The Appeal CommissionThe Workers Compensation Act of Manitoba

Applicable legislation

This appeal deals with the calculation of the worker’s average earnings. Section 45 of The Workers Compensation Act (the “Act”) deals with the calculation of average earnings. Subsection 45(1) of the Act provides:

Calculation of average earnings

45(1) 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.

The Average Earnings Policy eals with the calculation of wage loss benefits and states as follows:

Formulas

The establishment of a worker’s average earnings under either section 45 of the WCA as it pertains to workers injured prior to January 1, 1992 or sections 45(1) and 45(2) of the WCA as it pertains to workers injured on or after January 1, 1992, will be governed by the same formulas. These formulas incorporate either regular earnings at the time of the accident, or average yearly earnings or probable yearly earning capacity. The formula that best represents the worker’s loss of earnings will be chosen.

Thus the Average Earnings Policy identifies three different formulas - regular, average and probable - which may be used to calculate a worker's wage loss benefits.

Schedule “B” to the Average Earnings Policy provides further guidance on when “Probable Yearly Earning Capacity” should be used. Schedule “B” states:

The probable yearly earning capacity formula forecasts what a worker may be expected to earn for a consecutive 12 month period after the accident…

…

For probationary employees, benefits are based on the worker’s regular or average yearly earnings at the time of the accident and are adjusted to reflect the starting wage of a non-probationary employee when the worker’s probationary period would have ended (unless it is established that the worker would not have successfully completed the probationary period).

The Apprenticeship Policy allows the average earnings of a worker to be upwardly adjusted to reflect what the worker would likely have earned, were it not for the compensable injury. The Apprenticeship Policy applies only to individuals who meet the definition of either “apprentice” or “youthful worker”. For apprentices, the policy provides:

Once average earnings have reached the prevailing wage of a starting journeyman, this policy will not apply and adjustments will be made in accordance with the indexing provisions of the Act.

Worker’s position

A written submission was prepared by a worker advisor on the worker's behalf. It was submitted that the worker was entitled to wage loss benefits equivalent to that of a Class 1 employee. The worker had graduated from the training program in January 2003, but due to permanent right knee restrictions resulting from the workplace accident, she was not allowed to participate in field training. If she could have completed the probationary period, she would have been able to work towards a Class 1 level. It was submitted that it was not fair and just that her future loss of earnings was not being compensated and that the “most fair average earnings” had not been calculated.

The advancement structure for the position being sought by the worker was that a new employee entered as a recruit and would be paid at a recruit rate until the training course was completed. The employee would then be paid at a probationary rate for one year. After one year of service, the employee would be promoted to Class 5, and every year thereafter, the employee would advance one class until Class 1 was achieved. Each advancement would be accompanied by an increase in wages. In the worker’s case, if she not been physically disabled from continuing to pursue the position, on January 23, 2006 she would have become a Class 4 employee and at this point, she would first experience an increase over what she was previously being paid.

Analysis

The issue before us is whether or not the worker is eligible for further wage loss benefit adjustments. Wage loss benefits are calculated with reference to “average earnings”. According to the Apprenticeship Policy, increase adjustments to average earnings will only continue until: “average earnings have reached the prevailing wage of a starting journeyman.” The key issue for the panel to determine is what level should be considered to be the prevailing wage of a “starting journeyman”. In order for the appeal to succeed, we must find that Class 1 is equivalent to a starting journeyman. We are not able to make that finding.

In the panel’s opinion, the WCB was correct in applying the Apprenticeship Policy to the worker’s situation and further correctly determined that the apprenticeship period ended upon the completion of the probationary period and achieving a Class 5 level. The panel views the staged classes or ranks as being no different than other occupations where levels or steps are created to reflect incremental increases in rate of pay. This does not mean that persons in the lower levels are still in training or are not yet qualified; it simply means that an individual’s salary will reflect the amount of on the job experience which the individual possesses. At an earlier stage in the file, the worker argued that there is a physical fitness test which must be performed each year; however, the panel does not view this as being an ongoing learning requirement. The physical fitness test is used to ensure that the workers maintain a minimum level of physical ability in order to remain qualified to perform the job.

The panel found support in its views by the concept that if a worker was injured when in Class 4 or 3, that worker would only receive wage loss benefits according to the rate of pay for that class. The average earnings of such a worker would not be gradually increased up to a rate of pay equivalent to a Class 1 employee. If the worker’s argument was to be accepted, all persons in occupations with structured steps would be entitled to have their wage loss benefits gradually increased over time until they reached the highest step or level. This could not have been the intent of the Act, which instead provides for annual indexing of a workers’ pre-accident earnings.

The worker has no doubt suffered a loss of opportunity as a result of her accident. The head supervisor was very complimentary regarding her performance as a recruit. Generally speaking, the Act relies on the income being earned by the worker at the time of the accident to establish average earnings. There is only limited provision for compensation for loss of future potential. The Apprenticeship Policy only allows increases in average earnings to the level of a starting journeyman. In the present case, while the worker would have been entitled to the benefit of being moved forward from a recruit’s wages to the salary of a Class 5 employee, she was already being paid in excess of this amount at the time of the accident.