Canada: Ontario Court Of Appeal Determines That Employer Cannot Rely Upon An Employee's Waiver Of Risk Of Injury

The recent decision of Fleming v. Massey1 raises the very interesting question of whether an injured employee can waive his or her rights under Part X of the Workplace Safety and Insurance Act2 (WSIA). This is an important question with wide implications as similar provisions are in existence in workers' compensation legislation in New Brunswick3, Nova Scotia4 and Prince Edward Island5.

Background

In Fleming v. Massey the respondents held a go-kart racing event. During such events, a race director was required. The regular race director was unavailable and Mr. Fleming filled the role. Mr. Massey crashed the go-kart he was driving into some hay bales lining the track. Mr. Fleming was injured as a result of the crash. The Respondents argued that Mr. Fleming had signed a waiver releasing the Respondents from liability for all damages associated with participation in the go-kart event due to any cause, including negligence. The Motions Judge found that Mr. Fleming was not an employee but rather a volunteer who received a stipend, and that he had signed a waiver, that he knew generally what signing the waiver would mean and that the wording of the waiver was broad enough to cover all eventualities6. Mr. Fleming appealed arguing that the Motions Judge erred in finding that he understood the effect of the waiver when he signed it.

Mr. Fleming also contested the finding that he was not an employee. The fact that Mr. Fleming was a paid employee on the day of the go-kart event was admitted by the Respondents on appeal7. Further, the parties agreed that Mr. Fleming was not an insured worker under WSIA. The reason being was that go-kart tracks are classified as "non-covered" by the Workplace Safety and Insurance Board of Ontario. Workers at such facilities are not insured unless the employer has specifically applied for WSIA coverage. The respondent race track did not apply for WSIA coverage. The result was that Part X of WSIA applied and Mr. Fleming was permitted to sue the employer for damages he sustained in the workplace accident.

Part X of WSIA, like the equivalent provisions in New Brunswick, Nova Scotia and Prince Edward Island, stipulates that a worker may bring an action for damages against his or her employer where the injury occurs (1) by reason of a defect in the condition or arrangement of the ways, works, machinery, plant, building or premises used in the employer's business or connected with or intended for that business, (2) where the worker is injured by reason of the employer's negligence, or (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 Respondents asserted that the waiver signed by Mr. Fleming precluded his action for damages under Part X of WSIA.

Mr. Fleming argued that public policy prevents workers from contracting out of the protection afforded to them by Part X of WSIA and that by allowing Part X employers to require their employees to waive their right to seek compensation would frustrate the public policy goals of workers' compensation legislation. Mr. Fleming argued that the waiver that he signed should be declared void.

The Ontario Court of Appeal commented that the case involved an important question of public policy8 for determination.

The Court of Appeal conducted an extensive overview of workers' compensation legislation. In so doing, the Court of Appeal concluded that the legislation makes absolutely clear that the general scheme providing for no-fault loss of earnings benefits to workers completely displaces all common law rights of action that workers may have against their employer. Part X of WSIA is an exception to this general scheme. The application of Part X is to a small number of workers not employed in either Schedule 1 or Schedule 2 industries. Employers under Part X neither contribute to the insurance fund nor are they liable to pay compensation benefits. An important feature of Part X of WSIA is that the statute provides workers with certain statutory rights of action for damages that abrogate some of the common law doctrines that normally restricted a worker's right to recover9, including permitting the worker to sue the employer for the negligence of the employer, the worker's co-workers, the person for whom work is being done under a contract and any contractors and subcontractors, establishing that contributory negligence by the worker is not a bar to recovery, and eliminating the defence of voluntary assumption of the risk.

The Decision

After examining the legislative intent, the Court of Appeal held that it would be contrary to public policy to allow individuals to contract out of the provisions of WSIA. Thus the waiver signed by Mr. Fleming was found to be void and of no effect, with the result that his action for damages for the injuries he sustained in the go-kart crash could proceed.

In finding that it would be contrary to public policy to allow individuals to contract out of the provisions of WSIA, the Court of Appeal recognized that workers' compensation legislation, like human rights legislation, is enacted for the benefit of the community at large and designed to provide broad protection for workers10. The Court of Appeal opined that a reading of WSIA as a whole could not support an interpretation that the Legislature intended to permit the waiver of the statutory actions created by Part X11.

Lessons for Employers

Accidents with injuries to workers not covered under workers' compensation legislation are rare but they do happen.

In New Brunswick, Part I of the Workers' Compensation Act does not apply to:

  1. persons whose employment is of a casual nature and otherwise than for the purposes of the industry,
  2. persons who play sports as their main source of income,
  3. outworkers,
  4. members of the family of the employer residing with the employer who are under sixteen years of age,
  5. persons employed as domestic servants and
  6. industries excluded by regulation from the scope of Part I of the Act, which would include an industry that throughout the year of its operations has less than three workers at the same time usually employed and the fishery industry except for undertakings in which twenty-five or more workers are at the same time usually employed12.

Plaintiffs' counsel, defence counsel, insurers and insurance adjusters need to be aware of the applicable provisions of the workers' compensation legislation in their jurisdiction. The legislation alters traditional common law negligence principles and arguably gives an injured worker an advantage in the litigation by eliminating contributory negligence, voluntary assumption of risk defences, and permitting an expanded scope of potential parties to sue. Further, with the Fleming v. Massey decision, the Ontario Court of Appeal has confirmed that as a matter of public policy, parties cannot contract out of these provisions. Therefore, any waiver or release of liability that the parties might previously have negotiated will be void and of no effect.

All of the above suggests that if you are an employer that is otherwise excluded from the coverage afforded by the workers' compensation legislation in your jurisdiction, it might be worthwhile to consider applying for voluntary workers' compensation coverage. In New Brunswick, voluntary coverage is an option, albeit on such terms and conditions and for such period of time as WorkSafe NB may determine13. Voluntary coverage is also available in Nova Scotia14 and Prince Edward Island15.

Footnotes

1 2016 ONCA 70
2 1997, S.O. 1997, c. 16 Sched. A
3 Part II Sections 86 to 88 Workers' Compensation Act SNB c. W-13
4Part I Sections 221 to 223 Workers' Compensation Act SNS 1994-95 c. 10
5 Part II Sections 87 to 90 Workers' Compensation Act RSPEI 1988 c. W-7.1
6 Item 1 at para. 2
7 Ibid at para 6
8 Ibid at para. 11
9 Ibid at paras. 24 and 25
10 Ibid at para. 34
11 Ibid at para. 46
12 Subsection 2(3) and 6 of the Workers' Compensation Act and subsections 3(1) and 3(2) of New Brunswick Regulation 82-97 under the Workers' Compensation Act – Exclusion of Workers Regulation – Workers' Compensation Act
13 Subsections 4(1) and 4(2) of the Workers' Compensation Act
14 Subsection 4(1) of the Workers' Compensation Act (NS)
15 Subsection 2(3) of the Workers' Compensation Act (PEI)

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