One might expect that the issue of employer liability in negligence for failing to provide a safe employment environment should not be an earth shattering conclusion. Many persons subjected to workplace sexual harassment have considered this as a means of remedy. They should tread carefully.
The Duty of the Employer Well Founded
The Ontario Court of Appeal clearly defined such a duty of the employer, albeit in the context of the defence of a wrongful dismissal claim. The manager was then found to have a duty to protect the employer from the possibility of civil suits arising out of sexual harassment, and a duty as the agent of the employer to protect the employees from sexual harassment.
Further, the Occupational Health and Safety Act in Ontario makes it mandatory for the employer to maintain and implement a policy to ensure its workforce remains free from threats of workplace violence and harassment. The Act makes the investigation of such complaints compulsory. In addition, the policy developed by the company must state how the complaint is to be reported and in what manner the complaint is to be investigated.
The policy must include steps and procedures to permit employees to report workplace harassment. It must also explain the process in place by which the employer will investigate and deal with complaints.
Harassment is defined broadly and will include sexual harassment. The actual words used define workplace harassment as “engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome”.
Clearly there is a statutory duty and indeed a common law obligation upon the employer to maintain a safe work environment. One would expect that the law would allow a remedy in negligence for the failure to do so.
Ontario’s Policy Motivator
This is not, however, as simple a proposition, as the above references would suggest. There has been noticeable reluctance in Ontario and Nova Scotia at the appellate level to acknowledge such a claim in negligence against an employer for “policy” reasons.
The analysis of the application of the duty of care to an employer for damages for negligence will first require a review of the test as set out by the Supreme Court.
The first issue is whether the common law has recognized such a duty of care for such a category of cases. If this is not established, the second issue then will become whether there has been established a “novel” duty of care established. To date, there has been no establishment of such duty of care as a given presumption based on a claim in tort.
This being said, the accepted test for the establishment of such a “novel” duty of care” is that:
- There is a proper proximity between the parties that it “would not be unjust or unfair to impose such a duty of care”;
- The damages asserted are reasonably foreseeable as a consequence of the breach of this duty;
- There is no policy reason to deny or qualify such a duty.
The existence of such a duty of care was considered by the Ontario Court of Appeal in a case alleging physical and other abuse in the workplace, which was not sexual. The court found the first two steps of the “novel” approach were met, but the case failed on the policy considerations, due to the finding that such a tort notion of “good faith and fair dealing” in dismissing an employee would be a radical departure from the common law.
The Court of Appeal hence rejected such a tort duty on the basis that the suggested duty to “shield an employee during the entire course of his or her employment from acts in the workplace that might cause mental suffering strikes me as far more expansive than a duty to act fairly and in good faith during just the termination process”. Such a proposed duty, as the court noted, “would require employers to shield employees from the acts of the other employees that might cause mental suffering”.
Of significant note in this analysis was its dependence on the principle that the existing law allowed such a duty of good faith only on termination.
The Ontario Court of Appeal in 2008 considered whether such a claim in negligence could be made against the employer and/or the investigative company hired by the employer.
Due to certain suspicions held by the company, it retained a private investigative firm, Aston Associates Investigations Ltd. to explore the validity of its concerns. This company, in turn, placed an undercover agent into the workplace. It and the employer determined that certain Canac employees were engaged in theft and drug dealing.
The investigator named in its first report a list of suspects. Regrettably, it erred in its second report in the spelling of the accused person, incorrectly citing one Joao Correia, and not the correct suspect, Joao Corriero. The photographic identity cards were not cross-referenced. The wrongly accused person was 62 years old, some 40 years older than the correct suspect.
The company terminated the wrong person due to this error. He was also arrested by the police and faced criminal charges of theft.
He was held in custody for three hours and released. Four months later, the charges were dropped. Canac offered to reinstate, but the plaintiff was too shocked to return to work.
The plaintiff sued an assortment of defendants, including the employer and the investigative company and others for assorted forms of relief, including the intentional infliction of mental distress and negligence in the conduct of the investigation.
Certain defendants moved to dismiss the action in a summary judgment motion before Low J., which succeeded in part. It was from this motion that the plaintiff appealed to the Court of Appeal.
Low J. found, with respect to the claim for negligence in the investigation, that there could be no claim against the investigator nor the employer in law:
The motions judge found that the plaintiff did not stand in a relationship with any of the moving defendants (i.e., everyone except the police defendants) which could fall within a category or in a position analogous to an established category in which a duty of care has been recognized. She held that the plaintiff was a stranger to Aston and to all of the individual defendants. While he had a contract of employment with Canac, that did not create a duty of care contemplated by the claim. An employer has a right to terminate employment and the fact that “in coming to its decision the employer acted on misinformation negligently gathered does not augment the employee’s rights; nor is the employer’s obligation diminished if it acts without negligence”. In the absence of a duty of care, no action for negligent investigation lies.
The Court of Appeal disagreed with the motions judge and allowed the claim to proceed against the private investigator based on a broad policy perspective.
However, the Court saw no potential claim in law against the employer in negligence:
The Supreme Court, for policy reasons explained in Wallace, has refused to recognize an action in tort for breach of a good-faith and fair-dealing obligation. In this case, Canac fired the plaintiff for cause. It concedes that it was wrong in doing so and it may have been negligent. But, in our view, to recognize a tort of negligent investigation for an employer would be inconsistent with the holding in Wallace. It would, in effect, carve out an exception from the broad holding in Wallace where the reason for the dismissal was an allegation of criminality. We can see no principled reason for so doing.
The second reason that we would not recognize a duty of care on Canac lies in the potential chilling effect on reports of criminality by honest citizens to the police. Unlike Aston, Canac was not in the business of investigation. It was in many ways in the same position as any other citizen who reports criminal activity to the police. Public policy favours encouraging the reporting of criminality to the police. Someone not in the business of private investigation who honestly, even if mistakenly, provides information of criminal activity should be protected: see Mirra v. Toronto Dominion Bank,  O.J. No. 1804,  O.T.C. 365 (S.C.J.).
The Court of Appeal also allowed the claim for the intentional infliction of mental distress to proceed against the employer, the investigator and the Head of Human Resources in her personal capacity.
There are some inroads, however, developing to counter this principle. The law is not quite as simple one might conclude from the Court of Appeal decision, at least in other jurisdictions, notably British Columbia.
This principle was followed in one Ontario case which held there is no such tort as the negligent infliction of mental distress, as the trial judge found that the law was limited to good faith issues arising at the time of termination.
One subsequent case did allow the pleading of such a claim to stand when challenged on a dismissal motion, a decision which was reversed on appeal when the court held that “there was no such tort”.
It may well have been a pleading issue as the Divisional Court stated that “there is a tort of negligent infliction of psychiatric damage: But the plaintiff has not pleaded mental distress to herself that amounts to a recognized psychiatric illness”. The distinction appeared to rest in the need to plead a diagnosed illness as opposed to a general assertion of mental distress. The tort of intentional inflectional of mental distress requires a “provable illness” which is likely the reason for this distinction.
The basis, however, of a tort action in negligence against the employer was clearly denied in the two appellate decisions referenced above.
In each case there was no reference to the successful claim made in the British Columbia Supreme Court based on the negligent infliction of mental suffering. In this case the manager was sued for this claim and the employer was held vicariously responsible. The action was based on verbally abusive conduct.
The British Columbia Court of Appeal in a second case agreed with the proposition that a claim for negligence may be allowed against the employer and personal defendant in a similar context.
The plaintiff, an elementary school principal, was accused of certain improprieties, including physically grabbing an assistant while she was in a classroom, pulling her into a corridor towards a parent, while squeezing and bruising her arm.
A third party investigation ensued. Interviews were conducted with the assistant, the relevant parent and the plaintiff. Missing from the list of those interviewed was the teacher in the room, and all students who had been present in the classroom. In the course of the investigation, the plaintiff was given a summary of the allegations.
The investigator prepared a final report, which resulted in a letter of discipline, without providing the plaintiff the opportunity to respond.
The plaintiff’s counsel requested that Fox withdraw the letter and not send it to the professional body until the plaintiff could respond to the report. These requests were not granted.
The motions judge allowed for the dismissal of the action against Fox, a decision that was appealed to the Court of Appeal. The claim was based on “gross negligence”, a plea which was required as the legislation allowed only for such claims.
The Court of Appeal allowed the claim against Fox to continue. The critical policy considerations which denied the claim in the Ontario case against the employer were seen in a different light in this case. This court refused to strike the case on the preliminary motion as disclosing no reasonable cause of action:
It is also my view that, unlike the situation in Correia, it is not plain and obvious that policy considerations should negate the prima facie duty of care (i.e., the second part of the Anns/Kamloops test). Neither of the policy considerations relied upon in Correia is present in this case. Mr. Fox did not raise on this appeal any other policy considerations that would negate a prima facie duty if one were found to exist (but he is at liberty to do so at trial if he wishes).
The case settled, and hence did not reach trial for a final determination on the merits.
The Supreme Court of Canada in its November 2014 decision of Bhasin spoke to the issue of “honest performance” throughout the entirety of the relationship and that this duty of good faith is no longer limited to the “moment of termination”, as it arguably once was so confined.
Following Bhasin, there has evolved a distinct liberal reading of the Bhasin theme. The reluctance of the Court to rely specifically on the contractual term and instead consider the relationship in its broadest concept is reflective of a generous interpretation of the obligations of the contracting parties to one another.
The same liberal view may well apply to the determination of the issue of this developing tort and indeed the application of the Bhasin theme to the entirety of the employment relationship. The distinctive qualifiers offered by the Ontario courts to deny a negligence claim based appear to be falling by the wayside. The duty of good faith may readily allow a civil action for unfair conduct which is sexual harassment.
A recent decision of the Ontario Superior Court also reviewed the same “novel” analysis based on a claim made by female employees of a subordinate company in Guatemala who suffered sexual abuse. After noting that the first two steps of the analysis were met by the pleadings, the court then considered the policy issue, to which the court concluded that there were “competing” policy issues which were sufficient to allow the case to proceed to trial.
It is to be noted that the policy arguments may be unique to the facts of the case, namely, a Canadian mining company sued by persons alleging serious harm by security personnel at its foreign location, apparent steps being taken by the Canadian federal government to encourage a high standard of “corporate social responsibility” and the need to marshal the international activities of western companies in developing countries.
One would expect a possible claim could be made in contract or negligence where the employer was in default of its obligation to have in place a harassment policy to prevent and investigate workplace sexual harassment where such a policy is required by statute. These statutory duties may well allow for the policy considerations to be found in favour of the tort duty, particularly when read in conjunction with the Bhasin duty.
Other Ontario Cases of Note
A claim in negligence has been made successfully against a manager where a resident in a care facility sexually assaulted a youth worker. The employer was found to be vicariously responsible.
There are numerous examples of successful negligence claims against an employer for the failure to administer the disability benefits plan in a proper manner. The issue of such a “policy” positioned defence was never raised, and hence never debated in such cases.
These cases include decisions of the Ontario Supreme Court in July of 1989 in which the employer failed to advise the employee that he had insurance coverage, let alone the right of conversion. The plaintiff was successful in the claim. This was followed by similar successful claims in negligence by the employee against the employer in the Court of Queen’s Bench of Alberta in February of 2006,  the Ontario Supreme Court, and the Supreme Court of Nova Scotia. The latter was obiter as no liability was found on the facts.
The human rights regime does not specifically deal with employer in negligence in the strict sense of the word. It does, however, allow for the concept of a “poisoned work environment” to find employer liability. The conduct need not be intentional. It rarely is. In essence, it attaches liability to the employer’s failure to maintain a proper and safe workplace. It is negligence but for semantics.
This is likely not the end of the debate on the issue of a claim to be made against the employer in negligence. It should be revisited.
 The Supreme Court of British Columbia in Corfield v Shaw, Baker and Baker Industries, 2011 BCSC 1529 (CanLII), a 2011 decision of Mr. Justice Buller, agreed with the basic assertion in law that the employer owed to the plaintiff employee a duty of care, although did not apply the duty in this instance. In Fleming v Ricoh the issue was raised obliquely.
 Bannister v. General Motors of Canada Ltd. 1998 CanLII 7151 (ON CA), (1998) 40 O.R. (3d) 577 (O.C.A.). Gonsalves v. Catholic Church Extension Society of Canada 1998 CanLII 7152 (ON CA), (1998) 164 D.L.R. (4th) 339 (Ont. C.A.)
 Ontario’s OHSA has been amended by Bill 132 which is in effect as of September 8, 2016. “Workplace harassment” has been defined to include “workplace sexual harassment”. The amended provisions include the need to have the workplace anti-harassment program provide identity protections to the complainant (unless disclosure is necessary for the investigation or corrective action) and to allow for a different reporting mechanism where the supervisor is the alleged harasser and to consider how the employee will be advised of the results of the investigation and any corrective action.
In addition the employer must ensure that an appropriate investigation is conducted of all incidents and complaints of workplace harassment, that the worker be advised in writing of the results of the investigation and of any corrective action.
 Emphasis added
 Piresferreira v Ayotte OCA para 61, 319 DLR (4th) 665;  OJ No 2224 (QL); 263 OAC 347; leave to appeal refused  SCCA 283. This decision denied the claim against the employer and the supervisor in his personal capacity.
 Wallace v. United Grain Growers Ltd., para 76, 152 DLR (4th) 1;  4 WWR 86; 219 NR 161; 3 CBR (4th) 1;  CarswellMan 455;  SCJ No 94 (QL); 123 Man R (2d) 1; 159 WAC 1;  ACS no 94; 97 CLLC 210
 The same policy reason prevented a plaintiff from suing his employer for a negligent investigation in Correia v Canac Kitchens OCA, 91 OR (3d) 353; 294 DLR (4th) 525; 58 CCLT (3d) 29;  CarswellOnt 3712;  OJ No 2497 (QL); 167 ACWS (3d) 422; 240 OAC 153; 67 CCEL (3d) 1 . Much to the same effect is the decision of the Nova Scotia Supreme Court in Sanford v Carleton Industries 2014 NSSC 187 (CanLII)
 At para 15
 At para 73
 Amaral v Canadian Musical Reproduction Rights, 2007] OJ No 4266 (QL); 161 ACWS (3d) 654; 63 CCEL (3d) 244. The Court of Appeal 249 OAC 87; 73 CCEL (3d) 1; 2009 ONCA 399 (CanLII) offered no right or wrong review of the trial decision on this issue, which it issued in May of 2009. It regrettably chose to avoid the issue. It is odd that neither decision referenced Sulz which was initially decided in January of 2006, although it was before the court as it was cited on the issue of intentional infliction of emotional suffering.
 The motions decision in Mujagic v State Farm 95 OR (3d) 624; 71 CCLI (4th) 93;  OJ No 889 (QL) did, however, acknowledge Sulz and allowed the claim to proceed on a dismissal motion. This decision was reviewed by the Divisional Court 97 OR (3d) 474 on a leave application, which determined that “there was no such tort”, referring to Amaral as authority.
 Vanek et al. v. The Great Atlantic & Pacific Co. of Canada Ltd. et al.,  O.J. No. 4599 (C.A.) 2006 BCSC 99]
 Sulz v Attorney-General, 263 DLR (4th) 58; 54 BCLR (4th) 328; 37 CCLT (3d) 271;  BCJ No 121 (QL); 48 CCEL (3d) 92; 2006 BCSC 99 (CanLII), upheld by the Court of Appeal. 276 DLR (4th) 391;  2 WWR 419; 60 BCLR (4th) 43; 234 BCAC 88;  BCJ No 3262 (QL); 54 CCEL (3d) 190; 2006 BCCA 582 (CanLII). This issue was not argued on appeal.
 At para 39
 Much to the same effect is the decision of the Alberta Queen’s Bench in Styles v Alberta Investment Management 2015 ABQB 621 (CanLII) and generally in Karmel v Calgary Jewish Academy 2015 ABQB 731 (CanLII). The application of Bhasin v Hrynew to the entirety of the employment relationship is now clearly beyond dispute.
 Choc v Hudbay Minerals 2013 ONSC 1414 (CanLII)the issue arose on a motion to dismiss as showing no reasonable cause of action in negligence and hence the reasons allow only that the action may proceed to trial.
 As in Ontario, Canada, PEI, NWT and Saskatchewan
 Hudson v Youth Continuum et al 2012 ONSC 4421 (CanLII) and K.T. v Denis Vranich et al 361 (QL) 2011 ONSC 683 (CanLII). Neither claim was defended. These cases are directly contrary to the Ontario Court of Appeal decisions which were not referenced in either decision. It is an exaggeration to suggest that they reflect current Ontario law. The same claim based on verbally abusive conduct, not sexual harassment, was allowed in Shulz v Attorney-General and upheld on appeal, although there was no issue of this liability raised on appeal.