Constructive Dismissal or Workplace Injury?

November 21, 2021

By Brian Babcock

It is well established law that a worker cannot sue their employer (or coworkers) for a workplace injury covered by worker’s compensation. But until this case, few if any cases involved a claim for mental stress.

The employer brought an application to the Workplace Safety and Appeal Tribunal to determine whether the injury is compensable, and whether the right to sue exists.

The Tribunal found in favour of the employer. It found that constructive dismissal is different from wrongful dismissal, and in this case, the underlying facts alleged as the cause for quitting were “inextricably linked” to injuries for which compensation might be payable. The difference in available remedies made no difference.

The worker then applied to the Divisional Court for review. That court found in the worker’s favour and ruled that the original law suit for constructive dismissal could proceed. It held that “The use of a test that bars claims where facts in issue are ‘inextricably linked’ to a workplace accident will necessarily end more claims than it should.”

Instead, the Tribunal should gave considered the ‘historic trade-off’ that the Act represents. This requires looking beyond just the facts and consideration of the nature of the cause of action. Though the choice of cause of action in itself does not determine whether a suit is barred, it is an aid in determining whether the rights in question are within that historic trade-off.

In the case under consideration, the Tribunal’s error was recasting the facts as a personal injury claim, rather than a breach of contract claim. The court points out that the distinction is apparent when you consider that the constructive dismissal lawsuit claims damages not available under the Act.

Underlying the court’s reasoning is concern that the Tribunal’s decision:

encourages employers not to openly fire unwanted employees and suffer a claim for wrongful dismissal, but rather to make those employees’ lives so miserable in the workplace that they can be made to suffer chronic stress and be driven to resign without any fear of legal reprisal, all blithely justified under the banner of the historic trade-off.

Administrative law purists may have difficulty with the court’s approach, because one way to view it is that this represents a return to the ‘bad old days’ when ‘old school’ judges, protective of their turf, substituted their own judgment for a tribunal, to keep cases in the courts. The other interpretation is that one of the key principles of judicial review is that a tribunal that makes an error in law cannot be allowed to reach an unreasonable result – the rule of law being more important than pure theory.

Unless the issue goes to the Court of Appeal, this is now the law of Ontario, and employers ought to govern their conduct accordingly. As frequently noted in our articles, judges tend to lean in favour of employees to protect them from being victimized when they are vulnerable. Harassment might be the ultimate form of vulnerability.

Employees who feel they are victims of harassment may have a choice of remedies, and should obtain appropriate legal advice.