Case reshapes understanding of workplace injury claims across provincial borders
The Ontario Superior Court of Justice recently dealt with a workers' compensation case examining whether provincial workplace safety laws could prevent an Ontario worker from suing out-of-province parties in Ontario courts.
The case involved a truck driver who was injured in Texas while unloading cargo that had been loaded in New Brunswick. When given the choice between accepting workers' compensation benefits or pursuing legal action, the worker opted to sue both the out-of-province employer and their employee who had loaded the cargo.
The case highlighted fundamental questions about how workplace safety insurance systems operate when incidents involve multiple provinces, particularly regarding which province's laws govern employers' immunity from lawsuits.
The events began when an Ontario-based trucking company was hired to transport goods from New Brunswick to Texas. The first driver transported the cargo from New Brunswick to Toronto, where the second driver took over for the journey to Texas, where he sustained injuries while unloading.
The court outlined the historical foundation of workers' compensation in Canada: "Workers' compensation is a system of compulsory no-fault mutual insurance administered by the state... In Canada, the history of workers' compensation begins with the report of the Honourable Sir William Ralph Meredith, one-time Chief Justice of Ontario, who in 1910 was appointed to study systems of workers' compensation around the world and recommend a scheme for Ontario."
The system operates on what the court called the "historic trade-off." As explained in the decision: "Workers lost their cause of action against their employers but gained compensation that depends neither on the fault of the employer nor its ability to pay. Similarly, employers were forced to contribute to a mandatory insurance scheme, but gained freedom from potentially crippling liability."
The workplace safety tribunal initially ruled that the worker could proceed with the lawsuit because the employee who loaded the cargo had no connection to Ontario. The tribunal cited a 1985 British Columbia case about jurisdictional limits.
The decision stated: "The tribunal held that defendants sued in Ontario courts by injured workers must be in Ontario or sufficiently connected to Ontario to allow the province to affect their property and civil rights in Ontario. It held that [the employee] had no connection to Ontario so the Province could not affect his property and civil rights."
The court found this interpretation problematic, noting: "This led to the seemingly perverse result that because [the employee] had no connections to Ontario, he can be sued here for a tort committed in New Brunswick and injuries suffered in Texas."
The court emphasised that workers' compensation operates as a shared policy across Canada. The decision stated: "Since the Supreme Court of Canada decision in Morguard, provinces are seen less as independent foreign states at common law and more as part of a cooperative federal whole."
The court explained that the central issue wasn't about Ontario attempting to regulate out-of-province parties, but rather about determining "whether Ontario workers who are entitled to statutory no-fault workers' compensation benefits can sue at common law in the Ontario Superior Court of Justice."
The decision added: "The Ontario statute is not aimed at protecting or affecting the property and civil rights of [the employee]. His property and civil rights are regulated by the Province of New Brunswick."
The court ultimately determined that the tribunal had incorrectly applied constitutional principles about territorial jurisdiction. It ordered the matter to return to a new tribunal for fresh consideration, specifically directing it to interpret the workers' compensation legislation without considering constitutional limitations on Ontario's authority over out-of-province parties.
As stated in the decision: "I set aside both decisions below concerning whether [the worker] and his spouse are entitled to sue [the employer] and [the employee] in the Ontario Superior Court of Justice. I remit the matter to a differently constituted decision-maker or panel to consider the statutory interpretation... freed from the constitutional doctrine of extra-territoriality."
The court concluded that the proper focus should be on interpreting the Ontario legislation "in accordance with the modern principle of statutory interpretation... with due regard to the shared national implementation of workers' compensation schemes."
