Assessment Of Damages In Psychological Harassment Cases: Overview Of Recent Trends

In recent years, Quebec’s legislative framework regarding psychological harassment in the workplace has undergone significant changes. However, it is truly through recent decisions that the contours of the applicable law have become clearer. These decisions provide concrete insight not only into the types of damages awarded, but also into how the Administrative Labour Tribunal (hereinafter the “Tribunal”) exercises its discretion, particularly when assessing whether to grant punitive damages in light of measures taken, or not taken, by the employer.

Broad but Structured Discretion

As a reminder, section 123.15 of the Act respecting Labour Standards (hereinafter the “ALS”) grants the Tribunal particularly broad powers of intervention when a psychological harassment complaint is upheld. Although this provision lists several possible remedies, such as reinstatement, compensation for lost wages, moral and punitive damages, funding for psychological support, etc., this list is not exhaustive. The Tribunal may issue any order it considers fair and reasonable, based on all the circumstances established in evidence.

The awarding of moral damages is based primarily on a factual analysis. Among the criteria considered by the Tribunal are:

• the duration and frequency of the harassment;
• the intensity and severity of the conduct;
• the hierarchical status of the perpetrator;
• the impact on psychological health;
• the effects on the victim’s personal and professional life.

These factors reflect a central idea: moral injury is not presumed. It must be demonstrated through its concrete effects. This approach is part of a broader principle that every person has the right to the safeguard of their dignity, psychological integrity, and reputation. The ALS provisions on harassment give effect to these fundamental rights in the workplace context.

Punitive Damages: A Tool for Prevention, Not Compensation

It is in the area of punitive damages that the analysis becomes particularly relevant for employers. Unlike in some other legal frameworks, the Tribunal emphasizes that, in cases of psychological harassment, it is not necessary to prove an unlawful and intentional violation on the part of the employer in order to award such damages.

Their purpose is not to compensate the victim, but rather to denounce, deter, and prevent wrongful conduct. That said, such damages must remain proportionate and must not exceed what is necessary to achieve this preventive objective.

A first decision, Adade v. Plastic Bank Recycling Corporation¹, clearly illustrates the limits of awarding punitive damages in cases of psychological harassment in the workplace. In that case, the complainant sought $25,000 in punitive damages, alleging the existence of an organizational culture of harassment. However, the Tribunal concluded that the evidence did not support such a claim.

While the employer did not have a formal policy specifically addressing harassment, the evidence showed that a code of conduct was in place and that it clearly prohibited workplace harassment. In addition, no other similar incidents had been established within the organization, and the employer had not been informed of the alleged conduct in this particular case. In this context, the Tribunal found it difficult to fault the employer for inaction or institutional tolerance and therefore declined to award punitive damages.

In comparison, the decision in Mahfoud v. 9063-3090 Québec Inc.², highlights the circumstances that may justify a more significant award. In that case, the complainant sought $18,000 in punitive damages. The evidence revealed that several actions by the company’s management were explicitly intended to humiliate him. Moreover, the complainant had reported the situation on multiple occasions, without any intervention from the employer.

The Tribunal emphasized three (3) key factors: the deliberately humiliating nature of the conduct, its repetition over time, and the employer’s awareness of its impact. Despite the company’s small size, the Tribunal concluded that an award of $18,000 in punitive damages, in addition to $9,000 in moral damages, was necessary to ensure a real deterrent effect.

Key Takeaways for Employers

In conclusion, these decisions confirm that an employer’s responsibility does not rest solely on the existence of internal policies, but on their effective day-to-day implementation. It is not enough to merely adopt such policies; they must also be known, understood, and actively enforced.

The case law also makes clear that inaction, a lack of follow-up, or delayed intervention may, depending on the circumstances, expose an employer to significant consequences, particularly in the form of punitive damages. Conversely, an employer that acts diligently, even in the absence of a perfectly structured policy, will generally be in a stronger position to demonstrate that it has fulfilled its obligations.

Footnotes

1. 2026 QCTAT 700.

2. 2025 QCTAT 978.

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