Friday, October 29, 2010

The Workers Compensation Statutory Bar ...

...Held Not Applicable in Newfoundland Maritime Law.



The Workers’ Compensation Statutory Bar Held Not Applicable in Newfoundland Maritime Matter The Supreme Court of Newfoundland and Labrador, Trial Division has ruled that the statutory bar prohibiting employees and their families from suing employers for injuries suffered or death occurred in the course of employment is inoperative in the context of navigation and shipping.

Ryan Estate v. Universal Marine, the Court overruled the Newfoundland and Labrador Workplace Health, Safety and Compensation Commission (the “Commission”) and held that the families of two deceased fishermen were entitled to sue the designer, builder and inspector for the negligent design, construction and inspection of the fishing vessel “Ryan’s Commander” which capsized causing the deaths. This decision has significant implications for any business involved in shipping, the fishery and
offshore oil and gas, and could potentially have repercussions in other industries in the federal domain.

One of the fundamental principles of workers’ compensation regimes in Canada is the creation of a no-fault compensation system. In what has been described as the “historic trade-off”, workers surrendered their right to pursue civil remedies in return for the entitlement to workers’ compensation benefits in the event of a workplace injury or death. Employers pay into the insurance scheme, but in turn are protected from being sued. Essentially, an injured worker or the dependants of a deceased worker cannot maintain a claim in respect of a compensable disability or loss of support against the employer of the injured or deceased worker,any other employer covered by the Act, or any worker of such other employer. While there are certain specific exceptions, notably in the case of automobile accidents, the statutory bar is contained in every province’s workers’ compensation legislation.

Ryan Estate involved the interaction between the provincial workers’ compensation legislation, and matters of federal jurisdiction. The Constitution Act, 1867, divides certain powers into federal and provincial responsibilities. While workers’ compensation falls within in the provincial powers, considered to relate to
“property and civil rights”, there are circumstances where it may interact with
federally regulated industries, that is, those falling within the federal powers such as “navigation and shipping” as was the situation in Ryan Estate. When provincial legislation affects matters of federal jurisdiction (or vice versa), the courts may undertake an analysis of the nature or “pith and substance” of the impugned legislation to determine its applicability. The courts will also assess
the impact of the legislation, sometimes considering doctrines of
“interjurisdictional immunity” (“reading down” legislation which is otherwise constitutional) and “paramountcy” (the principle that federal legislation “trumps” provincial legislation).

Provincial workers’ compensation schemes have been found to be constitutional and to apply to federal undertakings. As well, other courts have found the statutory bar to apply in the context of federal undertakings. In particular, the British Columbia
Supreme Court upheld the statutory bar in Laboucane v. Brooks, a case also involving the fishing industry. Furthermore, the Ontario Superior Court of Justice came to the same conclusion in Dionne v. Ontario (Workplace Safety & Insurance Appeals Tribunal), a case considering the issue in the context of a nuclear power plant. Moreover, in an analogous situation, the Nova Scotia Court of Appeal concluded that provincial occupational health and safety regulations applied to the fishing industry in that province. This jurisprudence makes the result in Ryan Estate all the more surprising. The Court in Ryan Estate framed the constitutional argument as “simply that legislation relating to navigation and shipping was reserved to the Federal Parliament under The Constitution Act, 1867 and that Parliament had legislated in that field by reason of the Marine Liability Act and the Federal Courts Act and that neither of these pieces of legislation contained any bar against any action which an injured person was entitled to bring under Canadian maritime law, both statutory and common law.”

The Court held that the Workplace Health, Safety and Compensation Act (the “WHSCC Act”) impaired the right of injured parties to bring a civil action under the Marine Liability Act, a piece of federal legislation which addresses claims of persons or dependents of persons injured or killed in circumstances involving matters relating to navigation and shipping. The Court decided that liability in a marine context fell within federal jurisdiction, and found that the Marine Liability Act created a “federal right” to bring such an action. The Court further held that the statutory bar impaired the federal power to sue, which is “a core feature of federal legislation governing navigation and shipping” and “an essential element of the requirement for uniformity of legal rights in navigation and shipping situations.” The Court read down the WHSCC Act, holding that in the circumstances, the statutory bar was rendered inoperative.

The employers in Ryan Estate paid into the workers’ compensation regime, and some of the claimants received benefits, but the employers were not protected by the statutory bar. In other words, one half of the “historic bargain” was held not to apply. Further, the case suggests that this would now be true of all employment falling within “navigation and shipping” and, potentially, of any employment falling within the federal domain (aeronautics, fishing etc) where there is federal legislation that, like the Marine Liability Act, can be construed as giving rise to a federal “right” of action.

The Court distinguished Mersey Seafoods Ltd. on the basis that occupational health and safety is essentially one aspect of labour relations, which on fishing boats is generally a provincial undertaking. The conclusion in Ryan Estate has left the somewhat peculiar result that while the fishery is subject to provincial occupational health and safety regulation, it is not subject to at least the statutory bar provisions of the provincial workers’ compensation regime, although the two pieces of legislation are closely interconnected.

The Court did not discuss or consider the Laboucane or Dionne decisions mentioned above. In each of those cases, the respective Courts undertook a perhaps more pragmatic analysis of the interaction of the federal undertaking and provincial workers’ compensation statutory bar.

In Laboucane, the Court held that the statutory bar was solely within the exclusive jurisdiction of the province. The Court reasoned that the statutory bar was not “integrally connected with maritime matters” and that the fact that the accident happened on a vessel was “not enough to displace the characterization of the claim [of the claimant] as arising out of a workplace incident.” We would suggest the reasoning in Laboucane is equally applicable to, and should have been followed in, Ryan Estate.

In Dionne, the Court held that the statutory bar did not conflict with section 4 of the Nuclear Liability Act. The thrust of the Nuclear Liability Act is similar to the Marine Liability Act. That provision holds nuclear operators absolutely liable for breaches of duties created under that act, without proof of negligence. While the Nuclear Liability Act may outline a cause of action, it does not create a right to sue an employer that the statutory bar takes away. Based on that conclusion, which we would suggest should apply in the circumstances of Ryan Estate, the Court held that no consideration of paramountcy was necessary.

What this case means is that employers in shipping and navigation, and potentially in other federally regulated industries, are more likely to face civil actions resulting from accidents occurring in or connected to the workplace, and are less likely to be able to avail of the protection of the workers’ compensation statutory bar. We are advised that the Ryan Estate case is likely to be appealed.

For more information please contact the practice group leader: Cecily Y. Strickland at or 709.570.8826.

My question (Wayne Coady ) is the Federal Government a signature to the "Historic Agreement? And can they prove this by producing their signature on the orginal document?

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