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Plaintiffs Face Obstacles in COVID-19 Employment Class Actions

Plaintiffs Face Obstacles in COVID-19 Employment Class Actions
June 19, 2020

Putative class actions filed in connection with COVID-19 employment-related matters may face some obstacles in proceeding. Certain hurdles exist in the common law provinces in Canada that may prove insurmountable.

Section 21 of the Alberta Workers' Compensation Act (Act) bars any claim or causes of action against the employer for any compensation as a result of any accident happening to the worker. The Act, which is similar to other legislation throughout the common law provinces, grants jurisdiction over such claimed injuries to be determined through the mechanisms outlined in the Act; for example, please see Section 26 of Ontario's Workplace Safety and Insurance Act, 1997, Section 127 of the British Columbia Workers' Compensation Act and Section 43 of The Workers' Compensation Act in Saskatchewan. Interestingly, the Act and similar provincial legislation supplant not only all rights and causes of action, statutory or otherwise, to which a worker would otherwise be entitled, but it also applies to the worker's legal personal representatives and dependants. Similarly, Section 23 of the Act, and similar provisions in corresponding common law jurisdictions, provide that if an accident happens to a worker, entitling the worker or the worker's dependants to compensation under the Act, neither the worker, the worker's legal personal representatives, the worker's dependants nor the worker's employer has any cause of action in respect of or arising out of the personal injury suffered by, or the death of, the worker as a result of the accident. The terms "dependant" and "accident" are broadly defined in the Act and similar provincial legislation. The latter definition includes a wilful and intentional act, a chance event, disablement and a disabling or potentially disabling condition caused by an occupational disease.

Under the Act, if a worker contracts COVID-19 as a direct result of the duties of their employment, he or she may be entitled to compensation from the Workers' Compensation Board (WCB) if the nature of employment involves sufficient exposure to the source of infection, and the nature of employment is shown to be the cause of the condition or the nature of employment creates a greater risk of exposure for the worker. For more information, see the WCB Worksheet and WCB Fact Sheet.

Alberta and other common law courts in Canada take a strict approach to ensuring that worker compensation claims are dealt exclusively within the jurisdiction of the WCB, and not the courts. Attempts to circumvent that legislation by commencing actions directly against officers and directors, who are not subject to the Act, have generally proven to be unsuccessful as it is generally difficult to establish that a particular officer or director has acted beyond her or his scope of duties and obligations.

In the context of COVID-19, it is likely that the courts will continue to confirm the jurisdiction of the WCB to award compensation through that regime instead of through the courts. In Stewart v. Enterprise Universal Inc., 2010 ABQB 259, the plaintiff was a nurse at the Holy Cross Centre in Calgary and brought a class action as the representative plaintiff against the owner and operator of the hospital—and his employer—together with the officers and directors of that corporation, on the basis that he and other nurses had allegedly been exposed to asbestos from renovations which resulted in health issues. Enterprise brought a summary judgment application prior to certification of the class action based upon the Act. Justice Sheila Martin—as she then was prior to her elevation to the Supreme Court of Canada (SCC)—granted summary judgment dismissing the claim and citing the express provisions of the Act and a plethora of cases which precluded recovery in civil actions where the Act applies. Justice Martin also dismissed the proceeding against the directors of the employer, finding that they were protected by the corporate veil and that it had not been pierced in the circumstances.

The particular circumstances of each case would need to be examined in light of the specific provisions of the Act, and other provincial legislation as applicable, to determine whether such legislation would preclude civil actions, including class actions.

A further obstacle arising for unionized employees under a collective agreement is the SCC decision in Bisaillon v. Concordia University, 2006 SCC 19, where the SCC denied an employee’s attempt to bring a class action against their employer on the basis of a dispute over pension plan funds. In doing so, the SCC held that to allow the class action to proceed would be incompatible with the exclusive jurisdiction of grievance arbitrators and the representative function of certified unions. In coming to that conclusion, the court participated in an analysis as to whether the dispute arose out of the collective agreement and specifically, whether the dispute, "in its essential character, arises from the interpretation, application, administration or violation of the collective agreement." Some litigants have attempted to circumvent that common law jurisprudence, which has been adopted in many common law jurisdictions, by arguing that the courts should have residual jurisdiction over all matters not falling within such collective agreement; however, to date, those attempts have been unsuccessful. While the SCC’s decision in Bisaillon v. Concordia University arose out of a Quebec labour dispute, the principles set out therein have been adopted across the country.

Based on the above principles outlined in common law provincial legislation, combined with the common law jurisprudence, employees subject to WCB legislation or collective agreements will face significant and perhaps insurmountable obstacles in commencing civil actions, including class actions, related to COVID-19 claims.

For further information, please contact:

Dalton W. McGrath, Q.C.         403-260-9654
James Sullivan, Q.C.                 604-631-3358
Andrea York                              416-863-5263
Birch Miller                               403-260-9613
Michael O’Brien                       403-260-9753

or any other member of our Litigation & Dispute Resolution or Employment & Labour groups.
Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.