Where employment law and contract law principles meet WCB

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By: Chris Drinovz

Sherstobitoff v British Columbia (Workers’ Compensation Appeal Tribunal), 2019 BCSC 1659

Chris D. Drinovz of KSW Lawyers recently represented our client Dale Sherstobitoff in a judicial review overturning a decision of the Workers Compensation Appeal Tribunal (“WCAT”). Ms. Sherstobitoff was injured on her first day at a new job as a heavy equipment operator. The issue before WCAT was whether her employment was permanent or temporary. This in turn determined her rate of compensation while disabled under the Workers Compensation Act (the “Act”). This judicial review presented an interesting intersection of employment law, workers compensation law, and administrative law.

In the WCB regime, when a worker is injured less than 12 months into the job, that worker receives WCB benefits at a rate based on what they actually earned in the 12 months prior to the injury. Section 33.3 of the Act provides an exception for workers whose employment was not casual or temporary i.e. permanent. In this case, the worker’s compensation is based on the average earnings of other permanent company employees doing similar work. This often results in a more favorable wage rate than what a temporary worker would receive.

Ms. Sherstobitoff was hired to operate a haul truck for a contractor on the Site C dam project. She did not have a written employment contract or any terms that limited her employment to casual or a fixed term. The employer argued the employment was nevertheless temporary because its work at the Site C dam project would come to an end and it had no other projects in BC at the time of hiring. WCAT agreed with the employer.

In its analysis, WCAT invoked common law principles of contractual interpretation and reasoned that interpreting the nature of Ms. Sherstobitoff’s agreement required looking at the surrounding circumstances such as her past periods of short-term employment with multiple employers and the apparently seasonal nature of the heavy construction industry. In the judicial review, we argued that WCAT’s contractual interpretation was flawed and therefore patently unreasonable. In particular:

"The correct approach which accords with the common law and WCAT jurisprudence would be for the Tribunal to consider only the objective evidence that informs the terms and conditions of the employment contract at the time of hiring. Such evidence includes any written offer letter(s), employment contracts, collective agreement, and documents provided or things said at the time of hiring and the entering into of the agreement."

In the Court’s decision, Madam Justice Fleming stated that “in these circumstances, I view legal findings relating to general common principles of contractual interpretation, or mixed findings of law and fact based on a contractual interpretation as susceptible to review for patent unreasonableness” (para 65). She noted that the only way to determine the nature of the worker’s employment was to consider the principles of contractual interpretation with the goal of objectively determining the parties’ intention at the time the contract was formed. Applying this standard, Madam Justice found that “although the common law framework required the [WCAT Vice Chair] to consider and make findings about the words of the Contract, his reasons demonstrate he did not do so. Instead he immediately turned to the surrounding circumstances” (para 71). She therefore found WCAT’s decision patently unreasonable and remitted the matter back for a re-hearing.  

There are two key takeaways here:

  1. First, the decision highlights that the nature of the employment contract is relevant not just in determining matters such as severance pay, but in determining a worker’s wage rate for a WCB claim. This gives employers and employees yet another reason to ensure they have a written employment contract clearly setting out the terms and conditions of employment.
  1. Second, those making submissions at the Tribunal level can take comfort knowing that administrative decision-makers who engage in legal exercises such as contractual interpretation are subject to the review of the Court to ensure conformity with accepted common law principles.

If you are an employer or an employee seeking advice regarding your employment relationship, the Employment & Labour Practice Group at KSW Lawyers would be pleased to speak with you. Please contact us at cdd@ksw.bc.ca or 604-746-4357.