A Victory for Employers: Piresferreira v. Ayotte Limits Liability for Mental Suffering in Employment Relationships

Ontario employers can rest easy as a result of the Ontario Court of Appeal’s recent decision in Piresferreira v. Ayotte, 2010 ONCA 384.  The appeal revisited the issue of an employer’s duty to protect an employee against mental suffering in the workplace. The Court of Appeal held that restricting an employee’s ability to hold an employer liable for negligent or intentional suffering in the workplace was necessary for policy reasons.

Marta Piresferreira, an former account manager with Bell Mobility (Bell), launched a lawsuit for damages against Bell for mental suffering that she allegedly suffered as a response to a series of conflicts with her former manager, Richard Ayotte.  Piresferreira had a track record for being an exceptional employee, though her most recent performance appraisal in 2004 indicated room for improvement existed. Prior to the incident that gave rise to this lawsuit, Ayotte initiated a process to develop a Performance Improvement Plan (“PIP”) for Piresferreira.

On May 12, 2005, Ayotte (who had a history of aggressive behaviour and verbal abuse) yelled and swore at Piresferreira because she failed to schedule a client meeting. After Piresferreira unsuccessfully tried to schedule the meeting, Ayotte pushed her left shoulder. Piresferreira left the office. Shortly after this incident, she was given a negative PIP.

Bell addressed Piresferreira’s complaint about the assault by giving her the opportunity to receive a formal apology from Ayotte. She declined to receive the apology. Instead, Bell gave Ayotte a disciplinary warning and required him to participate in conflict resolution courses.  The day after the issue was formally resolved by Bell’s HR department, Piresferreira went on sick leave for “stress leave due to anxiety – dealing with work harassment.”  She never returned and subsequently commenced litigation for wrongful dismissal and tort damages.

At trial, Aitken J. determined that Bell and Ayotte were jointly and severally liable for:

1. The tort of negligent infliction of mental suffering;
2. The tort of intentional infliction of mental suffering;
3. Battery and assault.

In addition, she held that Piresferreira had been constructively dismissed. Her continued employment at Bell was impossible because the company merely “relocated” Ayotte within the same office, and offered to change her reporting structure.

Five issues arose in  Ayotte’s appeal to the Ontario Court of Appeal. I will focus on the first issue of the appeal decision, negligent infliction of mental suffering. Specifically, the Court of Appeal inquired whether Aitken J. erred in finding that the tort of negligent infliction of mental suffering was available in the context of the employment relationship.

Policy Strikes Again: No tort of negligent infliction of mental suffering is available in employment relationships

Piresferreira argued that Bell owed her a duty of care through her contractual relationship with the company as manifested in Bell’s Code of Business Conduct. Juriansz J.A., writing for the Court of Appeal, determined that a common law duty of care existed even in the absence of a contractual term. For concurrent tort liability to be available there must be a common law duty of care that would exist even in the absence of the specific contractual term which created the corresponding contractual obligation.  In Central & Eastern Trust Co. v. Rafuse, [1986] 2 S.C.R. 147, Le Dain J. differentiated between a duty that is created by the contract and an independent common law duty.

Juriansz J.A. then applied the Anns test (formulated by the House of Lords in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.) ), which was adopted by the SCC in Nielsen v. Kamloops (City), [1984] 2 S.C.R. 2. This test is used to determine whether a duty of care exists.  It involves (i) asking whether the relationship between the plaintiff and the defendant is sufficiently close or “proximate” to render damages reasonably foreseeable, and (ii) whether there are countervailing policy considerations why the duty should be limited or not recognized.

The Court of Appeal held that a prima facie duty of care existed based on the sufficiently close relationship between the parties, and the presence of a reasonably foreseeable injury.  Its analysis then turned to the question of whether there were negating policy considerations that prevented the duty of care from being recognized. Unsurprisingly, the Court of Appeal determined that recognizing such a tort would better left to the expertise of the legislature. Imposing a duty to protect employees from the variety of workplace incidents that may cause mental suffering too greatly expanded the scope of liability for employers. It is for that policy reason that the prima facie duty was negated.

It is clear that expanding employers’ liability for mental suffering would create many problems. I agree with the Court of Appeal’s decision to overturn Aitken J.’s finding on this particular issue.  Recognizing this  tort would open up a floodgate of claims from disgruntled and dissatisfied employees unhappy with their current situation.  Generally speaking, workplace conflicts are commonplace.  Under this tort, an employer might be held liable for extreme frustration and duress resulting from a computer crash that erases many days worth of work.  Clearly, this tort would impose an unrealistic duty upon employers.

My Obiter Dictum:  Remoteness of Damages

In my opinion, the Court of Appeal’s decision invites a short discussion on the remoteness of damages.  Although the tort was not recognized, I pose the question, “What if it had been?”

The inquiry into this legal issue would begin by determining whether damages resulting from an particular act are too remote for damages to be awarded.  Remoteness is a legal concept that considers whether the damages are too far removed from an incident based on an objective standard.

In the fact scenario that I pose, Piresferreira’s mental injury would not be categorized as too remote. Most people would understandably react in a negative manner to a violation of their bodily integrity. Based on existing precedent, there are interesting outcomes that could occur.

In Mustapha v. Culligan of Canada Ltd., 2008 SCC 27 , the SCC clarified the relationship between remoteness and the situation where a particular victim is prone to an “unexpectedly severe” reaction. According to that decision, only upon the satisfaction of the threshold requirement that a reasonably foreseeable injury be inflicted on a person of ordinary fortitude, the thin skull rule will apply.

The thin skull rule makes a defendant responsible for all of a plaintiff’s injuries, even if the injuries are more extensive than those that would be suffered by the average person.  This idea of  taking your victim as you find them ensures that victims are fully compensated for the full extent of their injuries.

The next step in this inquiry would be to analyze the application of the thin skull rule to Piresferreira’s situation once the remoteness of damages issue had been addressed. An average person would likely not have suffered to the extent that Piresferreira did.  Among other things, she experienced post-traumatic stress disorder, a major depressive disorder, and anxiety. She was allegedly unable to work at all until her retirement (5 years).

All of these consequences were accepted to be a result of a push to the shoulder, which left no physical injury, and Bell’s subsequent actions taken after the incident.

In this case, the average person certainly would experience some form of mental anguish after being subjected to the treatment that Piresferreira experienced.  However, whether it would go as far as post-traumatic stress disorder is questionable.  For the purpose of this hypothetical situation, Ayotte and Bell would likely be found liable for the full extent of damages, as the thin-skull rule would be applicable. This hypothetical illustrates the implications of recognizing a duty of care for  mental suffering experienced in the workplace. For the time being, judicial deference to precedent has kept this potential floodgate closed. The question remains whether it will remain closed with the ever-changing demands of the job.