Workers' Compensation

A - Introduction

Each province in Canada has created a provincial workplace insurance fund that provides employees who have been injured in the workplace with access to certain health care benefits and reimbursement for lost earnings. The scheme is intended to relieve the injured worker of the delay, cost and difficulty of suing an employer in a tort action or in a civil action for negligence in the workplace. Compensation is to be pro-vided expeditiously and without proof of fault. In turn, employers are required to fund the system through payroll assessments, but are shielded from the risk of lawsuits and damages from employees injured on the job.

In practice, the Canadian schemes operate by having assessments levied upon employers, which are then gathered into a common fund from which benefits are paid to workers who are disabled as a result of their employment. Administration and adjudication are carried out by a statutory corporation, such as the Workplace Safety Insurance Board in Ontario and the Commission de la santé et de la sécurité du travail in Québec.

B -Determination of Employer Contributions

The legislation governing workers' compensation is provincial in scope, so the particulars of each statute may vary from province to province. However, the statutes generally apply automatically and the coverage is compulsory for most employers.

Where an industry is excluded from the compulsory coverage, it may be possible to opt in. The employer may apply to the appropriate board for the coverage of the business or undertaking. If the application is accepted, which is the normal practice, the business or undertaking of that employer will be covered.

Rates are usually established by examining the employer's industry group and then adjustments are made based on claims experience. Surcharges arising from actual claims can be significant. The money is collected into an accident fund from which benefits are paid. Employers are prohibited from seeking any indemnity or contributions from workers for assessments or other liabilities under the applicable legislation.

C - Benefits

Injured workers are entitled to income replacement if the injury results in an inability to work. In addition, benefits will cover health-care needs arising from the injury, such as prescription drugs, assistive devices and therapy. Workers may also be entitled to a lump-sum amount if the injury results in a permanent impairment.

Duty to Accommodate Rehabilitated Workers

The legislation generally requires an employer to re-employ a worker injured on the job either to the pre-injury position or to other suitable employment. This obligation is intended to reduce the accident costs arising from workers' compensation claims as well as to encourage reintegration of injured but rehabilitated workers into the workplace. Where reintegration into the former workplace is not feasible due to the nature of the injury, an employee may also qualify for job retraining.

Working in Canada

The Immigration and Refugee Protection Act governs the admission of foreign nationals into Canada. No work permit is required for business visitors who visit Canada to meet with Canadian clients or to assess trade or business opportunities. Work permits are required for foreign nationals who will be providing their services in Canada. A number of programs exist to facilitate work permits and entry to Canada.

Whistleblower Protection

In Canada, it is a criminal offence for an employer to take disciplinary measures, or threaten or adversely affect the employment of an employee, with the intent to stop an employee from providing information to law officials regarding wrongful activity. Anti-reprisal provisions that protect employees who report wrong activity of their employers are also found in various provincial employment standards legislation and human rights and workers' health and safety legislation.


There are significant difference between employment laws in Canada and other jurisdictions, including the United States. Before commencing operations in Canada, prudent employers should consult with a Canadian employment lawyer to avoid the missteps most commonly made by foreign employers expanding their operations into Canada.

(Note: this is the final installment of a five part series on Employment Law. View the full article)

About Mackrell International - Canada - MacDonald Sager Manis LLP is a full service business law firm in Toronto, Ontario and a member of Mackrell International. Mackrell International - Canada is comprised of four independent law firms in Alberta, British Columbia, Ontario and Quebec. Each firm is regionally based and well-connected in our communities, an advantage shared with our clients. With close relations amongst our Canadian member firms, we are committed to working with clients who have legal needs in multiple jurisdictions within Canada.

This article is intended to be an overview and is for informational purposes only.