June 29, 2010

The HR Space is edited by Dominique Launay, Karen M. Sargeant and Brian P. Smeenk

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, a 2008 trial decision awarding the employee over $500,000 in damages. The law suit was brought when the employee said she could not continue her job. Her boss had pushed her on the shoulder and verbally abused her during a workplace dispute.

Background

Ms. 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 towards employees. Ms. Piresferreira, on the other hand, was known to be a sensitive employee who did not take well to criticism.

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

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

Human Resources eventually became involved but did not interview Ms. Piresferreira or apologize to her. Instead, Human Resources also insisted she return to work and sign the performance improvement plan. Ms. Piresferreira refused, and submitted a doctor's note indicating that she could not attend work because of stress and harassment in the workplace. After that Ms. Piresferreira never returned to work. She then sued Mr. Ayotte and Bell Mobility.

Trial Decision

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

In addition, the judge awarded Ms. Piresferreira damages for battery and intentional infliction of mental suffering – both resulting from the pushing incident. Bell Mobility was also held vicariously liable for these damages. Even more surprisingly, the judge said that Bell Mobility breached its duty of care to Ms. 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 Ms. 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.

Mr. Ayotte and Bell Mobility appealed the decision to the 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 is not 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. These 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" had not been fulfilled.

It is 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 could not be said to have been calculated to harm the employee.

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

What this Means for Employers

Even though employers can breathe a brief sigh of relief that the 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 Ms. Piresferreira intends on appealing the Court of Appeal's decision. Stay tuned…