Seasonal Worker Did Not Qualify as “Employed” for Purposes of Loss of Income Payments under Automobile Insurance Policy
In Temple v. Aviva Insurance Company of Canada,1 the Supreme Court of Newfoundland and Labrador determined that the plaintiff, a seasonal worker, was not employed at the date of the motor vehicle accident. As a result, he did not qualify for loss of income payments under Section B of Newfoundland and Labrador’s standard automobile insurance policy. In its decision, the court clarified the test for determining when a seasonal worker meets the policy’s condition of being employed.
The plaintiff, Paul Temple, was involved in an accident while a passenger in a vehicle insured by the Defendant, Aviva Insurance Company of Canada. The parties agreed that Temple qualified as an “insured person” under Section B (Accident Benefits) of the automobile insurance policy, and Aviva had already paid medical rehabilitation benefits. However, Aviva denied loss of income benefits, and applied for summary trial seeking a declaration that Temple, a seasonal fisher, was not “employed at the date of the accident”, as required by the policy.
The evidence established that Temple had worked as a seasonal fisher for about twelve years. He had worked for a number of boat owners, including his uncle from 2000 to 2007, and again in 2010.
The accident occurred during the off-season in April 2012. Temple had not yet committed to any particular employer or employment. He had recently upgraded his qualifications and was seeking work as a captain on a fishing boat. There was no such opening on his uncle’s boat. Nevertheless, Temple testified that had he failed to secure a captain’s position, he could have returned to work for his uncle in a less lucrative capacity.
The standard automobile insurance policy provides for loss of income benefits during the period that the insured person, because of the accident, suffers a substantial inability to perform the essential duties of his or her occupation or employment. To qualify for these benefits, the insured person must have been “employed at the date of the accident”.
The policy also provides that a person “shall be deemed to be employed” in two specific circumstances. According to the court, Temple did not meet either of the deeming provisions. First, Temple was not “actively engaged in an occupation or employment for wages or profit at the date of the accident”.2 To the contrary, Temple “confirmed that he was looking for work”.3 Second, Temple conceded that, while he had worked during the twelve months preceding the accident, his employment was for less than the required six-month period.
Relying on Fougere v. Wawanesa Insurance Co.,4 Temple argued that the policy “should be interpreted to provide coverage for seasonal workers who demonstrate that, at the date of the accident, there was every likelihood that they would have again worked in the seasonal work in which they have been employed in the past”.5
Temple also relied on Gaudet v. Co-operators Insurance Co of Canada,6 where the plaintiff was not actively working at the date of the accident, but was found to be employed and entitled to loss of income benefits having fished with his uncle in the prior year as well as in the year of the accident. Aviva, however, argued that the Gaudet case was distinguishable because the plaintiff’s brother had registered his second fishing boat and licence in the plaintiff’s name, and the licences remained in the plaintiff’s name for a full year after the accident. Consequently, the evidence established a continuing course of employment between the plaintiff and his brother, with the plaintiff on a temporary lay-off at the time of the accident. In these circumstances, the court was able to conclude that but for the accident, the plaintiff would have resumed employment with his brother.
In response to Temple’s argument, Aviva relied on two appellate decisions, Logan v. Pafco Insurance Co.7 and Sansone v. State Farm Mutual Automobile Insurance Co.8 While neither case involved seasonal workers, they did “assist in determining how a court should interpret and apply the condition of employment-related eligibility for loss of income under Section B of a standard automobile insurance policy”.9 According to Aviva, these cases supported its position that, on a proper interpretation of the policy, Temple had to present evidence of “an existing employment relationship or contract at the date of the accident”.10 Otherwise, Aviva argued that the court “would be rewriting the mandated policy language to provide that all seasonal workers are deemed to be employed year-round”.11
Following its review of the cases relied upon, the court accepted the statement from Sansone, to the effect that the policy requires “an existing contract of employment or actual employment”,12 and described the test as follows:
… the Policy condition requiring that an insured be employed at the date of the accident must be interpreted such that there must be an existing contract of employment or actual employment at the date of the accident. It is not necessary that such a contract of employment be in writing but the evidence must establish that the plaintiff had an ongoing employment relationship with an employer such that he or she was either actively employed, on call, or on temporary lay-off with a right of recall or with a definite commitment for future work. As such, in certain circumstances, seasonal workers not actively working at the date of the accident may be considered employed at the date of the accident. However, in other circumstances, seasonal workers may not qualify.13
In the end, whether the test is met will turn on the facts of each individual case. Here, Temple had no ongoing employment relationship at the date of the accident, no definite employment arrangement for the future, and no commitment from or right to work with his uncle. Moreover, since he had not worked for his uncle during the prior fishing season, he was in no position to argue that he was merely on “temporary lay-off or on call”.14 As a result, Temple failed to meet the condition of being employed at the date of the accident and he could not claim loss of income benefits under the automobile insurance policy.
Lessons for Insurers
Although a broad and liberal approach is usually applied when interpreting accident benefits coverage under automobile insurance policies, there are limits to this approach. Any interpretation should be consistent with the words of the policy.
Loss of income payments are conditional on the insured person having been employed at the date of the accident. This determination may be particularly challenging in the case of seasonal workers and each case will depend on its own facts, but at the end of the day, the condition remains.
This case suggests that, at a minimum, seasonal workers will need to establish an ongoing employment relationship with an employer such that they were either actively employed, on call, or on a temporary lay-off with a right of recall or with a definite commitment for future work. A mere likelihood of working seasonally again, as they had in the past, is insufficient to meet the condition of the policy for the purposes of obtaining loss of income payments.
1 Temple v. Aviva Insurance Company of Canada, 2019 NLSC 80. Cox & Palmer represented Aviva Insurance Company of Canada.
2 Temple v. Aviva, para. 7.
3 Temple v. Aviva, para. 7.
4 Fougere v. Wawanesa Insurance Co., 2002 NBQB 364.
5 Temple v. Aviva, para. 14.
6 Gaudet v. Co-operators Insurance Co of Canada (1993), 111 Nfld & PEIR 1 (PEISC TD).
7 Logan v. Pafco Insurance Co., 2000 NSCA 58.
8 Sansone v. State Farm Mutual Automobile Insurance Co. (1979), 25 OR (2d) 108 (ONCA).
9 Temple v. Aviva, para. 27.
10 Temple v. Aviva, para. 33.
11 Temple v. Aviva, para. 33.
12 Temple v. Aviva, para. 32.
13 Temple v. Aviva, para. 41.
14 Temple v. Aviva, para. 42.