Decision #109/07 - Type: Workers Compensation
Preamble
A file review was held at the Appeal Commission on July 5, 2007 at the worker’s request.
Issue
Whether or not the worker’s pre-accident wages have been correctly calculated.
Decision
That the worker’s pre-accident wages have not been correctly calculated.
Background
On August 31, 1983, the worker injured his lower back during the course of his employment as a painter. The Workers Compensation Board (WCB) accepted the claim for compensation and calculated the worker’s pre-accident earnings to be $560.30 per week which was higher than the maximum annual earnings amount paid for at that time. The worker was therefore paid the maximum compensation rate based at the time of his injury. Effective May 1988, the worker’s wage rate was recalculated at $593.29 based on wage increase information that was obtained from the accident employer.
In February 1991, the employer advised the WCB that the worker would not have received any further wage increases as he was not a journeyman painter. As a result, the worker’s weekly rate remained at $593.29. Based on 1992 legislation, he received regular increases to his pre-accident average earnings based on the Consumer Price Index.
The worker subsequently asked the WCB to reconsider his wage rate calculations based on his being considered a second year apprentice at the time of his injury instead of a mere labourer, for the purposes of calculating rate of pay.
In a decision dated September 7, 2006, Review Office indicated that it did extensive investigations to confirm whether the worker was an apprentice at the time of his accident. This included contact with the worker, his brother-in-law, the provincial apprenticeship department, the worker’s prior employer and the Painters Union.
Review Office indicated that it did not dispute the worker’s belief that his rate of pay at the time of his injury was the same rate as what a second year apprentice received but it did not find that this verified the worker’s status as an apprentice or that he would have received subsequent increments. It noted that the worker advised that he had started the steps to be part of the apprenticeship program several years prior to his compensable injury and had not pursued it. Review Office said it could not be presumed that he would have completed the steps to become an apprentice at the time of his injury. It said the WCB cannot base average earnings on what could have been and it considered the worker’s status at the time of the compensable injury and applied the appropriate legislation and policies in calculating the worker’s earnings. Based on these factors and taking into consideration WCB policy 44.80.30.30, Prospective Earnings – Apprentices and Youthful Workers, it determined that the worker’s pre-accident wages were correctly calculated.
The case was considered again by Review Office on March 13, 2007 at the worker’s request. The worker contended that he would have been a journeyman and received a journeyman’s wage if not for his compensable injury. Included with his submission to Review Office was a witness statement which stated that the worker was going to be in the apprenticeship training program and would have become a journeyman.
In its decision of March 13, 2007, Review Office confirmed that the worker’s pre-accident wages were correctly calculated. It stated that the evidence referred to in its September 7, 2006 decision remained valid. In addition to that evidence, Review Office indicated that it took into consideration the information that was supplied by the employer on September 23, 1988 that the worker would have received the following pay increases if not for his compensable injury: $11.17 per hour effective May 1, 1987 and $11.52 per hour effective May 1, 1988. It then contacted the Manitoba Apprenticeship Board and obtained the 1987 and 1988 hourly rates for journeyman and apprentice painters which were as follows:
1987 rates
Journeyman = $15.95
Second Year (65%) = $10.37
Third Year (75%) = $11.96
1988 rates
Journeyman = $16.45
Second year (65%) – $10.69
Third year (75%) = $12.33
Based on its review of this information, Review Office said there was no correlation between the apprenticeship rates and the pay rates that the employer was assigning to the worker. Review Office also noted that it obtained apprenticeship rates for 1983. It stated that the worker was paid $10.88 per hour at the time of his injury. The journeyman rate then was $15.55 per hour, the second year apprentice rate was $10.11 per hour and the third year apprentice rate was $11.66 per hour. While the employer acknowledged the worker’s experience and paid him a higher than average starting rate of pay, Review Office indicated they never paid him based on apprenticeship rates. Review Office also considered the witness statement but stated that the determination of pre-accident wages cannot be based on speculation as to what an individual may or may not have achieved. On May 25, 2007, the worker appealed Review Office’s decision and a file review was conducted.
Reasons
Chairperson Walsh and Commissioner Malazdrewich:
In this appeal, the worker submits that if his compensable injury had not occurred, he would have become a journeyman painter. Accordingly, he submits the WCB, in providing compensation, ought to calculate his wage rate on that basis and not on the basis of his being a mere labourer. He argues that the evidence supports his position that if not for the work-related accident he would have been able to continue the training process to become a journeyman painter.
In our view, the evidence supports the worker's position.
The Evidence
Evidence received in the WCB file from the Manitoba Apprenticeship Branch indicates that in 1983, the year the worker was injured, the journeyman's wage rate was $15.55. Second and third year apprentices were to be paid based on 65% and 75% of that rate, respectively.
Manitoba Regulation 231/7 to The Apprenticeship and Trades Qualification Act S.M.1972, c.45 in effect at the time of the accident provided that a second year apprentice should be paid wages at not less than 70% of the prevailing wages of a journeyman.
The evidence in this case was that the worker was paid $10.88 per hour at the time of his accident. This amounts to 70% of the journeyman rate in effect at the time.
The evidence is clear, therefore, that as at the time of the compensable injury, the worker's wage rate was on a par with the rate paid to second year apprentices for journeymen painters.
It is also clear that the worker was not, in fact, registered as an apprentice at the time of his accident but this, in our view, does not affect the rate of pay which ought to be considered in calculating his average earning capacity as at the time of his accident. We note that in considering the worker's appeal the WCB spoke with an individual at the Apprenticeship Training Board who indicated that painters fall under a non-compulsory/voluntary trade and that it is therefore not necessary for a painter to be registered as an apprentice. That is, if an employer is willing to recognize prior work hours, these hours can be retroactively counted towards a registered apprenticeship.
In our view, this is precisely what was contemplated in this case.
The evidence of the worker was that the employer had promised him that he would be in the formal apprenticeship training program as of the fall of 1983 with the goal of becoming a journeyman painter. In support of this evidence the worker attached a letter from a co-worker. In that letter the co-worker indicates that he was employed as a journeyman painter and at times a foreman with the worker's employer at the time the worker was hired to work for them. The co-worker indicated that as the worker:
"… had a great deal of experience and showed a lot of promise as a painter, … [the employer] opted to classify him as a second year apprentice. This was done to reflect his experience but more importantly, to reflect … [the employer's] commitment to have … [the worker] take the apprenticeship training so that he could become a journeyman. This was their intention, and, had … [the worker] not been injured this is what would have occurred. Indeed, it was standard protocol for them to encourage people to get their journeyman ticket.
As a result of his compensable injury … [the worker] was unable to commence his training that would have resulted in a much higher salary."
The worker's evidence was that this statement could also have been verified by another individual employed by his employer and who was responsible for setting up the training plan. That individual, however, is now deceased.
There is no evidence on the file to dispute the worker's position in this regard. The only evidence from the employer was that some painters were apprentices/journeymen and some were not. The employer's evidence simply confirmed that the worker was not registered as a formal apprentice as at the time of the compensable injury.
Analysis
The worker's average earnings and earning capacity are calculated in this case, in accordance with the legislation in effect at the time of the compensable injury. Section 37 of The Worker's Compensation Act R.S.M. Cap.W200 provides as follows:
"The average earnings and earning capacity of a workman shall be determined with reference to his average earnings and earning capacity at the time of the accident, and may be calculated upon the daily, weekly, or monthly, wages and other regular remuneration which the workman was receiving at the time of the accident, or upon the average yearly earnings of the workman for one or more years prior to the accident, or upon the probable yearly earning capacity of the workman at the time of the accident, as may appear to the board best to represent the actual loss of earnings suffered by the workman by reason of the injury, but not so that his average earnings shall be deemed in any case to exceed the rate of $21,000.00 per year."
[emphasis added]
In our view, based on the totality of the evidence in this case, we find on a balance of probabilities that if the worker had not been injured during the course of his employment he would have been registered as an apprentice on the way to becoming a journeyman painter. This was more than mere speculation. Accordingly, his probable yearly earning capacity should be calculated on that basis, as best representing, in our view, the actual loss of earnings suffered by him by reason of the compensable injury. Notwithstanding this finding, the majority notes that the worker’s benefits are still subject to the maximum yearly earnings as defined by the Act.
In reviewing this matter we also took note of the decision of September 7, 2006 from the Review Office which took into consideration WCB Policy 44.80.30.30. We note, for the sake of completeness, that that Policy is not applicable to the facts of this case. The Policy applies to youthful-worker claims and to new claims arising from accidents on or after January 1, 2001.
Accordingly, for all of the above reasons, we find that the worker's pre-accident wages have not been correctly calculated.
Panel Members
S. Walsh, Presiding Officer
A. Finkel, Commissioner
B. Malazdrewich, Commissioner
Recording Secretary, B. Kosc
S. Walsh - Presiding Officer
Signed at Winnipeg this 17th day of August, 2007
Commissioner's Dissent
Commissioner Finkel’s Dissent:
The worker in this case has had his pre-accident earnings calculated on the basis of what he was actually earning at the time of his accident in 1983. He is seeking to have his pre-accident wages recalculated, and in particular is proposing that we should rely on his prospective earnings as an apprentice painter in the calculation of his wage entitlements beyond the date of his compensable accident.
The facts of this case are relatively straightforward, and my decision ultimately deals more with my interpretation of the Act and WCB policies than it does with factual discrepancies. The file discloses that the worker had been a painter with the accident employer for a number of years, and was considered to be skilled in his trade, without “papers.” At the time of the workplace accident, the worker was being paid at the equivalent of an apprentice hourly wage (this scale was established under a broad trades collective agreement), although he was not actually an apprentice. The employer generally encouraged its painters to register for the apprenticeship program, which would entitle them to an apprentice pay scale, and later on the completion of the requisite number of hours, they would receive the designation of journeyman painter and access to an even higher pay scale.
The file evidence from the worker and the employer shows that the employer specifically encouraged the worker to apply to the apprenticeship program. The employer had done so in the past, and in the summer of 1983 it again promised the worker that it would support his application to the apprenticeship program in the fall of 1983. The worker was injured that summer, and at the time of the accident, had not applied for the Province of Manitoba’s apprenticeship program, and was not registered in that program.
Applicable Legislation
Section 37 of the Act in force in 1983 deals with how wages should be calculated for injured workers. This section provides that wage loss is usually determined by the worker’s “average earnings and earning capacity at the time of the workplace injury” or “upon the probable yearly earning capacity of the workman at the time of the accident…” This terminology bears a general similarity to the provisions of the current Act, which also allows for consideration of actual or probable earnings.
The WCB Board of Directors has, from time to time, passed different policies to govern how and when different calculations schemes should be used. WCB Policy 44.80.10.10 Benefits Administration – Wage Loss applies to all decisions on or after January 1, 2001, regardless of the date of accident. It notes in its Policy Purpose section that “This policy ensures that the same method of calculating average earnings is available regardless of the date of accident…Any definitions of earnings for the establishment of earnings before the accident are also to be applied consistently in the establishment of earnings after the accident.”
Section A.6 of the policy notes that “The WCB will develop administrative schedules to allow for the consistent application of this policy. These schedules will apply to specific industries and occupations, and will address the special circumstances of certain workers.”
Schedule B – Probable Yearly Earnings Capacity sets out a limited number of examples when neither regular earning nor average yearly earnings accurately reflect the worker’s loss of earning capacity. There are four examples provided, three of which do not apply to the facts at hand (these examples include a lack of history of prior employment, or a short term aberration in employment circumstances inconsistent with past work history, or a probationary employee). The fourth example is where “the worker is an apprentice or youthful worker (see policy 44.80.30.30).”
In 1994, the WCB Board of Directors first passed a more specific policy dealing with two particular situations within the probable future earnings category: youthful workers and apprentices. Policy 44.80.30.30, Prospective Earnings – Apprentices and Youthful Workers, provides three definitions of “apprentice,” one of which is relevant to the case at hand:
“Apprentice” in a trade means an apprentice as defined under the terms and conditions in The Apprenticeship & Trades Qualifications Act (i.e. unless the person is declared an apprentice in a designated trade under The Apprenticeship & Trades Qualifications Act the person is not an apprentice for the purposes of this policy.”
If an injured worker meets the definition of apprentice, the worker is entitled to have his average earnings calculated on the basis of the established wage for the apprenticeship year until they reach the prevailing wage of a starting journeyman, following which the indexing provisions of the Act will apply.
This policy was not in place when the worker was injured in 1983, and thus does not automatically apply to the case at hand. However, as noted above, this policy does have some bearing on the case at hand, given the provisions of WCB Policy 44.80.10.10 which encourages consistency in all decisions made as of January 1, 2001, regardless of date of accident.
Analysis
WCB Policy 44.80.10.10 provides guidance on when to use regular earnings at the time of the accident and when to use probable future earnings. Its current wording allows for injured apprentices to have access to “probable yearly earnings” if they meet the requirements of Apprentices and Youthful Workers policy. That policy, in turn, requires formal registration under The Apprenticeship & Trades Qualifications Act for this to happen.
Certainly, if this policy regarding apprentices was in place in 1983, this appeal would be dealt with summarily; the facts are clear that the worker was not registered in the province’s apprenticeship program at that time, and thus he would not meet the criteria of the policy. As such, his regular earnings at the time of his workplace accident would be the basis for the calculation of his average earnings.
In the absence of such a policy, the question turns on how narrowly or broadly “probable yearly earnings” should be applied.
It is my view that the WCB strongly favours consistency in how average earnings are to be calculated. This is reflected in WCB Policy 44.80.10.10 Benefits Administration – Wage Loss, passed by the WCB Board of Directors, which is specifically noted to apply to all decisions on or after January 1, 2001, regardless of the date of accident. It notes in its Policy Purpose section that “This policy ensures that the same method of calculating average earnings is available regardless of the date of accident.”
Policies such as Policy 44.80.30.30, Prospective Earnings – Apprentices and Youthful Workers, have been place since 1994, and have provided the basis for consistent decision-making for some 13 years since, in determining when the WCB should use its discretion in implementing probable yearly earnings instead of earnings at the date of accident. In reading this policy, it is clear that this is a very limited remedy. It applies only to youthful workers (those who would be expected to have career mobility that would take them from entry level or minimum wages, and projects wage increases to the industrial average wage), and to apprentices – those workers actually in an apprenticeship program. For apprentices, the policy assumes that once in the program, they will complete it, and allows the calculation of their average earnings to rise accordingly.
I note specifically the policy’s requirement the worker be in the program. This policy does not in any way deal with or allow for consideration of what might be. In many respects, this is consistent with the tenor of Schedule B – Probable Yearly Earning Capacity in WCB Policy 44.80.10.10 Benefits Administration – Wage Loss which is a “Schedule of Exceptional Circumstances” attached to the policy. Schedule B notes that “The probable yearly earning capacity formula forecasts what a worker may be expected to earn for a consecutive 12 month period after the accident.” Again, the examples cited demonstrate a remarkably limited number of circumstances where this might apply: a worker without a history of prior employment, an anomalous wage circumstance at the time of accident (e.g. a career change), a probationary worker, or a youthful worker or apprentice.
What is missing from this list is telling. Many workers might be on the cusp of a promotion or may have received a promise of a new job, or may even have a potential new position based on an impending retirement or entitlement to a next vacancy based on seniority. These circumstances are not, however, noted under Schedule B as being appropriate for consideration as a probable yearly earning capacity. These examples would all thus be adjudicated on the basis of the worker’s earnings of their regular earnings at the date of the accident.
The circumstances of this case fit into this latter list. The worker here had the promised support of entry into the apprenticeship program. He had not applied to the program and was not registered for it. As such, what he had was a promise, no different than a promise of a promotion. This, to my mind, is not sufficient to trigger the limited application of the probable yearly earning capacity clause in the 1983 Act, especially given the general desire as stated by WCB policy that encourages consistency in decisions regarding calculation of average earnings in all decisions on or after January 1, 2001. As such, I would deny the worker’s appeal.
A. Finkel, Commissioner