Decision #53/03 - Type: Workers Compensation

Preamble

An Appeal Panel hearing was held on March 31, 2003, at the claimant's request. The Panel discussed this appeal on March 31, 2003.

Issue

Whether or not the average earnings used in the calculation of the worker's additional disability award are appropriate.

Decision

The worker's prior full time earnings should be used in the calculation of her additional disability award.

Decision: Unanimous

Background

The claimant injured her right wrist and left calcaneus on April 28, 1987 as a result of a work related accident. The claim for compensation was accepted by the Workers Compensation Board (WCB) and the claimant was paid various benefits which included retraining into a different occupation and a permanent partial disability award with respect to her left ankle.

The claimant's disability was assessed on a number of occasions by the WCB between 1988 and 2002. Effective May 9, 2002, the claimant's disability rating was increased from 7.9% to 15%, which entitled her to a monthly pension award of $147.68 per month. On September 26, 2002, the claimant disagreed with the way her average earnings were established to calculate the additional disability award and the case was sent to Review Office for consideration.

In a decision dated November 8, 2002, Review Office confirmed the claimant's average earnings at $639.90. When rendering its decision, Review Office made reference to Section 49(1) of the "Old Act", WCB policy 44.80.10.10, Average Earnings and the Union Local's agreement with the employer concerning job share positions.

Review Office noted that the claimant's gross earnings in 1999 was $43,020.38. In the year 2000, the claimant earned $45,726.20. The claimant was then absent from the work place for one year in 2001 due to maternity leave. In 2001, the claimant was offered and accepted a position on a 50% job share basis and was initially paid $829.13 bi-weekly.

Review Office confirmed the 15% disability rating effective May 9, 2002, the date of the disability rating examination. Given that the claimant's actual earnings on May 9, 2002 were less than her former earnings indexed by a formula in the Act, Review Office believed it was appropriate to have used this figure as it was higher than the actual earnings. Review Office did not believe that the claimant's prior earnings in the years 1999 and 2000 could be utilized as the worker made a career choice decision in the year 2001 that was carried forward in the year 2002 to work in a 50% job share situation in a lower paying position. The claimant's earnings in this position were understandably lower than they were when she was a full time worker in the calendar years 1999 and 2000. Review Office did not believe that the claimant's average earnings would have been set higher if she had not been employed at all as she had stated in her letter of appeal. Review Office opined that the same method of calculation would have been utilized with the same results. On January 17, 2003, the claimant disagreed with Review Office's decision and an oral hearing was arranged.

Reasons

This case involves a worker who suffered a relatively serious injury to her ankle as a result of a workplace accident in 1987. Her claim for compensation was accepted and benefits were paid accordingly.

These benefits included retraining, as it was determined that she would be physically unable to return to her previous job. Benefits also included a permanent partial disability rating as she had incurred a permanent loss of range of motion in her ankle. Initially set at 3.8%, this rating was periodically increased following reassessment. The most recent reassessment was done in May 2002 and was set at 15%.

At issue in this appeal is the amount of her earnings used as the base for determining her financial award for the reassessed disability. In the normal course, her earnings at the time of the reassessment would be used. In this case, the claimant was working in a 50% job-share position. As her earnings in this position were lower, the adjudicator determined that it should be based on her earnings at the time of the original injury, adjusted in accordance with a formula set out in The Workers Compensation Act.

The worker argued that the earnings should be based on her full-time earnings prior to going on maternity leave. She sought reconsideration by Review Office on this basis. Review Office upheld the adjudicator's decision. She then appealed to this Commission.

For her appeal to be successful, the Appeal Panel would have to determine that her argument in respect of base earnings is correct. We did come to that conclusion.

Before reaching our decision, we conducted a thorough review of the claims file and held an oral hearing at which we heard testimony and argument from the claimant.

As noted above, the compensable injury occurred in 1987. Thus, the case is governed by the provisions of the 'old' Act.

Review Office, in its reconsideration, relied, for the most part on Board Policy 44.10.20.50, Recurring Effects of Injuries. From our review of this policy, it is our conclusion that this policy does not apply to this claimant, in this case.

This policy, in respect of a compensable injury incurred prior to January 1, 1992, defines "recurrence" as "a clinically demonstrated increase in permanent impairment; or a disability which has been directly related to a previous compensable condition."

For accidents after January 1, 1992, recurrence is defined as "a clinically demonstrated increase in permanent impairment which results in a loss of earning capacity, or a disability which has been directly related to a previous compensable condition and has resulted in a current loss of earning capacity." (Our emphasis.)

We would note that what the 'new' Act terms as "loss of earning capacity" equates to "total temporary disability" in the 'old' Act.

Further review of other provisions of this policy leads us to conclude that it is intended to apply to a situation where the "recurrence" has led to an inability to work for a period of time: temporary total disability in the old Act; loss of earning capacity in the new. That was clearly not the case here. She did not lose any time from work as a result of this increased disability.

Our conclusion that this claimant did not suffer a recurrence, as defined in this policy, leads to the further conclusion that the provisions regarding average earnings in that policy do not apply.

We then looked to Board Policy 44.90.10.02, Permanent Impairment Rating Schedule, which states, in part: "The award is not related to loss of earning capacity nor is it a proxy for loss of earning capacity."

From this, we find further support for our position that it is not necessarily the rule that the base for calculating the disability award be the current earnings or the adjusted earnings at the time of the accident.

To determine what we consider to be the correct formula for calculating this claimant's disability award, we turned to Board Policy 44.80.10.10, Average Earnings. We note the following from this policy:
"This policy ensures that the same method of calculating average earnings is available regardless of the date of accident. The method used will always be the one that best reflects the worker's actual loss of earnings."

"These formulas incorporate either regular earnings at the time of accident, or average yearly earnings or probable yearly earning capacity. The formula that best represents the worker's loss of earnings will be chosen."

"Average yearly earnings include any remuneration that the worker received as a result of employment or employment-insurance benefits. To determine a worker's true loss of earnings, the WCB will generally use documentable employment data from any consecutive 12-month period during the one or two years before the compensable accident. If the WCB determines that this calculation does not produce an accurate reflection of a worker's loss of earnings, it will generally use documentable employment data from a 12-month period during, or an average of, a longer period of up to five years."
While we have already concluded that this is not a "loss of earning capacity" situation, we nonetheless adopt the sentiment of this policy which we believe to be that compensation benefits should reflect the real earning capacity of the claimant. In virtually all cases of an increased disability rating, those benefits will be based on current earnings. From time to time, though, cases will arise where this won't work. This is one such case.

The timing of her reassessment needs to be considered. Had it occurred prior to her going on maternity leave - or, even, during that leave - there would have been no argument as to the base for calculating her benefits. Maternity leave is a matter of public policy, as well as being a provision in the collective agreement under which she worked. As such, her absence from work and lack of full-time earnings in this limited time frame is irrelevant to this consideration.

Had she waited until she returned to full-time work, there would also be no problem. The fact that it occurred while she was in a job-share position was purely accidental. We accepted her testimony that she did not seek this position, but that it was offered to her at the time she was considering a return to full time work from maternity leave. We also note her evidence that she is now in the process of regaining full time employment with her employer.

Her increased disability rating was not the result of a discrete event occurring during her half-time employment. It was the result of continuing deterioration of her ankle, which happened over the course of eleven years, from her previous assessment. In fairness to her, her benefits should reflect this.

To that end, it is our conclusion that her disability award should be based on the "average yearly earnings" formula contained in Board Policy 44.80.10.10, set out above. It is our further conclusion that the amount used as the base should be her earnings in the twelve month period immediately prior to her going on maternity leave.

The appeal is allowed as set out above.

Panel Members

T. Sargeant, Presiding Officer
A. Finkel, Commissioner
M. Day, Commissioner

Recording Secretary, B. Miller

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

Signed at Winnipeg this 20th day of May, 2003

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