Worker's Compensation in Ontario and Restrictions on the Right to Sue an Employer

The Workplace Safety and Insurance Act, 1997 governs the Ontario workers’ compensation system.

Fundamental to this system is a compromise in which workers give up the right to sue for their work-related injuries, irrespective of fault, in return for guaranteed compensation for accepted claims.

Employers receive protection from lawsuits in exchange for financing the program through premiums.

Employees cannot sue employers or most other employers for injuries occurring during employment, in most circumstances.

This system of collective liability provides compensation for injured workers and their families, while spreading individual costs among employers.

It means that if an employee commences a lawsuit against its employer or other employer, that employer can have the lawsuit dismissed.

Here is how it works:

Section 13(1) of the WSIA, 1997 states that a worker who sustains a personal injury by accident, arising out of and in the course of his or her employment, is entitled to benefits under the insurance plan.

Section 28 of the WSIA, 1997 provides that a worker employed by a Schedule 1 employer is not entitled to commence an action against any Schedule 1 employer (or a Director, Executive Officer or a worker employed by any Schedule 1 employer) in respect of the worker’s injury. This protection from lawsuits is the trade-off for the compensation injured workers receive.

Section 27 of the WSIA, 1997 states that Section 28 applies with respect to a worker who sustains an injury that entitles him or her to benefits under the insurance plan. Therefore, this prevents workers who are entitled to benefits under the insurance plan from suing another employer who is also within the same Schedule 1.