The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

This is an application under subsection 68(4) of The Workers Compensation Act ("the Act"). The applicants are seeking an order that the right action against them is removed by the Act.

Issue

Whether or not the right of action is removed pursuant to the provisions of the Act.

Decision

That the right of action against the applicants is removed pursuant to the provisions of the Act.

Background

This application arises from a workplace accident in which a worker died. It deals with the right of the worker's estate to take legal action against the defendants named in a statement of claim that was filed in the Manitoba Court of Queen's Bench.

The mother of the deceased worker, in her capacity as representative of the worker's estate, has commenced legal action against the two applicants named as defendants in a statement of claim, specifically the worker's employer ("the employer") and the Government of Manitoba ("Manitoba").

The nature of the action against the employer and Manitoba is set out in the Statement of Claim. Paragraph 12 alleges that the worker's death was "occasioned by the breach of statutory duty" by the employer under The Workplace Safety and Health Act ("WSHA") and provides particulars of the employer's alleged breaches. Paragraph 13 alleges that Manitoba has a duty to enforce its legislation and regulations in accordance with its powers and to do so in a reasonable and prudent manner, including regular inspections. Paragraph 15 alleges that Manitoba failed on numerous occasions to properly inspect and enforce its legislation and regulations with respect to the employer, resulting in an unsafe work environment which resulted in the death of the worker. Paragraph 16 alleges that the callous disregard for the safety of its workers by the employer and the failure of Manitoba to properly enforce its own laws merits an award of punitive damages. The action is brought under The Fatal Accidents Act of Manitoba ("the FAA").

The employer and Manitoba have applied to the Appeal Commission under subsection 68(4) of the Act for an order that the legal action filed against them be removed and forever stayed.

Relevant dates:

• The workplace accident which is the basis of this application occurred on November 21, 2014.

• The Statement of Claim was filed in the Court of Queen's Bench on or about November 2, 2016, against the employer and Manitoba.

• The employer filed a Statement of Defense on January 9, 2017. Manitoba has not filed a Statement of Defense as of the date of the hearing.

• The Appeal Commission held a pre-hearing meeting with counsel representing the parties on May 15, 2017, to discuss the issues to be considered, the nature of the material to be filed and the procedure to be followed at the hearing.

• An oral hearing was held on November 9, 2017 to determine the issue as detailed above.

Reasons

Applicable Legislation

The Appeal Commission and this panel are bound by the Act, regulations made under the Act and by the policies of the WCB's Board of Directors.

The preamble to the Act provides:

WHEREAS Manitobans recognize that the workers compensation system benefits workers and employers in Manitoba;

AND WHEREAS Manitobans recognize that the historic principles of workers compensation should be maintained, namely

(a) collective liability of employers for workplace injuries and diseases; (b) compensation for injured workers and their dependants, regardless of fault; (c) income replacement benefits based upon loss of earning capacity; (d) immunity of employers and workers from civil suits; (e) prevention of workplace injuries and diseases; (f) timely and safe return to health and work; and (g) independent administration by an arm's-length agency of government;

Subsection 1(1) provides, in part:

Definitions 1(1) In this Act,

"accident" means a chance event occasioned by a physical or natural cause; and includes (a) a wilful and intentional act that is not the act of the worker, (b) any (i) event arising out of, and in the course of, employment, or (ii) thing that is done and the doing of which arises out of, and in the course of, employment, and (c) an occupational disease, and as a result of which a worker is injured;

"employer" includes (a) a person (i) who has in service under a contract for hiring or apprenticeship, written or oral, expressed or implied, a person engaged in work in or about an industry…

(b) the Crown in right of the province, and municipal corporations, boards and commissions having the management and conduct of any work or service owned by or operated for a municipal corporation, or by or for the Government of Manitoba, … "industry" means all industries in Manitoba except those industries excluded by regulation under section 2.1; … "worker" includes (a) a person, … who enters into or works under a contract of service or apprenticeship, written or oral, expressed or implied, whether by way of manual labour or otherwise, …

Section 2 provides:

Application of Part I

2 This Part applies to

(a) all employers and all workers in all industries in Manitoba except those excluded by regulation under section 2.1 (exclusion);

(b) employers, workers, directors of corporations that are employers or independent contractors that are admitted as being within the scope of this Part under section 74 (optional coverage) or section 75 (optional coverage for independent contractor);

(c) non-profit or charitable organizations admitted as being within the scope of this Part and their deemed workers under section 75.1 (volunteer coverage);

(d) persons declared to be workers under section 77 (declared workers); and

(e) deemed employers and their declared workers under section 77.1 (work experience program).

Subsection 9(1) provides:

Right of action against person other than employer 9(1) Where an accident happens to a worker in the course of his employment under such circumstances as entitle him or his dependants to an action against some person other than his employer, the worker or his dependants, if entitled to compensation under this Part, may claim the compensation or may bring such an action.

Subsection 9(7) provides:

Limitation of right of action 9(7) In any case within subsection (1), the worker, his or her legal personal representative and dependants, and the employer of the worker have no right of action in respect of the accident against an employer in an industry, against a worker of such an employer or against a director of a corporation that is such an employer, where the accident happens within the conduct of the operations usual in, or incidental to, the industry carried on by the employer.

Subsection 12 provides:

Board to decide all claims 12 No action lies for the recovery of compensation under this Part; and all claims for compensation shall be heard and determined by the board.

Subsection 13(1) provides:

Compensation to be in lieu of other rights 13(1) The right to compensation provided by this Part is in lieu of all rights and rights of action, statutory or otherwise, to which a worker, or his legal personal representative, or his dependants, are or may be entitled against the employer or a director of the corporation that is the employer, for or by reason of personal injury to, or the death of, the worker occasioned by any accident which happens to him arising out of, and in the course of, his employment; and no action in any court of law against the employer or a director of the corporation that is the employer in respect thereof thereafter lies.

Subsection 68(4) provides:

Board to determine right of action 68(4) Where an action in respect of an injury is brought against an employer, a director of a corporation that is an employer or a worker of an employer, the board has jurisdiction, on the application of a party to the action, to adjudicate and determine whether the right of action is removed by this Act; and the adjudication and determination is final and conclusive, and if the board determines that the right of action is removed by this Act, the action shall be forever stayed.

Subsections 73(1) and (2) provide, in part:

Accident fund continued 73(1) A fund called the "accident fund" is continued for the payment of the compensation, outlays and expenses under this Part.

Assessment classes established 73(2) Subject to section 79 (assignment of industry to class and group) and the regulations, the following classes are established for the purpose of assessment: …. (c) Class C — the Crown in right of Manitoba and those agencies of the government described in section 76 and not otherwise included under Class A, Class B or Class E; … (e) Class E — Employers in all industries in Manitoba not included in the above classes and not excluded by regulation under section 2.1.

The WCB Board of Directors have enacted WCB Policy 22.10, Elective Rights, which deals with third party cases where the worker is provided an election to claim compensation or take legal action.

Agreed Statement of Facts

The parties submitted a Statement of Agreed Facts but without any agreement that the facts set forth are necessarily relevant. The Statement included the following facts (paraphrased):

1. On November 21, 2014, the worker died as a result of an accident which occurred at the employer's premises.

2. At the time the accident occurred:

a) the worker was employed by the employer and was considered a "worker" within the meaning of subsections 1(1) and 4( 1) of the Act; b) the employer was an "employer" in an industry, as the terms are defined in subsection 1(1) of the Act; c) the employer fell under the mandatory provisions of the Act and had workers compensation coverage; and d) Manitoba fell under the mandatory provisions of the Act and had workers compensation coverage - (note the worker's mother's counsel does not agree that this point is relevant to the application.)

3. The accident arose out of and in the course of the worker's employment with the employer within the meaning of subsection 4(1) of the Act.

4. On January 26, 2015, an adjudicator for the Workers Compensation Board (WCB) called the worker's father. In the conversation, the Adjudicator advised that "with WCB, they cannot sue the employer".

5. On June 15, 2016 a representative of the WCB wrote the worker's father. The letter stated in part "if you are considering legal action in relation to a possible third party liability claim, please be advised that you can choose to claim benefits from the WCB or take legal action against the third party who caused the injury". In a memorandum to file by the WCB representative dated June 15, 2016, the representative noted that she asked the worker's father whether their lawyer was pursuing a product liability claim. The memorandum notes that the father could not elaborate on the nature of claim. The memorandum also notes that if they are pursuing legal action in relation to product liability, the WCB representative should send an election form to complete.

6. On November 2, 2016, a Statement of Claim was filed in the Court of Queen's Bench against the employer and Manitoba. The claim requested damages under the FAA.

7. The claim was brought by the worker's mother on behalf of relatives of the worker and seeks compensation under the FAA for damages resulting from the death of the worker.

8. On December 5, 2016, counsel for the employer wrote to the Appeal Commission to make an application pursuant to section 68(4) of the Act for a determination that a right of action was removed by sections 4(1), 12 and 13(1) of the Act.

9. On December 6, 2016, further to Manitoba's request for Particulars, counsel for the worker's mother filed Particulars with the court.

10. On December 12, 2016 counsel for Manitoba wrote to the Appeal Commission to make an application pursuant to section 68(4) of the Act for a determination that a right of action was removed by section 9(7) of the Act.

11. On December 19, 2016, counsel for the worker's mother wrote to the Appeal Commission setting out the worker's mother's position that she believed that she was permitted to pursue a legal remedy against the employer and Manitoba.

12. On December 21, 2016, counsel for the employer wrote the Appeal Commission outlining its position that it was not a "third party" as contemplated by subsection 9(1) of the Act.

13. On January 8, 2017, the employer filed a Statement of Defense.

14. On January 9, 2017, the Appeal Commission wrote to the employer and Manitoba regarding the convening of a hearing and enclosing a list of documents in the WCB claim file.

15. Pursuant to subsection 60(1) of the Act, the Appeal Commission has exclusive jurisdiction to examine, inquire into, hear and determine all matters and questions under Part I of the Act including determinations under section 68(4).

16. Paragraph 16 to Paragraph 19 outline steps regarding setting and convening of the hearing.

The panel found the agreed statement of facts to be consistent with evidence on the claim file.

The Employer's Position

The employer was represented by legal counsel.

Counsel noted that the parties had agreed that:

• the worker died as a result of an accident which occurred at the employer's premises on November 21, 2014. • the worker was employed by the employer. • the worker was considered a worker within the meaning of the Act. • the employer was an employer in an industry as defined in the Act. • the employer fell under the mandatory provisions of the Act. • the employer had WCB coverage at the material time. • the accident arose out of and in the course of the worker's employment with the employer.

Counsel submitted that given the above facts, it is the employer's positon that the combined operation of sections 4, 9, 12, and 13 of Act lead to the conclusion that the right of action is removed. She submitted that:

…given these undisputed facts, our position is that had the worker survived the accident, he would have received compensation out of the accident fund for injuries sustained pursuant to section 4(1) of the Act.

As a result, compensation was and is payable out of the accident fund. Several key aspects of the provisions in the Act, we say, are particularly important and make it, frankly, abundantly clear, there can be no right of action against an employer.

She submitted that:

• subsection 4(1) states if an accident arising out of and in the course of employment is caused to a worker, the worker is entitled to compensation out of the accident fund.

• the header to subsection 9(1) provides "Right of action against person other than the employer". This makes it clear that the right of action only arises where it is in relation to someone other than the employer.

• Section 12 provides that the board is to decide all claims and that no right of action lies for recovery of compensation under this part, which indicates there is not to be a civil suit.

• Section 13 specifically sets out that an employer cannot be sued and that the right to compensation is in lieu of all rights and rights of action, statutory or otherwise. It applies to an employer and to the director of a corporation which is an employer. She said this includes an action under the FAA.

• Regarding the Third Party Election Form upon which the respondent's counsel appears to rely, it clearly applies only to an action against a third party and not to the employer.

• The Third Party Election form appears to have been sent out in the context of a product liability claim.

The employer's counsel disputed the worker's mother's position that an action can lie in cases where the employer's conduct is willful or intentional, notwithstanding the provisions of the Act. While not acknowledging any willful or intentional conduct, the employer's counsel noted that under the Act, the definition of accident is a chance event occasioned by a physical or natural cause and includes (a) a willful and intentional act that is not the act of a worker.

She submitted that contrary to paragraphs 20 to 23 of the worker's mother's Statement of Claim, the Act is intended to cover incidents arising out of or in the course of employment as a result of which a worker is injured, even in circumstances where those incidents arise out of willful or intentional conduct.

Regarding the nature of the prosecution facing the employer, the employer's counsel submitted that there is a significant distinction between a regulatory strict liability offence under the WSHA, which is what the employer is currently defending actively, and offences under the Criminal Code, which the employer has not been charged with.

She noted the employer is dealing with a strict liability onus, so there is no necessity on the part of the crown to prove intent, and no necessity to prove anything willful.

She commented that there is a workplace safety and health regime, whose duty it is to deal with workplace safety and infraction of related rules. She submitted that:

In fact, we suggest that the existence of these very two specific regimes, one to deal with potential regulatory criminal liability, and one to address compensation for an injured worker or their dependents, supports the position that a civil claim is not intended to be the mechanism to address a workplace accident. In support of the employer's position, the employer's counsel noted case law which she believes to be significant and relevant to the issues being addressed. She noted Appeal Commission Decision 151/04. This decision, which also arose from the death of a worker in a covered workplace confirmed that no right of action lies against the employer. The case also dealt with the impact of the FAA. It noted that a statutory right of action to relatives of the deceased can exist but only where if the death had not ensued, the deceased himself would be entitled to maintain that action.

The employer's counsel also noted two Supreme Court of Canada cases which she said further confirm the historical objectives of the legislative scheme. Pasiechnyk v. Saskatchewan (Workers' Compensation Board) [1997] SCJ No. 74 and Marine Services International Limited v. Ryan Estate 2013 SCC 44.

The employer's counsel noted the emphasis given by the Supreme Court to the historical trade-off in the Pasiechnyk decision and the Marine Services decision, that the common law action for negligence has been abolished for all work related injuries in all jurisdictions in Canada, leaving the statutory scheme as the exclusive source for compensation.

Manitoba's Positon

Manitoba was represented by legal counsel.

Manitoba's counsel submitted that Manitoba was a third party employer which he said means:

…that government was neither the worker nor their employer, but some outside party and outside entity, a third party.

The counsel stated that the question is whether the right of action to sue Manitoba as a third party is removed by the provisions of the Act.

He noted that with respect to claims against third parties, as in this case, section 9(7) of the Act, says if that third party also happens to be an employer subject to mandatory coverage under the Act, then in the appropriate circumstances the right of action is removed against the third party. However if the third party is not an employer, then the right of action may be available to an injured worker.

As regards to Manitoba, he submitted that as it relates to the civil claim by the Respondent, the key issues under section 9(7) are: Is the Government of Manitoba an employer in an industry, and, did the accident happen within the conduct of the operations usual in, or incidental to, the industry carried on by Manitoba?

Counsel noted that Appeal Commission Decision 115/07 found that to be an employer in an industry really means to be an employer in a section 73 industry, that is, an industry that is described as one of the classes for the purposes of section 73 of Act. He submitted this is consistent with what the Supreme Court of Canada said in the Pasiechnyk decision. He stated that the Supreme Court was interpreting Saskatchewan’s substantially similar legislative regime.

Counsel submitted that by definition under the Act, Manitoba is an employer in a section 73 industry. He said that subsection 73(2) (c) identifies the Crown in right of Manitoba as a class of employer subject to the mandatory coverage under the Act. He noted that the parties have agreed that Manitoba had mandatory coverage under the Act.

Counsel said that the real question as it related to Manitoba is whether the accident occurred within the conduct of operations usual in the industry carried on by Manitoba as provided by section 9(7).

Regarding the suit filed against Manitoba by the worker's mother, Manitoba's counsel noted that Manitoba was not on the employer's site on the date of the accident nor did one of its employees physically cause or contribute to the accident. Referring to the filed documents, counsel said that the suit arises from the government branch which administers and enforces the WSHA. The allegation is that Manitoba failed in its duty to enforce, uphold and apply that legislation. He noted that the worker's mother, as set out in the Particulars, is claiming that Manitoba:

A) failed to conduct regular inspections of the worksite on the employer's premises, or B) did conduct inspections, but did so improperly.

Counsel submitted that both of the activities noted by the worker's mother are at the heart of the claim against Manitoba. He noted that both the Pasiechnyk decision which arose under Saskatchewan's equivalent legislation, as well as the Bell decision (Bell v. Canada (Attorney General) 2002 NSCA 8) dealt with similar claims against branches of the provincial governments.

Counsel submitted that:

The nature of the claim that has been made against Manitoba is also substantially similar to the claims that were at issue, both in the [Pasiechnyk] decision, which again arose under Saskatchewan’s equivalent legislation and was ultimately decided by the Supreme Court of Canada, as well as in the Bell decision.

Counsel noted that in Pasiechnyk, a number of workers died when a crane fell over onto a trailer where the workers were taking their morning coffee break. The dependents of those deceased workers brought an action against the Government of Saskatchewan. He noted that the dependents in the Pasiechnyk case alleged that the Government of Saskatchewan failed to enforce and apply Saskatchewan’s equivalent to WSHA which in that province is called The Occupational Health and Safety Act.

Counsel noted that the Supreme Court of Canada ultimately agreed that a claim for compensation was the exclusive avenue available to the workers and their dependents, and agreed that the right of civil action against the Government was removed by Saskatchewan’s legislation.

He noted that the Nova Scotia Court of Appeal made a similar finding in the Bell case which arose out of the Westray coal mine accident.

Counsel submitted that:

It’s our position that the types of allegations that have been made against the Government of Manitoba in [the worker's mother's] statement of claim, fall squarely within the operations usual in the industry carried on by the Government of Manitoba, and that this is confirmed by the provisions of The Workplace Safety and Health Act. And accordingly, the right of action against the Government of Manitoba, if there is any, is removed by section 9(7) of The Workers Compensation Act, and the exclusive avenue available to [the worker's mother] is to make a claim for compensation.

Counsel agreed with the positon of the employer's counsel regarding the application of the FAA.

Counsel noted that a third party election form was provided to the worker's family and that the background information suggests it was in contemplation of a products liability claim. Counsel submitted that:

But in any event, and regardless of what that employee had in mind at the time and, frankly, regardless of what they advised [a family member] of at the time, if section 9(7) removes the right of action against the Government of Manitoba, then there simply is no election to be made.

In response to the worker's mother's submission on the difference between policy and operational functions of Manitoba and the Application of section 9(7), Manitoba's counsel submitted that:

The issue is whether the conduct that the Government is alleged to have engaged in, and that allegedly caused or contributed to the workplace accident, falls within the meaning of section 9(7) of the Act, and we submit that it does.

He referred to his written submission:

And at paragraph 29, the way I framed the question is as follows: Did the third party employer, Manitoba, do something in the course of its work that allegedly caused an injury to a worker in the course of their work?

To my mind, that’s the type of claim that section 9(7) is intending to address, provided of course that the third party is an employer in an industry and has coverage under the Act.

They’re saying if you’re an employer, even if you’re not the employer of that worker, and you’re alleged to have done something that’s usual in the operations of your industry, and it’s alleged that those activities caused an injury to a worker engaged in their work, that’s a matter that ought to be addressed through a claim for compensation, rather than through a civil action.

The Worker's Mother's Position

The worker's mother was represented by legal counsel.

Her counsel noted that, with reference to the Pasiechnyk and the Marine Services decisions, that the Supreme Court noted that workers compensation schemes, although in every jurisdiction in Canada, are not identical, that the workers compensation schemes are a form of no fault insurance.

The worker's mother's counsel's submission included the following passage:

At this point I want the panel to consider the following hypothetical. I am an employer. My industry is regulated, is part of the workers compensation scheme. It’s working hours, I have an employee that’s working. For some reason, maybe I’m a psychopath or maybe I’ve got some other reason, I pick up a blunt instrument and severely bludgeon him. Maybe he dies, maybe he doesn’t, doesn’t matter, they’re both the same. Does anybody seriously think that he can’t sue me if he’s alive? Does anybody seriously think that? Because I don’t.

Manitoba Public Insurance is a no fault system. If I destroy my own car they’re not going to pay me. If they think I destroyed my own car, they’re not going to pay me, and if I want to get paid, I’ve got to sue them. And yet, you’re not allowed to sue as a result of car accidents.

I’m not suggesting that what happened here was in the same degree as the hypothetical that I gave you. We have the squirrel eating the electric cable on one extreme, we have the act of very probably a murder on the other extreme, and everything in between are shades of grey. And just like it’s easy to tell broad daylight and it’s easy to tell pitch darkness, the interesting questions are, when do you turn the street lights on, when do you turn the street lights off, what shade of grey comes into play to do that?

It’s my respectful submission that the workers compensation schemes were never meant to allow people to hide behind them, and the Supreme Court has said that. In the Pro-Crane case, at page 901, and that’s at tab 6 of the Government’s brief, in the Pro-Crane case Mr. Justice Sopinka talking about the ruling from the board in Saskatchewan, the board accepted that the Act was not intended to protect persons from lawsuits merely because of their status as employers. There’s got to be more.

And, what is this claim as against the employer? The claim is that the employer was culpable, severely culpable, and that the employer, for those reasons, ought to be liable.

It’s not all black, but it’s my respectful submission that the claim as stated is enough of a grey to take it out of the no fault, and to take it in closer to where it’s black.

The worker's mother's counsel continued further:

…What I’m saying is that I’m conceding that no case of murder could be made out against the employer here. I’m not even sure if a case of manslaughter could be made out, although employers are occasionally charged with manslaughter.

What I am saying is that the allegations in the statement of claim allege sufficient culpability that bring it to the point where it’s outside what the workers compensation schemes were meant to cover.

And on the, you know, all we have here is the allegations, and we all know, and I certainly know, … we all know that not every statement of claim leads to a successful lawsuit. Plaintiffs are sometimes, sometimes have their claims dismissed. But we haven’t got anywhere near there yet.

All we’re at is a statement of claim, and it’s my respectful submission that the statement of claim, the allegations in the statement of claim are sufficiently serious that they ought to be taken out of the workers compensation scheme.

And at least to a certain degree the Government of Manitoba agrees with me, because the Government of Manitoba has seen fit to charge the employer under The Workplace Health and Safety Act. … I’m not asking you to tear down the Act, I’m not asking you to completely emaciate, is perhaps the best word, I’m not asking you to emaciate the Act. I’m asking you to say that in this situation, because of the allegations of fault, because of the charges, the civil claim ought to be allowed to proceed.

Regarding the claim against Manitoba, the worker's mother's counsel referred to a comment by Justice Sopinka on page 908 of the Pasiechnyk case. Justice Sopinka noted that the Saskatchewan act was amended one year after its passage to provide that injured Schedule 1 workers could not sue any Schedule 1 employer and that this amendment was likely designed to account for the multi-employer workplace.

Counsel referred to subsection 9(7) of the Act. He submitted that:

… the phrase where the accident happens within the conduct of operations usual in or incidental to the industry carried out by the employer. It’s my respectful submission that what that phrase is saying is the employer is company A, they run a warehouse. Company B has a loading crane, Company C is a trucking firm, they're all covered by the Act. The crane belonging to company B is loading items from the warehouse onto the truck, there’s an accident, all those things are usual in or incidental to the running of the warehouse. They, having a crane to load a truck is usual or incidental to the running of a warehouse. Enforcing legislation is not usual in or incidental to a business. It isn’t. It’s an undertaking that the Government takes on.

He also submitted that:

That’s my argument, there are things that fall out of insurance schemes, and when you’ve got serious culpability, it’s not something that’s meant to be covered by an insurance scheme.

The worker's mother's counsel noted that the statutory provisions in Bell were different from those in Manitoba and that the Bell case is not applicable.

Counsel referred to a Manitoba case, Northern Goose Processors Ltd v. Canadian Food Inspection Agency (2006 MBQB 198), for the proposition that the government can be sued for not doing its job once it undertakes a job.

Counsel submitted that while government cannot be sued for its policy making functions, it can be sued for operational matters. He submitted that Pasiechnyk differs from the current case as it involved the policy and regulatory function of government.

He also submitted that the first step in addressing the issue is to recognize that workers compensation is an insurance scheme and that not all things are covered by the scheme.

Counsel submitted that:

And allowing this case to proceed is not going to rip down the scheme, and it’s not going to open the floodgates because if plaintiff can prove culpability, they’ll get a judgment. And if plaintiff can’t prove culpability and the judge thinks it was a frivolous case, they’ll get hammered.

Counsel submitted that alternatively, the panel could stay its decision until the statutory charges have been dealt with.

In response to a question from the panel, counsel explained that in his opinion, the test applicable to Manitoba's status is that a third party employer has to be doing something usual or incidental to what the employer (worker's employer) does. In this case Manitoba was not operating in the same industry as the employer.

Analysis

The issue before the panel is whether or not the right of action is removed pursuant to the provisions of the Act. The applicants, the employer and Manitoba, are seeking a determination that the right of action is removed by the Act.

Compulsory no-fault insurance and the Historic Trade-Off

There was much discussion at the hearing about the "historic trade-off." It is an accepted fact that the worker's compensation system in Manitoba was modeled after the system recommended to the Ontario Government in 1910 by the Honourable Sir William Ralph Meredith. The Meredith recommendations were adopted in Ontario in 1914. In 1916, a system based largely on these recommendations was adopted into law in Manitoba.

Two key elements which are part of Manitoba's legislation are the establishment of a system of compulsory no-fault mutual insurance administered by the state and the so called "historic trade-off" by which workers lost their cause of action against their employer and gained compensation that does not depend on fault of the employer or its ability to pay the cost of the injury.

The historic trade-off has been recognized by many courts across the country. Perhaps the most famous and relevant to the proceedings at this application is the Pasiechnyk decision which was referred to by all parties at the hearing. This case involved an accident at a worksite where a crane fell over onto a trailer killing two workers and injuring several others. The dependents of those deceased workers and injured workers brought an action against the Government of Saskatchewan arising from the alleged failure of the government to regulate an industry.

The majority decision of the Supreme Court of Canada was written by Mr. Justice Sopinka. He noted that in arriving at its decision, the Saskatchewan WCB considered four questions which have come to form the foundation of many right of action determinations: The questions, with some minor alterations are:

i) is the plaintiff a worker within the meaning of the Act; ii) did the worker suffer personal injury arising out of and in the course of her employment; iii) is the defendant an employer within the meaning of the Act; and iv) if the defendant is an employer within the meaning of the Act, did the incident happen within the conduct of the operations usual in, or incidental to, the industry carried on by the employer.

In addition, Justice Sopinka reviewed the historical trade-off and concluded it was a necessary feature of the compensation system.

The panel further notes that in 2005 when the Act was amended, the Legislature of Manitoba saw fit to include a preamble recognizing the principles upon which the Act is based, including:

(a) collective liability of employers for workplace injuries and diseases; (b) compensation for injured workers and their dependants, regardless of fault; (d) immunity of employers and workers from civil suits;

In addressing an application under subsection 68(4), the panel attaches significant weight to the principles contained in the preamble and particularly to the historic trade-off.

The Action against the Employer:

The employer is seeking an order pursuant to subsection 68(4) of the Act that the action brought by the worker's mother is removed by the Act and is forever stayed.

The employer asserts that the combined operation of sections 4, 9, 12, and 13 of the Act leads to the conclusion that the right of action against the employer is removed.

In determining whether an action should be stayed, the Appeal Commission considered the four questions noted in Pasiechnyk and followed in Appeal Commission No. 115/07:

i) is the plaintiff a worker, within the meaning of the Act; ii) did the worker suffer personal injury arising out of and in the course of his employment; iii) is the defendant an employer within the meaning of the Act; and iv) did the incident happen within the conduct of the operations usual in, or incidental to, the industry carried on by the employer.

The panel finds that the questions are answered affirmatively in the statement of agreed facts, and notes that the worker's mother's claim arises through the worker.

To be clear, in making our decision, the panel finds that the following facts, which have been agreed to, are of significance when applying the law to this case:

a) at all material times:

i) The worker was a worker within the meaning of the Act; ii) The employer was an employer in an industry within the meaning of the Act; iii) The worker died as a result of an accident which occurred at the employer's premises and arose out of and in the course of his employment with the employer; iv) The employer fell under the mandatory provisions of the Act and had workers compensation coverage.

Subsection 13(1) provides that the right to compensation is in lieu of all rights and rights of action to which a worker or his legal personal representative or dependents are or may be entitled to against the employer or director of an employer and that no actions lie in any court of law. The panel finds that this section effectively removes the worker's mother's right to take action against the employer.

Counsel for the worker's mother argued that the conduct of the employer removed it from the protection of the Act. He suggested that the conduct noted in the Statement of Claim outlines the actions or inactions on the part of the employer which amounted to callous disregard for the safety of the worker. He argued that the panel must look at culpability. He submitted that:

…where there is a real degree of culpability, that’s not what the workers compensation schemes were meant to cover.

The panel notes the allegations relate to the failure to provide a safe workplace. In the panel's view, the position is essentially adding "degree of fault" criteria to the Act, which is contrary to the historic tradeoff as endorsed by the SCC and the pre-amble of the Act. The panel is unable to find that the allegations in the Statement of Claim remove the employer from the protection of the Act.

It was also noted the employer has been charged with offences under the WSHA. The panel is not able to find the existence of such charges removes the employer from the protection of the Act.

The panel finds that the right of action against the employer is removed. The panel orders that the action commenced in the Court of Queen's Bench by the worker's mother against the employer is removed by the Act and is forever stayed.

Action against Manitoba

As noted above, the worker's mother has also commenced an action against Manitoba. Paragraph 15 of the statement of Claim alleges that Manitoba failed on numerous occasions to properly inspect and enforce its legislation and regulation with respect the employer, resulting in an unsafe work environment which resulted in the death of the worker. Paragraph 16 alleges, in part, that the failure of Manitoba to properly enforce its own laws merits an award of punitive damages.

In considering the status of Manitoba, the panel notes that Manitoba is specifically defined as an employer under subsection 1(1) of the Act. It provides that "employer" includes:

(b) the Crown in right of the province, and municipal corporations, boards and commissions having the management and conduct of any work or service owned by or operated for a municipal corporation, or by or for the Government of Manitoba,

Further, Manitoba is identified under section 73(2) of the Act as being in Class C for the purpose of assessment. The panel also notes industry means all industry in Manitoba except those excluded by regulation. Therefore in performing its functions, Manitoba is in an industry.

In determining whether Manitoba is covered under the circumstances of this accident, the panel considered subsection 9(7):

Limitation of right of action 9(7) In any case within subsection (1), the worker, his or her legal personal representative and dependants, and the employer of the worker have no right of action in respect of the accident against an employer in an industry, against a worker of such an employer or against a director of a corporation that is such an employer, where the accident happens within the conduct of the operations usual in, or incidental to, the industry carried on by the employer.

The panel finds that this section covers all employers who are providing services in an industry when a worker is injured. The panel agrees with Manitoba's counsel that the final reference in this section is to the industry carried on by the third party employer.

The panel rejects the positon advanced by the worker's mother's counsel that this section only applies to employers who are in the same industry as the worker's employer. In the panel's opinion, the employer need not be performing the services in the same industry as the worker's employer. Such an interpretation would greatly narrow the application of the "historic trade-off" and is inconsistent with the historic application of this section.

The panel also finds that the interpretation suggested by the worker's mother's counsel is contrary to the findings in the leading cases dealing with the scope of the statutory bar.

The panel finds that the case before it is similar to the facts in both the Pasiechnyk decision and the Bell decision. As noted previously, Pasiechnyk involved an action against the government of Saskatchewan arising from its duty to regulate the industry. The Bell decision dealt with the Westray Mining disaster. It was alleged that the Province of Nova Scotia: acted negligently and/or in breach of statutory or fiduciary duty in providing financial support to the Westray Coal Mine project, in certifying and monitoring the qualifications of the personnel working at the mine, in issuing the mining licenses and permits required for the operation of the mine, in approving and monitoring the mine plans and in the regulation of mine safety.

While there are differences in legislation between Saskatchewan, Nova Scotia and Manitoba, the concept of the immunity under workers compensation legislation for government agencies performing their statutory duties is the same.

The panel finds that subsection 9(7) of the Act is applicable in determining Manitoba's status. The panel finds that no right of action exists against Manitoba pursuant to subsection 9(7) of the Act. The panel finds that the right of action against Manitoba is removed. The panel orders that the action commenced in the Court of Queen's Bench by the worker's mother against Manitoba is removed by the Act and is forever stayed.

FAA and the Act

As noted in the background, the action, in which the employer and Manitoba have been named as defendants, was made pursuant to the provisions of the FAA and is brought by the worker's mother on behalf of relatives of the worker who is now deceased, against the employer and Manitoba.

Although not bound by strict legal precedent, the panel attaches weight to the reasons provided in Appeal Commission Decision 151/04 which dealt with circumstances similar to those in this case and was advanced under the FAA. Decision 151/04 determined:

The action is brought pursuant to statutory rights set out in the FAA. Section 2(1) of that act provides:

"Liability for damages caused by death 2(1) Where the death of a person is caused by wrongful act, neglect. or default, and the act, neglect, or default is such as would, if death had not ensued, have entitled the deceased to maintain an action and recover damages in respect thereof, the person who would have been liable, if death had not ensured, is liable for damages, notwithstanding the death of the deceased, even if the death was caused in circumstances amounting in law to culpable homicide."

This section, therefore, provides a statutory right of action to relatives of the deceased but only where, if death had not ensued, the deceased himself would have been entitled to maintain that action.

In this case, pursuant to section 4(1) of the WCA, compensation was payable out of the Accident Fund. Had the deceased survived he would have been entitled to receive compensation, personally. Since section 13(1) of the WCA provides that the right to compensation is in lieu of all rights of action, statutory or otherwise to which the deceased worker was entitled, it is clear that had the deceased, if he had survived, tried to bring an action against the applicant (his employer), his right of action would have been removed by the WCA.

The nature of fatal accident claims was discussed by the Manitoba Court of Appeal in Jaman Estate v. Hussain [1995] M.J. No. 264. The court in that case stated that a claim brought by the personal representative of a deceased on behalf of any beneficiary who acquires rights by virtue of the FAA is a derivative action and "As such it arises exclusively 'through' the deceased and is confined to those claims authorized by The Fatal Accidents Act."

The court went on to find that those who claim pursuant to a derivative claim can have no better rights than the individual "through" whom they are claiming.

Therefore, since we find that the right of action of the deceased worker, had he survived, would have been removed, the right of action of the respondent and the parties for whose benefit she brings the action and who therefore claim "through" the deceased, is also removed.

Regarding the action before this panel, the panel finds that, had the worker survived, he would have been entitled to apply for compensation, personally. Subsection 13(1) of the Act provides that the right to compensation is in lieu of all rights of action, statutory or otherwise, to which the deceased worker was entitled. The panel finds that had the worker, if he had survived, tried to bring an action against the employer and Manitoba, his right of action would be removed by the Act.

Given the panel's findings under Subsections 9(7) and 13(1) that the right of action under the Act has been removed against the ER and Manitoba, the panel finds that no action can be brought against the employer and Manitoba under the FAA.

Relevance of Correspondence between WCB and Worker's Family

At the hearing, it was noted that on or about June 15, 2016, a WCB representative wrote to the worker's family. The letter stated that "if you are considering legal action in relation to a possible third party liability claim, please be advised that you can choose to claim benefits from the WCB or take legal action against the third party who caused the injury."

The panel notes that in a memorandum to file dated June 15, 2016, the WCB representative who had mailed the form noted that she had asked the worker's family member "if he knew if his lawyer was pursuing a product liability claim. [The family member] advised that he could not elaborate on what they were pursuing but that his lawyer -[name] advised that the case would be the first of its kind in Manitoba."

For the purpose of adjudicating this application, the panel finds that the form was provided in contemplation of a product liability form. The panel notes that no product liability claim has been advanced and in any case, finds that the mailing of the form cannot bestow a greater right to a worker than that bestowed under the Act. The panel attaches no weight to the existence of the form.

The panel also notes that reference was made to the WCB Board of Director's Policy 22.10, Elective Rights. Given the panel's findings on this application, the policy is not applicable.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, B. Kosc

A. Scramstad - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 29th day of December, 2017