The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

An Appeal Panel hearing was held on November 20, 2002, at the request of the employer. The Panel discussed this appeal on November 20, 2002.

Issue

Whether or not a compensable loss of earning capacity exists effective October 6, 2001; and

Whether or not the worker is entitled to wage loss benefits.

Decision

That there was a compensable loss of earning capacity effective October 6, 2001.

That the worker is entitled to wage loss benefits.

Decision: Unanimous

Background

On October 15, 2001, the claimant telephoned the call centre at the Workers Compensation Board (WCB) to report left arm and shoulder pain which occurred during his work activities as a production worker (working with windows) on September 28, 2001. The claimant also reported the following information:

• October 1^st - worked his regular 8 hour shift. Was advised on this date that he would be laid off on October 5th;
• October 2^nd - called in sick as he could not work
• October 3^rd - off work due to his birthday (company allowed for this)
• October 4^th - worked 8 hours on light duties but his arm was not good as he was carrying boxes and putting screws and washers together.
• October 5^th - worked 4 hours and then took 4 hours vacation time even though he had a sore arm.
• his doctor told him that he would still be off work due to his injury, even if he wasn't laid off.
• The claimant applied for unemployment insurance due to lay off.

The Employer's Report of Injury form that was faxed to the WCB indicated the following:

"Worker claims that his left arm hurts due to installing windows. Please read attached medical letter."

The medical letter that was attached with the employer's submission was dated October 2, 2001. The physician stated that the claimant was suffering from significant chronic joint inflammation and pain. He felt that the claimant's arthritis was most likely a result of his work activities and that the claimant would require long term treatment for his arthritis.

The above physician also completed a Doctor's First Report dated October 10, 2001, showing that the claimant was first assessed on October 2, 2001. Examination findings were pain in the shoulder, elbow and forearm with lifting associated with neck pain. The claimant had tenderness and left shoulder crepitus. The diagnosis rendered was acute arthritis and muscle strain.

When speaking with a WCB adjudicator on October 23, 2001, the claimant indicated that there was no specific accident that had caused his difficulties. He was fine prior to his shift of September 28, 2001 but the pain gradually increased over the course of his shift. He was sore from his elbow to the wrist and was experiencing pain in the front of his shoulder.

The claimant described to the adjudicator the type of work he was performing on the date of his injury. The claimant said that he reported his difficulties to his supervisor on September 28, 2001 and that a green card was completed on October 1, 2001.

When speaking with a WCB adjudicator on October 29, 2001, the claimant's supervisor confirmed the work duties that were described by the claimant. On September 28, 2001, the claimant complained about his shoulder and was offered other duties which he refused. The claimant complained about every little ache and pain. He was not sure if the claimant was having any difficulties prior to his shift of September 28th. The supervisor did not believe that the claimant complained about his shoulder on October 1st or that he related his time loss on October 2nd to his shoulder injury. He felt that the claimant was just using up his time prior to the scheduled lay off.

The supervisor stated that the claimant performed light duties on October 4th, i.e. assembling screws. This involved sitting on a bench and putting a washer on a screw. The claimant would lift a box off the rack (weighing about 10 lbs.) at chest level. He was not sure how many boxes the claimant lifted. This was the lightest duty he had. He confirmed that the claimant left work early on October 5, 2001 and that the claimant was using up his 4 hours off prior to the lay off. The claimant did not complain about his shoulder on these days.

A WCB medical advisor reviewed the case on November 1, 2001. He stated, "gradual onset of left arm pain (shoulder, elbow, wrist) on shift of September 28th ; seems to be a strain - duration expected at 4-6 weeks. I note claimant has been laid off. The A/P (attending physician) refers to diagnosis of arthritis - there is no x-ray, I do not know how this diagnosis was arrived at. Certainly, arthritis would not have been caused by workplace...".

In a progress report dated November 6, 2001, the attending physician reported subjective complaints of pain and stiffness in both shoulders and left elbow. Objective findings included crepitus in both shoulders.

In a decision dated November 15, 2001, the claimant was advised that the WCB would accept responsibility for his left arm/shoulder difficulties based on a diagnosis of a strain. Based on medical information received on November 6, 2001, it was the opinion of primary adjudication that the claimant's ongoing difficulties were the result of his pre-existing condition of arthritis. The WCB accepted responsibility for the claimant's medical treatment related to the muscle strain until November 5, 2001 inclusive and final. However, with respect to time loss from work, primary adjudication concluded that the claimant's time loss was due to economic reasons and not to the compensable injury. Therefore the claimant was not entitled to wage loss benefits. On December 17, 2001, the claimant's union representative appealed this decision and the case was referred to Review Office for consideration.

On February 22, 2002, Review Office determined that a compensable loss of earning capacity did exist effective October 6, 2001 and that wage loss benefits were payable. Review Office felt that the claimant had not recovered from his shoulder strain, which was accepted by the WCB, as of October 6, 2001. A compensable loss of earning capacity did exist until such time as it was felt the claimant had recovered from the strain injury.

Review Office noted that the employer had placed the claimant on modified duties for the 1st week of October and that these duties ended on October 6, 2001 due to the lay off. This did not negate the WCB's responsibility regarding loss of earning capacity up to the point where it was deemed the claimant had recovered from the shoulder strain.

On March 4, 2002, an advocate for the employer asked Review Office to clarify its decision of February 22, 2002. The advocate noted that the employer had accommodated the claimant in suitable duties such that there was no loss of earning capacity until he was laid off due to the terms of the collective agreement and his seniority. The advocate felt that the lay off was unrelated to the claimant's compensable injury, and that the claimant was therefore not entitled to full wage loss benefits once the layoff period began.

The Review Officer handling the case contacted the claimant on March 4, 2002. The claimant advised that in his five years with the company, this was either his second or third layoff. He stated that layoffs did not occur yearly but were tied in with economy and demand for the employer's product. Three years ago he had concurrent employment and he collected regular EI disability benefits. At the time of the conversation, the claimant was in his 6th month of layoff and he just had just received a 15 week EI disability cheque the previous week. The claimant told the Review Officer that if he wasn't injured, he would have looked for work.

On March 11, 2002, Review Office clarified its position on the issue of "loss of earning capacity" with the employer and reference was made to portions of WCB Policy 43.20.20 regarding Modified and Alternate Return to Work. Review Office was of the position that the claimant was competitively disadvantaged as he went on disability employment insurance as opposed to regular employment insurance and had to wait many months for his 15 week cheque, which was the maximum payable under disability employment insurance. By claiming disability benefits while many co-workers would be claiming regular benefits without such significant delays in payments, one could argue that that fact alone would mean the claimant was being treated differently by employment insurance, and thus he was disadvantaged.

On May 9, 2002, the employer's advocate appealed Review Office's decision and an oral hearing took place on November 20, 2002.

Reasons

The employer in this case is appealing a decision of the Review Office that granted wage loss benefits to an injured worker after October 6 2001, at which time the claimant had been laid off under the terms of a collective agreement. The claimant had been on modified duties at the time, for a diagnosed left shoulder/arm strain overlaid on a pre-existing chronic degenerative arthritis condition. The acute portion of the claimant's difficulties had been expected to last four to six weeks (into the period of the layoff). On that basis, the adjudicator originally granted medical aid benefits for that period, but concluded that the layoff was for economic circumstances and not as a result of the injury, and therefore did not provide for wage loss benefits. The Review Office overturned the second finding and reinstated benefits after October 6, 2001, indicating that there was a compensable loss of earning capacity after that date, and an entitlement to wage loss benefits. The period of benefits under consideration by this panel is a four week period from following October 6, 2001 to November 5, 2001, during which time wage loss benefits were paid to the worker.

Although there are two issues listed in the appeal, this is essentially a single issue stated in two different ways. In fact, we note that this was argued as a single issue by both parties at the hearing. For the employer to succeed in its appeal, we would need to establish that there was no compensable loss of earning capacity suffered by the worker after October 6, 2001, and thus no entitlement to wage loss benefits at that time We were not able to come to this conclusion, and find that that the worker was in fact entitled to wage loss benefits after October 6, 2001. Our reasons follow.

We wish to note at the outset, that while we are ultimately maintaining the decision of the Review Office, we have used different reasons; it is our opinion that the Review Office has erred twice in its interpretation of the policy, and that their decision was not sustainable based on the reasons provided.

Dealing with the worker's status prior to the layoff, we note that the worker was employed in a physically demanding job. He was diagnosed with a muscle strain and arthritis of his left shoulder. Because of his difficulties in performing his regular duties, he was assigned to modified duties on October 1, 2001, where he worked until his layoff on October 6, 2001. Given the complexity of the claim, both medically and in the reporting process, there were delays before the claim was ultimately accepted. Although the worker had filed for EI sick benefits and group insurance, WCB did find that the worker had suffered an accident under the Act.

The WCB accepted the muscle strain, but not the arthritis. On November 1, 2001, a WCB medical advisor indicated that the medical restrictions for a muscle strain would be warranted for a period of four to six weeks. Thus, at the time of the layoff, the compensable injury was still at play, causing the worker to be on modified duties, and unable to perform his pre-accident job. However, the employer had fully accommodated the worker until the date of the layoff, and as such, he had not suffered a loss of earning capacity while he was working.

In cases where an injured worker is laid off for economic reasons, the Board has passed WCB Policy 43.20.20 - Modified and Alternate Return to Work with the Accident Employer, to deal with entitlement to ongoing wage loss benefits. Section B.5, in particular, deals with workers in modified duties positions and describes the situations in which they should or shouldn't receive wage loss benefits during the layoff period. Section B.5 reads, in part, as follows:

B.5 Criteria - Benefit eligibility if employment conditions change

If a worker doing modified or alternate work experiences a change in job requirements, lay-off, shutdown, lockout or strike, the worker may be eligible for additional benefits. When the WCB determines whether the worker is eligible for additional benefits, it will consider whether there is a loss of earning capacity and, if so, whether or not it is due to the injury.

The WCB recognizes that when the work is interrupted due to economic conditions (labour issues or other factors that affect all workers), the initial loss of earning capacity is not due to the injury. If the worker is expected to return to the previous employment in a reasonable time period, the worker is not at a disadvantage compared to other workers at that workplace who are also experiencing a loss of earnings.

If the work interruption becomes prolonged to the point where similarly employed workers are pursuing other employment opportunities, and the injury places the injured worker at a competitive disadvantage in the general labour market, then the WCB will determine whether there is further entitlement to wage loss benefits and/or rehabilitation services.

When the WCB determines whether the loss of earnings was due to the injury, it will consider the following questions:

1. Is the work interruption temporary or long term? Is the work interruption a normal cyclical event?
2. What is the worker's actual earning capacity in the general labour market?
3. Is the worker's current wage representative of actual earning capacity, or is it partially subsidised as part of a rehabilitation initiative?
4. Is the worker at a competitive disadvantage compared to uninjured workers so that, as a result of the worker's injury, the worker cannot effectively compete with other workers in the job market?

In assessing the applicability of this policy, Review Office noted that Section B.5 could not be applied, because the criteria in the preceding Section B.4 had not been met. That section sets out situations where the WCB's participation or resources might be needed, to facilitate a modified work plan. With due respect, we do not see Section B.4 as a precondition for the application of B.5. Rather, in our review of the full policy, we note that sections B.3 and B.4 deal with situations where workers can return to a work placement with the accident employer, while B.5 deals with situations were workers cannot return to the workplace. As such, we interpret the provisions of B.4 as having no bearing on this worker's entitlement to benefits under Section B.5

Review Office also noted that the worker was competitively disadvantaged because he was applying for EI sick benefits, rather than EI regular benefits, and that the delays associated with the first program were substantial in comparison to the second program. Again, with due respect, we do not interpret "competitive disadvantage in the general labour market" as referring to competition for EI benefits, but rather to competition for jobs.

In considering the appeal, we have reviewed the provisions of Section B.5 of the policy, and the evidence on the file and as presented at the hearing. We have made the following findings of fact in respect of the layoff:

• The worker was laid off on October 6, 2001, pursuant to the seniority rules set out in the collective agreement in effect at the workplace. As such, the layoff was due to economic circumstances.
• The worker was on modified duties at the time of the layoff, and had compensable medical restrictions at the time of the layoff arising from an injury at the workplace.
• These restrictions were in place for a four to six week period, and would have precluded him from returning to his pre-accident employment.
• The announced layoff was for an indeterminate period, and in fact was a prolonged layoff, lasting over six months.
• The claimant had been laid off by his employer the previous year, for economic reasons. During that period, he did not apply for EI benefits, but had instead been able to gain temporary employment as a labourer working for a renovator. His earnings at that time were at about the same level as his earnings with his accident employer.
• This position was again available to the worker after the October 6, 2001 layoff, but he felt unable to take on that job due to his work injury.

Based on these findings of fact, we have concluded that the worker was at a competitive disadvantage in comparison to his fellow employees at the time he was laid off, and for the period during which he had compensable medical restrictions. He was essentially a one-armed worker at the time he was laid off, and his alternate employment (which was equivalent to his pre-accident job in terms of physical demands) was outside his medical restrictions. While he had an equivalent earning capacity in the general labour market, he was unable to compete during the period of his compensable medical restrictions. Accordingly, he had a compensable loss of earning capacity and was entitled to wage loss benefits following October 6, 2001. We would therefore dismiss the employer's appeal.

Panel Members

T. Sargeant, Presiding Officer
A. Finkel, Commissioner
W. Leake, Commissioner

Recording Secretary, B. Miller

T. Sargeant - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 16th day of December, 2002