The committee heard a convincing presentation from the NWT Association of Municipalities with respect to provisions in the Workers' Compensation Act which allows an injured worker and in some cases the board itself, to recover costs from third parties other than the worker's employers.
The extent to which third parties were held liable in the NWT legislation is unique in Canada. There is considerable variation from one jurisdiction to the next with respect to third party liability. Arguably any third party provisions run contrary to the Meredith Principles which state that in return for guaranteed compensation, workers have no legal right to sue employers or co-workers for negligence resulting in work place injury. Differing opinions exist as to whether this suit bar should apply to all employers paying into the workers' compensation system or just the injured workers own employer. The NWTAM submission argue that the third party liability should be restricted.
A difficult problem is faced by NWT municipalities that deliver services through the use of contractors. The Workers' Compensation Act provides for the Workers' Compensation Board to recover from everyone but the employee's own employer. In circumstances where an injured worker was working for one of the municipality's contractors, the board could attempt to recover the cost of its compensation payout by suing the municipality.
The position of the NWT Association of Municipalities was that "employers contribute to the workers' compensation pool, and are therefore immune to claims."
The NWT Association of Municipalities provided some examples of the serious implications surrounding the application of third party liability provisions. Perhaps the most worrisome is with respect to liability for occupational disease or injury related to environmental contaminants. It is exceedingly difficult and costly for municipalities to obtain liability insurance for claims related to toxic discharges, see page and emissions. At public hearings the association provided the following scenario:
"So a garbage hauling contractor's worker who catches a disease from his duties at the dump receives workers' compensation benefits. And then he and the board can, under existing workers' compensation law, recover from the city. And in this case the city is on its own with no insurance coverage."
The Association of Municipalities pointed out that this risk area might significantly effect current directions toward municipal involvement in recycling and salvage programs. Also, since the local governments across the NWT share pooled liability insurance coverage, a harsh judgment against one municipality would likely affect liability insurance costs for all municipalities.
The committee took note of the fact that the NWTAM had on July 11, 1990, passed the following motion with respect to the Workers' Compensation Act:
"That the NWTAM lobby the GNWT to have the Workers' Compensation Act changed to alleviate any risk to municipalities under the Workers' Compensation Act as laid out in the special report by Falconar Insurance Associates Ltd., dated July 12, 1990."
The standing committee on agencies, boards and commissions deliberated seriously on this important matter, but was unable to come to a consensus. Clearly, there are no solutions available, and there was some general feeling that the prohibition against the right to sue ought to be expanded. The degree to which it would be more appropriate to do so is presently uncertain. The standing committee felt that additional public input on this matter, and a fuller understanding of the Workers' Compensation Board position, would be valuable in deriving a proposal for legislative change.
The standing committee is of the opinion that the matter needs to be addressed, and would like to see a full consideration of related issues and solutions proposed within the legislative action paper.
Motion To Accept Recommendation 24, Carried
Mr. Chairman, therefore I move that this committee recommends that the legislative action paper include a full consideration of third party liability provisions within the Workers' Compensation Act; and further, that the legislative action paper propose a range of suitable options which can then be the subject of further public discussion and review.