The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

An appeal panel hearing was held on April 26, 2007. The panel discussed this appeal following the hearing on the same day.

Issue

Whether or not the worker was overpaid; and

Whether or not the overpayment must be repaid.

Decision

The worker was overpaid; and

Only the overpayment covering the period commencing May 29, 2006 to June 12, 2006, inclusive, must be repaid.

Decision: Unanimous

Background

On May 23, 2006, the worker sustained compensable injuries to his right elbow and wrist. His claim for compensation was accepted by the Workers Compensation Board (“WCB”) and wage loss benefits commenced on May 29, 2006. In the Worker’s Accident Report dated May 29, 2006, the worker reported that he worked approximately 80 hours biweekly weather permitting and was paid an hourly wage of $23.50. The employer delayed in providing the WCB with its Employer Injury Report containing wage information. In the absence of the employer’s wage information, the WCB assessed the worker’s entitlement to wage loss benefits using the information provided by the worker, which indicated that his gross weekly wage (based on 40 hours @ $23.50 per hour) amounted to $940. This resulted in a weekly wage loss benefit payable to the worker of $615.18. The WCB commenced providing biweekly wage loss benefits to the worker amounting to $1230.36.

On June 13, 2006, the employer faxed the Employer’s Injury Report to the WCB indicating that the worker worked approximately 25 hours per week. The Report stated that the worker’s gross earnings for the period commencing April 25, 2006 (the date that the worker began employment with that employer) until May 23, 2006 was $3172.51. The WCB reassessed the worker’s wage loss benefits based on the worker’s actual weekly gross earnings of $660.94. This resulted in a revised weekly wage loss benefit payable to the worker of only $466.15.

For the 8 week period from May 29, 2006 to July 21, 2006, the worker received wage loss benefits amounting to $4,921.44. Based on the revised weekly wage loss benefit, he should have received $3,729.20, resulting in an overpayment of $1,192.24 in wage loss benefits for this period. As the case manager believed that the worker had been aware of the error, the worker was advised that he was responsible for repaying the full amount of the overpayment.

The WCB further reviewed the worker’s weekly gross earnings based on additional information provided by the worker of his average weekly wages for each of the years 2004, 2005 and 2006. The worker’s highest average weekly wage was $597.66 earned in 2005. Using the average weekly wage rate for 2005, the WCB lowered the worker’s weekly benefit rate to $429.85 effective August 19, 2006.

In a decision dated November 7, 2006, the Review Office was of the opinion that the worker had exaggerated the wage information that he provided to the WCB resulting in the overpayment and concluded that under WCB Policy 35.40.50 respecting Overpayment of Benefits, the worker must repay the overpayment. The Review Office also concluded that the 2005 average weekly earnings of $597.66 represented the worker’s average earnings for calculation of wage loss benefits.

The worker filed an appeal of the Review Office’s decision respecting the conclusion that he was responsible for an overpayment and a hearing at the Appeal Commission was arranged.

Reasons

Issue No. 1: Was the worker overpaid?

The worker attended the hearing without representation. The employer did not appear at the hearing.

The worker did not dispute the fact that an overpayment occurred when the WCB calculated and paid wage loss benefits based on weekly gross earnings of $940 rather than on the actual weekly gross earnings of $660.94.

The panel therefore finds that the worker was overpaid the amount $1,192.00 for the 8 week period from May 29, 2006 to July 21, 2006.

Issue No. 2: Must the overpayment be repaid?

The injury in this case occurred on May 23, 2006. The worker filed his Accident Report on May 29, 2006 indicating that he worked approximately 80 hours biweekly weather permitting. Under the provisions of The Workers Compensation Act (the Act), the employer has a duty to file its Injury Report within 5 business days of becoming aware of the injury. Despite requests from the WCB, the employer failed to provide the report and on June 12, 2006, the WCB prepared a Benefit Calculation Report assessing the worker’s entitlement to wage loss benefits based solely on the information provided by the worker. The employer was fined under subsection 18(1) of the Act for failing to provide the report within the time required. The worker’s first wage loss benefit payment of $1,230.36 was paid to the worker covering the period of May 29, 2006 to June 9, 2006.

The evidence on file indicates that on June 13, 2006, the Employer’s Injury Report was faxed to the WCB. This report contained the information respecting the worker’s actual gross earnings of $3,172.51 for the close to 5 week period that the worker had been employed with this employer and that the worker worked approximately 25 hours per week during that period. For the period from June 10, 2006 to July 21, 2006, the WCB did not reassess the worker’s wage loss benefits in light of the new information provided by the employer. The worker continued to receive three biweekly cheques each in the amount of $1230.36, covering the periods of June 10, 2006 to June 23, 2006; June 24, 2006 to July 7, 2006 and July 8, 2006 to July 21, 2006.

The file contains a Benefit Calculation Report dated August 3, 2006 reassessing wage loss benefits based on the employer’s information. In a memorandum to the file, the case manager indicates that he did not notify the worker of the information provided by the employer and the resulting overpayment until their meeting on August 3, 2006. The worker also testified at the hearing that he was not aware of the overpayment until he met with the case manager on August 3, 2006.

In determining whether the overpayment to the worker must be repaid, the panel considered WCB Policy 35.40.50. Part 3 (ii) of the Policy provides that all overpayments will be pursued for recovery, unless:

(ii.) they resulted from either an administrative error by the WCB, or the receipt of incorrect information from an employer that affected eligibility or the amount payable.

The exception to this provision is that the overpayment will be pursued if the WCB considers that the error or incorrect information was so material or obvious that the worker should have recognized it and reported it to the WCB;

The Policy provides guidance on what may amount to an administrative error:

Administrative error by the WCB may include:

• incorrect use of available data to determine eligibility or calculate payment,
• failure to obtain relevant information before making a decision to pay,
• unreasonable delays in acting upon available information.

Further, Part 4 (i) of the Policy provides that despite the provisions in Part 3, overpayments will be pursued for recovery where “there was fraud, deliberate misrepresentation or withholding of key information affecting benefits entitlement”.  The panel finds there was no intent to deceive or knowingly misrepresent wage information on the part of the worker. 

In reaching this finding, the panel notes that the worker was employed as a construction worker doing stucco and taping and the evicence indicated that his hours varied considerably depending on the weather.  The worker testified that there were no formal records kept of the hours that he worked.  The worker would advise the employer of how many hours he worked at the end of the week and the employer would provide biweekly cheques that generally were in the amount of $1000.  However, the employer did not provide the employee with a breakdown showing how his wages were calculated and no information was provided with the payment regarding the number of hours worked or what deductions if any had been made by the employer.  The evidence on file indicates that the worker requested pay stubs from the employer but the employer failed to provide them.

In light of the lack of information that was provided by the employer to the worker concerning the breakdown of wages paid to the worker; the difficulty the worker had in communicating or obtaining wage information from the employer and the fact that the worker's hours varied significantly depending on the weather, the panel finds that in the circumstances of this case the overpyaments did not occur as a result of fraud or deliberate misrepresentation or withholding of key information.

In considering whether and when an administrative error occurred, the panel notes that the initial payment by the WCB in the amount of $1230.36 resulted from the information provided by the worker and not as a result of an administrative error on the part of the WCB.  In an effort not to unreasonably delay payment to the worker, the WCB acted upon the available information and actively pursued the employer to obtain additional information.

However, the evidence indicates that as of June 13, 2006, the WCB had the employer's wage information and was in a position to reassess the worker's wage loss benefits and failed to advise the worker of the overpayment or adjust his benefits until August 3, 2006.  The panel is of the view that the WCB's failure to reasses the worker's wage loss benefits for over 7 weeks amounted to an unreasonable delay in acting upon available information and therefore the overpayments for the period commencing June 13, 2006 until July 21, 2006 resulted from the WCB's administrative error.  The panel is of the view that the error was not so material and obvious that the worker should have recognized it and reported it to the WCB.

In conclusion, the panel holds that the worker is only required to repay the overpayment covering the period from May 29, 2006 until and including June 12, 2006.  The worker is not required to repay the overpayments resulting from the WCB's administrative error covering the period of June 13, 2006 to July 21, 2006.

Panel Members

M. Thow, Presiding Officer
A. Finkel, Commissioner
M. Day, Commissioner

Recording Secretary, B. Kosc

M. Thow - Presiding Officer

Signed at Winnipeg this 22nd day of June, 2007