Workers’ compensation, 1918: the beginnings

Written by David Frank on April 23, 2018

James Sugrue (1883-1930), the first president of the New Brunswick Federation of Labour and a pioneer of workers’ compensation in New Brunswick. Photo from the Labour History in New Brunswick Project.

The debate had been going on for years. When workers take a job, they put themselves at the disposal of an employer in return for their pay. But workplaces can be dangerous. What happens when workers are injured and unable to continue to work as before? What if they are killed on the job, leaving families dependent on their earnings? Are employees entitled to any compensation for injuries or fatalities on the job?

In nineteenth-century New Brunswick, the short answer was no. The assumption was that injuries at work, even fatalities, were a voluntary risk undertaken by the individual employee. To gain compensation, a disabled worker or the family of a worker killed on the job would have to take the employer to court and prove that the employer was negligent in some way. This did not happen often.

New Brunswick started to legislate in this area in 1903. While claiming to recognize workers’ needs, the Employer’s Liability Act actually did more to protect employers. It limited the situations in which employers could be held responsible. It also limited the amounts that workers and their families could receive. Most of all, it did not change the expectation that workers and families would have to take legal action to obtain benefits.

This legislation was a disappointment to social reformers such as Frank Hatheway, who had hoped for a more helpful law. He went on to be elected to the provincial legislature in 1908, but even as a member of the governing party, he won only minor improvements.

At this stage, the initiative shifted to the labour unions, especially in Saint John and Moncton, where large numbers of members worked in dangerous conditions on the docks and in railway yards. When the New Brunswick Federation of Labour was founded in 1913, workers’ compensation was one of their first priorities – a notable example of organized labour taking on a cause that would benefit all workers.

A key figure here was James Sugrue, the determined young Saint John carpenter who was the first president of the Federation. He repeatedly took the provincial government to task until finally, in early 1917, a commission of inquiry was named. Sugrue was one of the members, and they travelled the province to hear evidence from employers, doctors, journalists – and workers.

They also looked at laws recently adopted in Ontario. These were based on a new premise. Instead of individual risk, they accepted the assumption that danger, disability and death in the workplace were a shared social responsibility. In return for giving up the right to take legal action, workers would receive compensation through a system of public insurance. The costs were carried by a payroll tax based on the level of hazard in an industry. This kind of no-fault system, as it is often called, was a way of socializing the risks of danger at work. It promised defined benefits for workers while limiting employer liability. And the extra cost of doing business, it was expected, would encourage employers to support better safety standards in the workplace.

The Workmen’s Compensation Act was introduced in March 1918, and both Liberal and Conservative parties supported the bill. The opposition called it a revolutionary change – a good thing, they said, because it understood that, regardless of the cause of a workplace accident, workers and their families needed dependable assistance.

Despite the gendered terminology of “workmen’s” compensation, the proposed law applied to both male and female workers – except that the largest group of women employees at the time, domestic servants, were specifically left out. Also not covered were farm labourers, clerical workers, police and firemen. And there was more evasive action during the debate in the legislature. Amendments were brought in – and passed – to exclude the province’s most dangerous occupations in the fisheries and the woods.

As passed into law, the Act was an incomplete achievement, evidence of the slow and uneven pace of social reform in our society. Benefits were often meagre. But it was considered advanced social legislation at the time, and New Brunswick politicians congratulated themselves on their progressive thinking.

There was more to the story in the century after 1918, much more. Sugrue was named as one of the three original board members to administer the act. This was clear recognition of the stake workers had in improving the system and advancing workplace safety, commitments that only grew stronger over the next century.

And the law was evolving. Already in 1919, the provisions were extended to workers in the woods. Some employers complained, and the government had to take one of them to the Supreme Court of Canada in order to secure compliance. It would not be the last time employers complained about the cost of workers’ compensation.

The Act received royal assent on 26 April 1918. Interestingly, it was signed into law by the same William Pugsley, now lieutenant-governor, who, as attorney-general in 1903, had introduced the earlier, disappointing, Employer’s Liability Act.

David Frank is the author of Provincial Solidarities: A History of the New Brunswick Federation of Labour (Athabasca University Press, 2013).

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