The British Columbia government has introduced legislation to modify the WorkSafe BC approach to mental stress, and to compensate for bullying and harassment in the workplace.
The proposed amendment to the Workers Compensation Act (British Columbia) is significant and will result in new types of claims for compensation under the Act. It is hard to predict the full impact, but it is likely to be in the tens of millions of dollars per year.
The important change is in the test for determining whether the mental disorder is compensable. Under the current law, workers can only claim for “an acute reaction to a sudden and unexpected traumatic event”.
Under the new law, that is changed to “a reaction to one or more traumatic events” or “predominantly caused by a significant work-related stressor, including bullying or harassment, or a cumulative series of significant work-related stressors”.
Both the current and new law are about injuries in the course of employment and require a diagnosis under the Diagnostic and Statistical Manual of Mental Disorders. Most importantly, the Act will still exclude from compensation problems caused by changes to working conditions, discipline or termination.
Nevertheless, the types of workplace incidents and issues that can lead to mental stress claims is intentionally broadened and we can expect to see more claims of bullying and harassment going to WorkSafe BC. Some of these new claims might have been covered by private disability benefits plans, and to that extent there will be a savings for insurers and the employer buyers of those plans. But there is bound to be a significant incremental cost to WorkSafe BC, which ultimately falls on all employers in the province.
Also, to the extent claims will be made to WorkSafe BC instead of to an insurer (or not at all), employers will face a larger cost and administrative burden to respond.
The Bill had second reading on May 3, 2012, and could be passed soon. We will watch the impact with interest.