Negative work environments can be costly

Mercer’s recent communiqué on labour law highlights the remarkable case of Piresferreira v. Ayotte, in which the Ontario Superior Court awarded a former employee substantial damages where the employer’s negative behaviour caused mental distress.

The case
The Ayotte case involves an employee whose performance began to wane and an aggressive immediate supervisor who was verbally and physically abusive. After an incident in which he shoved the employee, the supervisor presented her with a performance improvement plan, which signalled the beginning of a process that could eventually lead to dismissal. The employee refused to sign it and approached HR for assistance. HR subsequently dragged its feet and failed to resolve the problem, resulting in the deterioration of the employee’s mental health.

After three months, the employee commenced legal action against her employer and supervisor. The employer proposed an accommodation, which the employee refused, and the employer then stated that the supervisor had been relocated, which later was found to be untrue. According to the employee’s lawyers, the workplace had been poisoned by the actions of the supervisor and the employer’s reaction to those actions, and the employer had failed to provide a safe workplace for the employee.

The verdict
The court agreed. At the time of the assault, the employee was 64 years old and drew an annual salary of $58,900 with a history of annual bonuses in excess of $50,000. She was awarded damages of $501,000—four times what the court would have awarded the employee in a constructive dismissal action. Additionally, her partner was awarded damages of $15,000.

The court found the supervisor responsible for assault and battery, intentional infliction of emotional distress and negligent infliction of emotional distress. The employer was held responsible—or vicariously liable—for the actions of the supervisor and its employee, and was jointly and severally liable for the damages. In addition, the employer itself was held to have committed the tort of negligent infliction of emotional suffering.

According to Mercer, this last direct liability of the employer arose because of HR’s failure to make the workplace safe for the employee. HR displayed little concern for the employee, had not discussed the assault with the employee, had not apologized, had focused inappropriately on return to work as opposed to the well-being of the employee, had failed to appropriately discipline the supervisor, and had misrepresented certain facts to the employee.

Employers must be aware that exceptional facts can lead to exceptional damages, explains the communiqué, as it only takes one incident to cause not only substantial damages but also irreparable damage to reputation.

What should employers do?
Employees have the right to work in an atmosphere of civility, decency, respect and dignity, explains Mercer. If the company senses that it is not providing such a culture, it should immediately rectify the situation through the following means:

• Adopt a clear-cut violence and harassment policy as well as procedures for monitoring its application and effectiveness.
• Select managers carefully. If someone has neither the temperament nor the experience to lead staff, find someone with those qualifications or be prepared to invest in substantial training.
• Train managers on how to lead staff appropriately, including how to coach employees when their performance is substandard.
• Manage the manager’s performance and behaviour. If a manager is achieving good financial performance but demonstrates inappropriate behaviour toward employees, an expensive problem may be waiting to explode.
• Act quickly and objectively, and in accordance with the company’s written policy, when a complaint of harassment or violence is received.
• Conduct an impartial inquiry and get the facts. Obtain consulting or legal advice immediately. Remember that an employer may be vicariously responsible for the action of any employee and will be directly responsible for employees in a position of authority, including managers and HR representatives.

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