Indemnification Policy 46-305 | Effective Date: January 30, 2014

Purpose

The purpose of this policy is to provide guidelines for the indemnification of employees who have been made a party to an action by reason of their discharging a responsibility on behalf of WorkSafeNB.

Scope

This policy applies to employees of WorkSafeNB who have acted in good faith and within the scope of their employment.

Statements

1.0 General

The WHSCC & WCAT Act provides WorkSafeNB with the authority to indemnify its employees against all costs, charges, and expenses, including an amount paid to settle an action or satisfy a judgment, where the employee has been made a party to an action by reason of having acted on behalf of WorkSafeNB.

In order to be entitled to the indemnity, an employee must have acted honestly and in good faith with a view to the best interests of WorkSafeNB. In criminal or administrative actions or proceedings, the employee must have reasonably believed his or her conduct was lawful.

No indemnity is available to an employee when the action is by or on behalf of WorkSafeNB against the employee.

2.0 Entitlement to Indemnity

Employees covered by this policy are automatically entitled to indemnity by WorkSafeNB, unless it is proven on a preponderance of evidence that the employee acted in bad faith. Acting in bad faith includes actions that were:

  • Precipitated by malice;
  • For personal gain;
  • Contrary to a superior’s instructions;
  • Fraudulent in nature; or
  • Breaches of confidentiality.

2.1 Conditions for Entitlement

In order for WorkSafeNB to indemnify the employee, there are four conditions that must be satisfied:

  • Cooperation of the employee entitled to indemnity;
  • Non-admission of liability;
  • No insurance policy coverage; and
  • Agreement of costs recovered. 

Cooperation of Employee Entitled to Indemnity

The cooperation of the employee entitled to indemnity must be provided to WorkSafeNB in all matters, except in a pecuniary way, relating to the defence of the claim or in the prosecution of any appeal. This includes requests by WorkSafeNB, such as attending all meetings, hearings and trials, assisting in effecting any settlement, securing and giving evidence, and obtaining the attendance of witnesses.

Non-admission of Liability

Without prior written approval of WorkSafeNB, the employee entitled to indemnity shall not:

  • Assume any obligation;
  • Admit any liability; or
  • Take any steps to compromise the defense of the claim.

Policy of Insurance

The claim is not covered by any policy of insurance effected directly or indirectly for the benefit of the employee. A homeowner’s policy of insurance providing personal liability coverage for the employee is not considered to be a policy of insurance for the purpose of this condition.

Costs Recovered

The employee entitled to indemnity shall agree that any costs recovered in the defense of the action are the property of WorkSafeNB and such costs are to be made payable to WorkSafeNB. The employee shall agree to release such costs in favour of WorkSafeNB and execute any such documentation that may be required to ensure that the costs awarded are paid to WorkSafeNB.

2.2 Level of Entitlement

When an employee is entitled to indemnity, WorkSafeNB will have general conduct of the action and will defend, negotiate or settle claims and, when necessary, pay all loss damages, costs or expenses as incurred.

3.0 Procedures

The procedure to follow when an employee seeks entitlement are as set out in this section.

3.1 Notification

The employee shall notify the appropriate person in writing, and document the allegation and defense to the allegation.

Notification shall be to the following:

  • Where the action is against a member of the Board of Directors, notification shall be to the Chairperson of the Board of Directors;
  • Where the action is against a Vice-President or an employee within a department that reports directly to the President/CEO, notification shall be to the President/CEO; and
  • Where the action is against an employee, an officer appointed under Section 5(1) of the Occupational Health and Safety Act, or a person authorized to act on behalf of WorkSafeNB, notification shall be to the Vice-President to whom the named party reports.

3.2 Acknowledgment of Entitlement

The recipient of the notification shall advise the employee of the entitlement to indemnity and shall set forth the terms and conditions of this entitlement. The employee’s acceptance of these conditions must be in writing.

3.3 Dispute Respecting Entitlement

Where there is an allegation that the employee did not act in good faith, the recipient of the notification shall gather as much information as is necessary/possible respecting the allegation in order to determine whether or not the employee remains eligible for indemnity.

3.4 Adjudication of Entitlement

In the event that the recipient of the notification has reasonable grounds to believe that the employee may not be entitled to indemnity, they shall notify the employee of the basis for such belief and set a date for a hearing into the reasonableness of their grounds for believing non-entitlement to indemnity.

Employee - a member of the Board of Directors, an employee of WorkSafeNB including an officer appointed under Section 5 of the Occupational Health and Safety Act, persons authorized to act on behalf of WorkSafeNB, former members of the Board of Directors, an employee who has terminated their employment at WorkSafeNB but was employed at the time of the act or omission in question, and the heirs and legal representatives of any individual named above.

WorkSafeNB – means the Workplace Health, Safety and Compensation Commission or "the Commission" as defined by the Workplace Health, Safety and Compensation Commission and Workers’ Compensation Appeals Tribunal Act (WHSCC & WCAT Act).

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