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Morningstar Lights the way to more constructive dismissal claims

September 17, 2021

In a recent decision, the Divisional Court overturned a finding of the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”) and ruled that the Applicant, Judith Morningstar, could bring a constructive dismissal action in Superior Court even though she had already filed a workplace harassment claim with the WSIAT.

Morningstar’s ordeal began while she was working as a housekeeping supervisor for Hilton Niagara Falls/Fallsview Hotel and Suites (“Hilton”). During the last 1.5 years of her employment, Morningstar’s colleagues conducted a campaign of harassment against her. The harassment included allegations that Morningstar had an odour emanating from her, spraying her with Lysol and covering the seat of her chair with towels and bathmats. They also spread rumours about the alleged odour, her job performance and interfered with her administrative work.

This behaviour, indifference from management, and the humiliation and distress caused by an internal investigation and its lack of material findings led Morningstar to take a leave from her role. Eventually, Hilton insisted that Morningstar return to work alongside her abusers. She refused, asserting that she had been constructively dismissed for, among other things, Hilton’s failure to fake sufficient steps to provide a safe working environment where she would not have to work with her harassers. Because of this ongoing abuse, Morningstar resigned from her position.

Morningstar sued Hilton for constructive dismissal, breaches of the OHSA and ESA, the tort of harassment and for a poisoned work environment.  She also sought aggravated, moral, and punitive damages.  Morningstar alleged that she had been forced her to resign because of her co-workers’ harassment which was supported and reinforced by Hilton.

Hilton applied to the WSIAT to bar Morningstar from bringing her civil claims against it. The vice chair who heard the application held that Morningstar’s Constructive dismissal claim involved the type of exceptional circumstances which would bar her from proceeding with the claim. In particular, the vice chair found that her claim for constructive dismissal, as well as her other claims, derived from her injury and was so inextricably linked to the injury that section 31 of the Workplace Safety and Insurance Act (the “Act”) barred her from bringing her civil claim. The WSIAT upheld this decision upon appellate review.

Section 31 of the Act bars employees from bringing tort-like actions where the cause of action appears to be a disguised WSIB action. But WSIAT decisions have consistently recognized that wrongful dismissal and constructive dismissal actions involve employment and contract law, not tort law, and should not be subject to the same restrictions. Further, the types of damages awarded in wrongful or constructive dismissal actions are unavailable to parties under the Act.

Morningstar brought an application before the Divisional Court to overturn the WSIAT decisions. The Divisional Court disagreed with the findings of the WSAIT and found that the constructive dismissal claim was not inextricably linked to the injury. The court said that, while employees cannot bring tort-like claims for harassment (as that is covered by the Act), constructive dismissal and wrongful dismissal claims are not the types of tort-like claims which are excluded by section 31 and thus are not barred. The court suggested that the WSIAT’s reasoning would encourage employers to make unwanted employees so miserable in the workplace that they would suffer chronic stress and be driven to resign with no fear of legal reprisal, rather than just terminating the employee. The court found this to be a non-desirable result.

After an in-depth review of all the applicable factors, the court overturned the WSIAT’s decision and permitted Morningstar to proceed with her claim against Hilton in the Superior Court for aggravated, moral and punitive damages as well as constructive dismissal.

Employers should be aware of this decision and the fact that they cannot avoid potential wrongful or constructive dismissal claims just by virtue of an employee proceeding with the WSIAT. Conversely, employees should be aware that they may still have a right to bring a wrongful or constructive dismissal action, even if they have started WSIAT proceedings.