Employment & Labour

New harassment damages — be mindful of potential liability

By Laura Williams

Recently, Ontario courts have been faced with an increase of claims for harassment damages by employees claiming they have been mistreated by their employers. Previously, the courts had not definitively recognized harassment as a standalone tort, or wrongful act giving rise to liability. Instead, employees would receive damages related to workplace harassment only indirectly, such as by claiming punitive or aggravated damages.

However, in this 2017 decision, the Ontario Superior Court of Justice definitively recognized harassment as a standalone tort that may on its own give rise to damages owed to employees who experience workplace harassment.

Employers have since faced the risk of potentially large damage awards for the tort of harassment in addition to the various other forms of potential liability they already faced. The decision is currently under appeal, but unless and until it is overturned on appeal, employers should expect employees who allege that they’ve been subjected to workplace harassment to continue to claim damages for harassment as part of wrongful dismissal actions. Employers should keep in mind, though, that employees’ ability to obtain damages under the tort of harassment is likely limited by the more recent changes that granted employees entitlement to Workplace Safety and Insurance Board (WSIB) benefits for chronic mental stress injuries caused by workplace harassment.

Proving harassment damages

For an employee to prove harassment damages, she or he will have to fulfill the four-part test identified in the 2017 decision:

  1. Was the conduct of the employer towards the employee outrageous?
  2. Did the employer intend to cause emotional stress or did they have a reckless disregard for causing the employee to suffer emotional stress?
  3. Did the employee suffer from severe or extreme emotional distress?
  4. Was the outrageous conduct of the employer the actual and proximate cause of the emotional distress?

Extreme employer misconduct

In this case, the plaintiff was a dedicated police officer who was exceptionally qualified to perform national security work, receiving excellent performance reviews. However, his employer abruptly transferred him out of his unit to an inferior role, citing a supposed political conflict of interest. He was later the subject of financial fraud investigations, despite a lack of evidence. For seven years, he complained about harassment by his superiors, yet the police force did not listen or appropriately address his complaints.

In reasoning that the plaintiff was the subject of harassment, the court applied the facts of this case to the four-part test:

  1. The police force’s decision to transfer the plaintiff was outrageous because it was unjustified and punitive. The court found the decision that the plaintiff could not continue to do national security work was based on a personal view of his superior, rather than a genuine concern about a political conflict or the plaintiff’s inability to perform. The court also determined that the employer had not sufficiently considered or evaluated whether a conflict truly existed. The police force’s actions resulted in a “permanent stain on [the plaintiff’s] reputation and career”, and he consequently became the “black sheep” of the police force.
  2. The police force’s conduct constituted a reckless disregard for causing the plaintiff to suffer emotional distress. Also, the plaintiff’s superior had a reckless disregard for his emotional stress when ordering an investigation into very serious financial fraud with no legitimate basis for doing so.
  3. The plaintiff suffered extreme emotional distress due to his mistreatment by his superiors and employer. He went on sick leave on three separate occasions, he was under the care of a psychologist, became depressed and isolated, and suffered from stress, dizziness, and nausea. Of note, the court indicated that an employee claiming damages for harassment is not required to provide medical evidence to prove severe or emotional distress.
  4. The police force ignored the plaintiff’s many pleas to address his complaints of harassment over several years. Such conduct in ignoring the plaintiff’s emails, along with the police force’s other improper conduct, “went beyond all standards of what is right or decent” and was the actual and proximate cause of the plaintiff's severe emotional distress.

The court found that the plaintiff had fulfilled the criteria for the tort of harassment and awarded him damages of $100,000 for harassment and intentional infliction of mental distress, along with other damages.

Impact of WSIB chronic mental stress benefits

Even though the court in this case awarded substantial harassment damages, it is important to note that employees may be limited in bringing some of these types of claims due to recent amendments to the Workplace Safety and Insurance Act, 1997 (WSIA) related to chronic mental stress benefits. Specifically, the WSIA amendments, which came into effect on Jan. 1, 2018, allow WSIB benefits to be granted to employees experiencing mental distress due to workplace harassment, among other causes. Since these amendments, it is our view that employees are arguably prevented from claiming harassment damages in tort (or through the courts, Ontario Human Rights Tribunal, or arbitration) because the WSIA prohibits employees from making claims for damages from employers outside of the WSIB system where the claim, if proven, would be compensable by the WSIB. For a more detailed analysis of the interaction between chronic mental stress damages under the WSIA and other forms of legal claims for damages on the basis or workplace harassment, please see our previous blog post.

Takeaway

The decision shows how employer misconduct justifies substantial damages awards and forms the basis of how future claims for harassment damages will be determined by the courts. It is likely that more and more employees will claim harassment damages, although usually as part of existing wrongful dismissal claims once the employment relationship has ended, when employers fail to take complaints seriously and engage in outrageous conduct.

It is imperative that employers fulfill their duty to address complaints of harassment and not ignore employees’ pleas. Employers must also ensure disciplinary measures are backed up with internal decision-making or performance evaluations to try to prevent allegations of harassment relating to a disciplinary decision.

Overall, employers must have a harassment policy in place and take steps to address harassment when it is raised, or a complaint is made. A robust harassment policy ensures employers clearly follow their legal obligations when facing challenging allegations of harassment by employees. When employers correctly follow the guiding steps of a harassment policy by appropriately investigating harassment complaints brought forth by their employees, they reduce the risk of future harassment claims materializing into actual harassment damages.

Even more, employers should leverage the new reality that tort harassment claims are likely statutorily barred under the WSIA in certain circumstances. As employees in many cases are no longer legally permitted to bring claims for harassment damages outside of the WSIB system, employers facing tort harassment claims in civil actions should consider responding to those claims by arguing that the employee is not legally able to bring the claim, and was instead required to have sought benefits related to the alleged harassment from the WSIB.

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