ compensation claims in Ontario resulting from chronic mental stress.

Will claims increase? Time will tell. But some key questions arise as a result of the decision: • How will employees prove that the mental illness occurred as a result of the workplace?

  • Will workers’ compensation claims increase, and short- and long-term disability claims relating to mental illness decrease?
  • If so,what impact will this have on premiums paid by employers to insurers for disability plans and to the Workplace Safety and Insurance Board?
  • Are we collectively equipped to manage these types of claims and help employees who are suffering from mental illness?

We don’t yet have the answers to all of these questions, but, in the meantime, employers can take the following steps:

1) Involve senior leadership – Leaders must be passionate about the health and welfare of their employees, take action, invest in programs and measure results.

2) Provide training to leaders at all levels –
Focus on education and communication to reduce the stigma associated with mental illness, and provide tools and resources.

3) Create a culture of health and employee well-being –
Revise programs and practices, and create new ones that align with an overall strategy of workplace health.

4) Implement the National Standard of Canada for Psychological Health and Safety in the Workplace –
This will go a long way in reducing the risk of increased mental health claims and providing an improved working environment for employees.

As they take these steps, employers need to understand that the mental health bar has been set higher. A psychologically safe workplace is no longer a nice-to- have—it’s a must-have.

Julie Holden is senior vice-president, Central and Atlantic Canada, with SEB Benefits and HR Consulting.

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