DNF: Waiver Fails to Protect Self-Insured Employer from Injured Employee’s Court Action

The Workplace Safety and Insurance Act regime is predicated on the categorization of employers within its scheme.  Some employers do not need to be insured at all.  If they choose not to be insured the Act gives their employees the right to bring a civil case against them for injuries suffered in the course of employment.  A recent Ontario Court of Appeal decision clarified the law surrounding the eligibility of employees to make such a claim.

In Fleming v Massey, the employer operated a go-kart racetrack facility.  Such a facility does not have to register for WSIB coverage, and this employer had not voluntarily opted-in to such coverage.

The employee was filling in for another worker as “race director.”  While fulfilling his duties in this role, the employee was injured in a go-kart collision.

The employee brought a civil suit against his employer and others, alleging that their negligence caused his injuries.

Prior to the accident, the employee had signed a waiver releasing the employer from any liability for injuries sustained at work, including those suffered as a result of the employer’s negligence.  The employer relied upon this waiver and asked the trial court to dismiss the action on a preliminary basis.  The motion judge accepted the validity of the waiver and dismissed the claim.

On appeal, the employee argued that the waiver was void.

The Court of Appeal reviewed the history of employee claims against employers that pre-dated the workplace compensation system.  Historically, it was immensely difficult, if not impossible, for employees to claim any compensation from their employers for injuries suffered at work.  This was in large part due to the doctrine of voluntary assumption of risk, which essentially held that a worker accepted the risks that came with being employed in a given position.

The workplace compensation system replaced this traditional system, implementing the system with which modern employers are familiar, namely a no-fault, administrative insurance benefit system which is mandatory for most employers.  This system precludes private court actions by employees against insured employers for injuries suffered in the course of employment.   Employees insured under this system are not permitted to waive their entitlement to benefits.

The question before the Court was whether the same law that prevented employees from waiving benefits under this system also precluded them from waiving their entitlement to sue their employer when their employer was not insured under the system.

The Court determined that it did.

The Court determined that the worker’s compensation model in the form of the WSIA was a complete rejection of the voluntary assumption of risk model that had existed before its inception.  The waiver was characterized by the court as an attempt to create a situation where the employee assumed the risk of his employment.  That was contrary to the purpose underpinning the WSIA, and was therefore impermissible on the grounds of public policy.

As a result, the waiver was void, and the employee was entitled to continue his action.

Employers who are not obligated to carry WSIB coverage are at risk of facing significantly greater costs then insured employers in the case of significant workplace injuries.  This case shows that even in cases where employees voluntarily relinquish their rights to take action against their employer, that permission may be withdrawn, and the Court will ultimately not give weight to such a waiver.  As a result, a significant tool that self-insured employers could use to minimize their liability for workplace accidents has been rendered useless.