Mind the Gap: Nova Scotia Expands WCB Coverage to Chronic Workplace Stress

Workplace stress is nothing new—but the legal landscape is evolving to reflect its serious, long-term impacts.

As of September 1, 2024, Nova Scotia’s Workers’ Compensation Act (WCA) recognizes gradual onset psychological injuries, marking a major development for workers experiencing chronic stress tied to their employment. Historically, compensation was only available for mental injuries stemming from sudden, traumatic workplace incidents. Under the new regime, workers may qualify for compensation even where mental harm develops over time, so long as it results from identifiable, significant work-related stressors.

This update mirrors legal and policy developments across Canada. However, key exclusions remain. Understanding the threshold for eligibility is critical for workers, unions, and employers alike.

Who Qualifies? Understanding the Criteria for Gradual Onset Stress Claims

In support of the legislative amendment, the Workers Compensation Board (WCB) released the WCB Nova Scotia Psychological Injury Policy. This policy outlines the requirements for a successful gradual onset stress claim:

• A DSM-5 diagnosis of a mental disorder from a qualified psychiatrist or psychologist;
• Clear evidence that the injury arose in the course of employment;
• A showing that the predominant cause of the mental disorder was work-related stressors;
• The presence of objectively identifiable workplace events or circumstances which caused the mental stress. A WCB case manager will need to be able to identify these causes.
  

These elements ensure claims are grounded in both clinical diagnosis and workplace realities, drawing a clear line between general job stress and compensable injury.

High Stress ≠ Compensable Injury: Why Causation Matters

Merely feeling stressed at work isn’t enough to trigger WCB coverage. The nature and source of the stress matter. The workplace stressor(s) must be clearly identifiable and traumatic due to intensity or duration.

As specified in the policy, claims are more likely to succeed where the worker:

• Witnessed or experienced a traumatic workplace event (e.g., serious injury, violence, death);
• Was subject to ongoing harassment or bullying, particularly when substantiated through documentation or third-party evidence.
  

The WCB’s approach emphasizes objective workplace-created harm, rather than the worker’s subjective experience of stress. The aim is to ensure consistency, fairness, and a clear standard of proof.

What the Act Does Not Cover

Section 10J(2) of the WCA outlines specific exclusions, clarifying what types of workplace stress do not qualify for compensation:

• Normal workplace friction: Interpersonal conflicts that fall short of harassment or bullying ;
• Reasonable management actions: a decision or action of the worker’s employer relating to the worker’s employment—including discipline, terminations or changes in job duties, even if stressful.
  

These carve-outs limit liability for employers making necessary operational decisions, while also setting a clear evidentiary bar for workers.

Insights from Other Provinces: British Columbia and Ontario

Pickering v WCB, 2025 BCSC 376

A recent decision from the British Columbia Supreme Court highlights how exclusions for management decisions may be challenged in court. The province’s WCB Act maintains similar requirements to Nova Scotia for mental disorder claims, including predominant causation by a significant work-related stressor and exclusion for mental disorders caused by a decision of the employer relating to the worker’s employment (the “labour relations exclusion”).

In Pickering, the WCB had denied a claim for psychological injury arising from persistent harassment and management’s failure to effectively intervene, citing the labour relations exclusion. The claimant brought a constitutional challenge against the WCB, alleging that the labour relations exclusion constituted discrimination against people with mental disabilities under section 15 of the Canadian Charter of Rights and Freedoms. The Court agreed, finding that the exclusion was arbitrary and should be limited to management actions taken in good faith. The plaintiff’s claim was remitted to the WCAT or WCB for a re-determination based on the read-down version of the labour relations exclusion. Notably, the plaintiff also brought a claim alleging that the predominant cause standard was discriminatory. However, the Court found that this standard was justified based on the complex and multi-factorial nature of mental disorders.

This case signals that courts may scrutinize employer conduct beyond the surface of managerial decisions. If management decisions are a pretext for harassment, or where employers fail to protect workers, exclusions may not apply.

Morningstar v WSIAT

In Morningstar v WSIAT, 2021 ONSC 5576, Ontario’s Divisional Court ruled that a worker could pursue a civil lawsuit for constructive dismissal and damages for mental distress, despite overlapping WCB coverage.

The Court held:

• Workers’ compensation legislation does not bar all civil claims, particularly in cases of constructive dismissal or mental distress caused by breach of contract.
• There is a legal distinction between statutory benefits (e.g. workers compensation coverage) and common law entitlements (e.g. damages for constructive dismissal).
  

In Nova Scotia, the workers compensation regime does not necessarily preclude wrongful dismissal or constructive dismissal claims, especially where the employer failed to prevent psychological harm. Workers may need to evaluate multiple legal avenues when pursuing mental injury claims.

A Parallel Legislative Development: Psychological Health and Safety Now Part of OHS  Law

In parallel with the WCA amendments, Nova Scotia passed Bill 464, amending the Occupational Health and Safety Act, SNS 1996, c 7 to explicitly recognize psychological health and safety as part of an employer’s statutory duties.

Pursuant to this amendment, employers have an obligation to protect workers from psychological harm, in addition to physical hazards. For employees, this means that hazards such as harassment, bullying, and toxic workplace environments are now recognized as occupational health and safety (OHS) concerns. Workers may raise OHS complaints related to psychological risks, and these can be subject to investigation and enforcement.

Further, effective September 1, 2025, all employers will be required to develop and implement a harassment prevention policy. The OHS Act itself does not prescribe the specific contents of these policies; instead, the details will be set out in future regulations. This represents a significant expansion from the current regime, where only certain employers—such as those subject to the Violence in the Workplace Regulations—must maintain harassment-related protocols.

Final Thoughts: A New Era for Workplace Mental Health

Nova Scotia’s recognition of gradual onset stress as a compensable injury reflects an important legal and cultural shift. Together with Bill 464, it marks the province’s move toward treating psychological safety as a fundamental workplace right. However, the law still draws important boundaries between stress and injury, and between lawful management conduct and bad faith employer actions. Workers, unions, and employers should remain vigilant about how these rules are applied and tested in practice. For legal advice on mental injury claims, workplace investigations, or occupational health obligations, our team is here to help.

If you have questions about how these changes affect your rights or need help pursuing a psychological injury claim, our firm can help. We advise employees across all sectors and are closely following how these new laws will be interpreted in Nova Scotia.