The modern workplace is becoming increasingly complex. In growing numbers, workplaces are being contributed to by students, interns, volunteers, contractors and employees who generally have greater mobility than ever before to engage in alternate working relationships with their employers.
In this ever-evolving workplace environment, where the traditional lines of “worker” and “employer” become increasingly blurred, the question of who constitutes a “worker” for the purposes of workers’ compensation is a fundamental and important one.
First, it touches upon the very purpose of workers’ compensation legislation, which involves the trade-off where in exchange for the no-fault benefits offered by workers’ compensation, workers forego the right to sue their employer or co-workers for their workplace injuries. The question whether someone is a “worker” is therefore essential in assessing whether a civil action can proceed against the company or whether the matter is covered solely by the workers’ compensation regime.
Second, an employer is interested in this issue from a purely operational point of view. An employer will be assessed premiums on the basis of who its workers are and will have claims costs assessed against its experience rating for injuries sustained by workers. By clearly understanding who is and is not a “worker,” the employer is able to assess which members of its workforce will affect the company’s premiums and claims experience ratings.
As a starting point, the workers’ compensation system is inclusive; therefore, the definition of “worker” is necessarily broad. As a result, the definition is not limited to the traditional employer-employee relationship and will capture most situations in which an individual is performing work for a company under any contract of service. As a general rule, anyone who is being paid for services and does not themselves employ any workers would be considered a worker of the employer.
Contractors
One common circumstance where the question of who constitutes a worker becomes relevant is with respect to work performed by contractors. Where the contractor operates as a corporation and employs workers, he is generally considered an employer himself and would have to have workers’ compensation coverage in place. Such true contractors would not be considered workers of the company and do not impact the premiums of the employer. Nor would injuries to the contractor’s employees affect the experience rating of the company who hired the contractor.
However, it is quite common in many industries for companies to create contractor relationships with individuals who are not incorporated or are really running a one-person operation without employing anyone else themselves. Such individuals may well be considered workers of the company who hires them under contract, unless they have their own coverage. Too often, the solo-contractor who is not really running a business but instead enjoying his contractor status from a tax benefits point of view, will not have workers’ compensation coverage in place, making the company responsible for premiums and claims costs associated with that operation.
As a result, when hiring contractors, employers should ensure they are contracting with a corporation, rather than an individual. In addition, employers should make it a condition of the contracting relationship that the contractor carries her own workers’ compensation coverage. Lastly, the employer should make sure the contractor’s workers’ compensation account is in good standing. If a contractor’s account is in arrears, in some cases the employer may become liable for unpaid premiums related to the work the contractor performs. As a result, it’s good practice to request clearance letters through the provincial workers’ compensation board confirming that the contractor is operating in good standing.
Directors
The question of whether a director or executive officer is considered a “worker” is particularly tricky to assess and varies among jurisdictions. Some workers’ compensation systems expressly exclude directors. In other jurisdictions, whether the director or officer will be deemed a “worker” will depend in part on whether she is on the company’s payroll and performs services akin to the company’s day-to-day business.
Such a coverage issue can become a nightmare scenario, especially in closely held companies where the worker doing the on-the-ground work of the business may also be the owner and director of the corporation. Without coverage, the company is not protected from civil suit.
This was the result in the Ontario case of Sam’s Auto Wrecking Co. where the company’s vice-president was injured during the unloading of a truck and successfully sued his employer. In addition, the employer’s own liability insurance policy contained an exclusion for workplace injuries, revealing a gap in coverage that resulted in the employer bearing the full loss on its own.
Learners
Another common extension of the concept of “worker” that is consistently addressed in workers’ compensation legislation across Canada covers individuals who are considered learners.
The ordinary definition of a worker covers anyone who is performing work under a contract of service. However, the statutory workers’ compensation schemes uniformly recognize coverage for those individuals who are not strictly employed or working under a contract for service but are still subject to the ordinary hazards of the workplace as a result of a training program, testing program or probationary work prior to the commencement of the actual working relationship.
In Newfoundland & Labrador (Workplace Health, Safety & Compensation Commission) v. Mason, the issue before the court was whether coverage should extend to the fatal injuries of an individual who fell 65 feet from a communications tower. In this case, an individual went to a job interview as a rigger and, during the interview process, the company foreman started showing him some techniques for using equipment and safety harnesses and ultimately travelled to the tower site to test his ability with climbing and working at heights. It was during this test climb that the interviewee fell.
The company, presumably trying to avoid the claims costs associated with dependents’ benefits, took the position that workers’ compensation coverage was not engaged because the individual was not a worker since the incident occurred pre-employment and during the recruitment process. The court, however, confirmed the limited safety training and test climb constituted sufficient “hands-on” instruction to categorize the worker as a learner, so coverage was extended.
Volunteers
A somewhat related example to that of the learner is the volunteer. Volunteers, by definition, are not being paid for services and are not operating under a contract of service. As a result, volunteers do not fit the definition of “worker” that is used in workers’ compensation legislation and are generally not covered. However, they can be subject to the same hazards and risks of employment as any employee of the company and if they are injured, a civil action may proceed against the company.
There are some interesting cases which involve non-cash payments to volunteers, such as gift cards, certificates or food in which such “payments” were deemed to be sufficient to turn a volunteer into a worker, but a company is frankly in an unenviable position when the defence to a tort action comes down to the slices of pizza that were provided in the lunch room.
As a result, if a business is a charitable organization or not-for-profit that is contemplating using volunteer labour, it is a good idea to consider purchasing voluntary coverage to avoid the risks of having non-covered labour in the workforce.
Illegal workers
One emerging issue that is brought into focus as Canada is contemplating its policies on immigration in light of the Syrian refugee crisis is that of the illegal worker. The question may arise whether a worker is disentitled from workers’ compensation coverage in circumstances where the underlying employment relationship is illegal and the person in question is actually prohibited from working altogether. While there are no reported cases on this issue directly, one would assume that public policy would favour extending coverage in these sorts of cases given the vulnerability of the persons in question. In addition, cases of illegal workers may well be distinguishable from cases where a worker is engaged in illegal acts at the time of injury, which would raise the threshold issue of entitlement on the basis of “removing oneself from the course of employment.”
In this ever-evolving workplace environment, where the traditional lines of “worker” and “employer” become increasingly blurred, the question of who constitutes a “worker” for the purposes of workers’ compensation is a fundamental and important one.
First, it touches upon the very purpose of workers’ compensation legislation, which involves the trade-off where in exchange for the no-fault benefits offered by workers’ compensation, workers forego the right to sue their employer or co-workers for their workplace injuries. The question whether someone is a “worker” is therefore essential in assessing whether a civil action can proceed against the company or whether the matter is covered solely by the workers’ compensation regime.
Second, an employer is interested in this issue from a purely operational point of view. An employer will be assessed premiums on the basis of who its workers are and will have claims costs assessed against its experience rating for injuries sustained by workers. By clearly understanding who is and is not a “worker,” the employer is able to assess which members of its workforce will affect the company’s premiums and claims experience ratings.
As a starting point, the workers’ compensation system is inclusive; therefore, the definition of “worker” is necessarily broad. As a result, the definition is not limited to the traditional employer-employee relationship and will capture most situations in which an individual is performing work for a company under any contract of service. As a general rule, anyone who is being paid for services and does not themselves employ any workers would be considered a worker of the employer.
Contractors
One common circumstance where the question of who constitutes a worker becomes relevant is with respect to work performed by contractors. Where the contractor operates as a corporation and employs workers, he is generally considered an employer himself and would have to have workers’ compensation coverage in place. Such true contractors would not be considered workers of the company and do not impact the premiums of the employer. Nor would injuries to the contractor’s employees affect the experience rating of the company who hired the contractor.
However, it is quite common in many industries for companies to create contractor relationships with individuals who are not incorporated or are really running a one-person operation without employing anyone else themselves. Such individuals may well be considered workers of the company who hires them under contract, unless they have their own coverage. Too often, the solo-contractor who is not really running a business but instead enjoying his contractor status from a tax benefits point of view, will not have workers’ compensation coverage in place, making the company responsible for premiums and claims costs associated with that operation.
As a result, when hiring contractors, employers should ensure they are contracting with a corporation, rather than an individual. In addition, employers should make it a condition of the contracting relationship that the contractor carries her own workers’ compensation coverage. Lastly, the employer should make sure the contractor’s workers’ compensation account is in good standing. If a contractor’s account is in arrears, in some cases the employer may become liable for unpaid premiums related to the work the contractor performs. As a result, it’s good practice to request clearance letters through the provincial workers’ compensation board confirming that the contractor is operating in good standing.
Directors
The question of whether a director or executive officer is considered a “worker” is particularly tricky to assess and varies among jurisdictions. Some workers’ compensation systems expressly exclude directors. In other jurisdictions, whether the director or officer will be deemed a “worker” will depend in part on whether she is on the company’s payroll and performs services akin to the company’s day-to-day business.
Such a coverage issue can become a nightmare scenario, especially in closely held companies where the worker doing the on-the-ground work of the business may also be the owner and director of the corporation. Without coverage, the company is not protected from civil suit.
This was the result in the Ontario case of Sam’s Auto Wrecking Co. where the company’s vice-president was injured during the unloading of a truck and successfully sued his employer. In addition, the employer’s own liability insurance policy contained an exclusion for workplace injuries, revealing a gap in coverage that resulted in the employer bearing the full loss on its own.
Learners
Another common extension of the concept of “worker” that is consistently addressed in workers’ compensation legislation across Canada covers individuals who are considered learners.
The ordinary definition of a worker covers anyone who is performing work under a contract of service. However, the statutory workers’ compensation schemes uniformly recognize coverage for those individuals who are not strictly employed or working under a contract for service but are still subject to the ordinary hazards of the workplace as a result of a training program, testing program or probationary work prior to the commencement of the actual working relationship.
In Newfoundland & Labrador (Workplace Health, Safety & Compensation Commission) v. Mason, the issue before the court was whether coverage should extend to the fatal injuries of an individual who fell 65 feet from a communications tower. In this case, an individual went to a job interview as a rigger and, during the interview process, the company foreman started showing him some techniques for using equipment and safety harnesses and ultimately travelled to the tower site to test his ability with climbing and working at heights. It was during this test climb that the interviewee fell.
The company, presumably trying to avoid the claims costs associated with dependents’ benefits, took the position that workers’ compensation coverage was not engaged because the individual was not a worker since the incident occurred pre-employment and during the recruitment process. The court, however, confirmed the limited safety training and test climb constituted sufficient “hands-on” instruction to categorize the worker as a learner, so coverage was extended.
Volunteers
A somewhat related example to that of the learner is the volunteer. Volunteers, by definition, are not being paid for services and are not operating under a contract of service. As a result, volunteers do not fit the definition of “worker” that is used in workers’ compensation legislation and are generally not covered. However, they can be subject to the same hazards and risks of employment as any employee of the company and if they are injured, a civil action may proceed against the company.
There are some interesting cases which involve non-cash payments to volunteers, such as gift cards, certificates or food in which such “payments” were deemed to be sufficient to turn a volunteer into a worker, but a company is frankly in an unenviable position when the defence to a tort action comes down to the slices of pizza that were provided in the lunch room.
As a result, if a business is a charitable organization or not-for-profit that is contemplating using volunteer labour, it is a good idea to consider purchasing voluntary coverage to avoid the risks of having non-covered labour in the workforce.
Illegal workers
One emerging issue that is brought into focus as Canada is contemplating its policies on immigration in light of the Syrian refugee crisis is that of the illegal worker. The question may arise whether a worker is disentitled from workers’ compensation coverage in circumstances where the underlying employment relationship is illegal and the person in question is actually prohibited from working altogether. While there are no reported cases on this issue directly, one would assume that public policy would favour extending coverage in these sorts of cases given the vulnerability of the persons in question. In addition, cases of illegal workers may well be distinguishable from cases where a worker is engaged in illegal acts at the time of injury, which would raise the threshold issue of entitlement on the basis of “removing oneself from the course of employment.”
