Employees who are wrongfully dismissed may be entitled to damages for mental distress if they can show that the manner of dismissal caused them mental distress that was in the contemplation of the parties. Such damages may arise where the employer attacks the employee’s reputation, misrepresents the reason for the dismissal, or terminates the employee to deprive them of a particular right, such as a pension benefit or permanent status.[1]

To prove a claim for mental distress, courts have typically required employees to show that they suffered a diagnosed psychological condition as a result of the employer’s conduct. This focus on a medical diagnosis has prevented claims from employees who have no diagnosis, but have nevertheless suffered serious mental distress.

            Diagnosis is not necessary

The Supreme Court of Canada recently addressed a similar issue in Saadati v. Moorhead, 2017 SCC 28 (CanLII)[2]. In its unanimous decision released on June 2, 2017, the Court found that a person claiming damages for a mental injury does not need to prove they have a medically recognized psychiatric or psychological injury.

The plaintiff was the victim of a series of motor vehicle accidents leading to chronic pain. The trial judge found that the plaintiff suffered mental injuries as a result, including a changed personality and cognitive difficulties. He was therefore entitled to damages.

The plaintiff did not provide expert evidence to show that he suffered a diagnosed psychological condition. Instead, he relied upon the testimony of his friends and family to show that after the accident he had become irritable and developed slowed speech, and his personal relationships deteriorated as a result.

The trial judge found that this evidence was sufficient to prove a mental injury.

In upholding the trial judge’s finding, the Supreme Court said that the law is meant to treat mental and physical injuries equally. Someone claiming a physical injury does not need to show that the injury fits within a particular classification or label. The law should not impose a higher burden in the case of a mental injury.

The Court affirmed the importance of protecting mental health, remarking that injury to our mental health can be a more fundamental violation of our sense of self than a physical injury.

The Court also said that the law should not be tied to whether modern psychiatry happens to recognize a particular diagnosis, since this can change over time.

            Proving Mental Injury

The Supreme Court found in Saadati v. Moorhead  that the claimant must still demonstrate a sufficient degree of mental disturbance. Ordinary psychological upset alone is not enough. To reach this threshold, a claimant must show that:

  1. The mental disturbance is serious and prolonged, and
  1. The mental disturbance rises above the ordinary annoyances, anxieties and fears that come with living in civil society.

Although it is not required, expert evidence can still be helpful in establishing a claim. If there is no psychiatric diagnosis, however, the decision-maker can still find that there is a mental injury based on the evidence.

            Employment Law

 This case has significant implications for employment law. Although Saadati v. Moorhead is a negligence case, it is unlikely the courts or labour arbitrators will apply a different, more onerous test in cases of mental distress.

When an employee claims damages for mental distress, the judge or labour arbitrator should adopt the Court’s approach. They should not be concerned with a diagnosis. Instead, they should focus on the claimant’s symptoms and their effects, and the level of harm that the symptoms represent.

This approach would allow employees without a diagnosed, psychological condition to be compensated for their mental distress.

For more information about damages and mental distress, please contact Jillian Houlihan.



#WorkLawWednesday: every second Wednesday Pink Larkin answers general questions about employment and human rights law. This is not intended to be legal advice and should not be relied on as legal advice.



[1] Honda Canada Inc. v. Keays, [2008] 2 SCR 362, 2008 SCC 39 (CanLII)

[2] Saadati v. Moorhead, 2017 SCC 28 (CanLII): The full text of the case is available here.