The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker has an accepted claim with the Workers Compensation Board (WCB) for a 1999 accident that occurred in the workplace. The worker is currently appealing a decision that was made by the WCB’s Review Office which stated that his wage loss benefit rate was correctly calculated. A file review was held at the Appeal Commission on October 28, 2008 to consider the matter.

Issue

Whether or not the worker’s wage loss benefit rate is correct.

Decision

That the worker’s wage loss benefit rate is not correct.

Decision: Unanimous

Background

The worker injured his right low back on August 27, 1999 in a work related accident. His claim for compensation was accepted by the WCB and various types of benefits and services were paid to the worker.

The worker has since argued that the WCB did not consider all relevant income information for the year 1998, which was used to determine his wage loss benefit rate for his 1999 claim. In support of his position, the worker referred to a T4 that he received from a particular employer in 2001 in the amount of $10,338.03 based on a ruling that was made by the Manitoba Labour Board which he stated should be applied to his 1998 pre-accident income. An appeal was forwarded to Review Office to consider the matter.

On August 1, 2008, Review Office determined that the worker’s wage loss benefit rate was correctly calculated. In its opinion, none of the $10,338.03 should be considered in the worker’s earnings for 1998 for the purposes of calculating his average earnings. Review Office placed weight on the worker’s work history, the comparatively small amount involved, and the fact that his average earnings were set at a substantially higher level than his earnings at the time of his accident. Review Office considered that $854.14 per week was a more than adequate reflection of the worker’s earning capacity at the time of his accident and was consistent with the intent of Section 45 of The Workers Compensation Act (the Act). The worker appealed Review Office’s decision to the Appeal Commission and a file review was arranged for October 28, 2008.

Following the file review held in October 2008, the appeal panel requested additional wage information from the worker’s union hall. This information was received and was forwarded to the worker for comment. On January 5, 2009, the panel met to render its final decision to the issue under appeal.

Reasons

The worker in this case was injured on August 27, 1999, and received wage loss benefits subsequent to his injury, in accordance with subsection 39(2) of the Act. After 12 weeks of wage loss payments, in accordance with WCB Policy 44.80.10.10, Average Earnings, the WCB instigated a review of the worker’s pre-accident wages in order to establish his wage loss entitlements. This policy provides, in part, that:

Regular Earnings:

Regular earnings are the amount of earnings a worker normally receives as remuneration in the occupation(s) in which he or she was employed at the time of injury. Regular earnings are based on the normal payment schedule (daily, weekly, monthly, annually, etc.) converted to a weekly amount. Earnings from concurrent employment (whether in a covered or non-covered industry) which are reduced or eliminated due to an accident in a covered industry are included in regular earnings.

Regular earnings do not normally include overtime, special reimbursements for employment expenses or bonuses that are not regularly paid.

Average Yearly Earnings:

Average yearly earnings include any remuneration that the worker received as a result of employment or employment-insurance benefits. To determine a worker’s true loss of earnings, the WCB will generally use documentable employment data from any consecutive 12-month period during the one or two years before the compensable accident. If the WCB determines that this calculation does not produce an accurate reflection of a worker’s loss of earnings, it will generally use documentable employment data from a 12-month period during, or an average of, a longer period of up to five years.

4. Average Earnings Review:

An average earnings review occurs whenever the WCB recalculates a worker's average earnings. The WCB may review and adjust a worker's average earnings on any claim when further documentation is received which indicates that a recalculation would result in a more accurate representation of the actual loss of earnings.

The Worker’s Position:

The worker argues that not all relevant income has been included in the WCB’s calculation of his 1998 income, and that this affected the calculations of his wage loss entitlements for his 1999 workplace injury. In particular, he notes that his 1998 wages were based on his 1998 T4s, and do not account for the fact that he was wrongfully terminated from employment by a different employer (now out of business) on December 4, 1998. This was later confirmed by the Manitoba Labour Board, who reinstated him to his job in September 1999. Under the Board’s order, he ultimately received a payment of $10,338.03 from his previous employer which he argues is “back pay” and should be fully included in the WCB’s calculation of his 1998 work income. This would lead to an increase in wage loss benefits paid to him on his 1999 claim.

Analysis:

In its deliberations, the panel noted that the information on file was incomplete with respect to the nature of, or the detailed calculations that made up the payment of $10,338.03 to the worker. Following the review meeting, the panel sought out clarification of this payment from the parties involved in the Manitoba Labour Board process, and received a letter from the worker’s union dated December 12, 2008, and then shared the letter with the worker for his comments.

The panel notes that the $10,338.03 award comprises, in its entirety, a series of wage loss calculations from December 5, 1998 (the day following the worker’s termination by his employer) to August 31, 1999. There are no additional or severance payments notes as being included in this award.

It is the view of the panel, in reading this documentation, that the payment ordered by the Manitoba Labour Board to the worker was not a lump sum or a severance award which might be considered to be applied fully or in part to the worker’s income in 1998. Rather, the calculations leading to the figure of $10,338.03 reflect a careful examination of all the worker’s pay periods from the date of his termination until the date of his reinstatement, including consideration of other income earned by the worker with other employers during that time. As such, there were payments made to the worker under the award that attempt to reinstate his wrongful wage losses in the 1998 calendar year, and as well, to reinstate his wrongful wage losses in the 1999 calendar year.

Based on the evidence before us, we find on a balance of probabilities that the worker’s 1998 income should be adjusted, but only to the degree that it reflects what the worker’s restored income was in 1998. The panel notes that the worker received a payment of $4,403.68, for lost income during the period December 5, 1998 to January 10, 1999. The remaining payments comprising the total of $10,338.03 were for his lost employment income in 1999, and would have no bearing on the calculation of his 1998 pre-accident income. In accordance with our finding, the worker should have his 1998 income recalculated by the WCB, adding in the pro-rated portion of the $4,403.68 that would apply to the period December 5 – 31, 1998, with adjustments then made by the WCB, as required, to the worker’s post-injury wage loss entitlements. While the panel notes that the worker was paid a Christmas bonus of $706 for 1998 (which is part of the $10,338.03 paid to the worker), the WCB policy states that bonuses are not normally included in regular income, unless they are “regularly paid.” The file evidence does not disclose a pattern of regular bonus payments, and the panel has thus determined that it would not qualify as part of the worker’s 1998 income.

The worker’s appeal is allowed in part, with the allocation of a portion of the retroactive wage payment made in 1999, as noted above.

Panel Members

A. Finkel, Commissioner
M. Day, Commissioner

Recording Secretary, B. Kosc

A. Finkel - Commissioner

Signed at Winnipeg this 13th day of January, 2009