On June 13, 2008, the Workplace Safety and Insurance Board (of Ontario) issued the “Fatal Claim Premium Adjustment” policy that cancels rebates earned by employers in the case of a workplace fatality. The WSIB’s new policy is anti-employer and arguably puts fault back into a workers’ compensation system that has been based on a “no fault” principle since its inception in 1914 under the Meredith principle. The WSIB offered little explanation for this dramatic policy change which appears to have been implemented to avoid further media scrutiny and to further punish employers
The September 23, 2008 front page headline in the Toronto Star proclaimed “No Cash for Killer Firms”. The Star went on to state, “the Workplace Safety and Insurance Board (“WSIB”) made the [Policy] change after a Star investigation found the agency paid out millions of dollars in rebates, prompting a sweeping year-long review of the incentive program at the centre of the controversy.”
Although the Star had been consistently running articles on the WSIB, one might hope that the WSIB would have had a more principled basis for the policy than responding to media scrutiny as the basis for this dramatic and punitive policy change. Although the Star was several months late in acknowledging the passage of the June 9, 2008 policy by the Board of Directors of the WSIB, for which it took credit, their inflammatory use of the phrase “Killer Firms” clearly encourages a fault finding mentality. The new WSIB policy has injected fault into the longstanding, no-fault workers’ compensation system of Ontario. If this can happen in Ontario, which is similar to workers’ compensation systems in every Canadian jurisdiction, then it can happen anywhere in Canada.
The policy reads as follows: “In the year of a traumatic fatality claim, a premium increase, equivalent to the NEER or CAD-7 refund an employer is entitled to receive, is applied to the employer of the deceased worker.”
In other words, even though experience rating systems are designed and managed by the WSIB to encourage employers to reduce on the job accidents and injuries, rebates will be revoked during years in which a workplace fatality occurs. This new policy, euphemistically titled the Fatal Claim Premium Adjustment, is a punitive intervention and departure from the long established incentive systems by the WSIB known as experience rating systems.
The Star article makes the point that “the WSIB will claw back the rebate regardless of whether the firm broke a safety law”. This is another disturbing part of the new policy. However, this aspect of the new policy is clearly contrary to s. 82 of the Workplace Safety and Insurance Act (“the Act”), which states:
82. The Board may increase or decrease the premiums other wise payable by a particular employer in such circumstances as the Board considers appropriate including the following:
- If, in the opinion of the Board, the employer has not taken sufficient precautions to prevent accidents to workers or the working conditions are not safe for workers.
- If the employer’s accident record has been consistently good and the employer’s ways, works, machinery and appliances conform to modern standards so as to reduce the hazard of accidents to a minimum.
- If the employer has complied with the regulations made under this Act or the Occupational Health and Safety Act respecting first aid.
- If the frequency of work injuries among the employer’s workers and the accident cost of those injuries is consistently higher than that of the average in the industry in which the employer is engaged. 1997, c. 16, Sched. A, s. 82. The Act, empowering the conduct and policy making decision of the WSIB, specifically addressees compliance with the Occupational Health and Safety Act (“OHSA”) in paragraph 3 only regarding “first aid”. That provision does not appear to provide legislative authority for the new policy.
Therefore, there is a serious question as to whether or not the WSIB has overstepped its legislative authority in passing policy clearly designed to punish an employer the year that a traumatic fatality occurs even if there is no legal violation The policy will be imposed even though a Ministry of Labour investigation may conclude that the employer was not responsible for the cause of the accident and not in contravention of the provisions of the OHSA.
Interestingly, the Star reported on a workplace fatality where a mining company pleaded guilty to an OHSA violation, and in the same year received a WSIB rebate. The Star argued that this was outrageous. However, trying to justify an attack on the no-fault workers’ compensation system, through an emotionally charged personal tragedy, has resulted in a punitive, anti-employer change in WSIB policy. If the WSIB wishes to introduce fault into the workers’ compensation system, to be fair to all sides, then it puts at risk workers’ entitlement to benefits. If fault for accidents is relevant in the workers’ compensation system, the entitlement to benefits needs to be tied to worker negligence. Workers who are negligent, and are injured or cause injury to others, would have to accept responsibility for their actions. Does the WSIB really wish to deny benefits to workers and their families if the worker violated an employee safety rule or the OHSA? This is clearly the implication of introducing fault in the workers’ compensation system. Fairness requires a rethinking of this new WSIB policy.