In December 2008, the Ontario Superior Court of Justice awarded Marta Piresferreira, a former employee of Bell Mobility Inc., more than $500,000 in damages arising from an assault at the hands of her supervisor. The Court found the company and supervisor jointly liable for Piresferreira’s damages.

Then in May of this year, the Court of Appeal reversed the lower court decision. The reversal places limits on employees’ ability to hold an employer liable for causing emotional distress. The Appeal Court stated that employees may not make the charge of negligent infliction of mental suffering against an employer or supervisor for conduct in the course of employment.

The original decision offered a significant increase in damages to employees who allege constructive dismissal due to an intimidating or abusive style of management or supervision, opening the door to employees to ground their claim in the law of torts as opposed to the law of contracts, the latter being the conventional domain of employment relationships.

The employer appealed.

Tort of negligent infliction of mental suffering

The Appeal Court decided that the tort of negligent infliction of mental suffering was not available to Ms. Piresferreira in this case.

Bell Mobility’s Code of Business Conduct, which formed part of the employment contract, placed a duty of care on the employer to ensure that employees did not suffer mental distress. And the trial judge found that the employer’s conduct constituted “a fundamental breach of the terms and conditions of employment”. However, due to the nature of tort law, the common law duty of care must be independent of the employment contract. Thus, Piresferreira couldn’t rely on the code of conduct in her claim.

The Court subsequently looked to the 2008 Honda v. Keays decision and found that, in cases where an employer’s allegedly tortious behaviour includes the termination of an employee, then employees can seek compensation for mental distress. But the Piresferreira case didn’t involve dismissal. However, in contract cases where the employer did not terminate the employee, an employee who suffers mental distress due to the employer’s abusive conduct can claim constructive dismissal, and still have recourse to damages under Honda. This situation was closer to Ms. Piresferreira’s claim.

Thus, contract law already provides a remedy for the loss complained of here; the recognition of the tort was not necessary. As a result, the Appeal Court set aside the award for this tort.

Tort of intentional infliction of mental suffering
The tort of intentional infliction of mental suffering was available to Piresferreira, but her evidence could not support it. The court examined the supervisor’s conduct since the employer was vicariously liable and not liable on its own. The trial judge found that, in providing a performance improvement plan immediately after assaulting the employee, without apologizing, his conduct was “flagrant and outrageous”. However, the court placed too much weight on the fact that the supervisor did not apologize before handing her the inevitable performance improvement plan. The tort was unsuccessful since the employee could not show that the supervisor intended to cause the mental suffering, or that he was “substantially certain” his actions would cause mental distress. The award for this tort also had to be set aside.

Assault and battery award
In terms of the assault and battery award, the supervisor and employer admitted that an inexcusable battery occurred, but questioned the damages that the trial judge awarded. The Court of Appeal agreed: the trial judge did not separate the damages award from the other torts, and awarded a sum for many reasons (“a chain of events”) in addition to the tort of battery. The Appeal Court stated, “It is difficult to discern what, other than chronology, links these acts into one chain … The acts and omissions of (the employer) relied on by the trial judge were neither necessary nor the inevitable result of the battery”.

Therefore, the conclusion that the battery caused all the damages was unreasonable. Hence, the Appeal Court reassessed the damages from the battery at $15,000 (still a generous amount).

Constructive dismissal
The trial judge found that the employee was constructively dismissed, and assessed damages based on a 12-month notice period. The employer argued that the trial judge refused to consider the employee’s failure to mitigate her damages, and incorrectly gave an award of $45,000 for the manner of dismissal. The Court of Appeal stated,

I would not give effect to the argument regarding (the employee’s) failure to mitigate her lost wages because the trial judge, as she was entitled to do, accepted the evidence that (the employee) was incapable of working in any other employment.

Also, there was a clear evidentiary foundation for the trial judge’s finding of the employer's bad faith in the constructive dismissal of the employee. Thus, the trial judge’s assessment of damages of $45,000 for mental suffering from the manner of her dismissal had a solid foundation. The Court of Appeal chose to affirm the trial judge’s assessment.

To that end, the employee was awarded:

• $15,000 in damages for the battery, for which the employer and supervisor were jointly and severally liable
• The award of damages for constructive dismissal ($87,855)
• An additional $45,000 for mental suffering due to the manner of dismissal

Concept of damages in employment
For the types of tort liability discussed above to be available to an employee, there has to be a common law duty of care that is independent of the employment contract.

Moreover, in a case where the employer’s allegedly tortious behaviour includes the termination of the employee, compensation for mental distress is available under the Honda v. Keays framework. On the other hand, in a case where an employer’s abusive conduct causes an employee to suffer mental distress, but the employer does not terminate the employee, the employee can claim constructive dismissal and still have recourse to damages under the framework. The law already provides a remedy in respect of the loss; the recognition of a tort is not necessary. In the Piresferreira case, this was why there was no reason to award a finding in tort law.

Lastly, with respect to the intentional torts, damage awards must deal only with the tort. In this case, the employee was not even injured by the battery, and it was unreasonable to conclude that all the damages the employee experienced were caused by the battery.

According to the Lawyers Weekly, Piresferreira v. Ayotte is expected to be appealed to the Supreme Court of Canada. Thus, this issue is not settled yet.

This post was written with assistance from Christina Catenacci, LL.B.