New Ontario legislation grants workers’ compensation benefits for mental health injuries, but the bar for entitlement is high
It’s no secret that employers in Ontario have been overwhelmed by the sweeping array of labour and employment law changes of the past two years.
From Bill 148, The Fair Workplaces, Better Jobs Act, 2017, to the legislation that rescinded most of it — Bill 47, the Making Ontario Open for Business Act, 2018 — and a host of other new statutes such as the Pay Transparency Act (the implementation of which has been delayed indefinitely), business owners, managers and HR professionals have faced unprecedented HR law compliance challenges.
While many in the business community are applauding the Progressive Conservative government’s efforts to correct that perceived legislative overreach, they remain frustrated by the need to amend employee policies, HR procedures and employment contracts once again. Nonetheless, they’re welcoming a reprieve from the former Liberal government’s efforts to level the employment playing field through the implementation of worker-friendly legislation, which many business leaders deemed a direct threat to their organizations’ growth and success.
The passage of Bill 127, the Stronger, Healthier Ontario Act, 2017 — implemented on Jan. 1, 2018 — only fueled that perception. The wide-ranging budget implementation bill amended the Workplace Safety and Insurance Act, 1997 (WSIA), among many other pieces of legislation. In doing so, it granted Workplace Safety and Insurance Board (WSIB) benefit entitlements to employees suffering from mental health injuries. The amendment was spurred by a Workplace Safety and Insurance Appeals Tribunal decision that found the former provisions of the WSIA covering mental stress, and denying employees coverage for such injuries, were unconstitutional because mental health injuries were treated differently than physical injuries. What raised the ire of employers, however, was the fact that workers would now be eligible to apply for WSIB benefits relating to an appropriately diagnosed, chronic mental stress caused by a “substantial work-related stressor.” Employees would not be entitled to stress-related benefits relating to their employment, such as a change in job-related duties, discipline, or their dismissal.
Perhaps most alarming to employers was the fact that workplace harassment and bullying would qualify as stressors. At the peak of the #Metoo movement, and a period of heightened sensitivity around the impact of negative workplace interactions, employers’ exposure to HR law risk seemed to increase dramatically. Business leaders and HR professionals worried these new entitlements would lead to a raft of new WSIB claims, some legitimate, but others potentially exaggerated or bogus. After all, it would be relatively easy for an employee to claim his work was stressful or that he had been bullied, and therefore use an alleged mental health injury to file a WSIB benefit claim.
It turns out these changes, and employers’ concerns, have been much ado about nothing — at least for now.
A recent WSIB audit found that more than 90 per cent of chronic mental stress claims have thus far been denied. This is a positive trend for employers fearful of the potential administrative and financial impact of a sharp increase in approved claims — assuming the trend continues, employers should not experience significant increase in approved claims related to employee mental health and corresponding spikes in their premium rates. It remains unclear if the tide will turn in future, should the WSIB eventually begin approving more mental health-related claims. However, for the time being, two arbitration decisions from 2018 provide direction as to how the new provision of the WSIA regarding chronic mental stress benefit entitlement acts as a bar to claims for these sorts of damages where they would now, if proven, be compensable under the WSIA.
Distinguishing stress in the course of employment
In OPSEU and Ontario (Ministry of Community Safety and Correctional Services) (Rosati), Re and OPPA and Ontario Provincial Police, Re, arbitrators ruled that proven chronic mental stress claims, which would be eligible for compensation under the WSIA rules, would act as a bar to legal claims against employers for damages arising out of the injuries. The reason: under a longstanding WSIA provision — which only became relevant to chronic mental stress claims when amendments to the WSIA allowed for mental health-related damage claims stemming from allegations of workplace harassment — individuals are prohibited from making claims and seeking damages from their employer outside of the WSIB system in cases where those claims would be subject to WSIB compensation.
In their decisions, the arbitrators drew a hard line between mental stress claims “relating to employment” — such as changes in job-related duties, discipline, or dismissal — and those “arising out of the course of employment” —that is, mental stress caused by certain types of workplace harassment and bullying. In these two cases, workplace harassment was deemed to have occurred, meaning that the chronic mental stress arose during the course of employment and was not related to the job itself. As a result, the injured employees were eligible for compensation under the WSIA, thereby prohibiting claims for damages relating to medical costs incurred and income lost due to the alleged harassment.
If a claim is found not to be compensable under the WSIA, employees can still make claims related to alleged harassment and bullying through other avenues, such as civil court or the Ontario Human Rights Tribunal. Adjudicators in these forums would then decide the merits of such claims on a case-by-case basis, and award or deny damages accordingly.
These developments raise strategic questions for employers who may be forced to address a worker’s claims of workplace mistreatment or harassment outside the WSIB system. Specifically, would it be advantageous to argue that the employee is not entitled to damages because their claim should instead be made through the WSIB? While that determination will vary depending on the specific circumstances of each case, it’s worth noting that pursuing that strategy is potentially risky and could lead to a successful WSIB claim by the employee, resulting in substantial claims costs for the employer. Still, that could be a favourable approach if it means avoiding hefty legal costs through potentially lengthy litigation, and the risk of even higher damages being awarded to the employee through a civil suit, union grievance or a human rights claim.
The bottom line is that new WSIB benefits for workplace mental stress — which at first seemed problematic for employers — could prove beneficial. This is good news for employment law-weary managers and HR professionals who have become accustomed to navigating an ongoing barrage of compliance challenges. That said, leaders are best advised to work smartly proactively when navigating the complex WSIB system. Being proactive and thinking strategically could mean the difference between making an imprudent legal decision, and one that has a positive long-term operational and financial impact on their organization.
For more information see:
• OPSEU and Ontario (Ministry of Community Safety and Correctional Services) (Rosati), Re, 2018 CarswellOnt 1017 (Ont. Grievance Settlement Bd.).
• OPPA and Ontario Provincial Police, Re, 2018 CarswellOnt 14884 (Ont. Arb.).
