Northern Exposure

Canadian Court Not Prepared to Act as Workplace Referee

By Sara Parchello

Does an employer have a broad obligation to protect employees from mental distress that may be caused in the workplace? Ontario’s Court of Appeal recently answered this question in Piresferreira v. Ayotte and Bell Mobility Inc. with a resounding “no.” The decision reverses, in part, an award made back in 2008 – where an employee was awarded over half a million dollars in damages after her boss pushed her on the shoulder and verbally abused her during a workplace dispute.

Piresferreira was a 60-something account manager who had worked with Bell Mobility for about 10 years. She reported to Richard Ayotte, a person known to be a “critical, demanding, loud and aggressive manager.” He was known to pound his fists on the desk, yell, and swear at his employees, and act in other intimidating ways toward employees. Piresferreira, on the other hand, was known to be a sensitive employee who didn’t take well to criticism.

Things came to a head between the two on May 12, 2005.

On that day, Ayotte discovered that Piresferreira had failed to arrange a meeting with a major client. Ayotte began yelling and swearing at Piresferreira and commenting on her inability to do her job. Piresferreira insisted that she had tried to arrange the meeting and, as evidence, attempted to show Ayotte the messages on her Blackberry. After some back and forth, when she held her Blackberry in front of Ayotte, he pushed her on her left shoulder, saying that she should get away from him. Ayotte followed up the incident by presenting Piresferreira a performance improvement plan and telling her that her job was in jeopardy if she didn’t sign it.

Human resources eventually became involved but didn’t interview Piresferreira or apologize to her. Instead, human resources also insisted she return to work and sign the performance improvement plan. Piresferreira refused and submitted a doctor’s note indicating that she couldn’t attend work because of stress and harassment in the workplace. After that Piresferreira never returned to work. She then sued Ayotte and Bell Mobility.

Trial decision
At trial, the judge awarded Piresferreira all of the normal types of damages arising out of a wrongful dismissal case.

In addition, the judge awarded Piresferreira damages for battery and intentional infliction of mental suffering – both resulting from the pushing incident. Bell Mobility was also held vicariously liable for those damages. Even more surprisingly, the judge said that Bell Mobility breached its duty of care to Piresferreira by failing to provide her a safe and harassment-free environment as spelled out in its Code of Business Conduct.

As a result, the judge awarded Piresferreira over half a million dollars, a large part of which was because of the judge’s finding of intentional and negligent infliction of mental suffering.

Ayotte and Bell Mobility appealed the decision to the Ontario Court of Appeal.

Court of appeal
The Court of Appeal overturned the award of damages based on intentional and negligent infliction of mental suffering.

Most notably, the court ruled that employees cannot sue their employer for negligent infliction of mental suffering. That isn’t a claim the courts should recognize. In this context, that meant there could be no separate negligence claim for the breach of the Code of Business Conduct. The employee was limited to claims arising from the breach of her employment contract. Those include damages arising from the constructive dismissal of the employee, as defined recently by the Supreme Court of Canada in Keays v. Honda.

The Court of Appeal reasoned that there is no legal duty for employers to “shield an employee during the entire course of his or her employment from acts in the workplace that might cause mental suffering.” As a result, there could be no damages awarded on the basis that such a “duty” hadn’t been fulfilled.

It’s also important to note, however, that the court left open the possibility of awarding damages for the intentional infliction of mental suffering on an employee. And an employer can be vicariously liable for such acts by its managers. In this case, the trial judge was found to be wrong in concluding that this was done to the employee. There is a high legal standard for proving intentional infliction of mental suffering, Here the conduct couldn’t be said to have been calculated to harm the employee.

Although an Ontario decision, this decision is expected to influence courts across Canada.

What this means for employers
Even though employers can breathe a brief sigh of relief that the Canadian courts may be reluctant to play the role of workplace referee when it comes to inappropriate workplace conduct, the decision underscores the importance of ensuring that your workplace has comprehensive reporting and investigative procedures for instances when an employee raises a complaint. It also underscores the importance of managers knowing they must not intentionally cause mental suffering.

Further, it’s not clear that the matter is actually over. The buzz is that Piresferreira intends on appealing the Court of Appeal’s decision.  Stay tuned.

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