Subrogation - 610-1-IPG-090

1. Subject

In accordance with sections 9, 10 and 11 of the Government Employees Compensation Act (GECA), this document sets out the Labour Program’s policy on subrogation.

It provides clarification on the administration of GECA claims where an employee subrogates his or her right to pursue legal action against a third party to the Crown.

2. Definitions

Crown

Federal departments and agencies, most Crown corporations, and parliamentary employers such as the Senate, the House of Commons, the Library of Parliament, the Office of the Senate Ethics Officer and the Parliamentary Protective Service, who are subject to the GECA.

Dependant

In relation to an employee, includes:

1. a common-law partner of the employee, and
2. a person who was cohabiting with the employee immediately before the employee’s death and is a parent of the employee’s child. (For further information, see “Dependants” in the Interpretations, Policies and Guidelines on Compensation Issues.)

Election to claim

Formal notice that the employee provides to the Labour Program indicating the choice to claim compensation under section 9 of the GECA. Election to claim initiates the subrogation process.

As per section 11 of the GECA, employees must notify the Labour Program whether they are electing to claim within three months of their injury date. Election to claim received after the three-month period may be allowed by the applicable WCB. Election to claim made by the employee or their dependants, once provided to the Labour Program, is final for injuries/illnesses occurring on or after June 13, 2014.

Only after receiving the employee’s election to claim may the Labour Program take steps to pursue legal action against a third party.

Employee

Individuals in the service of the Crown paid a direct wage or salary by or on behalf of her Majesty.

Subrogation

Subrogation is the effect of an employee’s or a dependant’s decision to claim compensation under the GECA. In effect, the employee or dependant has transferred his or her rights to take action against a third party. As a result, the Crown has the discretion to pursue legal action in claims where a third party is identified as being wholly or partially responsible for the employee’s illness or injury.

Third party

A person, corporation, or other body, other than the Crown or an employee of the Crown. Third-party claims should be identified where a third party may be wholly or partially responsible for an accident that causes an employee’s injury or illness.

Workers compensation board (WCB)

The provincial workers’ compensation board adjudicating the ill or injured employee’s claim as per the terms established in the applicable Service Agreement with the Labour Program.

3. Issue

The GECA does not specify principles or considerations for the administration of third-party GECA claims where an employee has subrogated his or her rights to the Crown.

4. Question

What principles and considerations should guide how the Labour Program administers third-party GECA claims where an employee has subrogated his or her rights to the Crown?

5. Program position

Election to claim must be received before the Labour Program may pursue any legal action against a third party. The employee or dependant must provide the election to claim to the Labour Program no later than three months following the injury date.

The Labour Program has exclusive jurisdiction to determine whether third-party action should be pursued. This determination should reflect both the interests of the employee as well as those of the Labour Program including its responsibility for the management of public funds. Therefore, when an employee or a dependant subrogates his or her rights to the Crown, legal action should only be taken where it is financially prudent with a reasonable chance of success.

Third-party claims should be administered according to the specific laws and policies of each WCB’s judicial system. Timely actions should be taken with the understanding that missed judicial deadlines represent lost opportunities for cost recovery.

In settling third-party claims, the Labour Program should endeavour to recover the costs borne by the Labour Program, the employer, and general and special damages. Following this disbursement, any excess monies may be paid to the employee or to his or her estate.