Ontario’s Workplace Safety and Insurance Appeals Tribunal (WSIAT) has granted a partial victory to a worker pursuing a constructive dismissal claim against his former employer, El-Met-Parts.
The ruling allows the worker, D.P., to continue his civil action for wrongful dismissal, punitive damages, and certain special damages, while limiting his right to claim aggravated damages related to injuries allegedly sustained during his employment.
The case centres around a lawsuit filed by D.P. in January 2022 against El-Met-Parts, where he sought damages for constructive dismissal, aggravated and punitive damages, and other related compensation. D.P., who began working for El-Met-Parts in 1979, alleged that he was constructively dismissed in December 2021 due to an intolerable work environment created by the employer’s alleged harassment and bullying.
The tribunal was tasked with determining whether D.P.’s right to sue was removed by Ontario’s Workplace Safety and Insurance Act (WSIA).
The tribunal recognized that “damages for wrongful or constructive dismissal are not compensable under the WSIA,” a key factor in allowing D.P. to pursue his claims for damages related to the dismissal.
D.P.’s lawsuit outlined several heads of damages, including $165,000 for wrongful dismissal, aggravated damages of $50,000, and punitive damages of $50,000. The tribunal’s decision hinged on the distinction between damages resulting from the alleged constructive dismissal and those that could be construed as arising from workplace injuries.
Constructive dismissal and damages
D.P.’s claim for constructive dismissal was based on his allegation that El-Met-Parts, through a senior executive, created a “toxic and intolerable work environment,” forcing him to resign. He argued that the employer’s conduct amounted to a repudiation of the employment agreement, entitling him to damages equivalent to 30 months’ salary and benefits.
The tribunal acknowledged the legitimacy of the constructive dismissal claim, noting that such claims do not require proof of a personal injury but rather focus on the employer’s conduct, which allegedly demonstrated an intention to no longer be bound by the employment contract.
As such, D.P.’s claims for damages related to the lack of appropriate notice of termination and compensation in lieu of notice were permitted to proceed.
Aggravated and punitive damages
A more complex aspect of the tribunal’s decision concerned D.P.’s claims for aggravated and punitive damages. He argued that the harassment and bullying he endured caused significant physical and mental distress, and that the employer acted in bad faith during dismissal.
In considering these claims, the tribunal distinguished between aggravated damages tied to the alleged constructive dismissal and those related to injuries sustained during the course of employment. While D.P.’s claim for aggravated damages related to the dismissal itself was allowed to proceed, the tribunal ruled that any claim for damages connected to workplace injuries, such as mental distress caused by harassment, was barred under the WSIA.
Conversely, the tribunal found that the claim for punitive damages could proceed in full. Unlike aggravated damages, punitive damages are not compensatory but are intended to punish egregious conduct by the employer. The tribunal cited the Divisional Court’s decision in Morningstar v. WSIAT to support its ruling, which emphasized that punitive damages could be pursued as part of a wrongful dismissal action without requiring proof of an injury.
Special damages
D.P. also sought special damages for out-of-pocket expenses incurred while seeking new employment. The tribunal allowed this claim to move forward, noting that these damages were related to the constructive dismissal rather than a compensable injury under the WSIA.
For more information, see Decision No. 225/24, 2024 ONWSIAT 955 (CanLII).
