Since the Workplace Safety and Insurance Board (the “WSIB”) implemented a new policy in January 2018 that grants WSIB benefits to employees for chronic mental stress, many employers and employees have wondered how the WSIB and other adjudicative bodies would interpret and apply the new entitlement. Although the WSIB has been slow to release new decisions to help clarify how the WSIB will interpret the new entitlement, two 2018 arbitral decisions have addressed the way in which the new entitlement will interact with related claims. Specifically, these two 2018 decisions dealt with employee grievances involving allegations of harassment at work, in which the grievors sought damages related to medical costs incurred and income lost because of the alleged harassment. In both cases, the arbitrators held that the claims for damages were at least partly barred because of the new entitlement to WSIB benefits for chronic mental stress.
The new WSIB policy was adopted following an amendment to the Workplace Safety and Insurance Act, 1997 (the “WSIA”), which provides that WSIB benefits may be granted for chronic mental stress. That WSIA amendment was in turn created by the legislature in response to a decision of the Workplace Safety and Insurance Appeals Tribunal, which found that it had been unconstitutional to deny benefits to employees experiencing chronic mental stress arising out of and in the course of their employment. The new WSIB policy provides that employees with an appropriately diagnosed mental disorder that has been predominantly caused by substantial work-related stressors may access WSIB benefits. The policy provides that employees may access WSIB benefits only for stress which arises out of and in the course of their employment, such as stress caused by certain types of workplace harassment and bullying. This type of stress is distinguished from stress caused by issues related to employees’ employment, such as an employer’s decision to change the work performed or dismiss an employee; employees are not entitled to WSIB benefits for that type of stress.
In the two arbitration decisions, Ontario Public Service Employees Union (Rosati) v Ontario (Community Safety and Correctional Services) and OPPA and Ontario Provincial Police, Re, the arbitrators held that the new provision of the WSIA acted as a bar to claims for these sorts of damages where they would now, if proven, be compensable under the WSIA. These decisions were made on the basis of a longstanding WSIA provision that prohibits individuals from making claims for damages from the employer outside of the WSIB system where the claim, if proven, would be compensable by the WSIB. While this provision existed well before 2018, it became relevant to claims for damages related to allegations of workplace harassment following the amendment to the WSIA and new WSIB policy regarding chronic mental stress.
In arriving at these decisions, both arbitrators noted the distinction between mental stress arising out of and in the course of employment and mental stress relating to employment. In both cases, it was held that the harassment experienced arose out of and in the course of employment but were not related to the job being performed. As such, the arbitrators held that the injuries were compensable under the WSIA and therefore the claims for damages related to the alleged harassment were barred. Both arbitrators found that the relevant consideration was not whether the employee had made a claim under the WSIA but whether a claim, if proven, would be compensable under the WSIA. The arbitrators found that the inverse was also true; if a claim is not compensable under the WSIA, employees are free to make claims related to the alleged harassment through other avenues, such as claims in court, arbitration or Human Rights Tribunal of Ontario proceedings based on the Human Rights Code, the Occupational Health and Safety Act or the common law tort of harassment. Since the WSIA does not extend benefits for mental stress related to a worker’s employment, employees may still make claims for actions related to their employment that cause mental stress and which are not compensable under the WSIA–though whether or not they would be entitled to damages in relation to those claims would be decided on a case-by case basis.
Although the amendment to the WSIA and new WSIB chronic mental stress policy seemingly opened the gates for a flood of new mental health-related WSIB claims, a recent audit conducted by the WSIB found that over 90% of claims for benefits related to chronic mental stress thus far had been denied. In one case, reported on by Canadian media, Margery Wardle, was allegedly subjected to sexually-explicit language, pictures of pin-up girls and scantily-clad models and was allegedly grabbed and followed into a women’s washroom, among other alleged improper conduct. She was denied chronic mental stress benefits by the WSIB on the basis that her stress was caused by interpersonal conflict which did not constitute a substantial work-related stressor and therefore did not give rise to benefits entitlement.
Assuming this trend holds up, employers should not experience a significant increase in approved claims related to employee mental health or dramatic shifts in their premium rates. However, chronic mental stress claims nonetheless create a new potential source of costs for employers, and these costs could become significant if the WSIB begins to approve such claims more often.
In the coming months and years, we will closely follow how the WSIB, courts, arbitrators and other legal adjudicators respond to the seemingly conflicting decisions rendered in the arbitral cases and the Wardle case. The arbitral decisions held that workplace harassment was compensable under the WSIA and thus barred the grievors’ claims while the WSIB found that the alleged conduct to which Ms. Wardle was subjected, which many would argue may well constitute workplace harassment, was not compensable and therefore denied her WSIB claim. Given that the WSIB appears to be denying most chronic mental stress claims, it is likely that situations will arise where an adjudicator denies a claim that does not rely on an entitlement under the WSIA on the basis that the claims, if proven, would be compensable by the WSIB, but then the WSIB denies a claim seeking entitlement to WSIB benefits based on the same facts. If such situations arise, it could lead to either or both the WSIB and non-WSIB legal adjudicators changing their treatment of these types of claims.
Although the circumstances when employees will be entitled to WSIB benefits for chronic mental stress will continue to become clearer in the coming years, these two arbitral decisions already make it clear that other adjudicative bodies will now be more hesitant to award damages against employers for claims relating to workplace mental stress. Employers facing claims for damages related to alleged mistreatment or harassment at work outside of the WSIB system–including in civil actions, union grievances, human rights claims and otherwise–should be strategic in determining whether to respond to those claims by arguing that the employee is not entitled to those damages because they should have instead made a WSIB claim, as the employers in these two arbitration cases successfully did. Making those arguments could lead to the employee making such a WSIB claim, which could in turn result in significant claims costs faced by the employer in the event the claim is approved. However, it will nonetheless often be worthwhile for employers to do so in order to avoid being liable for damages to the employee directly, particularly while the WSIB is denying the vast majority of these claims.
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