Decision #101/99 - Type: Workers Compensation
An Appeal Panel review was held on June 30, 1999, at the request of the claimant.
Whether the claimant's wage loss benefits should have been subject to average earnings review; and
Whether the average earnings have been properly calculated.
That the claimant's wage loss benefits should have been subject to average earnings review; and,
That the average earnings have been properly calculated.
The claimant fractured his right wrist on November 30, 1998, during the course of his employment as a carpenter. The claim for compensation was accepted by the Workers Compensation Board (WCB) and benefits were paid accordingly.
On January 13, 1999, the claimant was informed of the process used by the WCB when paying benefits to a worker while he/she is off work. The Payment Assessor explained that the first 12 weeks of benefits is based on the initial information provided by the worker and his employer. As the time loss approaches 12 weeks, the WCB then reviews the rate to make sure the worker is being paid the correct amount, which may result in an increase or decrease in the worker's rate of pay. Subsequent file information revealed the following:
- the claimant had been seasonally employed with the accident employer since August 1997. The claimant's 12 month gross earnings were $19,883.13. His employment periods were August to September 1997 and July 1998 to November 30, 1998. From October 1997 to June 1998, the claimant would not have been eligible for employment insurance as he had not been with the company long enough. Prior employment was also seasonal as per his 1996 and 1997 income tax records.
- in 1996 the claimant's total income was $20,458.00 and in 1997 was $12,344.00. Therefore, effective February 23, 1999, the claimant's new rate of pay would be $393.42 per week, which would be further reduced by probable deductions for EI, CPP and income tax to establish the net income. The WCB then pays 90% of the net income which was approximately $260.06 per week.
On February 24, 1999, the claimant was informed that his new rate of pay beginning February 23, 1999 would be $260.06 per week based on his 1996 income tax information. On March 4, 1999, the claimant appealed this decision to the Review Office.
In a decision letter dated March 17, 1999, the Review Office stated it was satisfied that the average earnings used to determine the claimant's wage loss benefit rate after the 13th week had been appropriately determined in compliance with WCB policy. On March 25, 1999, the claimant appealed this decision and a non-oral file review was conducted at the Appeal Commission.
The claimant is appealing the decision by the Workers Compensation Board (WCB) to have his wage loss benefits subjected to an average earnings review, and whether or not his average earnings have been correctly calculated.
With respect to the average earnings review issue, we note in our review of the file and of the claimant's Application to Appeal, that the process or terminology surrounding calculation of wage loss benefits may not be fully understood by the claimant. Our reasons will refer to this process as well as our consideration of the evidence on the file.
The claimant's entitlement to wage loss benefits, and the mechanisms for calculation of those benefits are set out in the Workers Compensation Act (the Act) and policies passed by the WCB Board of Directors. The WCB is required to follow the legislation, regulations, and policies that apply to the claimant's file.
The Act sets out the benefits that an injured worker may receive once a compensable accident has been established. Subsection 39(4) of the Act states that wage loss benefits are payable to an injured worker the day after an accident, for a "loss of earning capacity" suffered by the worker.
The Act goes on to define "loss of earning capacity." Subsection 40(1) indicates that "average earnings" are the basis of wage loss calculations, and Section 45(1) sets out how average earnings are calculated, stating that "The Board shall calculate a worker's average earnings before the accident on such income from employment and employment insurance benefits, and over such period of time, as the board considers fair and just"
The WCB has passed and implemented Policy 18.104.22.168 - Average Earnings to provide further clarity in the calculation of average earnings. The policy distinguishes between three different types of employees and sets out a different calculation process for each. The three categories are: Permanent full-time employees, part-time or seasonal workers or workers with irregular earnings patterns, and workers with irregular earnings patterns and significant changes in earnings from previous year.
In reviewing the evidence on file, we find that the claimant falls under the second category noted above, namely, a "part-time or seasonal worker or one with an irregular earning pattern." This is based on the evidence that the claimant is a carpenter working for the employer construction company from August to September 1997 and from July 1998 to the date of the accident, with evidence that the claimant had a similar working history prior to these years. There is also information from the employer that the claimant's position at the time of the accident was seasonal, with layoffs based on availability of work and weather conditions.
For seasonal employees like the claimant, Section 7(b) of the Policy sets out the following calculation processes:
- Initial payments would be based on the regular earnings at the time of the accident. Section 3 of the Policy indicates that this is done to ensure expeditious payment of benefits. This information would be readily available from the employer's payroll office.
- Review: The WCB will initiate an average earnings review effective from week 13 onwards and it will be based on average yearly earnings. Section 4 of the Policy indicates that the WCB will initiate this review where there is evidence of an irregular earnings pattern. Where the review indicates that the worker's wage loss benefits should increase, the increase is made retroactive to the date of the accident. Where the review results in a decrease, the decrease is delayed and made effective the 13th week of benefits payments. From 13 weeks and onwards, the worker's actual loss of earnings, on an annualized basis, becomes the basis for calculation of wage loss benefits.
In reviewing the evidence on file, we find that:
- the WCB's initial payments to the claimant following his accident date of November 30, 1998 were based on his regular earnings at the time of the accident. The claimant received benefits at this rate for the first 12 weeks of this claim.
- there is correspondence from the WCB to the claimant dated January 13, 1999 which sets out the process outlined above for calculation of wage loss benefits, both for the initial payment period and for a review of the rate of pay as the time loss approaches 12 weeks (the average earnings review). The letter notes that the rate of pay could be affected by other income sources, seasonal work, and periods of unemployment in the year before the accident.
- an annual earnings review was in fact initiated, with contact made by the WCB to the employer on January 13, 1999 to determine the claimant's work status. It was during this contact that the claimant's seasonal status was confirmed. On the basis of financial information received, an adjustment in wage loss benefits was implemented as of February 25, 1999, which was Week 13 of benefits payments.
Based on our review of the file, we find that the preponderance of evidence supports a finding that the claimant was a seasonal worker at the date of the accident on November 30, 1998, and that the WCB's actions in undertaking the average earnings review were undertaken in a manner consistent with the legislation and policy related to seasonal workers. As such, the claimant's appeal regarding the propriety of the WCB's having done an average earnings review of his wage loss benefits is denied.
The claimant has also appealed whether his average earnings have been properly calculated. In this regard, we note that Section 7(b) of Policy 22.214.171.124 referred to above indicates that payments from Week 13 onwards will be based on average yearly earnings.
Section 2 of the Policy defines "Average Yearly Earnings" as follows:
- "Average yearly earnings are the worker's earnings for any documentable consecutive twelve month period during the one or two years preceding the commencement of the loss of earnings as a result of the injury. Average yearly earnings include any remuneration which the worker received as a result of the employment."
In our review of the file, we note that the WCB obtained income tax returns for 1996 and 1997, and additional information on total earnings for the 12 months immediately up to the date of the accident of November 30, 1998. The total earnings for each period respectively were $20,458, $12,344, and $19,883. The WCB then selected the highest amount, being the $20,458 from the 1996 income tax return, as the basis for calculation of the claimant's average yearly earnings.
We find that the evidence on a balance of probabilities supports a conclusion that the WCB correctly calculated the claimant's average earnings and in doing so we note the WCB selected the most favourable of the consecutive 12 month periods i.e. 1996 as referenced above. Therefore the claimant's appeal on this issue is denied.
D. Vivian, Presiding Officer
A. Finkel, Commissioner
R. Frisken, Commissioner
Recording Secretary, B. Miller
D. Vivian - Presiding Officer
(on behalf of the panel)
Signed at Winnipeg this 9th day of July, 1999