While the Alberta Workers’ Compensation Act (“WCA”) establishes a no-fault insurance scheme for workers which is funded collectively by all employers, it also includes a significant “user-pay” component designed to promote injury prevention and disability management. This element of the WCA scheme is most aggressively applied through a number of measures which the Alberta Workers’ Compensation Board (“WCB”) describes as “performance pricing.” The two primary means through which the WCB ensures that poor performers pay more in premiums is the Experience Rating Plan and the Poor Performance Surcharge.

Under the Experience Rating Plan, the WCB will adjust an employer’s premiums up to a maximum of ± 40% based on the employer’s performance as measured against the industry average. Employers with claims costs that exceed the industry average by 80% or more will receive the maximum Experience Rating Surcharge (“ERS”) available under the Experience Rating Plan.1 The WCB will also impose a Poor Performance Surcharge (“PPS”) on top of the ERS if an employer has been assessed the maximum ERS for two or more consecutive years and consistently has a high number of claims on its experience account.2 The maximum PPS is 25% in the first year it is applied against an employer, however, this surcharge increases exponentially with each consecutive year it is applied, resulting in a maximum PPS of 200% for an employer who has received the maximum ERS for 5 for more consecutive years. Thus, an employer’s individual claim experience can have a dramatic impact on its WCB premiums.

In the event of a workplace accident, the general rule is that the WCB claim costs will be charged against the experience account of the injured worker’s employer. Accordingly, the most straightforward means for employers to control their WCB premiums is through improvements to their health and safety and disability management programs. However, the above framework for assessing WCB premiums has also made it increasingly important for employers to consider whether they have any basis under the WCB’s “Cost Relief” Policy to avoid or minimize the impact that a particular WCB claim will have on their experience account. One such basis for cost relief is s. 95(2) of the WCA, which empowers the WCB to transfer all or part of the cost of a claim to the experience account of another employer “if it appears to the satisfaction of the Board [WCB] that a worker has been injured or killed due to the negligence of another employer or another employer’s worker”. When the WCB receives a claim costs transfer application, it will determine the degree of negligence of all parties involved in the accident, and apportion the costs of the claim accordingly. Thus, claim costs transfers provide employers with a means to avoid bearing the brunt of claim costs resulting from the negligence of another employer or another employer’s workers.

But employers should also keep in mind that the accident reporting requirements under the WCA are primarily aimed at collecting information to determine the nature of the worker’s injury and whether that injury arose out of and in the course of the employment. Therefore, the WCB often has little or no information upon which it can form a reasoned decision as to where negligent responsibility for a worker’s injuries might lie. Because of this and the fact that claim costs transfers are intended to apply as an exception to the general rule, the applicant carries the onus of establishing a prima facie case of negligence against another employer (or its workers) before that other employer must respond with evidence to prove otherwise.

Once the WCB renders a decision as to whether to transfer costs, either party can request an internal review by the WCB. If unhappy with the WCB’s review of the decision, either party may then appeal to the Appeals Commission, an independent body established to hear appeals of workers’ compensation matters. Such appeals are not a true appeal, but rather a fresh hearing of the matter, where the parties are free to present new evidence and no deference is owed to the WCB’s determination of the matter.

Given the significant impact a single WCB claim can have on an employer’s WCB premiums, claim cost transfers are likely to become an increasingly more common subject of dispute between employers involved in workplace accidents.

Accordingly, whenever a worker is seriously injured in an accident involving multiple parties (or occurring at a multi-party worksite), each employer is best advised to proactively gather and preserve evidence showing that they were not negligently responsible for the worker’s injuries and/or that another party was at fault. It is also important for employers to continue to collect and consider new information as it becomes available, because it is always possible to revisit the issue of a cost transfer based on new evidence.