Are you causing your staff mental injury?

Then get ready for a big, fat lawsuit, as claims and awards for psychological damage at work soar.

Have you yelled at your EA today? Demanded somebody do in two days what would normally take a week? Told Jack in sales he’s a blundering nincompoop who couldn’t sell an ice-cold Coke to a castaway?

The old drill-sergeant approach to managing subordinates isn’t just out of fashion these days; it’s a legal liability. According to a report published last fall by the Mental Health Commission of Canada, awards for damages caused by “mental injury” in the workplace have soared 700% over the past five years.

That’s right: your employees can sue you for stressing them out — and win. To put it another way, bosses are no longer just responsible for their workers’ physical safety on the job, but their psychological safety as well. And you may be part of the problem.

For the time being, many companies and their old-school supervisors should count themselves lucky that most employees don’t know their rights on this front, or how courts and tribunals have been interpreting them of late. The kind of working conditions that lead into this legal danger zone include not just “egregious acts of harassment and bullying” but also chronic stress, excessive demands by managers, and unpaid overtime, wrote the report’s author, Dr. Martin Shain of the University of Toronto.

“It appears that, although there are limits to the duty to provide a psychologically safe workplace, the law is reaching further and further into the control rooms of both private and public organizations, large and small,” Shain concludes. “This reach extends into management of the employment relationship while it is still intact, rather than just at the point of its dissolution.”

However, the latest case law — including an appeal of a suit against Bell Mobility cited in Shain’s report — shows some push-back against this intrusion into workplace behaviour, notes Rob Sider, a labour lawyer with Lawson Lundell LLP in Vancouver. In 2008, the Ontario Superior Court ordered Bell to pay $500,924 in damages to an ex-employee in Ottawa whose former boss repeatedly yelled and swore at her, told her she didn’t know what she was doing and denied her the opportunity to explain. She finally quit in 2005 when he additionally pushed her in the shoulder (without causing physical injury) and told her he would put her on probation. She was later diagnosed with post-traumatic stress disorder.

The ruling was partly reversed last May by the Ontario Court of Appeal, which threw out the liability for negligent infliction of mental distress. The employer’s actions have to be deliberate for the charge to stick — that is, the harsh boss had to want to cause the subordinate a mental breakdown, not just be a jerk.

“The landscape there has changed” because of that ruling, Sider says. In addition, courts (though not human-rights tribunals) are raising the burden of proof for mental injury, which will likely limit the number of claims.

Nonetheless, says Sider, the emergence of mental injury claims makes it tricky, especially for small businesses, to, for example, assess the rising number of requests for stress leave. Small firms often have no set limit on sick days and no insurance for long- and short-term disability, so they resist a request for paid time off they deem dubious, or to guarantee leave-takers their jobs back after an extended absence. “The issue becomes: is the stress just an aversion to work, or is it a symptom of an underlying medical condition that must be accommodated?” Sider says.

Observing anti-harassment, anti-discrimination and anti-bullying policies increasingly enshrined in provincial employment standards will go a long way to minimize a company’s risk of being blamed for mental injury. But Sider adds that employers can further protect themselves by implementing a process whereby workers can take a grievance to somebody other than their immediate superior.

Of course, there are better reasons than the threat of litigation to maintain a mentally healthy workplace. North American statistics are hard to come by, but a recent Irish survey found that stress was the second-most-common cause of absenteeism (after back pain), which costs firms ???1,144 ($1,533) per employee per year. A 2003 estimate put the total cost of mental health issues to Canadian industry at $35 billion a year.

If you’re a hard-ass boss, though, you may respond more readily to the legal stick than to the carrot of undefined cost savings.