Exceptions To The Historic Compromise? Director Liability Under Provincial Workers' Compensation Regimes

In Canada, workers have given up their right to sue their employer or fellow workers for workplace injuries, and employers agreed to fund a no-fault workers' compensation insurance system, in what has been termed the historic compromise. However, the scope, coverage and protection from liability under such schemes varies from province to province. In some circumstances, directors may be personally liable for claims, offences or assessment under provincial workers' compensation and occupational health and safety regimes. Recently, the Alberta Court of Appeal affirmed that directors in Alberta could, in some circumstances, be personally liable for injuries that occurred in the workplace.

The Alberta Workers' Compensation Act provides that directors are not workers under the Alberta statutory scheme except when they apply for and receive coverage. Where directors are without coverage in Alberta, they may not be entitled to protection from private causes of action for workplace personal injuries.

In Hall v Stewart, 2019 ABCA 98, the defendant, a director of a construction company, was sued for negligence after workers were injured following the collapse of a staircase built by the director's company. While the company was deemed an employer under Alberta's workers' compensation legislation, and thus protected from claims for personal injury, the director had not applied for coverage and was not covered under the Alberta regime.

While acknowledging that directors are generally shielded from liability, the court noted that there are some situations where personal liability remains, notwithstanding the concept of a corporation as a separate legal entity and limited liability. Where both the company and the director owe a duty of care and where the company is immune from suit, the court concluded that the nature of the harm (a personal injury not an economic loss) required that the director not escape personal liability.

The court concluded that where the statutory scheme requires that directors register to receive compensation coverage, the directors must also register for coverage to receive the benefit of the limitation of liability provided by Alberta's statutory regime. Where the director had not registered for coverage, he could not escape personal liability even though his involvement in the tortious act was a part of the business of the corporation.

Liability from suit for workplace injury is more limited under most other provincial...