Volume 11, No. 1 - October/Octobre 2006
McKenzie v. British Columbia: Constitutional Protection of the Independence of Administrative Decision-Makers Recognized in Canadian Law
By Maryth Yachnin
Maryth Yachnin comments on the decision of the British Columbia Supreme Court in McKenzie v. Minister of Public Safety and Solicitor General et al. The decision considers a mid-term termination of an administrative-justice adjudicator.
2005-2006 Section Chair's Review - a Newsletter Exclusive!
By Mike Johnston
An Advocacy Primer Concerning the Workplace Safety Insurance Board-Canada Revenue Agency (WSIB-CRA) Joint Registration Initiative
By Lukasz Petrykowski
Lukasz Petrykowski provides an overview of the Workplace Safety and Insurance Board's information exchange program with the Canada Revenue Agency.
Case Summary: Logan v. Nova Scotia (Workers' Compensation Board), 2006 NSCA 88
By Susan Adams
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Ontario Bar Association | Association du Barreau de l'Ontario
The Ontario branch of the Canadian Bar Association | La division ontarienne de l'Association du Barreau canadien |
Workers' Compensation is published by the Workers' Compensation Section of the Ontario Bar Association. Members are encouraged to submit articles or suggest story ideas.
The articles that appear in this publication represent the opinions of the authors. They do not represent or embody any official position of, or statement by, the OBA except where this may be specifically indicated; nor do they attempt to set forth definitive practice standards or to provide legal advice. Precedents and other material contained herein are intended to be used thoughtfully, as nothing in the work relieves readers of their responsibility to consider it in the light of their own professional skill and judgment.
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McKenzie v. British Columbia: Constitutional Protection of the Independence of Administrative Decision-Makers Recognized in Canadian Law
Maryth Yachnin*
Can a legislature authorize the mid-term termination of administrative-justice adjudicators with notice but without any grounds for just cause dismissal? Is no principle of constitutional independence offended when, in the purported exercise of a statutory discretion, a government dismisses a competent tribunal adjudicator in a manner the courts assess as arbitrary, malicious and farcical?
We initially reported on the McKenzie case in our August 2005 newsletter.1 In the recent decision McKenzie v. British Columbia (Minister of Public Safety and Solicitor General), the B.C. Supreme Court determined - for the first time in Canadian law - that administrative tribunals may be subject to the same unwritten constitutional principles of judicial independence as apply to courts.2 McKenzie’s groundbreaking extension of the constitutional principle of judicial independence into the administrative realm is limited, however, to tribunals performing functions akin to the judicial role.
Background and Progress of the Action
In February 2005, Mary McKenzie, a Residential Tenancy Arbitrator, had her five-year re-appointment rescinded mid-term, without cause or reasons.3 McKenzie’s appointment was rescinded under the purported authority of s. 14.9(3) of the Public Sector Employers Act (PSEA), which outlines the compensation required where the appointments of B.C. tribunal members are revoked before the end of the term of appointment.4
McKenzie’s petition for judicial review was heard in January 2006, with a decision rendered on September 8, 2006. The British Columbia Council of Administrative Tribunals (BCCAT) intervened on behalf of the public interest.
Factual or Legal Grounds for Dismissal
Mr. Justice McEwan wrote the decision of the B.C. Supreme Court in McKenzie. First, McEwan J. established that there were no grounds upon which Ms. McKenzie, who had an unblemished service record, could have been dismissed for cause. McEwan J. found that McKenzie was essentially dismissed for standing up for herself and objecting to a change in the terms of her appointment; that after her dismissal the Respondents engaged in a relentless and specious personal attack on McKenzie; and that the Minister’s alleged “reconsideration” of the decision to terminate was a farce in which the Petitioner’s materials were not even placed before the decision-maker.5 The Minister consented to the reinstatement of McKenzie’s appointment as arbitrator because the Ministerial Order authorizing the termination lacked procedural fairness.
In McKenzie, the court held that the intention of the legislature that s. 14.9 (3) of the PSEA authorize a mid-term dismissal without just cause was not sufficiently unequivocal to override common law principles of independence.6 Of relevance to the court was the inconsistency between the PSEA, which did not specify any requirement for cause for mid-term terminations, and the Residential Tenancy Act, which - by authorizing termination of an arbitrator “for cause” - logically implied that arbitrators may not otherwise be terminated.7 On these grounds, the court in McKenzie concluded that the termination of Mary McKenzie without cause was unlawful and of no force and effect.
Constitutional Finding
However, the court in McKenzie also determined that - if s. 14.9 (3) had been sufficiently unequivocal to evidence legislative intention to override natural justice - the provision would be unconstitutional.
Judges in provincial, inferior courts cannot be terminated without cause – such a termination would fall afoul of the unwritten constitutional imperative of independence.8 Absent express statutory intention to the contrary, the common law principles of judicial independence also protect administrative adjudicators from being removed at the pleasure of the executive, although fixed-term appointments are acceptable.9
However, in Ocean Port, the Supreme Court of Canada stated that, where the legislative intention that Board members serve at the pleasure of the executive is clear, there is no room to import common law principles of independence and elevate them to constitutional status.10 Ocean Port has been widely interpreted to foreclose any extension of constitutional independence beyond superior and provincial courts.
McEwan J. distinguished Ocean Port, which primarily focused on tribunals as policy-making bodies,11 from the instant case, where the administrative tribunal was assigned responsibilities lifted straight from the courts’ jurisdiction. The B.C. Supreme Court stated that “[t]he question left unanswered by Ocean Port was what to make of tribunals that are not ‘government’ decision makers”.12
McEwan J. drew on post-Ocean Port jurisprudence such as Bell Canada v. Canadian Telephone Employees Assn., in which the Supreme Court of Canada found that the federal Human Rights Tribunal should be held to a high standard of independence from the executive branch.13 In Bell, the Court identified a “spectrum” of tribunals whereby tribunals which function more like courts require a higher degree of independence from the executive branch. McKenzie also relied on the Supreme Court’s decision in Ell v. Alberta, in which the Court recognized that justices of the peace do not fall within written constitutional protection, but nonetheless are constitutionally required to be independent because they exercise judicial functions related to the basis upon which the principle of judicial independence was founded.14
In situating the Residential Tenancy Tribunal within the high or judicial end of the Bell spectrum, McEwan J. noted that the function of residential tenancy arbitrators is to adjudicate issues between private parties, a role very similar to the judicial function, and that in fact residential tenancy arbitrators perform the exact functions previously performed by the courts. McEwan J. favoured a functional approach to determining the applicability of the principle of independence which, as the Supreme Court did in Ell, extends the principle of independence outside the strict definition of “courts” based on the connection between the role of the tribunal and the “bases” on which the principle of judicial independence are grounded. In concluding that the role of residential tenancy arbitrators was closely connected to, and required the protection of, constitutional independence, McEwan J. stated forcefully that:
If the Respondents are correct, the same function, depending solely on whether it is located in a court or in a tribunal, may require the constitutional protection of a fair and independent arbiter, or may be left to whatever cowed or needy sycophant the government, in its absolute discretion, thrusts into the judgment seat. This is . . . so fundamentally illogical and arbitrary, that it cannot be reconciled with the concept of the rule of law itself.15
Implications of McKenzie for Administrative Justice
The B.C. government recently filed its notice of appeal from the McKenzie decision.16 How far the McKenzie decision may take us down the road to constitutionalizing the independence of tribunals remains to be seen. While McEwan J. found authority for the McKenzie decision in case law since Ocean Port, the court’s extension of the principle of judicial independence from justices of the peace17 and fixed-term, part-time small claims court deputy judges18 to adjudicators in administrative tribunals is significant and unprecedented. It is not clear whether other courts would be convinced that recent caselaw justifies moving away from Ocean Port's seemingly conclusive statement that “[w]hile tribunals may sometimes attract Charter requirements of independence, as a general rule they do not.”19
However, McKenzie has the potential to force courts to consider – in a factual context where the breach of independence was particularly egregious – the applicability of constitutional principles to administrative decision-makers. McKenzie’s findings are likely limited to tribunals at the high end of the Bell spectrum. They would certainly seem to apply to tribunals which adjudicate matters of law between private parties such as the Ontario Rental Housing Tribunal. The WSIAT, which adjudicates what previously would have been personal injury claims under tort law, may also fall under McKenzie’s logic. It seems doubtful that McKenzie logic’s takes us any closer to protecting the constitutional independence of tribunals which adjudicate entitlements between private individuals and governments such as the Social Benefits Tribunal.
Whatever its limits, McKenzie is a groundbreaking case for the fairness and independence of administrative tribunals. For the first time since Ocean Port, it raises the prospect of limiting the ability of governments to override – with virtual impunity - common law principles of independence and impartiality in administrative justice.
* Maryth Yachnin, Staff Lawyer, Industrial Accident Victims Group of Ontario (I.A.V.G.O.), (416) 924-6477, yachnim@lao.on.ca.
1 “The McKenzie Case: Overriding Adjudicative Independence?”, 10 OBA Workers’ Compensation Newsletter 1.
2 [2006] B.C.J. No. 2061 (S.C.) [“McKenzie”].
3 Prior to this appointment, Ms. McKenzie had served for 10 years as a Residential Arbitrator.
4 R.S.B.C. 1996, c. 384, as amended by SBC 2003-47-54, enacted May 28, 2003.
5 McKenzie, supra at paras. 57-60.
6 McKenzie, supra at para. 112. In Ocean Port Hotel Ltd. v. British Columbia, the Supreme Court of Canada stated that unequivocal legislative intention that members of an administrative tribunal serve at the pleasure of the executive can override common law principles of independence; [2001] 2 S.C.R. 781 at para. 27 [“Ocean Port”].
7 McKenzie, supra at para. 82; Residential Tenancy Act, S.B.C. 2002, c. 78, s. 86.3.
8 Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R. 3 [“PEI Reference”].
9 2747-3174 Quebec Inc. v. Quebec (Regie des permis d’alcool) (1996), 140 D.L.R. (4th) 577 (S.C.C.). At para. 67, the Court noted that, while fixed-term appointments are acceptable, the removal of administrative adjudicators must not simply be at the pleasure of the executive.
10 Ocean Port, supra at para. 24.
11 In Ocean Port, supra at para. 24, the Court noted that “[g]iven [tribunals’] primary policy-making function, it is properly the role and responsibility of Parliament and the legislatures to determine the composition and structure required by the tribunal”.
12 McKenzie, supra at para. 149.
13 [2003] 2 S.C.R 884 [“Bell”]. The Court in Bell determined that the common law standard of independence was met, and therefore did not have to directly address whether constitutional principles of independence applied. However, the Court did suggest at para. 31 that the Tribunal was not bound to the highest standard of independence by unwritten constitutional principles.
14 [2003] 1 S.C.R. 857 at para. 26 [“Ell”]. Cited as a further extension of this principle was the Ontario Court of Appeal’s decision in Ontario Deputy Judges Assn. v. Ontario (Attorney General), in which constitutional independence was required with respect to part-time deputy judges in Small Claims Court; (2006), 210 O.A.C. 94 (C.A.) [ “Ontario Deputy Judges Assn.”]. McEwan J. found that the PEI Reference left open the possibility of elaboration on the basis that “courts” may include tribunals that are court-like, or courts in all but name, and that given cases like Ell and Ontario Deputy Judges Assn., now “anything broadly labeled a ‘court’ or with at least one foot within the ‘judicial branch’ of government will attract constitutional protection.”
15 McKenzie, supra at para. 150 (emphasis in original).
16 Of note, an appeal court in McKenzie could find that the statute was not sufficiently unequivocal to override principles of natural justice and choose not to venture into the more tenuous area of constitutional independence.
17 Ell, supra note 13.
18 Deputy Judges Association v. Ontario, supra note 13.
19 Ocean Port, supra at para. 24.
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2005-2006 Section Chair’s Report - a Newsletter Exclusive!
Mike Johnston*
I was appointed Past Chair of the Workers’ Compensation Section this year, an honour bestowed in large part, I believe, as a result of being the Chair last year(?!). As a retro piece, Susan asked me to provide a report summarizing the Section’s activities over the past year for this newsletter, which I am pleased to do. In summary, the 2005-2006 Section year was a success, and for one simple reason: we had an excellent, committed Executive supported by a dedicated, hard-working Sections Coordinator, Janet Green. However, given the notable improvement in the Chair for this year, the prognosis for 2006-2007 is even brighter.
Last year’s Executive, consisting of Rob Boswell, Alec Farquhar, Ann Somerville, Michael Zacks, Leo Dillon, Stephen Roberts, Dan Revington, Suzanne Dajczak, Joe Morrison, Susan Adams, the Davids (Wilken, Whitten, and Gorelle) and I, met at least 8 times as an Executive last year. Behind the scenes, however, were the numerous technology, AGR, CLE, program, newsletter, and other essential meetings attended by our Executive members to ensure that our goals were achieved on behalf of the (almost) 150 Section members we represent.
Those goals included the December 8 “Fibromyalgia” dinner program, the February 9 “Draft ESRTW Policies” dinner program, and the April 20 “Administrative Justice System” dinner program. On May 18, Dan and Stephen co-chaired our own full-day Continuing Legal Education event, the well-attended and received “When is an Accident Really an ‘Accident’”. Finally, on June 8, we celebrated the Ron Ellis Award Dinner, to recognize the outstanding achievement and contribution made to workers’ compensation law by our recipient, Ian Strachan. We would like to thank LexisNexis Canada for their sponsorship of the Ron Ellis Award.
As Editor, Michael Zacks must be commended for ensuring that four excellent and informative Section Newsletters were also created during the year, in electronic form. Many thanks as well to the contributors for their efforts. These issues can all still be downloaded from www.oba.org by going to our Section, clicking on “Newsletters”, and entering your name and membership number.
But that’s not all! Last year’s Executive also found time to discuss and seek consensus on many other issues relevant to the practice of workers compensation law, with our unique blend of employer, worker, and “neutral” perspectives. Topics included Schedule C of Bill 14 (the Access to Justice Act, 2005) regarding the regulation of paralegals, and the McKenzie case regarding the termination of a Tribunal member in B.C. Our new OBA List Serve capacity was utilized to further these discussions on-line.
I encourage all of our members to attend our upcoming programs, to utilize the List Serve, and to visit our Section on the OBA website on a regular basis to take advantage of all the information, publications, and contacts the Section provides for you.
On a personal note, many thanks to Janet and to all my Executive colleagues for an interesting, amicable and successful year. I have learned and benefited immensely from working with all of you.
* Mike Johnston, Workplace Safety & Insurance Board – Special Investigations Br, (416) 344-5580, mike_johnston@wsib.on.ca.
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An Advocacy Primer Concerning the Workplace Safety Insurance Board-Canada Revenue Agency (WSIB-CRA) Joint Registration Initiative
Lukasz Petrykowski*
This paper will serve to assist employers’ advocates in comprehending the origins and significance of the WSIB-CRA Joint Registration Initiative while providing an overview of relevant advocacy considerations.
Background
In 1999, amendments to the Income Tax Act (ITA) allowed the Canada Revenue Agency (CRA),1 to disclose taxpayer information to assist in the administration of the ITA. In the particular sphere concerning workers’ compensation, the genesis of the CRA’s authority to disclose taxpayer information is found in the legislative subsections reproduced below:
Subsection 241(4)(l)
An official may, “provide the business number, name, address, telephone number and facsimile number of a holder of a business number to an official of a department or agency of the Government
of Canada or of a province solely for the purpose of the administration or enforcement of an Act of Parliament or a law of a province, if the holder of the business number is required by that Act or that law to provide the information (other than the business number) to the department or agency.”
Subsection 241(4)(n)
An official may, “provide taxpayer information to any person, solely for the purposes of the administration or enforcement of a law of a province that provides for workers' compensation benefits.”
From the vantage point of reciprocal information-exchange, the Workplace Safety and Insurance Board (WSIB),2 is authorized by the Workplace Safety and Insurance Act, 1997 (WSIA) to enter into information sharing agreements with government authorities. The legislative subsections underpinning this authority are reproduced below:
Subsection 159(9)
“With the approval of the Lieutenant Governor in Council, for the purpose of administering this Act the Board may enter into agreements with the government of Canada or of a province or territory of Canada or with a ministry, board, commission or agency of such a government under which,
(a) the government, ministry, board, commission or agency will be allowed access to information obtained by the Board under this Act; and
(b) the government, ministry, board, commission or agency will allow the Board to have access to information obtained by the government, ministry, board, commission or agency under statutory authority.”
As noted in the textual construction of this legislation, particularly by the use of the word “may”, the WSIB is not mandated to participate in bi-directional information sharing with a government authority. It simply retains the permissive authority to consider and implement such a program if it sees fit and as it sees fit to do so.
WSIB-CRA Joint Registration Initiative
The most prominent episode of the WSIB exercising its authority in this regard was its signing of a Memorandum of Understanding with the CRA on March 29, 2004, which detailed the form and function of a collaborative information-exchange between the two agencies. The primary purpose of this information-exchange was to identify employers who were registered in one agency’s data pool but not in the other agency’s data pool. A secondary purpose was ensuring employers’ future compliance with applicable laws and regulations. The identification process utilized a computerized cross-referencing analysis and the initial results of this analysis were provided by the CRA to the WSIB in 2004 identifying over 1000 potential leads, half of which resulted in new employer WSIB registrations.3
This was only the pilot-phase of the initiative, however, which came to be known as the WSIB-CRA Joint Registration Initiative (JRI), a unique provincial-federal collaborative information-exchange authorized by law and stimulated by the knowledge that many employers in the province of Ontario were not compliant with the ITA or the WSIA. A positive consequence of the publicity surrounding the pilot-phase of the JRI was for hundreds of employers to come forward and voluntarily register5 with the WSIB.
By 2005, the JRI had advanced from the pilot-phase to its full implementation and the WSIB had identified another 10,000 potential leads where correspondence and follow-up contact were produced for the purpose of increasing compliance in WSIB registration. The primary rationale for the JRI’s existence as it concerns coverage was best captured in the words of the former Minster of Labour for the province of Ontario, Chris Bentley:
"This joint program is of enormous benefit to the workers of Ontario… By making certain that all employers required to pay workplace safety and insurance premiums do so, we are creating a system that provides appropriate coverage in workplaces across the province."6
A secondary rationale for the JRI’s existence as it concerns competition was posited by the former interim Chair and President of the WSIB, Jill Hutcheon:
"The agreement means Ontario's employers will be working on a level playing field and that the employees of the province will have access to expert advice on workplace health and safety.”7
By June 2006, the WSIB and CRA announced that due to their perception of achieving remarkable successes,8 the JRI would continue without significant changes. More so, it is quite likely that the utility and methodology of the JRI will be exported to other Canadian workers’ compensation jurisdictions and legislative amendments to concomitant provincial statutes will facilitate that development, where necessary.
Privacy Concerns
It is likely that Ontario’s JRI, or an extra-jurisdictional doppelganger implemented at some time in the future, will face a constitutional challenge by an employer believing that its privacy rights were impugned by the information-exchange envisioned by any such federal-provincial scheme. A partial or outright challenge to the validity of such a scheme would likely be based in the rights afforded by section 8 of the Charter of Rights and Freedoms which states: “Everyone9 has the right to be secure against unreasonable search or seizure.”
The CRA has acknowledged these concerns, to some extent, by illuminating its position that the JRI:
“operates under the federal government’s privacy regime, and fully respects both the Privacy Act and the protection of taxfilers’ personal information. When information is shared between the CRA and other institutions, the CRA first ensures that there is proper authority to proceed and that a written agreement is in place that clearly delineates the terms and conditions of the release of information and sets out strict security and confidentiality guidelines.”10
For the time being, the JRI appears to be constitutionally sound but this is not to say that its purveyors or protocols should be removed from future scrutiny altogether. The manner and scope in which information is shared between the WSIB and CRA, or government agencies in general, must be regularly monitored and always be tempered by the flame of the reasonable expectation of privacy which is afforded to taxpayers.
Appeals
An important difference between employers who were registered within the program confines of the JRI is the date of WSIB registration. If an employer was registered in 2004 or 2005, they were liable for premiums (and non-compliance interest) on a retroactive basis to January 1, 2002, in addition to their premium liability on a go-forward basis. This would likely have been felt as very punitive and financially onerous for many, if not most, employers. This would also have likely generated considerable appeal volume at the WSIB Appeals Branch with pleas for retroactive and/or registration relief.
This is the most likely reason why the WSIB altered its JRI date of retroactive registration to January 1, 2004, for employers registered in 2006, as this start-point is more palatable to employers. This start-point can also be seen as a significantly relaxed departure from the stricture of WSIB Policy which permits the following approach:
“For new registered employers, insurance premiums are paid to the WSIB from the date an employer hires its first worker…
Failure to register with the WSIB is a debt owed for prior premiums not paid and, therefore, does not involve adjusting an employer's premium.”11
This expansive approach is also underpinned by the possibility that a failure to register with the WSIB can be viewed as an offence under section 151 of WSIA and is prosecutable under the Provincial Offences Act. The maximum theoretical penalty for such an offence by a corporation, for example, is $100,000.
Since it is clear that the WSIB has the authority to set the start-point for retroactive premium liability to the date an employer hires its first worker, the JRI’s retroactive registration start-point can be seen as benevolent, at least on a comparative basis. Nonetheless, there is ample prospect to successfully object to and appeal a JRI-induced WSIB registration.
Relief of Retroactivity
For example, a case for retroactive relief could be made where a JRI-induced WSIB registration occurred in December 2005, with liability retroactive to January 1, 2002. In this case, an employer was only weeks away (January 2006) from the introduction of the January 1, 2004, retroactive date and as such missed the benefit of incurring two less years of retroactive liability because of a late 2005 registration as compared to an early 2006 registration.
This will be an important point to consider for advocates and adjudicators alike as more JRI-related appeals are likely now blooming at the Workplace Safety and Insurance Appeals Tribunal (WSIAT). It is quite likely that WSIAT would entertain such an argument as part of their mandate to adjudicate each particular case on its own particular “merits and justice” while taking into account all relevant circumstances in its deliberation. WSIAT would also appreciate such an argument, on the basis of analogy, if WSIAT case-law concerning the recognizable concept of “on the cusp”12 is used in its support.
It should also be pointed out that the JRI-induced retroactive registration dates seem to have been selected on an arbitrary basis (firstly, January 1, 2002 and secondly, January 1, 2004) and from a technical standpoint did not even originate from an enacted/published WSIB Policy giving further ammunition to any argument for retroactive relief.
Re-Classification
Another strategy that should be utilized when dealing with JRI-induced WSIB registration advocacy issues is to appreciate that such registration always involves the WSIB’s effort to appropriately classify an employer’s business activity for the purpose of premium assessments. In this light, an argument in support of an objection or appeal can simply be made that the classification unit (a hierarchical delineation of a WSIB Rate Group) selected by the WSIB is not correct on the basis that it does not reflect the true business activity of the affected employer.
For example, a JRI-induced employer who manufactures industrial machinery used in the food and beverage industry and was classified by the WSIB as belonging to Rate Group 411, Classification Unit 3192-001 “Industrial Machinery Operations” could argue that they should belong to Rate Group 403, Classification Unit 3199-000 “Other Machinery and Equipment Operations”. If successful, this would translate into a premium reduction of almost 50%.13
Another re-classification strategy to consider when dealing with JRI-induced WSIB registration advocacy issues is to argue that an employer was incorrectly classified in a WSIB compulsorily-covered classification unit and that the employer’s true business activity most resembles a by-application (non-covered) classification unit. This could occur, for example, where an employer who solely brokers ground freight transportation was classified by the WSIB as belonging to Rate Group 570, Classification Unit 4561-000 “General Freight Trucking” instead of Rate Group 958, Classification Unit 4592-003 “Freight Brokers/Forwarders (Ground Freight)”. If the latter classification was awarded, this would translate into a premium reduction of 100%, since an employer would have the prerogative of not applying for WSIB coverage at all and thus seek a refund of any premiums, penalties and interest that had been paid as a consequence of the initial WSIB registration decision.
Conclusion
The WSIB-CRA JRI is a unique collaboration between provincial and federal agencies designed and implemented to maximize employer compliance with WSIA and ITA. In its short history, it has impacted thousands of employers in the province of Ontario and will continue to do so indefinitely in the future. As such, this paper can serve as a useful summation for employers’ advocates wishing to understand the JRI and as an aid to facilitate better advocacy in service to employers in general.
* Lukasz (Luke) Petrykowski, B.Sc., LL.B., of the Ontario Bar, is a post-graduate student in the Program of Occupational Health and Environmental Medicine at McMaster University in Hamilton, Ontario. He is studying towards his D.O.H.S. (Diploma in Occupational Health & Safety) and articled at the Workplace Safety and Insurance Appeals Tribunal. He can be reached at lukepetry@hotmail.com.
1 The federal agency whose mandate is to administer the provisions of the ITA in the nation of Canada.
2 The provincial agency whose mandate is to administer the workers’ compensation system in the province of Ontario.
3 During this initial pilot-phase, the JRI’s scope was limited to three geographic areas and only captured the construction industry. During this same period, the WSIB provided the CRA with approximately 7500 potential leads for employers not registered with the CRA.
4 It should be pointed out that the JRI does not possess the functional capacity to detect non-compliant employers if such employers have dually failed to register with the WSIB and CRA.
5 The normative process for WSIB registration is best explained by WSIB Policy #14-02-02 entitled “Employer Accounts – Registration”. This WSIB Policy should also be reviewed in conjunction with WSIB Form 775A. Section 75 of WSIA imposes a legal obligation on employers to register with the WSIB within 10 days of becoming an employer if its operations are part of an industry included in Schedule 1 or 2 of WSIA.
6 “FEDERAL-PROVINCIAL AGREEMENT ENSURES FAIRNESS FOR BUSINESS AND PROTECTION FOR WORKERS”, CRA Press Release, January 24, 2005.
7 Ibid.
8 The JRI was awarded a Canadian Project Excellence (CPEX) Award in April 2006 for Best Practices recognizing particular achievement in the application of project management discipline, leadership and vision. See generally, “Revenue Agency and province of Ontario win best practices award for partnership”, CRA Press Release, April 28, 2006.
9 It has been successfully argued that some provisions of the Charter of Rights and Freedoms apply equally to corporations as they do to natural persons.
10 “Revenue Agency and province of Ontario win best practices award for partnership”, CRA Press Release, April 28, 2006.
11 WSIB Policy #14-02-06 entitled “Employer Accounts-Employer Premium Adjustments”
12 See for example, WSIAT Decision No. 2322/03 which supports the proposition that one factor that can be taken into account when a decision-maker exercises discretion to vary a finite retroactivity period for premium liabilities imposed on an employer by WSIB Policy is to discern whether a classification change took place “on the cusp” (or temporally proximate to) to the introduction of a new WSIB Policy. On a historical basis, the WSIAT cases giving colour to this argument dealt with the change from WSIB Policy #08-01-09 to #14-02-06.
13 In 2006, the WSIB premium cost for Rate Group 411 was $2.91/$100 assessable payroll while the WSIB premium cost for Rate Group 403 was $1.55/$100 assessable payroll.
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Case Summary: Logan v. Nova Scotia (Workers’ Compensation Board), 2006 NSCA 88
Susan Adams*
The issue on appeal from the Nova Scotia WCAT was whether a wrongful dismissal was an “accident” for the purposes of claiming workers’ compensation benefits.
In October 2003, Ms. Logan was dismissed from long term employment without cause. Ms. Logan sued her employer for wrongful dismissal; the case was settled and the award included an amount identified as pain and suffering.
An accident report was filed with the WCB in October 2004 claiming chronic depression and anxiety over a 9 year period. The WCB denied the claim and the case was appealed to the WCAT. The medical evidence on filed showed a history of stress in the workplace prior to the dismissal. When the case reached the Tribunal, additional medical reports indicated that Ms. Logan’s psychological state only became severe after her termination.
The submissions before the WCAT in support of entitlement to benefits focused on whether Ms. Logan suffered an injury by accident arising out of and in the course of employment.
As a general principle the Tribunal found that wrongful dismissals are not accidents for workers’ compensation purposes. The Tribunal also held that whether an event is traumatic is to be determined objectively. The claim for benefits was denied.
The Court of Appeal’s review
In Nova Scotia, the Workers’ Compensation Act (“WCA”) provides for a statutory appeal, with leave, to the Court of Appeal on questions of law and jurisdiction, but not on questions of fact (s. 256). Ms. Logan appealed the WCAT’s decision.
The standard of review
The Court began by considering the applicable standard of review using the pragmatic and functional approach. The first two issues under review were identified as the decision to apply an objective test to determine whether there was a traumatic event and the conclusion that a termination of employment cannot be a traumatic event. The Court decided that these issues are reviewed using a correctness standard. The third issue, reviewed on a reasonableness standard, was the Tribunal’s decision that the events in issue were not traumatic.
The relevant sections of the Nova Scotia Act
Section 2 (a) an accident includes:
(i) a willful and intentional act, not being the act of the worker claiming compensation,
(ii) a chance event occasioned by a physical or natural cause, or
(iii) disablement, including occupational disease, arising out of and in the course of employment,
but does not include stress other than an acute reaction to a traumatic event.
Section 10(1) Where, in an industry to which this Part applies, personal injury by accident arising out of and in the course of employment is caused to a worker, the Board shall pay compensation to the worker as provided by this Part.
Section 28 (1) The rights provided by this Part are in lieu of all rights and rights of action to which a worker, a worker’s dependant or a worker’s employer are or may be entitled against
a) the worker’s employer or that employer’s servants or agents; and
b) any other employer subject to this Part, or any of that employer’s servants or agents,
as a result of any personal injury by accident
c) in respect of which compensation is payable pursuant to this Part; or
d) arising out of and in the course of the worker’s employment in an industry to which this Part applies.
Wrongful dismissal as an accident
The Court agreed with the Tribunal that a wrongful dismissal is not an accident for workers’ compensation purposes.
It was common ground that the historic trade-off underlying the workers’ compensation system was not intended to affect the ability to sue regarding contractual claims for wrongful dismissal.
The appellant argued that recovery of damages for breach of contract is not an alternative to workers’ compensation benefits for a stress injury as a result of the wrongful dismissal. However, the Court’s view was that, unfortunately, summary dismissal is not unusual in today’s workforce. The manner of the dismissal and its impact on the worker may increase a wrongful dismissal award.
Did the worker experience a traumatic event?
The Tribunal considered whether there were aspects of the dismissal which qualified as a traumatic event and found there were not. The Court held that the Tribunal applied the correct legal principles to the facts and offered a reasonable basis for its conclusion.
Assessing traumatic events
In analyzing this aspect of the case, the Tribunal considered whether a reasonable person would regard the event as traumatic. The appellant submitted that the test should use a combination of objective and subjective factors. The appellant suggested the Tribunal ought to have asked whether a reasonable person, standing in the claimant’s place, with the same psychological profile, would react the same way.
The Court of Appeal approached this question through a discussion of ordinary meaning, immediate context and the history and purpose of the legislation.
In terms of the ordinary meaning of the word “traumatic”, the dual definition of a physical injury or distress did not exclude a subjective or objective approach.
In the context of the WCA, the term accident is not exhaustively defined in the legislation. However, it is limited by the exclusion of stress, other than in relation to a traumatic event.
The Court reviewed the history of the legislation and found that the cases prefer an objective approach.
The decision concludes by reviewing cases submitted by the appellant in support of the position that there is a subjective element to the test. Of interest are the paragraphs discussing the thin skull principle. The Court agrees with the intervener’s submission that the principle does not assist in determining whether or not there was an accident. The decision indicates that there must be an objectively determinable accident which arose out of and in the course of employment before one considers whether the individual is more susceptible to injury than another person.
The court held that whether an event is traumatic should be assessed from an objective point of view; the Tribunal did not make a reviewable error in so concluding.
* Susan Adams, Counsel, WSIAT, (416) 314-8851, susan.adams@wst.gov.on.ca.
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