Tuesday, 11 September 2012

Compensation for Foreign Locally Engaged Employees

The Ottawa Citizen published a story today concerning an Ottawa woman who was fired from the American embassy after being on sick leave for an extended period of time. As the article explains, the Embassy did not defend the action and as such we are left wanting for answers as to how and why Ontario law would apply to this individual.  

This post will focus on the reverse situation: what if an American was injured while working for the Canadian embassy in Washington?

Government Employees Compensation Action

I have previously blogged about the Government Employees Compensation Act, (“GECA”) in the context of its application to Canadian diplomats working abroad (Compensation for Injured Federal Government Employees.) However, a review of the GECA demonstrates that the Act may also be applicable to “locally engaged employees.”

Locally Engaged Employees

The term “locally engaged employee” is used, but not defined, within the GECA. Reference may be taken, however, from the Locally-Engaged Staff Employment Regulations, SOR/95-152, pursuant to which the Deputy Minister of Foreign Affairs is empowered to hire “employees” for Canadian “missions,” the latter being defined to mean an “office of the Government of Canada outside Canada, including an office of the Canadian Forces”

Payment to Injured Locally Engaged Employees

Section 7 of the GECA is the only section that contemplates how, if at all, locally-engaged employees, working for the Canadian government in foreign countries, may receive compensation for injuries sustained while at work for the Canadian government from the Canadian government.

Section 7(2) of the GECA provides that:

The Minister [of Labour] may, with the approval of the Treasury Board, award compensation in such amount and in such manner as he deems fit to
(a) an employee locally engaged outside Canada who
(i) is caused personal injury by an accident arising out of and in the course of his employment, or
(ii) is disabled by reason of any disease that is due to the nature of the employment and peculiar to or characteristic of the particular process, trade or occupation in which the employee was employed at the time the disease was contracted, and
(b) the dependants of such an employee whose death results from such an accident or disease,
and who are not otherwise entitled to compensation under any law respecting compensation to workmen and the dependants of deceased workmen. [Emphasis added.]

The word “may” and the phrase “not otherwise entitled” both give me pause. The reasons for my concern are these:

First, “may” as used in Canadian legislation, denotes permission without requirement. The word “shall” is used when the subject must perform an action. (In fact, section 11 of the Interpretation Act confirms this to be the case.) In this case, by using the word “may” the Minister is permitted to take action, but is in no case required to, and could not be forced to act by way of, for example, a writ of mandamus.

Second, the phrase “not otherwise entitled” demonstrates to me that the Canadian government wishes locally-engaged employees to exhaust all other avenues prior to making application to the Canadian government. This position is bolstered by section 7(1) of the GECA, which provides that:

Where an employee locally engaged outside Canada is usually employed in a place where under the law respecting compensation to workmen and the dependants of deceased workmen payments are made to a fund out of which compensation is paid to workmen and the dependants of deceased workmen, there may, with the approval of the Treasury Board, be paid to that fund, out of the Consolidated Revenue Fund, such payments in respect of that employee as may be deemed necessary by the Minister. [Emphasis added.]

Reading this provision closely, and being mindful of how workers compensation works in Canada, what section 7(1) says is, if there is a local insurance regime for workers, the Canadian government will pay into that fund. What is implicit is that the Canadian government would also expect that payments to injured locally-engaged employees would be made, first and foremost, out of that local fund.


I am not licensed to provide legal advice in any jurisdiction but Ontario. Ironically, therefore, although I am qualified to read and provide advice on section 7 of the GECA, I am not licensed to provide that advice to anyone who could possibly use it.

That said, my reading and interpretation of section 7 of the GECA, applying same to the hypothetical scenario of the American employee injured while working for a Canadian Consulate or Embassy is that the employee would first be expected to exhaust all possible remedies under local law, about which I of course know naught. If the local jurisdiction does not have a workers compensation regime, then the worker may apply for benefits from the Canadian Minister of Labour, and the Minister may, if approved by Treasury Board, make a payment to the injured worker. All of which to say, the worker better hope that the local workers compensation regime plays nicely.

As always, everyone’s situation is different.  The above is not intended to be legal advice for any particular situation and it is always prudent to seek professional legal advice before taking any decisions on one’s own case.

Sean Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer.  He tweets from @SeanBawden.

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