Nova Scotia Supreme Court tackles the question of whether or not being wrongfully dismissed is an accident for WCB purposes
Can a wrongful dismissal be an “accident” for workers’ compensation purposes? That question was recently put before the Nova Scotia Supreme Court.
Joanne Logan claimed workers’ compensation benefits arising out of her dismissal in October 2003. The dismissal was sudden and without cause from long-term employment. It had an immediate negative effect on her.
She was extremely upset and was unable to sleep. After two days of crying continuously and refusing to leave the house, she went to the hospital. At the emergency room, she was anxious, upset, crying and complaining of numbness and pain.
She sued her employer for wrongful dismissal. The case was settled during mediation for $96,000, including $21,000 for pain and suffering.
After that, she filed a claim for workers’ compensation benefits. Her claim was denied, a decision upheld by a hearing officer. Logan appealed that decision to the Workers’ Compensation Appeals Tribunal (WCAT).
By the time her claim came before the tribunal, a psychiatrist expressed the view that Logan had been “psychologically traumatized” by the situation. Although she had a history of stress problems at work well before her dismissal, her major depressive disorder and social anxiety disorder only became severe following the termination.
The focus of the debate before the WCAT was whether Logan had suffered an injury by accident arising out of and in the course of employment. This was a critical issue because the Workers Compensation Act (WCA) provides benefits for employees who suffer such injuries. The term “accident” under the WCA includes “disablement … arising out of and in the course of employment” but does not include “stress other than an acute reaction to a traumatic event.”
The WCAT ruled Logan’s injury was excluded because it did not result from a “traumatic event.” Citing the 2005 decision of the New Brunswick Court of Appeal in W. (D.) v. New Brunswick (Workplace Health, Safety & Compensation Commission), the tribunal held that management decisions do not qualify as traumatic events and that whether an event is traumatic is to be determined objectively.
“A sudden termination is not outside the realm of what is expected or usual within the workplace, and most people do not become disabled due to being fired,” the tribunal said. “Once a management decision is made to terminate a worker, it is often not in the employer’s best interest to keep that worker in the workplace with working notice. All of the events which (Logan) calls traumatic directly flow from, or are part of, the management decision to terminate her employment. They are not accidents for the purposes of workers’ compensation.”
The tribunal recognized that there might be gray areas around where wrongful dismissal ends and compensable accidents begin. It said an event is not automatically excluded from being traumatic within the meaning of the Workers Compensation Act merely because there is a labour relations context. But it affirmed the general principle that wrongful dismissals are not accidents for workers’ compensation purposes.
The WCAT pointed out that any other approach “would lead to employers paying increased assessments for insurance that they did not require. It would lead to an expansive interpretation of accident, when the legislature clearly intended to prevent expansive interpretations in stress cases.”
Logan appealed the tribunal’s decision to the Nova Scotia Supreme Court.
The Nova Scotia Supreme Court said the ordinary meaning of some everyday words in the WCA seem to point towards opposite conclusions.
“On one hand, everyone recognizes that the workers’ compensation system does not deal with compensation for wrongful dismissal,” the court said. “Being fired is not an accident for workers’ compensation purposes.
“On the other hand, the WCA says that the term ‘accident’ includes stress arising from an ‘acute reaction to a traumatic event.’ Being summarily and wrongfully dismissed from long-term employment, as (Logan) was, could certainly be described in every day language as a traumatic experience.
“So while it seems odd to think of being fired as a workplace accident, the statute’s inclusion of stress arising from a traumatic event could be seen as opening the door to workers’ compensation. Hence, the dilemma we face in this case.”
But though the court seemed to open the door slightly for a ruling in Logan’s favour, it quickly closed it.
“To make sense of these two apparently conflicting conclusions, one must interpret the words of the statute in light of its context and purpose,” the court said.
“When that is done, it becomes clear in my view that WCAT’s approach was sound. I would therefore dismiss the appeal. In my view, the words of the statute, read in their entire context, lead to the conclusion that whether an event is traumatic is to be assessed from an objective point of view — that of a reasonable person. In my view, WCAT made no reviewable error in reaching that conclusion.”
For more information see:
• Logan v. Nova Scotia (Workers’ Compensation Appeals Tribunal), 2006 CarswellNS 312 (N.S. S.C.).
• W. (D.) v. New Brunswick (Workplace Health, Safety & Compensation Commission), 2005 CarswellNB 389, 42 C.C.E.L. (3d) 163 (N.B. C.A.).
Joanne Logan claimed workers’ compensation benefits arising out of her dismissal in October 2003. The dismissal was sudden and without cause from long-term employment. It had an immediate negative effect on her.
She was extremely upset and was unable to sleep. After two days of crying continuously and refusing to leave the house, she went to the hospital. At the emergency room, she was anxious, upset, crying and complaining of numbness and pain.
She sued her employer for wrongful dismissal. The case was settled during mediation for $96,000, including $21,000 for pain and suffering.
After that, she filed a claim for workers’ compensation benefits. Her claim was denied, a decision upheld by a hearing officer. Logan appealed that decision to the Workers’ Compensation Appeals Tribunal (WCAT).
By the time her claim came before the tribunal, a psychiatrist expressed the view that Logan had been “psychologically traumatized” by the situation. Although she had a history of stress problems at work well before her dismissal, her major depressive disorder and social anxiety disorder only became severe following the termination.
The focus of the debate before the WCAT was whether Logan had suffered an injury by accident arising out of and in the course of employment. This was a critical issue because the Workers Compensation Act (WCA) provides benefits for employees who suffer such injuries. The term “accident” under the WCA includes “disablement … arising out of and in the course of employment” but does not include “stress other than an acute reaction to a traumatic event.”
The WCAT ruled Logan’s injury was excluded because it did not result from a “traumatic event.” Citing the 2005 decision of the New Brunswick Court of Appeal in W. (D.) v. New Brunswick (Workplace Health, Safety & Compensation Commission), the tribunal held that management decisions do not qualify as traumatic events and that whether an event is traumatic is to be determined objectively.
“A sudden termination is not outside the realm of what is expected or usual within the workplace, and most people do not become disabled due to being fired,” the tribunal said. “Once a management decision is made to terminate a worker, it is often not in the employer’s best interest to keep that worker in the workplace with working notice. All of the events which (Logan) calls traumatic directly flow from, or are part of, the management decision to terminate her employment. They are not accidents for the purposes of workers’ compensation.”
The tribunal recognized that there might be gray areas around where wrongful dismissal ends and compensable accidents begin. It said an event is not automatically excluded from being traumatic within the meaning of the Workers Compensation Act merely because there is a labour relations context. But it affirmed the general principle that wrongful dismissals are not accidents for workers’ compensation purposes.
The WCAT pointed out that any other approach “would lead to employers paying increased assessments for insurance that they did not require. It would lead to an expansive interpretation of accident, when the legislature clearly intended to prevent expansive interpretations in stress cases.”
Logan appealed the tribunal’s decision to the Nova Scotia Supreme Court.
The Nova Scotia Supreme Court said the ordinary meaning of some everyday words in the WCA seem to point towards opposite conclusions.
“On one hand, everyone recognizes that the workers’ compensation system does not deal with compensation for wrongful dismissal,” the court said. “Being fired is not an accident for workers’ compensation purposes.
“On the other hand, the WCA says that the term ‘accident’ includes stress arising from an ‘acute reaction to a traumatic event.’ Being summarily and wrongfully dismissed from long-term employment, as (Logan) was, could certainly be described in every day language as a traumatic experience.
“So while it seems odd to think of being fired as a workplace accident, the statute’s inclusion of stress arising from a traumatic event could be seen as opening the door to workers’ compensation. Hence, the dilemma we face in this case.”
But though the court seemed to open the door slightly for a ruling in Logan’s favour, it quickly closed it.
“To make sense of these two apparently conflicting conclusions, one must interpret the words of the statute in light of its context and purpose,” the court said.
“When that is done, it becomes clear in my view that WCAT’s approach was sound. I would therefore dismiss the appeal. In my view, the words of the statute, read in their entire context, lead to the conclusion that whether an event is traumatic is to be assessed from an objective point of view — that of a reasonable person. In my view, WCAT made no reviewable error in reaching that conclusion.”
For more information see:
• Logan v. Nova Scotia (Workers’ Compensation Appeals Tribunal), 2006 CarswellNS 312 (N.S. S.C.).
• W. (D.) v. New Brunswick (Workplace Health, Safety & Compensation Commission), 2005 CarswellNB 389, 42 C.C.E.L. (3d) 163 (N.B. C.A.).
