Vol. 148, No. 13 — June 18, 2014
SI/2014-53 June 18, 2014
JOBS, GROWTH AND LONG-TERM PROSPERITY ACT
Order Fixing June 13, 2014 as the Day on which Division 20 of Part 4 of the Act Comes into Force
P.C. 2014-648 June 5, 2014
His Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to section 426 of the Jobs, Growth and Long-term Prosperity Act, chapter 19 of the Statutes of Canada, 2012, fixes June 13, 2014 as the day on which Division 20 of Part 4 of that Act comes into force.
(This note is not part of the Order.)
The Order fixes June 13, 2014, as the date on which the provisions of Division 20 of Part 4 of the Jobs, Growth and Long-term Prosperity Act come into force.
The objective of the Order is to bring into force legislative amendments to the Government Employees Compensation Act (GECA). These amendments will help to streamline and improve the administration of work-related illness/injury claims submitted by employees of the federal government pursuant to the GECA. This initiative forms part of the Labour Program’s broader Deficit Reduction Action Plan commitments and aligns with the Government’s priority to achieve efficiencies and reduce costs.
Enacted in 1918, the Government Employees Compensation Act is administered by the Labour Program of Employment and Social Development Canada. It provides compensation to approximately 422 000 federal government employees, or their dependants, for injuries or illnesses arising out of or in the course of their employment. In 2012–13, approximately 18 000 workers’ compensation claims were filed pursuant to the GECA, by employees of federal departments, agencies and Crown corporations.
Under the GECA, when an employee sustains an injury in the course of employment which is attributable to a third party, the employee may choose to legally pursue the third party directly, or may transfer that authority to the federal government and then claim compensation under the GECA. If the employee transfers the right to pursue the third party to the federal government, the Labour Program may then decide to take legal action against the third party to recoup the costs resulting from the claim. In 2012–13, over 4 000 third party claims were initiated under the GECA. Crown corporations accounted for approximately two-thirds of these. The administration of third party claims is a resource-intensive process that incurs administrative as well as litigation costs.
The current system allows the Labour Program to grant employees permission to revoke their initial decision to either take action against a third party or to claim compensation under the GECA. When an employee asks to revoke their decision, a multi-stage verification and review process must be undertaken by the Labour Program before a decision to permit or deny revocation can be reached. This increases the administrative costs associated with the claim. In cases where an employee is granted a revocation and then abandons an action against a third party before a legal judgment is received, the Labour Program is at risk of not receiving repayment for the compensation already provided to the employee pursuant to the GECA.
The Order fixes June 13, 2014, as the date on which provisions of Division 20 of Part 4 of the Jobs, Growth and Long-term Prosperity Act come into force. The resulting amendments would
- — give the Minister of Labour authority to make regulations directing specified corporations or other bodies (e.g. Crown corporations, agencies, commissions, boards) to administer their own third party claims;
- — make an employee’s decision final when a choice is made to either take legal action against a third party or to claim compensation under the GECA; and
- — add a provision wherein Her Majesty (i.e. the Crown) would not carry any residual responsibility for the actions or omissions of corporations or other bodies in their administration of third party claims.
Granting the Minister of Labour the authority to make regulations under the GECA allowing specified corporations or other bodies to assume administration of their own third party claims would equip the Labour Program to develop and implement such regulations if and when required. Corporations or other bodies would be positioned to request that the Minister of Labour authorize them to administer their own third party claims. The Minister of Labour would also have the authority to direct a corporation or other body to administer their third party claims even if a request to do so was not initiated on their part.
At present, the GECA does not contain any provisions addressing the issue of revocation. This means that the Labour Program is exposed to the risk that they would not be reimbursed for the compensation provided under GECA to an employee who is granted revocation and subsequently abandons a legal action against a third party. This risk is mitigated by clarifying that the decision of the employee to take action themselves or to claim compensation under the GECA is final. Furthermore, the administrative processes would be streamlined and the costs associated with third party claims would be reduced.
The Crown would not be held responsible for actions or omissions on the part of corporations or other bodies in their administration of third party claims. This change aligns with an existing provision in the GECA that stipulates that an employee may not make a claim against the Crown or any agents thereof, other than for compensation under the GECA.
Compensation (e.g. medical and hospital expenses, rehabilitation services, and other benefits) provided to employees of federal departments, agencies, corporations or other bodies under the GECA would not be affected by the legislative changes.
In the fall of 2012, Crown corporations that would benefit most from the changes due to their higher volumes of third party claims were advised by the Labour Program of the proposed legislative amendments and meetings were held to explain the changes and to gauge their interest in engaging in third party claim recovery. Other Crown corporations were not formally engaged regarding the amendments due to their relatively low volume of third party claims initiated under GECA. The GECA amendments are publicly accessible via the Jobs, Growth and Long-term Prosperity Act.
Senior Policy Analyst
Federal Workers’ Compensation Service
Employment and Social Development Canada
165 De l’Hôtel-de-Ville Street
Place du Portage, Phase II, 11th Floor