Can you sue your employer for emotional distress in Canada?

This article is part of a series addressing popular topics and questions that clients and the public may have about the legal profession.

When employees suffer mental distress from inappropriate treatment such as harassment from co-workers, abuse from supervisors or bad-faith conduct from management, they may have grounds for legal action. These legal disputes are becoming more common. Since 2005, damage awards for mental injury have risen by 700 per cent, according to a report by the Mental Health Commission of Canada.

But the mistreatment must be severe, lawyers say, because successful claims related to mental distress are rare. They most commonly arise as part of an action for wrongful dismissal, says labour and employment lawyer Anne Marie Heenan.

“The important thing to know is that it's got to be more than just hurt feelings surrounding your dismissal,” says Ryan Watkins, an employment lawyer and litigator with Whitten and Lublin, in Toronto. The employer has to breach their good-faith obligations, he says.

“The law recognizes that it's always upsetting to lose your job,” says Heenan, who is a partner at Rae Christen Jeffries LLP. “So the fact that you're upset after you lost your job, or that you feel depressed for some period of time after you lost your job, or that it hurt your feelings – you're not going to be compensated for that at law.”

“However, if there's something that was done to you in the course of the dismissal that was really unfair, or in bad faith… you might have a valid claim for aggravated or moral damages based on the manner of dismissal.”

Conduct which could justify such a claim, she says, include terminating an employee after they make a harassment complaint without investigating the complaint, terminating an employee accused of wrongdoing without giving them an opportunity to respond and terminating for cause in bad faith to avoid paying legal entitlements or for the purpose of damaging the employee’s reputation. Watkins adds that humiliating, publicly shaming or firing the employee in a public frum could also count as a breach of good-faith obligations. So could terminating someone while they are on medical leave.

“There has to be some really inappropriate and bad faith conduct by an employer to enable an employee to obtain damages for mental distress,” says Heenan.

The employee is not required to provide medical information to demonstrate their mental distress to the court, but Watkins says it is wise to do so.

Damages in a wrongful dismissal action are generally limited to compensating the loss suffered from failure to provide reasonable notice, says Heenan. The former employee can tack-on a claim for aggravated/moral damages on the basis of mental distress if the employer could reasonably have contemplated that their manner of dismissal would cause mental distress, she says.

Outside the context of a termination, employees can also sue for negligent infliction of mental suffering when their employer’s conduct falls below the reasonable or acceptable standard of care, says Watkins. Typically, he sees those claims in response to workplace harassment, most commonly inflicted by the employee’s superiors. But the harassment can also come from colleagues. In that situation, the employer is required under the Occupational Health and Safety Act to investigate harassment complaints. When they fail to respond adequately to complaints, in violation of the Act, the employer is “on the hook” with the Ministry of Labour, and the employee can also sue for negligent infliction of mental suffering, he says.

Employees can also argue that unfair treatment in the workplace, which has resulted in mental distress, amounted to constructive dismissal. This is not a situation in which the employer terminated the employee, but where the employer made the conditions of employment unacceptable and thus effectively ended the employment relationship. The employee can then be entitled to claim damages for wrongful dismissal and aggravated/moral damages for the manner of dismissal, says Heenan.

Employees can also sue for intentional infliction of mental distress. “It’s a pretty high standard to meet,” says Heenan. The employee would have to prove that the offending employer or colleague “engaged in flagrant or outrageous conduct that was calculated to produce harm,” and that this conduct resulted in “visible and provable illness,” she says.

The visible and provable illness does not have to be as severe as a recognized psychiatric illness. Aside from medical evidence, the plaintiff could also use evidence from friends and family detailing a change in behaviour, says Heenan.

Employers are required to have policies, such as codes of conduct, to address workplace harassment and other toxic behaviour among employees. Employees can use those policies to file complaints internally.

“Most employee complaints about poor treatment in the workplace are going to be addressed internally without litigation,” says Heenan.