The Ontario Court of Appeal is refusing to consider an appeal from Ontario’s Divisional Court judgement that affirmed employees’ right to sue for wrongful and constructive dismissal in the civil courts in cases of chronic mental stress arising from workplace harassment.
“The case makes it very difficult for human resources professionals to give definitive advice to employers or employees because there are now three different forums where employees can seek relief — [the Workplace Safety and Insurance Appeals Tribunal], the [Ontario Human Rights Commission] and the courts,” says Carissa Tanzola, a management-side partner at labour and employment boutique Filion Wakely Thorup Angeletti LLP, who wasn’t involved in the case. “But the uncertainty could encourage settlements because it creates greater risk for all parties.”
The court of appeal didn’t give reasons for its January 2022 decision. But Brendan McCutchen, a partner at Wright Henry LLP who represented Judith Morningstar, a housekeeper at Hospitality Fallsview Holdings Inc., believes the court recognized that the divisional court was merely confirming established principles. “Ontario courts have long accepted that employees who are constructively dismissed can sue in the civil courts and are not limited to remedies under the [Workplace Safety and Insurance Act].”
But Shana French, a lawyer at Sherrard Kuzz LLP, who represented Hospitality Fallsview, maintains the divisional court decision was controversial. “The divisional court’s ruling was so inconsistent with pre-existing law that everyone in the profession has been writing about it.”
Tanzola is of the same mind. “In my view, the divisional court changed the law. And because the law is still in flux, it’s unfortunate that the court of appeal didn’t grant leave to appeal.”
The divisional court decision, released in August 2021, was unusual, adds French, because it overturned the WSIAT ruling that denied Morningstar the right to sue in the civil courts. “Historically, courts have shown WSIAT, a specialized tribunal, a great deal of deference, especially in a case that is so foundational to the jurisprudence.”
The tribunal ruling acknowledged that the WSIA, which bars employees from suing for injuries sustained at work, doesn’t take away the right to bring wrongful or constructive dismissal cases seeking reasonable notice or pay in lieu thereof in the civil courts.
The tribunal reasoned, however, that the right to sue didn’t obtain where a claim was “inextricably linked” to an injury governed by the statute. In the panel’s view, Morningstar’s civil suit was statute-barred as it amounted to a claim for compensation for chronic mental stress, an injury for which the WSIA specifically provides compensatory benefits.
The divisional court disagreed, pointing to what it saw as a clear legal distinction between claims seeking compensation for mental stress arising in the course of employment — which fall under the WSIA — and claims for wrongful dismissal based on an employer’s harassment or failure to prevent the harassment that caused the injury.
In any event, the case may be far from over. “The dispute over where Morningstar had the right to sue was conducted on the basis that the facts she alleged were true,” says French. “But it’s important to remember that they are merely unproven allegations still to be tested when the courts determine the merits of the case.”