Last month, the Ontario Court of Appeal allowed in part an appeal by the employer from the trial decision in Piresferreira v. Ayotte, [2008] O.J. No. 5187, rev’d in part [2010] O.J. No. 2224. In that decision, an Ontario court held employer Bell Mobility liable for negligence and constructive dismissal, and vicariously liable for the actions of a manager for negligent and intentional infliction of mental suffering, awarding employee Marta Piresferreira over $500,000 in damages.

The Court of Appeal decision is important for employers for two key reasons. First, the decision overturns the trial judge’s findings with respect to negligent and intentional infliction of mental suffering, placing important limits on an employee’s ability to claim tort damages for mental suffering. Second, the decision highlights the high potential liability in a case where an employer fails to prevent harassment in the workplace or to properly investigate a complaint of harassment.

The Facts

Marta Piresferreira was employed for 10 years with Bell Mobility. She worked in the Ottawa office as one of six account managers under the supervision of Richard Ayotte. By all accounts, Ayotte was a critical, demanding, loud and aggressive manager. Co-workers of Piresferreira confirmed her evidence that Ayotte would yell and swear at his employees, even banging his fist on the table in his rage. In contrast, Piresferreira was described by her co-workers as being nervous and sensitive, as refusing to take responsibility for problems, and as not responding well to criticism.

In 2004, the relationship between Ayotte and Piresferreira began to rapidly deteriorate. Ayotte became highly critical of Piresferreira’s performance and discussed putting Piresferreira on a Performance Improvement Plan (PIP) with his superiors. The situation came to a head one afternoon in May when Ayotte learned that Piresferreira had failed to arrange a meeting with a client. Ayotte yelled and swore at Piresferreira, accusing her of failing to do her job. Piresferreira attempted to justify herself, following Ayotte into his office and asking that he read an email on her blackberry to demonstrate that she had attempted to arrange the meeting. Ayotte told Piresferriera to get away from him. When she persisted in her explanations, he pushed her on her left shoulder causing her to step backwards. After this incident, Piresferreira left the office in tears.

Ayotte responded to the altercation by preparing a PIP for Piresferreira. The same afternoon, he sent it to HR asking that it be immediately approved and expressing his concern that Piresferreira would go on sick leave as soon as the PIP was presented. When Piresferreira next returned to the office, she was presented with the PIP. She refused to sign it and went home.

Piresferreira lodged a formal complaint with HR. An HR representative spoke with Ayotte who gave his version of the incident, claiming he was provoked by Piresferreira brandishing her blackberry in his face. At no time did HR contact Piresferreira to get her version of the event. Instead, HR sent an email to Piresferreira requesting that she attend a meeting with Ayotte to review her PIP. When Piresferreira declined to attend the meeting and provided a sick leave certificate to justify her absence, HR responded with a letter claiming that Piresferreira had refused to attend a meeting to allow Ayotte to apologize.

Ayotte received a disciplinary warning for his behaviour and was advised to attend two courses on effective communication at work. He received no further discipline.

Piresferreira never returned to work. She was diagnosed with post traumatic stress disorder and major depressive disorder and was totally disabled from work.

The Result at Trial
At trial, Justice Catherine D. Aitken awarded Piresferreira damages totalling $500,955. She held Ayotte and Bell Mobility jointly and severally liable for the entire amount. She also awarded Piresferreira costs of the action and trial in the amount of $225,000. The trial judge found Ayotte personally liable for the torts of battery and intentional and negligent infliction of mental suffering. She also found Bell Mobility vicariously liable for the torts committed by Ayotte, and directly liable for negligence and constructive dismissal.

The Ontario Court of Appeal 
The Court of Appeal upheld the trial judge’s finding of constructive dismissal and the reasonable notice period of 12 months (approximately $88,000) assessed by the trial judge.

The Court of Appeal overturned the trial judge’s finding with respect to Piresferreira’s tort claims. The Court found that the tort of negligent infliction of mental distress is not available in the employment relationship, and that there is no general duty of care requiring employers to shield employees from the acts of other employees that might cause mental suffering. Further, the Court confirmed that while the tort of intentional infliction of mental suffering is available in the employment relationship, there is a strict standard for the proof of an intentional tort. In this case, the tort was not made out because the evidence did not support a finding that Ayotte intended or knew that Piresferreira would suffer post-traumatic stress disorder, or a major depressive disorder, with the result that she would never be able to work in any employment again.

However, the Court of Appeal confirmed that damages for mental distress due to the manner of dismissal are available under the framework set out by the Supreme Court in Honda Canada Inc. v. Keays, [2008] 2 S.C.R. 362. The Court of Appeal awarded Piresferreira $45,000 in damages for mental distress due to the manner of her termination.

Finally, the Court of Appeal upheld the finding of battery and awarded damages of $15,000.

Lessons for Employers 
Despite the key findings in favour of the employer with respect to the torts of negligent and intentional infliction of mental suffering, this case continues to represent a cautionary tale for employers. Employers can take the following key lessons from the result in this case: