WORKPLACE SAFETY AND INSURANCE APPEALS TRIBUNAL DECISION NO. 194/16

WORKPLACE SAFETY AND INSURANCE APPEALS TRIBUNAL DECISION NO. 194/16 BEFORE: S. Martel: Vice-Chair HEARING: January 21, 2016 at Toronto Oral DATE OF DECISION: March 23, 2016 NEUTRAL CITATION: 2016 ONWSIAT 797 APPLICATION FOR ORDER UNDER SECTION 31 OF THE WORKPLACE SAFETY AND INSURANCE ACT, 1997 APPEARANCES: For the applicant: For the respondent: For the interested party (co-defendant): Interpreter: Y. Levinson, Lawyer G. Govedaris, Lawyer Did not participate N/A Workplace Safety and Insurance Appeals Tribunal Tribunal d appel de la sécurité professionnelle et de l assurance contre les accidents du travail 505 University Avenue 7 th Floor 505, avenue University, 7 e étage Toronto ON M5G 2P2 Toronto ON M5G 2P2

Decision No. 194/16 REASONS (i) Introduction [1] This is an application under section 31 of the Workplace Safety and Insurance Act, 1997 (WSIA) by the defendant, 1726837 Ontario Inc. carrying on business as Paramount Fine Foods et al. ( Paramount ), in an action filed in the Ontario Superior Court of Justice, File No. CV-13-475831. The other defendant in the action, N.S., was notified of the application but did not file any materials nor appear at the hearing. N.S. did not make a request for a determination in respect of the action against him. (ii) Issues [2] The court action and this application arise out of an accident that occurred on January 6, 2013. [3] The issue in this application is whether the plaintiff s right of action is taken away against the applicant Paramount pursuant to section 31 of the WSIA. [4] There are three questions in dispute in this application: 1. Whether the plaintiff s claim for wrongful dismissal is taken away by the WSIA. 2. Whether the plaintiff s claim against her employer for vicarious liability of an intentional tort is taken away. 3. Whether the plaintiff s complaint to the Ontario Human Rights Tribunal under the Ontario Human Rights Code is taken away. [5] No witnesses were called. The application proceeded on the basis of the documentary record and the representatives submissions. (iii) Background [6] Paramount is an incorporated company that carries on business in multiple locations as a butcher shop, fine foods market and restaurant. [7] The plaintiff began working for the applicant in May 2012. She was originally hired to work at the butcher shop operated by Paramount. Around July 2012, she was transferred to another location, a restaurant operated by Paramount, to work as a customer service representative. She alleges that her hours of employment were reduced when she was transferred. [8] The plaintiff alleges that the defendant N.S., who worked for Paramount as a chef/cook, made lewd, sexually suggestive and inappropriate comments and that she complained of his behaviour to management but that management did not take any steps to address the behaviour other than to direct N.S. not to interact with the plaintiff. [9] The plaintiff gave notice of her resignation on or about December 24, 2012 with her last date of employment scheduled to be January 6, 2013. [10] On January 6, 2013, the plaintiff was sexually assaulted in the lunchroom by N.S., while at work. She reported the assault to her employer. She subsequently also reported the assault to the police. N.S. was charged and convicted of a criminal act.

Page: 3 Decision No. 194/16 [11] The plaintiff also started a civil action against Paramount and N.S. The plaintiff seeks damages for wrongful termination, sexual assault and battery. She also seeks damages against Paramount in respect of its post-incident conduct, including an allegation of spoliation of evidence, and vicarious liability of N.S. s deliberate acts. (iv) Agreed facts and issues [12] At the outset of the hearing, the parties agreed to the following: The part of the plaintiff s action that is framed in negligence, carelessness and recklessness against Paramount is taken away by the WSIA. Paramount is a Schedule 1 employer. The plaintiff was a worker of a Schedule 1 employer who was in the course of her employment at the time of the sexual assault. N.S. was not an executive officer, director or shareholder of Paramount. N.S. was charged and convicted of a criminal act. The Tribunal does not have the jurisdiction to consider the plaintiff s claim against Paramount in respect of its post-incident conduct, including an allegation that Paramount allowed the security camera footage of the lunch room to be overwritten in the ordinary course or otherwise lost (spoliation of the evidence). [13] The parties disagreed on the following issues, which are the subject of this application: (v) Whether the plaintiff s claim for wrongful dismissal is taken away by the WSIA. Whether the plaintiff s claim against her employer for vicarious liability of an intentional tort is taken away. Whether the plaintiff s complaint to the Ontario Human Rights Tribunal under the Ontario Human Rights Code is taken away. Law and policy [14] Section 31 of the WSIA provides that a party to an action may apply to the Tribunal to determine whether: a right of action is taken away by the Act; whether a plaintiff is entitled to claim benefits under the insurance plan; or whether the amount a party to an action is liable to pay is limited by the Act. [15] Section 13 of the WSIA sets out when a worker is entitled to benefits under the WSIA: 13(1) A worker who sustains a personal injury by accident arising out of and in the course of his or her employment is entitled to benefits under the insurance plan. (2) If the accident arises out of the worker s employment, it is presumed to have occurred in the course of the employment unless the contrary is shown. If it occurs in the course of the worker s employment, it is presumed to have arisen out of the employment unless the contrary is shown. [16] Sections 26 through 29 of the WSIA provide the following: 26(1) No action lies to obtain benefits under the insurance plan, but all claims for benefits shall be heard and determined by the Board. (2) Entitlement to benefits under the insurance plan is in lieu of all rights of action (statutory or otherwise) that a worker, a worker s survivor or a worker s spouse, child or dependant has or may have against the worker s employer or an executive officer of

Page: 4 Decision No. 194/16 the employer for or by reason of an accident happening to the worker or an occupational disease contracted by the worker while in the employment of the employer. 27(1) Sections 28 to 31 apply with respect to a worker who sustains an injury or a disease that entitles him or her to benefits under the insurance plan and to the survivors of a deceased worker who are entitled to benefits under the plan. (2) If a worker s right of action is taken away under section 28 or 29, the worker s spouse, child, dependant or survivors are, also, not entitled to commence an action under section 61 of the Family Law Act. 28(1) A worker employed by a Schedule 1 employer, the worker s survivors and a Schedule 1 employer are not entitled to commence an action against the following persons in respect of the worker s injury or disease: 1. Any Schedule 1 employer. 2. A director, executive officer or worker employed by any Schedule 1 employer. (2) A worker employed by a Schedule 2 employer and the worker s survivors are not entitled to commence an action against the following persons in respect of the worker s injury or disease: 1. The worker s Schedule 2 employer. 2. A director, executive officer or worker employed by the worker s Schedule 2 employer. (3) If the workers of one or more employers were involved in the circumstances in which the worker sustained the injury, subsection (1) applies only if the workers were acting in the course of their employment. (4) Subsections (1) and (2) do not apply if any employer other than the worker s employer supplied a motor vehicle, machinery or equipment on a purchase or rental basis without also supplying workers to operate the motor vehicle, machinery or equipment. 29(1) This section applies in the following circumstances: 1. In an action by or on behalf of a worker employed by a Schedule 1 employer or a survivor of such a worker, any Schedule 1 employer or a director, executive officer or another worker employed by a Schedule 1 employer is determined to be at fault or negligent in respect of the accident or the disease that gives rise to the worker s entitlement to benefits under the insurance plan. 2. In an action by or on behalf of a worker employed by a Schedule 2 employer or a survivor of such a worker, the worker s Schedule 2 employer or a director, executive officer or another worker employed by the employer is determined to be at fault or negligent in respect of the accident or the disease that gives rise to the worker s entitlement to benefits under the insurance plan. (2) The employer, director, executive officer or other worker is not liable to pay damages to the worker or his or her survivors or to contribute to or indemnify another person who is liable to pay such damages. (3) The court shall determine what portion of the loss or damage was caused by the fault or negligence of the employer, director, executive officer or other worker and shall do so whether or not he, she or it is a party to the action. (4) No damages, contribution or indemnity for the amount determined under subsection (3) to be caused by a person described in that subsection is recoverable in an action.

Page: 5 Decision No. 194/16 [17] For the purposes of a right to sue application, it is typically unnecessary to make a factual finding about the allegations set out in a Statement of Claim. Instead, the Tribunal presumes that the events occurred as pleaded in the Statement of Claim and evaluates whether in that situation a right to sue is removed by the WSIA (see for example: Decision Nos. 1802/10 and 353/07). (vi) Conclusions (a) Is the plaintiff s claim for wrongful dismissal taken away by the WSIA? [18] In her Statement of Claim, the plaintiff seeks damages for wrongful dismissal and wrongful termination of her employment. [19] The Statement of Claim provides various particulars regarding her claim for wrong dismissal, which are summarized below: On or about July 2012, Paramount unilaterally altered the terms of the plaintiff s employment to drastically reduced hours in a non-butcher position at the restaurant premises. The plaintiff pleads that the fundamental changes to her employment agreement without her consent amounted to a constructive dismissal. N.S. made lewd, sexually suggestive and inappropriate comments to the plaintiff. The plaintiff s complained of N.S. s behaviour to management but management took no steps to address his behaviour other than direct him not to interact with the plaintiff. Paramount expressly/implicitly endorsed his behaviour. On or about December 24, 2012, the plaintiff gave notice that she could no longer work under the poisoned work environment and conditions and the employer agreed that her last shift would be January 6, 2013. The plaintiff states that the decision to terminate her was made after she complained of inappropriate conduct. She states that she never resigned her employment but was dismissed or constructively dismissed. [20] Under damages from the wrongful termination, the plaintiff pleads: The manner in which she was terminated caused her humiliation, embarrassment, loss of self-esteem and loss of self-worth. The plaintiff was constructively dismissed and/or dismissed from her employment without just cause and without any notice and for no other reasons. The plaintiff sustained damages and continues to suffer economic loss. [21] The respondent submits that several Tribunal decisions (Decision Nos. 494/04 and 237/03) have held that where personal injury and wrongful dismissal claims are advanced in a statement of claim, the WSIA does not operate to bar the wrongful dismissal cause of action. [22] The applicant submits that that the facts pleaded in the Statement of Claim regarding the wrongful dismissal claim are inextricably linked to the claim that is excluded by section 28 of the WSIA. The applicant relies on Decision No. 566/00 where it was found that the respondent s claims for damages in negligence and wrongful dismissal were inextricably linked

Page: 6 Decision No. 194/16 and were therefore statute-barred. The applicant submits that the unjust dismissal claim arises out of the same fact - the sexual assault - which occurred in the course of the plaintiff s employment. [23] Decision No. 237/03 1 reviewed a number of Tribunal decisions where subsequent to a workplace accident a plaintiff brought an action for personal injury and for wrongful dismissal. It noted that the overwhelming preponderance of those decisions found that an action for wrongful dismissal is not statute-barred. One of the few decisions that found that the plaintiff s action for wrongful dismissal was taken away by the WSIA, Decision No. 566/00, was decided based on an agreement between the parties. In that application, the Panel accepted the parties agreement that the respondent s claims for damages in negligence and wrongful dismissal were inextricably linked to the workplace accident and therefore state-barred. Unlike Decision No. 237/03, the decision does not include a detailed analysis of the jurisprudence and seems to have been essentially determined on the consent of the parties. I prefer the more detailed analysis of Decision No. 237/03. [24] In both Decision No. 237/03 and in this application, the wrongful dismissal action is in respect of an allegation of dismissal, constructive or otherwise. The action is not framed for or by reason of an accident. While there may be an incidental relationship between the facts underlying a worker s personal injury by accident and those underlying an allegation of wrongful dismissal, they are not sufficient to support a determination that the action for wrongful dismissal should be taken away by the WSIA. I further note that in this case, some of the facts pleaded in respect of the wrongful dismissal are completely separate from N.S. s conduct and relate instead to the change of the worker s terms of employment when she was transferred from the butcher shop to the restaurant premises. [25] The remedy for wrongful dismissal, as has been noted in several of the decisions, is damages in lieu of notice. The WSIA does not provide this remedy; a cause of action for wrongful dismissal is therefore not subsumed by the WSIA. [26] I apply the analysis in Decision No. 237/03 and find that the worker s claim for wrongful dismissal is not taken away by the WSIA. (b) Is the plaintiff s claim against her employer for vicarious liability of an intentional tort taken away? [27] The respondent submits that there is no Tribunal decision that has directly considered whether the WSIA removes a plaintiff s claim against her employer for vicarious liability of an intentional tort. [28] Paragraph 9 of the Statement of Claim pleads: The defendant [N.S.] is an individual who at all material times was a manager and/or principal 2 of the Paramount Defendants having effective control in his role as the head chef of Paramount Fine Foods The Paramount Defendants are vicariously liable for the acts and omissions of their employees, agents and principals, including [N.S.], under the legal doctrine of respondent superior. [29] The respondent submits that developments in the area of vicarious liability for criminal acts have not yet been explicitly addressed by the Tribunal. The respondent further submits that recent Ontario Superior Court and Court of Appeal decisions have awarded and/or upheld 1 A reconsideration of this decision was denied in Decision No. 237/03R. 2 For the purposes of this Tribunal application, the parties agreed that N.S. was not an executive officer, director of shareholder of Paramount.

Page: 7 Decision No. 194/16 awards for damages to victims of sexual assault and battery as against their employers. The respondent submits that the thread in Tribunal jurisprudence is that the intent of workers compensation legislation is to give workers a no-fault scheme for compensation and to protect employers from causes of action framed in negligence and recklessness only. [30] The applicant submits that this is not a novel issue and that the Tribunal has found employers to be immune from liability for their employees intentional torts. Only when an employer is the perpetrator of the criminal act is the usual protection afforded to employers taken away. In this case, the employer did not engage in criminal acts. [31] As acknowledged by both parties, Tribunal decisions have held that when an owner, director or officer of an employer is the perpetrator of a criminal act, that individual is not protected by the WSIA (see for example, Decision Nos. 2282/05 3 ). It is agreed in this application that N.S., the individual convicted of a criminal act, was not an executive officer, director or shareholder of Paramount. [32] The respondent submits that the only Tribunal decision to have broached the topic of vicarious liability is Decision No. 452/09. In that case, the plaintiff had commenced an action against her supervisor and her employer in respect of sexual assault and sexual exploitation committed by the supervisor. Paragraph 2 of the decision indicates that the Statement of Claim pleaded that the corporate Defendant is, in law, responsible for the actions of its employee. The issue in the appeal was whether the WSIA barred the plaintiff s right of action against her employer. [33] The decision ultimately concluded that subsection 26(2) of the WSIA was a complete answer to the application. Subsection 26(2) provides for entitlement to benefits under the insurance plan in lieu of all rights of action that a worker has against her employer. The plaintiff was entitled to claim benefits under section 13 of the WSIA, such that her right of action against her employer was barred by virtue of subsection 26(2) 4. [34] Paragraph 26 of Decision No. 452/09 also addressed one of the arguments raised by the respondent. The respondent submitted that the employer should not be protected from civil suit because the employer was aware of the supervisor s inappropriate conduct vis-à-vis another female employee prior to the respondent s assault. Decision No. 452/09 concluded that there was no direct evidence that the employer condoned the supervisor s actions. On the contrary, the employer terminated the supervisor after being made aware of the allegations of the female employees. The decision therefore concluded that there is no evidence that the employer itself engaged in any criminal or quasi-criminal conduct to the point that it ceased being an employer or took part in actions that were outside of the scope of employment. [35] One of the Court cases cited by the respondent is M.B. v. 2014052 Ontario Ltd., carrying on business as Deluxe Windows of Canada, et al. [2012] ONCA 135 where the Court of Appeal upheld a damages award against the defendant employer. The plaintiff in that case was assaulted by her supervisor who was a principal and part owner of the company for whom she worked. This was not a case of the employer s vicarious liability of one of its employees but rather, one where the perpetrator was in effect the plaintiff s employer. 3 A reconsideration of this decision was denied in Decision No. 2282/05R. 4 Subsection 26(2) of the WSIA is an absolute bar to an action by a worker injured in the course of his or her employment against his or her employer. See Decision No. 977/03 at paragraph 39 for an explanation of the interplay between subsection 26(2) and 28(3) of the WSIA.

Page: 8 Decision No. 194/16 [36] The respondent also relied on K.T. v. Vranich [2011] O.J. No. 361. In that case, the plaintiff was assaulted by the manager of the nightclub where she worked. She sued the manager (Vranich) and the nightclub (Elixir). All of the defendants were noted in default and therefore did not defend the lawsuit. There was evidence in that case that the manager was not just an employee but the ostensible face of this corporation. [37] Ultimately, the court concluded that Vranich wielded considerable economic power over the plaintiff and that there was a definite link between Vranich operating Elixir and his ability to dominate the plaintiff. The court held: [g]iven the de facto identification of Vranich as the working face/operating mind of Elixir and the circumstances that he took advantage of, it is not difficult to find vicarious liability on the part of Elixir (1389715 Ontario Inc.) for the actions of Denis Vranich. [38] As in Deluxe Windows, there appears to have been an element of ownership and/or directing mind in the relationship between Vranich and Elixir. In the case before me, it was agreed that N.S. was not a shareholder, director or executive officer of Paramount. It was also not claimed that N.S. was the operating mind of Paramount. [39] The applicant relies on Decision No. 201/95, which held that the plaintiffs action against their employer for an intentional tort was taken away by the WSIA. The Panel held that the fact that the worker's lawsuit is framed in terms of civil wrongs other than negligence does not, in and of itself, take those actions outside the scope of section 16 of the Workers Compensation Act 5 : The question to be resolved, in our view, is whether any or all of those alleged civil wrongs arise out of a workplace accident. To the extent that they do, the Respondents legal action is barred by section 16. [40] The facts of this case are not dissimilar to those of Decision No. 2501/09. The plaintiff in that case was assaulted in a parking lot by her crew chef. The crew chief was convicted of assault causing bodily harm. Having committed a criminal offence, the crew chief was not acting in the course of his employment and the plaintiff s right of action against him was not taken away by the WSIA. With respect to the plaintiff s action against her employer, the Vice-Chair found that subsection 26(2) of the WSIA was an absolute bar to an action by a worker injured in the course of her employment against her own employer. [41] I interpret the Tribunal jurisprudence as a whole as essentially stating that where a plaintiff is entitled to benefits under the WSIA, her rights of action against her own employer in respect of the workplace accident are taken away unless the employer s actions were criminal in nature such that the employer removed itself from the scope of the WSIA. [42] In this case, the plaintiff is alleging vicarious liability for N.S. s act and alleges that Paramount condoned harassment by N.S. The parties have agreed that the post-assault conduct is outside of the Tribunal s jurisdiction. Accordingly, I have only considered the plaintiff s claim against her employer leading up to and including the assault. All of these alleged events occurred while the plaintiff was acting in the course of her employment. Both sexual harassment and sexual assault have been accepted in Tribunal jurisprudence as falling within the definition of a workplace accident. The events therefore arose out of a workplace accident and as a result, the plaintiff s action against her employer, with the exception of the wrongful dismissal claim, is taken away by the WSIA. There is no claim in the Statement of Claim that Paramount s actions and those of its executive officers, directors and/or shareholders were 5 Section 16 of the Workers Compensation Act is the predecessor to subsection 26(2) of the WSIA.

Page: 9 Decision No. 194/16 criminal in nature so as to take them out of the scope of employment and outside the purview of the WSIA. (c) Is the plaintiff s complaint to the Ontario Human Rights Tribunal under the Ontario Human Rights Code taken away? [43] Section 31 of the WSIA allows a party to an action to apply to the Appeals Tribunal to determine whether the right to commence an action is taken away. [44] In addition to her court action, the plaintiff has also filed an application under section 34 of the Ontario Human Rights Code alleging discrimination with respect to employment because of sex. The Human Rights Tribunal of Ontario has released an interim decision in the application deferring the application pending the conclusion of other proceedings initiated by the plaintiff. [45] The respondent relies on Decision No. 2035/05 regarding its finding that an action, as defined in section 31 of the WSIA, does not include an application such that a party to an application cannot seek relief at the Tribunal under section 31 of the WSIA. [46] The applicant submits that the facts pleaded in the plaintiff s application under the Ontario Human Rights Code are essentially identical to the facts pleaded in the Statement of Claim. The applicant submits that if personal injury in the course of employment is covered by the workers compensation scheme, it is wrong to have double compensation where a plaintiff can essentially sue the employer multiple times based on the same facts. The applicant furthermore disagrees with the Tribunal jurisprudence s restrictive definition of the term action in section 31. The applicant submits that the plaintiff should not be able to use the same facts as the basis for more than one recourse for compensation and relies on Béliveau St-Jacques v. F.E.E.S.P., [1996] 2 S.C.R. 345. [47] In Béliveau, a worker alleged that she had been the victim of harassment in the workplace. She instituted a liability action based on the Charter of Human Rights and Freedoms against her employers and the alleged harasser in the Superior Court. She subsequently obtained compensation under the Quebec Act respecting industrial accidents and occupational diseases ( AIAOD ), for having suffered an employment injury as a result of the same events. The Supreme Court of Canada considered whether the victim of an industrial accident who has received compensation under the AIAOD may in addition bring a civil liability action based on the Charter. [48] The majority of the SCC held that the civil immunity of employers and co-workers under subsections 438 and 442 of the AIAOD is broad in scope and applies to an action under section 49 of the Charter based on the events that gave rise to the employment injury, because this remedy, in so far as it authorizes a claim of compensatory and exemplary damages, is a civil liability remedy. The majority noted that the object of the AIAOD is to provide compensation for employment injuries and the consequences they entail for beneficiaries. It establishes a compensation system that is based on the principles of insurance and no-fault collective liability, the main purpose of which is compensation and thus a form of final liquidation of remedies. The victim of an employment injury receives partial, fixed-sum compensation, and a civil liability action against the victim's employer (section 438) or against a co-worker who is alleged to have committed a fault in the performance of his or her duties (section 442) is prohibited. [49] I note that the Béliveau decision concerns a civil action brought under the Charter. It does not address whether similar reasoning would apply regarding an application under a

Page: 10 Decision No. 194/16 provincial human rights code. As noted in Decision No. 312/12, some of the remedies available under the Ontario Human Rights Code are not available under the WSIA. For example, in her application to the Human Rights Tribunal of Ontario, the plaintiff is seeking general damages, special damages and public interest remedies. There is no legislative authority under the WSIA to grant public interest remedies. [50] Furthermore, Béliveau arose out of a motion brought by the employer to the Quebec Superior Court. It was not initiated before an administrative Tribunal. [51] According to section 31 of the WSIA, the Tribunal only has the jurisdiction to consider an application brought by a party to an action for a determination that the right to commence an action is taken away. The term action has been repeatedly defined as a court proceeding within the meaning of the Courts of Justice Act (Ontario). It does not include a grievance (Decision No. 307 /00) or an application (Decision No. 2035/05). Whether or not there is merit to the applicant s argument in light of the Supreme Court of Canada decision in Béliveau, the employer s recourse is not with this Tribunal. The Tribunal does not have the statutory authority to make a finding that the WSIA removes the plaintiff s right to bring an application under the Ontario Human Rights Code. (vii) The plaintiff s right to claim benefits with the WSIB [52] It was agreed in this case and I accept that the plaintiff was a worker in the course of her employment at the time of the assault. She is accordingly entitled to claim benefits from the Workplace Safety and Insurance Board ( WSIB ). In this respect I note subsection 31(4) of the WSIA, which provides: 31(1) A party to an action or an insurer from whom statutory accident benefits are claimed under section 268 of the Insurance Act may apply to the Appeals Tribunal to determine, (a) whether, because of this Act, the right to commence an action is taken away; (b) whether the amount that a person may be liable to pay in an action is limited by this Act; or (c) whether the plaintiff is entitled to claim benefits under the insurance plan. (4) Despite subsections 22(1) and (2), a worker or survivor may file a claim for benefits within six months after the tribunal s determination under subsection (1).

Page: 11 Decision No. 194/16 DISPOSITION [53] The application is granted in part. 1. The plaintiff s claim for wrongful dismissal is not taken away by the WSIA. 2. The plaintiff s claim against Paramount for vicarious liability of an intentional tort is taken away by the WSIA. 3. The Appeals Tribunal does not have jurisdiction under section 31 of the WSIA to take away the plaintiff s right to bring an application under the Ontario Human Rights Code. [54] No order was sought on behalf of N.S. therefore no determination is being made in respect of the plaintiff s action against N.S. [55] Subsection 31(4) of the WSIA provides that a claim may be filed with the WSIB six months after a section 31 determination is made. DATED: March 23, 2016 SIGNED: S. Martel