Skip to content

Client Update: The “historic trade-off” prevails

The Supreme Court of Canada has now released the much anticipated decision in the case of Marine Services International Ltd. v Ryan Estate, 2013 SCC 44. In doing so, the high court has signaled, at least in the area of workplace compensation, a deference to provincial laws which is atypical in its maritime law decisions.

At issue was the interplay between a provincial workers’ compensation regime and the federal Marine Liability Act, the latter of which permits without qualification a private cause of action in any case in which a claim for injury or death is governed by the principles of Canadian maritime law.

This issue engaged the constitutional doctrines of Federal Paramountcy and Interjurisdictional Immunity. Put most simply, those doctrines provide that a federal statute or authority must prevail in the face of a provincial statute that either:

a. conflicts with an existing federal statute (here, the Marine Liability
Act
); or

b. impairs a constitutionally guaranteed sphere of federal authority (here, the federal power over navigation and shipping).

The facts of the case are simple, yet tragic. Two men were killed when their vessel capsized while returning from a fishing expedition off the coast of Newfoundland and Labrador. Their spouses and dependants obtained compensation from the provincial workers’ compensation regime. Thereafter, they commenced a civil claim against certain parties and asserted negligent design and construction of the fishing vessel. They also asserted that Transport Canada had negligently failed in its inspection of the vessel. These civil claims were brought pursuant to the federal Marine Liability Act.

A determination was then sought from the Newfoundland and Labrador Workplace Health, Safety and Compensation Commission as to whether the civil claims were statute-barred by virtue of the “historic trade-off” as confirmed by section 44 of the Newfoundland and Labrador Workplace Health, Safety and Compensation Act (“WHSCA”). The WHSCA states that workers give up their right of civil action for workplace injuries in favour of no-fault compensation. In other words, it was argued that the federal statute does not permit or maintain a parallel cause of action in relation to workplace injuries.

The Newfoundland and Labrador Workplace Health, Safety and Compensation Commission agreed that the civil action was statute-barred and therefore could not proceed. This decision was overturned by both the Supreme Court of Newfoundland and Labrador and a majority of the Court of Appeal. The lone dissenting voice at the Court of Appeal would have restored the Commission’s decision.

At the Supreme Court of Canada, the Commission’s original decision was unanimously restored. This means that the “historic trade-off” prevails and the civil claim cannot proceed under the Marine Liability Act.

In reaching this conclusion, the high court had to manoeuvre around its own past precedent. A prior decision seemed to suggest a federal priority in response to any interference by a provincial statute with the federal power to regulate claims of maritime negligence. In response, the court noted that we now have a more modern appreciation of the type of deference to provincial authority that is required by a flexible and co-operative commitment to the balance of powers between federal Parliament and the provincial legislatures.

With this in mind, the court concluded that although the “historic trade-off” does entrench upon the federal power over claims of maritime negligence, it does not “impair” the federal power to the level of constitutional concern.

This is because:

The intrusion of s. 44 is not significant or serious when one considers the breadth of the federal power over navigation and shipping, the absence of an impact on the uniformity of Canadian maritime law and the historical application of workers’ compensation schemes in the maritime context. For these reasons, s. 44 of the WHSCA does not impair the federal power over navigation and shipping.

The Supreme Court concluded that, properly interpreted, there is no actual conflict between the two statutes in any event. In the court’s view, the provincial statute “provides for a different regime for compensation that is distinct and separate from tort.”

The analysis provided by the Supreme Court is relatively short and conclusory in comparison to that previously given in decisions engaging these complicated doctrines of constitutional law. The most that can be said is that this decision signals respect for and a confirmation of the “historic trade-off” embedded in provincial workers’ compensation statutes despite federal statute law generally governing navigation and shipping that does not expressly provide for it.

At least in the context of workers’ compensation, this means that employers can rest easier with the knowledge that the “historic trade-off” will prevail to a considerable extent, even where a federal statute would seem to permit a parallel cause of action. Put differently, our constitutional framework should ensure that employers of seafarers will not be “twice vexed” for workplace injuries.

The full reasons of the Supreme Court of Canada can be read here.

The foregoing is intended for general information only and is not intended as legal advice. If you have any questions, visit our Labour and Employment Group or Marine Group. For more on our firm see stewmac.arrdev.ca.

SHARE

Archive

Search Archive


 
 

TTC’s Random Testing Decision: A Bright Light for Employers in the Haze of Marijuana Legalization

April 11, 2017

Rick Dunlop In my December 15, 2016 article, Federal Government’s Cannabis Report: What does it mean for employers?, I noted the Report’s1 suggestion that there was a lack of research to reliably determine when individuals are impaired…

Read More

Unionization in the Construction Industry: Vacation Day + Snapshot Rule = Disenfranchisement

April 4, 2017

Rick Dunlop and Michelle Black On March 14, 2014, CanMar Contracting Limited (“CanMar”) granted a day off to two of its hard working and longer serving employees so they could spend time with their respective families. That…

Read More

Sometimes a bad deal is just a bad deal: unconscionability and insurance claim settlements in Downer v Pitcher, 2017 NLCA 13

March 16, 2017

Joe Thorne and Meaghan McCaw The doctrine of unconscionability is an equitable remedy available in exceptional circumstances where a bargain between parties, be it a settlement or a release, may be set aside on the basis that…

Read More

Privilege Prevails: Privacy Commissioner protects solicitor-client communications

March 16, 2017

Jonathan Coady After more than five years, the Prince Edward Island Information and Privacy Commissioner (the “Privacy Commissioner”) has completed her review into more than sixty records withheld by a local school board on the…

Read More

The Latest in Labour Law: A Stewart McKelvey Newsletter – Nova Scotia Teachers Union & Government – a synopsis

March 7, 2017

Peter McLellan, QC & Richard Jordan Introduction On February 21, 2017 the Nova Scotia Government passed Bill 75 – the Teachers’ Professional Agreement and Classroom Improvement (2017) Act. This Bulletin will provide some background to what is, today,…

Read More

Scotia Mortgage Corporation v Furlong: The Supreme Court of Newfoundland and Labrador weighs in on the former client rule in commercial transactions

March 1, 2017

Bruce Grant, QC and Justin Hewitt In the recent decision of Scotia Mortgage Corporation v Furlong1 the Supreme Court of Newfoundland and Labrador confirmed that where a law firm acts jointly for the borrower and lender in the placement…

Read More

The Ordinary Meaning of Insurance: Client Update on the SCC’s Decision in Sabean

February 21, 2017

The Supreme Court of Canada released its decision in Sabean v Portage La Prairie Mutual Insurance Co, 2017 SCC 7 at the end of January, finally answering an insurance policy question that had divided the lower…

Read More

Client Update: Outlook for the 2017 Proxy Season

February 8, 2017

In preparing for the 2017 proxy season, you should be aware of some regulatory changes and institutional investor guidance that may impact disclosure to, and interactions with, your shareholders. This update highlights what is new…

Read More

Client Update: The Future of Planning and Development on Prince Edward Island – Recent Amendments to the Planning Act

January 23, 2017

Perlene Morrison and Hilary Newman During the fall 2016 legislative sitting, the Province of Prince Edward Island passed legislation that results in significant changes to the Planning Act. The amendments received royal assent on December 15, 2016 and…

Read More

Plaintiffs’ medical reports – disclosure obligations in Unifund Assurance Company v. Churchill, 2016 NLCA 73

January 10, 2017

Joe Thorne1 and Justin Hewitt2 In Unifund Assurance Company v Churchill,3  the Newfoundland and Labrador Court of Appeal considered the application of our rules of court and the common law as they relate to disclosure of documents produced in…

Read More

Search Archive


Scroll To Top