No Civil Action Where Workers’ Comp Available

In a recent post, we discussed a proposed class action in which the Court concluded that a claim for damages for emotional suffering due to alleged sexual harassment was not allowed by a civil lawsuit and was mandated to be brought under the relevant workers’ compensation statue.[1]

The general theory of such a statute is to provide a defined benefit of lost wages due to a workplace “accident”[2] and deny any right of the victim of the event to sue the employer for damages. In this sense it is workplace “no fault” insurance. The employee need not prove wrongdoing of the employer nor will he or she lose recovery due to any negligence on his or her part.

Impact of West Jet Case

The above case has not received the attention of which it is deserving as this issue has enormous significance for cases alleging tort claims based on conduct which is loosely described as “sexual harassment”. As there is no tort for “sexual harassment”, plaintiff counsel often use claims based on battery, assault and the intentional infliction of mental distress.

This is, however, not the first such case to deny a civil tort case to a person covered by workers’ compensation benefits.

Precedent in Place

The Alberta Court came to the same decision in March 2013[3] in dismissing a civil action brought by the plaintiff in which it was asserted that he had been bullied by his co-workers.

The employer motion was based on the proposition that the Workers’ Compensation Act applied and hence no civil action was possible against the employer. The Alberta statute allows for workers’ compensation claims based on emotional distress.

Ontario’s New Law

To bring this issue into focus in Ontario, the workers’ compensation statute was amended as of January of this year to allow for emotional distress claims for “chronic or traumatic mental stress arising out of and in the course of the worker’s employment”. Roughly 70% of Ontario’s workforce is covered by this statute.

This amendment will very likely bar any type of civil tort claim or claim in contract based on an abusive work environment and limit the recovery to the 75% tax free percentage of lost wages allowed under the statute. This will include a denial of any claims for aggravated damages and punitive damages, which recently have been very substantial.[4]

The availability of a workers compensation recovery may even limit recovery of human rights damages under the Human Rights Code, as unimaginable as that may seem at first blush. More will be said of this in a later post.

Complex Issues Mandate Clear Advice

The impact of the amendments to Ontario’s workers’ compensation law must be examined closely. From the employer’s perspective, particularly where joining the plan is voluntary, caution must be exercised to understand all the ramifications of the statute.

An employee contemplating civil action for workplace abuse must certainly be educated on the statute and its consequence of upon a civil claim. It may well be opportune to be able to obtain workers’ compensation benefits as opposed to a civil case. This being said, it is not an option. It is mandated. Get advice before you act.

If you have queries about this issue, be your employer or employee, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

[1] The employees were employed by an airline and hence were subject to the law of their respective provincial residence to determine which workers’ compensation statute applied. As the case originated in Alberta, it is likely that the proposed class members were Alberta residents.

[2] The term actually includes intentional conduct which is important to civil law employment tort claims alleging abuse.

[3] Ashraf v SNC Lavalin. This decision was upheld by Mr. Justice Mahoney and again by the Alberta Court of Appeal. The employee was allowed to assert that the abusive conduct was constructive dismissal.

[4] For example, the award in Galea v Wal-Mart of $250,000 for aggravated damages and $500,000 in punitive damages. No appeal has been taken of this decision.