December 2012 Workers Compensation Law Section Significant Workers Compensation Cases By: Ryan J. Conlin* This article provides a review of some of the most interesting decisions issued by courts in the past two years concerning prosecutions under the Workplace Safety and Insurance Act (the WSIA ). Ontario (Workplace Safety and Insurance Board) v. Valley 1 This case was a prosecution under the WSIA against a worker for failing to report a material change in circumstances and making false or misleading statements or representations to the WSIB on four separate occasions. The Defendant suffered a workplace accident in 2002 and had been in receipt of benefits ever since. In 2007, the Defendant made an arrangement to clear land for a dentist in exchange for dental services, the bulldozer was operated by a third party. The Defendant put in fence posts on his own property and assisted a farmer with some manual labour. The WSIB alleged that the Defendant failed to report a material change in circumstances and that he falsely reported that there was no improvement in his condition and that he was not fit to return to work. The Court held that the WSIB was required to prove that wrongful intention in addition to the prohibited conduct, i.e. that it had to prove mensrea. The Court was clearly troubled by what it perceived as lack clarity in the meaning of the term material change in circumstances and found that even the WSIB employees who testified were not able to articulate a clear definition of what the terms meant. The Court found the Defendant not guilty on all counts. The Court held that the WSIB did not have a system in place for explaining to workers what a material change in circumstances meant. It is my view that the WSIB s explanation on the Form 41 (the worker s report to WSIB about his condition) about what a material change in circumstances means is fairly straight forward. It explains in plain language that if a worker receives income or experiences a change in health status the WSIB must be advised within 10 days. It is quite possible that another Court would take a different view of the complexity of the material change in circumstances concept. 1 [2012] O.J. No. 1388 (Ont. Ct. Jus.)
On the facts of the case, the Court noted that the Defendant did not receive any wages or remuneration for the work performed for himself. The Court accepted that the physical labour that was performed was for very short durations and caused the Defendant a great deal of pain. Not surprisingly, the Court was left with a reasonable doubt about whether the Defendant considered the leasing of the bulldozer or the voluntary services performed for a farmer to be work which should be reported to WSIB. The Court found as a matter of law that the leasing of the bulldozer did not need to be reported to WSIB. The Court also held that the medical evidence did not establish that the worker s condition had changed to make him fit for work. The case establishes that the Defendant s intent when making reports to the WSIB will be critical in assessing whether an offence has been committed. Defendants will likely be given the benefit of the doubt where there is a legitimate question about whether an obligation arises under the WSIA. The reasoning in this case may be useful to future employer defendants in non-reporting prosecutions where the obligation to report is not crystal clear (i.e. traumatic mental stress). Ontario (Workplace Safety and Insurance Board) v. Koomson 2 This was another prosecution case against a worker for failing to report a material change in circumstances with respect to his functional abilities. The Defendant suffered a serious workplace accident which caused a serious deterioration in his cognitive abilities. The Defendant s driver s license was suspended as a result of his accident. The WSIB paid the Defendant a personal care allowance to support the hiring of a personal care attendant to supervise the Defendant 16 hours per day. The WSIB had determined that the Defendant required constant supervision from a personal care attendant because if there was an emergency situation, he would not be able to properly react to protect his own safety. The Defendant appointed his wife to be his personal care attendant. The WSIB became suspicious about the claim and hired a private investigator to follow the Defendant. The Defendant was seen in his community without a personal care attendant performing a variety of tasks without any obvious difficulty. He was observed driving a vehicle, exercising vigorously at a gym and interacting in a normal way with sales personnel at retail establishments. The WSIB contended that the Defendant s failure to report his ability to drive and function without a personal care attendant constituted a material change in circumstances of which the WSIB should have been notified. The Defendant asserted that the WSIB ought to have a called an expert witness to establish that the worker s cognitive abilities had changed and that simply examining surveillance evidence on a videotape was not sufficient to prove the offence beyond a reasonable doubt. The Court rejected this argument and accepted the WSIB s position that the offence did not relate to the worker s medical condition, but was focused on his failure to report his lack of need for a fulltime personal care attendant and his ability to drive. The Defendant asserted in argument that his activities were a symptom of his cognitive issues and should not be held against him. It should be noted that the Defendant did not testify or call any evidence to establish that his condition impacted his ability to understand the reporting 2 2011 ONCJ 755 (CanLII) - 2 -
obligation. The Court held that the surveillance evidence made it clear that the worker s condition had improved and that he was mentally capable of understanding that he should have reported his improvements to the WSIB. It is interesting to contrast the finding in the Koomsonmatter with the Valley case. In the Valley case the Court placed great emphasis on the difficulty of understanding what a material change in circumstances means. However, the approach taken in Koomsonsuggests the Board had no obligation provide any such explanation and that the obligation to report a material change could even be understood by a worker with objective mental problems. It is my view that cases where the Defendant can credibly assert that it failed to understand the obligation to report a material change in circumstances will be relatively rare. The Court in Koomson was not prepared to find that diminished cognitive ability created a reasonable doubt about a worker s understanding of his reporting obligation. Such an argument will only be credible in circumstances where the reporting obligation is potentially legally ambiguous or there is credible affirmative evidence that the Defendant failed to understand the reporting obligation. A. Potvin Construction Ltd. v. Ontario (Workplace Safety and Insurance Board) 3 This case involved an appeal by an employer and two employees of the corporation against multiple convictions under the WSIA and related sentences, and cross-appeals by the WSIB against numerous acquittals. The case is interesting from a number of perspectives and thankfully the Court provided in-depth reasons and analysis. Essentially, the case involved allegations that the employer had knowingly, falsely reported a large number of lost-time claims as no-lost time claims, to avoid the frequency and claims cost consequences to its CAD-7, all through filing either inaccurate Form 7s, and also that several Form 7s had been filed late. At trial, the employer was convicted on nine counts and fined $375,000 cumulatively, and the individual accused were convicted of three and six counts, respectively and fined $11,000 and $18,000, respectively (plus the applicable victim fine surcharges). The first interesting aspect of the appeal was the corporation s argument that the two employees were not the directing mind of the corporation and so their knowledge (or recklessness) could not be imputed to the corporation to demonstrate the mensrea component of the offence. The Trial Court rejected this argument, finding that each employee was given authority to act on behalf of the company for all aspects of health and safety issues, that they were acting within the scope of their authority, and so they were a vital organ of the company and virtually its directing mind in the sphere of duty assigned to them, and so attributed their intent, knowledge and actions to the corporation. The Appellate Court agreed. This finding, though, had some interesting consequences. In respect of a number of counts, the Trial Court acquitted the accused on the basis that other employees of the corporation (such as a supervisor) were aware that workers had sought healthcare, for example, but had not immediately advised the individual accused. The individual accused filed timely Form 7s if you 3 [2011] O.J. No. 6340 (QL). - 3 -
counted from the date they personally learned workers had sought healthcare. Having found that the two individual defendants were the directing mind, the Appeal Court upheld the Trial Court s findings that the corporation could not be convicted if its directing mind was unaware that the preconditions to filing a Form 7 had been met earlier. In my view, this is a somewhat surprising and technical interpretation. The decision suggests that corporate defendants may escape culpability for late-filing Form 7s simply by having inadequate communication between front-line and upper levels within the organization. Plainly this aspect of the decision was very fact-specific and so should be applied with caution. The second interesting aspect of the decision is that, on a few counts, the Appeal Court upheld the Trial Court s findings that the individual accused had been willfully blind to the status of the injured workers by failing to make reasonable enquiries to determine whether the workers commenced modified work programs before filing the Form 7s indicating they had no lost time. The Appeal Court rejected the Defendants argument that the Trial Judge had imported into the offence a failure to advise the WSIB of a change in circumstances. It is interesting to contrast this finding with the analysis of willful blindness as evidence of mensreacited above with reference to knowledge by the directing mind of worker status when only lower level supervisors were aware of the circumstances but had not yet advised senior personnel. Implicitly when read together, it did not constitute willful blindness on behalf of the corporation that it had no system in place to ensure adequate and timely communication between front-line supervisors and its directing mind respecting injuries occurring and healthcare sought. I am not convinced such an argument would be successful in future cases. The third interesting aspect of the case is the express finding, consistent with earlier jurisprudence 4, that the WSIB s guidelines cannot have the force of law nor attract sanctions. However, the Appeal Court ruled that the Defendants knowledge of the WSIB's policies create a context in which to assess their reporting actions. The fourth interesting aspect of the case is the issue of providing modified work at home to avoid lost time claims. With reference to the finding on the WSIB s guidelines, the Trial Court found that the homework provided was unsuitable and not-meaningful work, provided to the employees exclusively as a cost saving measure for the company. Together with the knowledge attributed to the Defendants that the WSIB had not authorized modified work from home and did not approve of it as a matter of policy, the Trial Court held that it was false or misleading to claim no lost time. In my view these two concepts are difficult to reconcile logically. Clearly the Court was unwilling to give credence to a practice by employers to provide make-work to avoid lost-time claims. However, nothing in the WSIA provides expressly that the reporting obligation is tied to a determination by the WSIB as to whether modified work offered is suitable. It is a slippery slope to hold otherwise. For example, what if the work had been offered on site, but was unsuitable for some other reason. Could reporting no lost time on a Form 7 be deemed a violation if the WSIB were to subsequently rule the offer of modified work was unsuitable? 4 E.g. Ainsley Financial Corporation et. al. Ontario Securities Commission et. al. (1994), 21 O.R. (3d) 104-4 -
Five interesting aspects emerge from the sentencing appeals. 1. The Appeal Court admitted new evidence on appeal that the Defendant corporation had paid surcharges attributable to the claims in question. That evidence had not been available at the time of trial, and it established that the corporate defendant had not in fact benefitted financially from its misconduct (a factor given weight in sentencing at trial without the benefit of the new evidence). 2. The Appeal Court found that the Trial Judge had committed an error of law by considering the severity of the injuries to the employees in question. Unlike in a prosecution for violations of the Occupational Health and Safety Act, no aspect of the offences under the WSIA, which predated the offences, caused or contributed to the severity of the injuries. This finding had been made previously in R. v. Long Lake Forest Products Inc. 5 (an appeal decision that was not before the Trial Judge when she rendered her decision on sentence). The Appeal Court found, however, that if a worker is absent from work longer as a result of the contravention that is an aggravating factor in sentencing. 3. The Appeal Court affirmed that although failing to plead guilty was not an aggravating factor, it was appropriate for the Trial Judge to note the absence of such plea as a mitigating factor. 4. The Appeal Court affirmed that it was appropriate for the Trial Court to have given weight to sentences imposed on guilty pleas with joint submissions on sentence. Ostensibly, the Appeal Court found that a trial judge is not bound to impose the sentence agreed upon by the parties and would not do so if it was manifestly unfit given the applicable sentencing factors. 5. The Appeal Court also confirmed that the following aggravating factors were appropriately considered on sentence: a. The seriousness of the prohibited conduct and a defendant's moral blameworthiness; b. The deprivation or the potential deprivation of benefits to the worker; c. The advantage the corporation or personal defendants gained from their illegal activity; d. The frequency of the offences; e. The offences occurred over a long period of time; f. The Appellant's absence of remorse. The Appeal Court also held that deterrence and denunciation remained important considerations in sentencing on convictions under the WSIA. In light of the Appeal Court s findings admitting fresh evidence relevant and that the Trial Judge erred when she considered the severity of the injuries of the employees in the relevant claim 5 [2009] O.J. No. 2193 (QL) - 5 -
files, the Appeal Court significantly reduced the fines on sentence appeal, but they nevertheless remained substantial. R. v. United Cleaning 6 In this case, the employer was acquitted on the charge of failing to report an accident to the WSIB within the timeframe permitted by law (two other charges relating to non-reporting of accidents were withdrawn by the WSIB during the course of the trial). The case involved an employee who was injured while working outside the province. The evidence before the Court established that the worker had reported that he sought healthcare as a result of his accident to the employer s Human Resources Manager. The employer s human resources manager testified that she remembered receiving the call from the worker and believed that she took steps to fax the Form 7 to the WSIB. She remembered completing the Form 7 and in accordance with her usual practice placed a copy in the employee s file. There was no fax confirmation or any other documentary evidence before the Court which showed that the fax was actually sent. When the WSIB called about the claim several months later, the Human Resources Manager testified that she found the completed Form 7 in the employee s file and she immediately provided a copy to the WSIB. The Human Resources Manager testified that she was familiar with WSIB reporting procedures, had developed a system for ensuring that accidents were reported to the WSIB and remembered taking specific steps to follow that reporting system with respect to the employee in question. The Court acquitted the Defendant of the charge before the Court. It held that the evidence of the Human Resources Manager was credible and as a result the WSIB had not met the burden of proving beyond a reasonable doubt that the Form 7 was not filed on time. Despite the results in this case, employers would be wise to take steps to ensure that they retain copies of fax cover sheets and other delivery verifications. * Ryan J. Conlin Partner, Stringer LLP 6 R. Conlin was lead counsel for the Defendant in this matter. - 6 -