Decision #162/08 - Type: Workers Compensation

Preamble

The worker sustained a compensable injury in a work related accident on October 21, 2003. On February 22, 2007, it was determined by the Workers Compensation Board (“WCB”) that the worker’s death on July 14, 2005 was related to the effects of his compensable injury. The issue presently being appealed by the worker’s widow is the WCB’s decision to deny her spousal rehabilitation benefits involving sponsorship in a two year Business Administration program. A file review was held on October 16, 2008 to consider the matter.

Issue

Whether or not the worker’s widow should be sponsored in a Business Administration program.

Decision

That the worker’s widow should be sponsored in a Business Administration program.

Decision: Unanimous

Background

On July 14, 2005, the worker died as a result of the effects of a compensable injury. Pursuant to The Workers Compensation Act (the “Act”), his surviving spouse was entitled to net income replacement benefits for five years, until July 13, 2010. She could also receive academic or vocational assistance to upgrade her employability and earning capacity, if she met certain conditions set out in WCB Policy 43.10.50.01, Rehabilitation for Spouses or Common-Law Partners of Deceased Workers.

In a memorandum to file dated April 10, 2007, a Vocational Rehabilitation Consultant (“VRC”) documented her discussion with the worker’s widow concerning vocational rehabilitation, long term academics and possible occupations that would increase her earning capacity. The widow provided information regarding her educational background and previous employment history. In 1996, the worker commenced a job share position with a school division as a secretary and her job duties included answering telephone inquiries, assisting students, ordering supplies, computer work, writing school newsletters and some accounting.

In April 2008, the widow advised the WCB that she applied for and was accepted in a full-time, two year, Business Administration Program at a local community college and asked that the WCB sponsor her in this program based on the following rationale:

  • The program would enable her to achieve a higher paying full time job with opportunities for advancement. Her hourly rate at her current job with the school division was $17.10 per hour.
  • Her part-time experience in an office setting and her prior learning knowledge was an asset for her to succeed in the program.
  • She was interested in pursuing a management or an accounting position and was planning to obtain a level III diploma toward a Certified General Accountant (“CGA”) designation.

In a memo to file dated May 2, 2008, the VRC recorded that she spoke with a WCB Employment Specialist (“ES”) who confirmed that the BA program would fit into National Occupation Classification (“NOC”) 1431, Accounting Clerk. The wage for this occupation was $402.00 per week with a maximum of $597.00 per week. The ES indicated that wage increases would be based upon experience along with education. As the widow had no experience, it would be hard to justify an increase in her earnings. The VRC then contacted the Director of Education at the CGA Association. He stated that an individual could earn $31,000 at level 1, $32,000 at level 2 and $37,000 at level 3. The director stated that these figures may not reflect individuals new to the field. He stated that an individual’s earnings could be lower if they had no experience even though they had equivalent to a level 3 CGA.

After reviewing related labour market information, the VRC opined that the occupational goal of NOC 1431 would not be cost effective. She said the WCB was responsible to ensure the occupational goal was realistic and one which was within an individual’s intellectual, vocational and emotional capabilities. She said the widow was not prepared for or attended post secondary education in over 28 years. It was concluded that sponsorship in a business administration program did not appear to be a realistic or viable goal.

In a letter dated May 2, 2008, the VRC advised the widow that it was not cost effective to sponsor her in a business administration program. The VRC stated,

“You currently earn $312.07 per week, this is based on working 2 ½ days per week earning $17.10 an hour. Labour market information indicates that graduates of the program in question earn $402.00 per week. While this difference is not insignificant, it is compared to the costs associated with achieving it.”

On May 5, 2008, the VRC outlined the following costs associated with a 2 year business administration program:

  • “Tuition and books approximately $4000.00 x 2 = $8000.00
  • More than likely tutorial support $4000.00 x 2 years (tutoring could be $20 to $40 an hour)
  • Net wage replacement approximately $312.07 a week (gross) $33,000.00 for 2 years

Starting wage for NOC 1421 Accounting Clerk is $402/wk with a maximum of $596/wk.”

In a submission to Review Office dated May 7, 2008, the widow requested financial support in pursuing a business administration program. She stated that she was not employed on a full time basis and was not paid during school breaks. She stated that her position was expected to continue as a job share for one to two more years. She felt that having a diploma would increase her earning potential in the long run and would help her to pursue many other career opportunities.

On May 21, 2008, Review Office confirmed the VRC’s decision that the widow’s sponsorship in a two year BA program was not a cost effective option. Review Office outlined the following reasons for its decision:

  • A community college Career Counselor outlined various occupations and starting/average wages associated with a two year BA diploma. These included NOC 1431, Accounting & Related Clerks, NOC 1411, General Office Clerk, NOC 1441, Administrative Clerk and NOC 1221, Administration Officers.
  • An earning capacity of $624.07 represents the widow’s present earning potential (she made $312.07 per week on a half time basis and pro-rated to full time equated to $624.07 per week). It noted that NOC 1441 and 1411 had education and experience requirements comparable with those possessed by the widow. It was felt that these two NOC codes reflected the widow’s current earning potential given her education and transferable skills.
  • The weekly earning capacity of $624.07 exceeded the starting weekly wage of NOC code 1431, which represented the occupation the widow would be deemed capable of seeking employment in after completion of the two year business administration program and NOC code 1221 which may also require the completion of the diploma program.
  • With respect to WCB policy 43.10.50.01, Rehabilitation for Spouses or Common-Law Partners of Deceased Workers, Review Office indicated the WCB must determine that the surviving spouse or common-law partner had the entry qualifications and a reasonable prospect of success. When this is not the case, the WCB will assist the spouse or common-law partner in exploring other alternatives. Given the widow’s personal circumstances, vocational goals, skills and work experience, sponsoring in the two year business administration program did not present a reasonable and feasible, cost effective vocational rehabilitation plan.

On July 8, 2008, legal counsel representing the widow, appealed Review Office’s decision to the Appeal Commission and a file review was arranged.

Prior to rendering its final decision, the appeal panel requested the following information from the WCB’s vocational rehabilitation branch:

  • A labour market analysis for a full time Administrative Assistant, (the widow’s current employment) or other comparable NOCs that are consistent with the widow’s current transferable skills; and
  • A cost effectiveness analysis report for the proposed 2 year business administration program.

The above information was received and was forwarded to the interested parties for comment.  On December 8, 2008, the panel met to render its final decision and considered a submission from the widow’s legal counsel dated December 2, 2008.

Reasons

Position of the Worker’s Widow

The widow was assisted by legal counsel in her appeal. It was submitted that the main focus of this appeal should be whether or not the business administration program would be of benefit to the spouse in terms of increasing her earning potential in the wake of losing the primary income earned in her family. It was admitted that there is currently a viable job market in the widow’s surrounding area for general office clerks and accounting clerks and that she would be qualified for either position. It was argued, however, that if the WCB were to upgrade the widow’s employment skills with the business administration degree, she would be qualified for a number of jobs with a higher income bracket. The submission also disputed the WCB’s assumptions that the widow was unlikely to finish the program in two years, that she would require tutoring and that getting the degree would not necessarily increase her employment earnings. It was submitted that these comments were speculative with no factual foundation. With respect to completion date, as the business administration program is only two years duration, if the widow was admitted to the program in January 2009, approximately 75% of the program would be completed by July 2010. Under the policy, WCB benefits for these programs may be extended due to exceptional circumstances, and given that delay in registration in this program was due to the negative decision by the WCB at the initial stages, the widow should not be prejudiced by the earlier rejection.

Applicable Legislation

Pursuant to section 33 of the Act, the WCB may provide academic or vocational training, or other assistance to the spouse of a deceased worker. Section 33 provides

Academic or vocational assistance

33 Where the spouse or common-law partner of a deceased worker

(a) Is receiving monthly payments under subclause 29(1)(a)(ii); and

(b) Requires assistance to become employable or to increase his or her earning capacity;

The board may make such expenditures from the accident fund as it considers necessary or advisable to provide academic or vocational training, or other assistance to the spouse or common-law partner for such period of time as the board determines.

WCB Policy 43.10.50.01 Rehabilitation for Spouses or Common-law Partners of Deceased Workers (the “Policy”) explains how and when and for how long rehabilitation for spouses or common-law partners will be provided. The Policy states, inter alia:

3. The goal of this rehabilitation assistance is to minimize the impact of the worker’s death on the surviving family by maximizing the employability and earning capacity of the surviving spouse or common-law partner up to the WCB maximum annual earnings at the time of the worker’s death.

4. Where a surviving spouse or common-law partner requests vocational rehabilitation assistance, the WCB will assess the individual’s personal circumstances, vocational goals, skills and work experience to determine the feasibility, extent and timing of cost-effective vocational rehabilitation assistance.

7. Vocational rehabilitation assistance will end when the WCB considers that the spouse’s or common-law partner’s maximum vocational/earning capacity has been attained, or when the entitlement to monthly benefits provided under subsection 29(1)(a)(ii) expires, whichever occurs first.

However, a rehabilitation plan that is substantially completed when entitlement to monthly benefits ends may, under exceptional circumstances, be supported to completion where the spouse’s or common-law partner’s progress in the rehabilitation plan is satisfactory to the WCB.

Analysis

The deceased worker’s widow has requested that she be sponsored pursuant to section 33 of the Act in a two year business administration program. The Appeal Commission and its panels are bound to follow the policies put in place by the WCB Board of Directors. The Policy’s stated goal is to minimize the impact of the worker’s death on the family by maximizing the employability and earning capacity of the surviving spouse. The Policy, however, also states that the WCB must consider the feasibility, extent and timing of cost-effective vocational rehabilitation assistance. The panel notes that this is a unique type of vocational rehabilitation benefit, in that it is time-limited to five years, and works to maximize future earnings rather than meet a pre-accident earning capacity. The time-limited nature of these benefits means that there is no real opportunity to revisit a vocational rehabilitation plan down the road, in the event that economic or other employment circumstances change.

In the present case, prior to the accident, the worker was earning gross wages of approximately $1,516 per week. The widow was employed in a half-time position as a secretary in a school division and was earning $312.07 per week. She was being paid at or near the top end of her pay scale, with little opportunity to increase either her hourly wage or number of hours worked. She also did not earn income during school breaks such as summer, Christmas and Spring Break. After her request for sponsorship in the business administration program was declined by the WCB, she sought full time employment, which was not available with her then-employer. In August, 2008, she was able to secure a full-time position as an administrative assistant, but with a different employer. Her new hourly wage is $2.00 less than what she was previously earning, which equates to approximately $604.00 per week. It is a one year term position, ending in August 2009.

Legal counsel has urged the panel to consider the benefit to the widow in terms of increasing her earning potential as the main focus of the appeal. While we agree that the goal of rehabilitation assistance for surviving spouses is to maximize earning capacity, this must be done in the context of considering the feasibility, extent, timing and cost-effectiveness of the assistance.

When weighing these factors, Review Office considered several NOCs which were representative of a salary range which the widow could be expected to earn upon successful completion of the two year business administration program. Two of the categories, NOC 1411 General Office Clerk and NOC 1441 Administrative Clerk required skills already possessed by the widow and therefore she was already employable in these areas without the business administration degree. NOC 1431 Accounting and Related Clerks had an average wage per week which was comparable to that which could be earned in NOC 1411 and 1441. NOC 1221 Administrative Officers had some potential for greater income, with a starting wage of $573.83 per week and an average wage of $740.68. Using the assumption that the widow’s current earning potential was $624.07, Review Office determined that it would not be a cost-effective option to sponsor her in the two year program.

While the panel acknowledges Review Office’s reasoning, we note that it does not take into the account the following (some of which could only be known after Review Office rendered its decision):

  • The widow has sought full time employment, but was only able to secure a position with a lower hourly rate than what she was previously earning, at approximately $604.00 per week;
  • The nature of the job market was that she was only able to find full time employment for a one year term position;
  • An earning potential of $604.00/$624.07 is slightly inflated as it does not take into account the fact that as an administrative assistant for a school, she does not get paid during school breaks;
  • Without upgrading, she is essentially at the top of her earnings with limited security of position and little ability to increase her income.

The Policy’s goal is to try to maximize the surviving spouse’s employability and earning capacity. Without upgrading, she cannot significantly increase her income and falls far short of the family income which was earned during the worker’s lifetime. The NOC codes explored by Review Office are not exhaustive of the occupations which she could enter into if armed with a business administration degree, and it is possible that she could earn income greater than that associated with the NOC codes considered. While it may be uncertain as to whether or not she would earn this greater income, it is certain that without the upgrading, she will not be able to earn much more than she is presently earning, and indeed, given the insecurity regarding job tenure and lack of room for advancement in her present field, there is no guarantee that she will be able to sustain her current level of employment or income. If armed with upgraded skills, she would be better able to compete for more secure and better paying positions. In the panel’s opinion, it would be worthwhile and cost-effective to upgrade her skills to, at minimum, help her attain a more secure position at her current level, and hopefully, allow her to advance to an occupation with better pay.

While from a cost-benefit point of view, this case may be a close call, the panel is of the view that if we do not allow the appeal, the spouse will be faced with a ceiling and denied any opportunity to increase or maximize her earnings. We feel this would be contrary to the overall goal of section 33 and the Policy. The costs of sponsoring the spouse in the business administration program are not so unreasonable that her request should be denied.

With respect to timing, given the unique circumstances of this case and the fact that the delay in registering for the business administration program is due to the adjudicative history, the panel feels it would be appropriate to extend the time for rehabilitation assistance to allow the spouse to register in January 2009 and to complete the business administration program by January 2011. The panel notes that we agree with legal counsel’s submission that it is only speculative that the spouse would not be able to complete the program in two years. Nevertheless, if required, further extensions may be considered by the WCB at a later date, based on the circumstances at that time. This decision has been released on an expedited basis, to allow for immediate implementation by the WCB.

For the foregoing reasons, we find that the worker’s widow should be sponsored in a business administration program. The appeal is allowed.

Panel Members

L. Choy, Presiding Officer
A. Finkel, Commissioner
M. Day, Commissioner

Recording Secretary, B. Kosc

L. Choy - Presiding Officer

Signed at Winnipeg this 11th day of December, 2008

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