Workers’ comp is not a get-out-of-jail-free card for employers to ignore toxic work environments

A handful of bad actors in Ontario behave like the workers’ compensation system is there as a shield to protect their company. They act like the “historic tradeoff” — that saw workers give up the right to sue their employers for injuries on the job in exchange for compensation through the Workplace Safety and Insurance Board (WSIB) — is designed to let them step back and shrug off the deeper responsibilities of maintaining a respectful, safe environment, and get on with business as usual.

But a recent arbitration ruling shows that the shield is far thinner than some believed. When it comes to workplace harassment and a poisoned environment — issues that don’t fit neatly under the WSIB’s mandate — an employer can’t just claim, “We’ve paid our dues” and expect to walk away. It’s a reminder that safeguarding employee well-being is more than a one-time transaction. It’s an ongoing obligation.

OPSEU versus the Ministry of the Solicitor General

The decision came from an arbitrator at Ontario’s Grievance Settlement Board (GSB), Daniel A. Harris. The case involved the Ontario Public Service Employees Union (OPSEU) acting for a worker, identified here as R.P., against the Ministry of the Solicitor General.

R.P. had been injured on the job and was approved for WSIB benefits for specific incidents of violence and trauma. But after those recognized incidents, something else took root in the workplace: ongoing harassment and a poisoned environment. The union argued that the worker suffered from management’s failure to prevent or address a toxic atmosphere long after the initial injuries had been covered by WSIB.

The employer tried to argue that once WSIB was involved — once some part of the injury was recognized as work-related — no other forum had the right to award damages. If you read the employer’s position plainly, it suggests that once workers receive any compensation, their other rights are essentially walled off. They can’t pursue further remedies, even if management neglects its duty of care and fails to stop continuing harassment.

Ongoing harassment

Arbitrator Harris didn’t accept that view. Instead, he drew a line between the initial, specific traumatic events that led to WSIB coverage and the ongoing harassment that followed. The former clearly fell under WSIB’s scope. The latter, however, did not. WSIB is meant to cover injuries or illnesses arising directly from the work environment — think accidents and traumatic incidents — but it does not cover mental stress that stems from management decisions, inaction, or misconduct that falls outside that core definition.

Section 13(5) of Ontario’s Workplace Safety and Insurance Act makes that exclusion plain. It’s not a new clause; it’s just been too easily ignored or misunderstood.

By confirming that the GSB has jurisdiction to award monetary damages for harassment and related harms that don’t fit under WSIB coverage, the ruling challenges the old assumption that employers are always protected. It says, in effect, that employers can’t just sit back and let a bad situation fester, believing that because an initial injury was compensated, their obligations have ended. As the arbitrator noted, the WSIB “specifically excludes” mental stress caused by “decisions or actions of the worker’s employer relating to the worker’s employment.”

Closing a loophole

This case caught our attention at HR Law Canada because it closes what I consider to be a dangerous loophole. Without this ruling, there would almost be an incentive for some employers to turn a blind eye to harassment, bullying, or a poisoned workplace environment. If all such claims were swept under WSIB’s umbrella, the employer might see no need to clean up the mess. After all, if there’s no additional penalty, why bother?

But in this ruling, the message is clear: if management fails to keep the workplace free from harassment and violence — even if the initial injuries were compensated by WSIB — the door isn’t closed. Damages can still be pursued under the collective agreement or other forums. This ensures there’s accountability beyond the limited realm and scope of workers’ compensation schemes.

The arbitrator’s decision is supported by past cases and a careful reading of the law. It references previous rulings where boards had to figure out where WSIB’s exclusive jurisdiction ends. In those earlier cases, the principle emerged that while WSIB bars “parallel recovery” for genuine workplace accidents, it doesn’t extend to preventing employees from seeking damages for breaches of their contract that lie outside WSIB’s reach.

Simply put, if the injury or harm isn’t something the WSIB is set up to handle, the employee should still have a chance to seek redress elsewhere.

This perspective makes sense. If we didn’t allow that avenue, what would stop a poor employer from exploiting the system? Imagine a scenario: a worker is injured and gets WSIB coverage. Then, because the employer knows that any harassment claims might also get tangled up in that coverage, they decide not to fix the toxic environment.

They might figure, “Let the system take care of it. We’re off the hook.” That’s exactly what this ruling is designed to discourage and prevent.

Drawing a line

To emphasize the point, the arbitrator mentioned that the WSIB had not granted entitlement for the ongoing harassment and bullying in R.P.’s case. Instead, WSIB drew a line — one that excludes stress caused by employer decisions. That left room for the GSB to step in. If they didn’t, the result would be a gap large enough to swallow any real protection for workers’ mental health and dignity on the job.

Remember: The “historic trade-off” was not intended to give employers a free pass on all forms of workplace harm. The idea behind WSIB coverage was to speed compensation for injuries without needing to go through lengthy lawsuits and to protect employers from what could be extremely expensive awards.

It was never meant to say that employers can ignore their duty to maintain a respectful, safe environment. If conditions deteriorate and management stands idle, the worker shouldn’t be forced into silence just because they once received a cheque from the WSIB for a prior incident.

Restoring a balance

What this ruling does is restore balance. It reminds everyone — unions, employers, and employees — that the fundamental duty of employers is to ensure fairness and safety at work. That duty doesn’t evaporate just because a payment went out or a claim was accepted. Harassment, bullying, and the poisoning of a workplace culture are not “just part of the job.” They are separate problems, and they can and should lead to separate remedies.

This decision proves that adjudicators and decision-makers — and the law itself — is willing to see beyond tidy categories. Workplace harm doesn’t always come neatly packaged as a single event. Sometimes it lingers, shaped by choices and failures in the weeks, months, and years that follow.

By affirming the right to seek damages in such cases, the ruling ensures that employees aren’t left with empty promises. It tells employers that respecting the workforce is not optional — and that old trade-off was never a blank check to do otherwise.

This article originally appeared in HR News Canada.