Alberta Court Of Appeal Confirms Directors Can Be Personally Liable For Workplace Injuries

The workers' compensation scheme is designed to provide no-fault compensation to injured workers. Under the workers' compensation scheme, however, workers lose their cause of action against their employer as well as other parties who may have been responsible for the workers' injuries suffered in the course of employment. Despite this, the Alberta Court of Appeal recently confirmed that a director can be personally liable for a workplace accident that resulted in an injury to a worker.

Facts

In Hall v. Stewart1 the defendant was a director of a company called DWS Construction Ltd. (DWS). DWS was retained as a subcontractor to complete work on the construction of a new home. Part of the scope of DWS' work was to install a temporary staircase into the basement of the home. The director of DWS was involved in the work on site. During the construction of the home, the staircase collapsed which resulted in injuries to the workers of another subcontractor. The injured workers were compensated by the Workers' Compensation Board (the Board). The Board then brought a subrogated action against the director of DWS seeking to recover the amounts the Board had paid to the workers.

DWS was an "employer" for the purposes of the Workers' Compensation Act (Act) and it had workers' compensation coverage. As DWS was an "employer", DWS and its employees were immune from any claims related to the injuries suffered by the injured workers. Under the Act, however, immunity does not apply to the directors of "employers", unless the directors purchase additional coverage. In this case, while the director of DWS had not purchased additional coverage, the director argued that he was immune from liability as any negligent act that was committed by him was within the scope of his duties as an employee of DWS, not as a director.

The Alberta Court of Appeal held that because he was a director of DWS and he participated in the installation of the staircase, he was not covered under the Act. The Court of Appeal then identified factors to consider when determining whether a director may be personally liable, which include:

Whether the negligent act was committed while engaged in the business of the...