The Appeal CommissionThe Workers Compensation Act of Manitoba

Worker’s Position

The worker was represented by legal counsel who provided a written submission dated December 7, 2006.

The worker’s representative advised that the worker is appealing the calculation of wage loss benefits paid to the worker from the date of his accident to the present date and is seeking a review of the calculations of his future wage loss benefits.

The worker’s representative advised that prior to the workplace injury the worker earned a base salary plus a bonus and incentive payment. He submitted that the bonus and incentive payments represent ongoing payments which would have been made to the worker but for the injury and therefore he should receive payment in regard to same as it is a loss in his earning capacity under section 45 of the Act. He submitted that since the worker returned to work, the WCB has not paid the worker anywhere near the maximum benefit level and that section 46 no longer serves as a statutory bar to paying the worker top-up benefits for the amount of the bonus and incentive.

The representative also submitted that the worker qualifies for Special Additional Compensation (SAC) pursuant to WCB policies.

Applicable Legislation and Policy

The Appeal Commission and its panels are bound by the Act, regulations and policies of the Board of Directors. There are several sections of the Act which are directly applicable to this appeal.

Subsection 45(1) provides 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, but the amount of average earnings shall not exceed the maximum annual earnings established under section 46.”

Subsection 46(1) provides “no regard must be taken of the earnings of the worker in excess of the maximum annual earnings when calculating earnings for the purpose of this Part.”

Each year the Board of Directors of the WCB makes a Regulation which sets out the maximum annual earnings for a specific year. The maximum annual earnings for 2001, the year of the worker’s accident, were set at $53,510.

WCB Policy 44.80.10.10 (Average Earnings)is also applicable to this case. It provides that in calculating the worker’s average earnings under section 45, the WCB will use formulas that “…incorporate either regular earnings at the time of accident, or average yearly earnings or probably (sic) yearly earning capacity. The formula that best represents the worker’s loss of earnings will be chosen.”

Analysis

In considering this appeal, it is necessary to keep in mind that the WCB operates on the basis of a wage loss system. Such a system pays a worker based upon the difference between the worker’s average earnings before the accident and the amount the WCB determines the worker is capable of earning after the accident. It is also necessary to keep in mind that the Act provides for maximum annual earnings which can have the effect of limiting the amount of wage loss benefits a worker is entitled to receive.

The issue before the panel was whether the worker’s average earnings and wage loss benefits have been correctly calculated. The panel has considered the representative’s submission, the evidence on the claim file, the applicable statutory and policy provisions and finds that the worker’s average earnings and wage loss benefits were correctly calculated.

A worker’s average earnings are limited to the maximum annual earnings as established under the Act despite the fact that the worker may have earned a greater amount. The amount of the wage loss benefits entitlement is then calculated pursuant to subsection 39(1) of the Act using the established average earnings. This is the case for all accidents that occur after December 31, 1991 and before January 1, 2006.

The panel notes that the worker earned more than the maximum annual earnings for accidents occurring in 2001. His earnings for the 12 month period before the injury were $70,842.72. This sum included all his employment earnings for the period. The maximum annual earnings for 2001 (the year of the injury) as established by regulation in accordance with subsection 46(2) of the Act were $53,510.00. The worker’s average earnings before the accident were therefore limited to this sum and his wage loss benefits were calculated using this sum.

The panel is satisfied that in calculating the worker’s average earnings before the accident, the WCB used the formula that best represented the worker’s loss of earnings as provided by WCB Policy 44.80.10.10.

Unfortunately, the statutory provisions applicable to this case, have the effect of limiting the worker’s wage loss to the maximum annual earnings amount. For example, information on file indicates that the worker’s total employment earnings in 2004 were $66,956.00, an amount that exceeds the maximum annual earnings applicable to the case. As the worker’s post accident earnings are greater than the maximum annual earnings in that particular year, the worker has not suffered a loss of earning capacity within the wage range covered by the Act, and is not entitled to wage loss benefits.

With respect to whether the bonuses should be considered in calculating post accident earnings, the panel finds that these payments received by the worker from the employer are properly considered as earnings from employment in accordance with WCB policy 44.80.30.10 (Establishing Post-Accident Earning Capacity)