Every Canadian province has legislation that provides compensation to employees who are injured, or who fall ill with an occupational disease, during the course of their employment. In Ontario, for example, compensation is provided by the Workplace Safety and Insurance Act (formerly the Workers' Compensation Act.)

Access to Benefits

Workplace Safety and Insurance benefits are funded by employer contributions called premiums. Employer premiums are set by the provincial Workplace Safety and Insurance Board and may vary from year to year. Depending on the annual number and associated costs of accidents and/or injuries, the employer may be charged a surplice or given a rebate.

Since the employer's contingent liability may be significant, purchasers of a business in Canada should be careful to check the scope of the vendor's workers compensation liabilities, which will be assumed upon the purchase of the enterprise.

An injured employee's entitlement to access the system is not based upon an assessment of who was at fault for the injury. However if the injury was self-inflicted or as the result of the serious and wilful misconduct of the employee, compensation may be denied.

In exchange for this employer funded compensation system, the employee relinquishes any right to begin a court action against the employer or against another employee in respect of an injury for which compensation is received. Any agreement between a worker and an employee to forgo entitlement to benefits is void.

The legislation does not cover every person who is employed in Canada, and care should be taken within each jurisdiction to determine whether the legislation covers the class of employers into which your business falls.

Payment of Benefits

For the most part, benefits are paid on a periodic basis. Some types of benefits are paid in a lump sum, such as health care reimbursements and non-economic loss (NEL) awards. Employees may also be provided with a work transition (“WT”) plan, which entitles employees to retraining so that they may re-enter the workforce in a different capacity after an injury at the workplace.

Prior to any authorized payment of benefits, both the employer and the employee are required to complete specific reports relating to the injury sustained. The employee will be required to obtain medical information supporting the nature, extent and possible duration of the injury suffered.

Where a worker is denied benefits or the employer disputes the payment of benefits, there is a multi-tiered appeal system to which the parties have recourse.

Returning to Work

Workplace safety and insurance legislation places an emphasis on the employee’s return to work. Where an employee can not return to work because the nature of their injury will prevent them from performing their pre-injury employment, the legislation provides for compensation and/or programs designed for the retraining of the injured worker.

Both the employer and the worker have a legislated duty to co-operate in the return to work of the worker.

Employers are generally required to continue an injured worker in employment for a minimum period after their return to work from an injury. Additionally, employers may be required to make alternative positions available to the employee if they are unable to return to their pre-injury employment. An employer may not be required to submit to these legislated requirements if they are below a threshold size.

For example, in Ontario, an employer must re-employ an injured worker if that injured worker was employed by the employer for one year prior to becoming injured. However, an employer with less than twenty workers is exempt from this requirement.

Employees must remain in contact with their employer and the Workplace Safety and Insurance Board during their absence from the workplace due to injury. In addition, employees are required to assist the employer to identify suitable employment that is available, that is consistent with the worker's functional abilities, and that will restore the employee's pre-injury earnings.

Employees will be required to seek appropriate medical treatment during the course of their injury. Medical treatment sought must be effective to correct the injury suffered by the employee. The Workplace Safety and Insurance Board may suspend payments being received by an employee if the employee does not co-operate in such health care measures as the Board considers appropriate.

Benefits for Psychological Issues, Mental Stress and Chronic Pain

Benefits may be provided for psychological issues if the issues are either a direct or indirect result of a workplace accident and/or injury.

However, in Ontario, legislation precludes the receipt of benefits for mental stress, except where the mental stress results from an acute reaction to a sudden and traumatic event arising out of and in the course of employment.

A worker is not entitled to benefits for mental stress caused by his or her employer’s decisions or actions relating to the worker’s employment, including a decision to discipline or terminate that worker.

Ontario’s Workplace Safety and Insurance legislation does provide for recovery for chronic pain, although in limited circumstances.

Workers Injured Outside Their Province of Work

Special provisions apply to workers injured outside of their normal province of employment. The payment of benefits in this circumstance is dependent upon the amount of time the worker is employed within their home province and where the worker habitually resides. The legislation of the province in which the worker was employed, and in which the worker was injured should be consulted prior to drawing any conclusions as to the eligibility of the worker to receive benefits.