EMPLOYERS CANNOT MAKE AN EMPLOYEE SIGN A WAIVER OF LIABILITY FOR WORKPLACE INJURY - THEY CAN STILL SUE

HARD LABOUR

[BY WARDS PC LAWYERS]

Workers’ comp’ is governed in Ontario by the Workplace Safety and Insurance Act, 1997, SO 1997, c. 16 and its regulations (the “Act”).

Employers Required to Register (Covered by the Act):

The Act contains lists of types of industries; namely, Schedule 1 and Schedule 2.  A worker employed in an industry or business listed in Schedule 1 or Schedule 2 of the Act is covered by the Act and the employer must be registered.

Schedule 1 Industries include (but are not limited to): mining and related industries; manufacturing; transportation and storage; retail and wholesale trades and construction. Different types of service-related industries are also covered by the Act, including temporary agencies, hospitality and full-time domestic workers.  

Schedule 2 Industries include (but are not limited to):  provincial governments; railways and telephone companies licensed by the federal government.  Although municipal governments are listed in Schedule 2, many have opted to become Schedule 1 employers. 

Some employers can make an application to the Workplace Safety and Insurance Board (the “WSIB”), the governing body administering the Act, to be considered a covered industry. The WSIB is effectively an independent trust agency that administers compensation and no-fault insurance for Ontario workplaces. The WSIB provides wage loss benefits, medical coverage and assistance for workers to return to the workplace.

“By application” industries include (but are not limited to):  financial institutions; health care practitioner practices; trade unions; private day cares and travel agencies, for example. 

Employers that are uncertain if they are covered by the Act should review the complete list of Schedules in Ontario Regulation 175/98 of the Act. They could also contact the WSIB for this information.

Most Ontario employers that employ workers (including family members and sub-contractors) must register with the WSIB within ten (10) days of hiring a full-or part-time worker. Registering with the WSIB provides workplace insurance coverage for those workers, including access to healthcare practitioners.

Employers Not Required to Register (Not Covered by the Act):

There are a few industries that do not have to register. Some employers considered not to be a “covered business or industry” include (but this is not an exhaustive list):

  • Banks, trusts and insurance companies
  • Computer software developers
  • Private health care practices (such as those of doctors and chiropractors)
  • Trade unions
  • Private day cares
  • Travel agencies
  • Clubs (such as health clubs)
  • Photographers
  • Barbers, hair salons, and shoe-shine stands
  • Taxidermists
  • Funeral directing and embalming

Generally, the Act specifically does not cover certain workers. These include: 

  • persons employed casually by an employer to do work other than for the purposes of the employer’s industry (for example, if you are hired on a very irregular basis to mow the lawn of a company). 
  • outworkers, or a person to whom work is given to be done in their own home or on other premises not under the control of the person who gave out the work. 

The Construction Industry:  

Employees of construction related firms are covered by the Act and can claim benefits and services from the WSIB if they meet the definition of a “worker” in the Act.  

As of January 1, 2013, these four categories of people who work in the construction industry are also considered “workers” under the Act: 

  • independent operators
  • sole proprietors
  • partners in partnerships
  • executive officers in corporations 

These people are “deemed workers” and, therefore, are entitled to claim benefits from the WSIB if they get injured at work. They are also “deemed employers,” even if they do not hire another worker. This means they must register under the Act unless they fall within a few, limited exemptions.

Even if an employer is not required to register, the employer can apply to obtain this insurance for its workers through the WSIB.

Employers Not Required to Register – You Cannot Make an Employee Release His or Her Rights to Sue You About an Injury in the Workplace:

So, if an employer is not required to register and does not voluntarily do so, can the employer make the employee sign a release of liability if the employee is injured in the workplace?

No – it is contrary to public policy in Ontario. In fact, employees cannot contract out of their protections under the Act, either, or be requested by employers to do so.

The case:

Fleming v. Massey, a January, 2016 decision of Ontario’s Court of Appeal.

This case means that employees, who are employed by businesses that are not required to register under the Act, may sue the employer when the employee is injured in a workplace event, even if the employee may have signed a waiver of liability to the employer previously.

Therefore, excluded employers who have employees sign a release or waiver for personal injury liability for, for example, corporate events or outings may not actually be protected from a claim if the employee is injured.

Effectively, the case determines that Ontario’s public policy for the Act does not allow an employee to ‘contract out’ of the legal protections available to that employee. Here, at the employer’s request, the employee had signed a waiver of liability releasing the employer from liability for damages sustained by the employee in the course of the employment. The employee initially sued the employer based on accident injuring the employee on a go-cart track. The employer successfully relied on the waiver at the trial level to have the claim summarily dismissed. The employee appealed, arguing that he was an employee under the Act and that the waiver should not be effective because it is contrary to the underlying principles and intent of the Act.

The issue raised for the Court was if the employee could legally “contract out” of his right and ability to sue the employer under Part X of the Act and, therefore, if the employee had (inadvertently) voluntarily assumed the risk of injury in his workplace. The Court of Appeal did not support the waiver signed by the employee and, in doing so, clearly affirmed that the Act constitutes a “categorical rejection” of the notion that employees voluntarily assume workplace risks. 

The Court of Appeal held the employee was an uninsured employee under the Act, including because the WSIB categorizes go-kart tracks as “non-covered”.  To be insured under the Act, the event or facility must voluntarily apply for coverage under the Act and for that coverage to be approved by the WSIB, which the employer in this case had not done. As a result, Part X of the Act, which applies to employees working in industries not required to be registered under the Act and, in particular, sub-section 114(1) of Part X applied, which gives uninsured workers the right to sue employers in certain circumstances.  That section reads:  

“A worker may bring an action for damages against his or her employer for an injury that occurs in any of the following circumstances:

  1. The worker is injured by reason of a defect in the condition or arrangement of the ways, works, machinery, plant, buildings or premises used in the employer’s business or connected with or intended for that business.
  2. The worker is injured by reason of the employer’s negligence.
  3. The worker is injured by reason of the negligence of a person in the employer’s service who is acting within the scope of his or her employment.”  

The employee successfully argued that he had a statutory right under the Act to sue his employer.

Once that was settled by the Court, it had to decide if the employee had “contracted out” of that right by signing the waiver given to him by the employer. After reviewing the historical law in this area, the Court of Appeal, largely based on a public policy perspective, ultimately changed the law and held that the Act was designed and intended to assure compensation to employees injured in the workplace, regardless of fault. In exchange for this coverage, employees gave up the ability to sue their employer for workplace injury. For those limited number of employees not employed by an employer covered by the Act, the Act gives them a statutory right to sue their employer for workplace injuries, which is embodied in Part X of the Act currently.  

Therefore, uninsured employees are not permitted to contract out of their protections under the Act any waiver to the contrary will not be effective.

Because of this case, employers should reconsider their use of waiver of liability by employees for workplace injury and also consider voluntarily applying for insurance under the Act, if they are not already required to be registered. This would prevent lawsuits from employees for workplace injury and cause any such injuries to be dealt with solely under the Act.   

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Jason Ward – WARDS PC LAWYERS

This WARDSPC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

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This WARDS LAWYERS PC blog is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca | www.wardlegal.ca