By Kelly VanBuskirk
Every once in a while, a Canadian employment law case causes employers to rethink their management practices.
The May 2014 decision of the Ontario Court of Appeal in Boucher v. Wal-Mart Canada Corp. slashing a million-dollar employment damages award made against Wal-Mart and one of its managers to a still eye-popping $410,000, is a recent example.
Undoubtedly, the appellate decision to reduce the award of damages in Boucher has induced a sigh of relief for some employers, but the legal principles at the heart of the decision should renew employer concerns regarding the importance of fair and psychologically safe management practices in Canadian workplaces.
Employers who study the implications of the decision will identify the value of the liability risk reduction strategies available in the Canadian Standards Association CAN/CSA-Z1003-13/BNQ 9700-803/2013 (the Standard), a national standard for psychological health and safety in the workplace. Although compliance with the Standard is currently voluntary, the document seeks to address legitimate concerns regarding Canada’s bulging mental disability crisis and, in doing so, also provides business owners and managers with a step-by-step guide to creating healthier workplaces and potentially reducing the mental health-related liability risks highlighted in the Boucher case.
Why is a standardized approach to workplace psychological health and safety important?
The Standard has been established, in part, as a response to the ballooning $50-billion annual business losses attributed to workplace mental health problems in Canada. Even in the absence of the Boucher ruling, the Mental Health Commission of Canada’s statistical rationale for urging employers to implement the Standard is compelling:
• More than 500,000 Canadians do not attend work in any given week due to mental illness
• More than 30 per cent of disability claims and 70 per cent of disability costs are attributed to mental illness
• Approximately over $50 billion is lost to the Canadian economy because of mental illness annually
The workplace mental health crisis is not solely a Canadian phenomenon. In the United States, the findings of a 2004 study conducted by the National Institute for Occupational Safety and Health (NIOSH) suggests that the number of lost work days for workers challenged by anxiety, stress and neurotic disorders is four times greater (25 days) than the number of work days lost for all other non-fatal injuries or illnesses (an average of six days).
The United Kingdom Mental Health Foundation asserts that, due to rising absenteeism and impaired productivity, mental health issues now cost British employers more than £26 billion per year. This data was collected in response to a 2012 IDEA survey, which suggests that British workers are the most depressed in Europe.
The conclusion to be taken from this data is that, even without consideration of Boucher v. Wal-Mart-inspired employer liability risks, the economic cost of mental disabilities to employers is a compelling motive for managers’ proactivity. In Canada, the CSA Standard is one of several responses to the expanding workplace mental health crisis in Canada, and should be of interest to employers as a cost reduction and employee wellness framework.
Additionally, and in light of the Boucher case, Canadian employers should also consider implementing the Standard as a liability risk management initiative.
Interactional justice as an employer liability risk
The Boucher decision is interestingly distinguishable from most other dismissal cases because it did not have to account for reasonable notice damages. Perhaps recognizing its risks in the case, Wal-Mart had already paid Ms. Boucher 32 weeks of notice compensation, which amounted to 160 per cent of her 20-week contractual entitlement. For the many employers and lawyers who believe that employees only sue for money, Ms. Boucher’s decision to pursue her legal claim in spite of having been overpaid on her contractual notice entitlement ought to underline the impact of perceived interactional injustices in employee claims decisions.
According to previous research, the manner in which employees assess the fairness of their employment relationships and their workplaces is significantly influenced by interactional justice assessments, such as their perceived fairness (versus the legality) of the treatment they receive from their employers. In Boucher, it appears that the plaintiff’s perception of unfair treatment perpetrated by her workplace supervisor, as well as Wal-Mart’s role in that misconduct, caused her to initiate the legal claim that resulted in her $410,000 award.
How the CSA Standard and interactional justice are related, and why that matters
Components of the Standard are fundamentally related to the provision of interactional justice, which in turn influences employee legal claims decisions. As a result, employers who implement the Standard will improve their provision of interactional justice and, consequently, should reduce their risk of facing circumstances like those that led to a $410,000 award in Boucher v. Wal-Mart. While the entirety of the Standard promotes employee welfare, organizational savings and liability reductions, implementation of the following six factors would have been particularly helpful to Wal-Mart in the Boucher case:
• Employers should actively demonstrate support for employees’ psychological wellbeing by taking concrete steps, such as engagement of employees in conversations about psychological wellness, in order to earlier identify and understand employee needs.
• Employers should foster a workplace culture that places a high value on fairness, caring, honesty and trust.
• Employees should be afforded clarity with respect to their core functions, their contributions to the organization, the expectations of them and how their work will be measured.
• Employers should establish strong requirements of civility and mutual respect amongst all staff, management and customers.
• Employers should provide employees with authentic and meaningful feedback for the purpose of supporting their personal and professional development.
• Employers are encouraged to create workplace environments where employees feel confident and safe to ask questions and to report mistakes without fearing that they will be judged negatively or will be inviting negative impacts on their careers.
Conclusion
The Boucher v. Wal-Mart decision underscores serious liability risks faced by Canadian employers. While many employers will likely do nothing in response to the potential costs illuminated by the case, prudent companies and organizations should consider implementing policies contemplated under the CSA Standard for Psychological Health and Safety in the Workplace.
The relatively simple concepts outlined in the Standard not only foster liability risk reduction but also healthier workforces and operational cost savings.
Kelly VanBuskirk is a partner at Lawson Creamer Lawyers in New Brunswick.