Decision #107/09 - Type: Workers Compensation
Preamble
The accident employer is presently appealing decisions made by Review Office of the Workers Compensation Board (“WCB”) which determined that the employer should not be allowed to recover an overpayment from the worker and that the overpayment should remain as a claims cost on the employer’s claims experience. A file review was held on October 8, 2009 to consider the matter.
Issue
Whether or not the employer should be allowed to recover the overpayment from the worker; and
Whether or not the overpayment should remain as a claims cost on the employer’s claims experience.
Decision
Whether or not the employer should be allowed to recover the overpayment from the worker; and
Whether or not the overpayment should remain as a claims cost on the employer’s claims experience.
Decision: Unanimous
Background
The worker suffered a compensable injury to his right hand in a 1979 work related accident.
Over the course of his claim, the worker has been in receipt of various types of compensation benefits and in April 2004, he began to receive partial wage loss benefits.
On January 4, 2008, a WCB case manager documented to the file that she verbally advised the worker that he would stop receiving long term wage loss (“LTWL”) benefits in May 2008 when he reached age 65 years. In a further memo dated May 16, 2008, the WCB case manager incorrectly wrote that the worker “turns 65 in May/09”, one year later.
On December 3, 2008, a WCB case management representative noted that the worker turned 65 on May 31, 2008 and was still in receipt of LTWL.
On December 18, 2008, the worker was told by his WCB case manager that the WCB had been paying him in error. The following conversation was documented: “[The worker] advised that he did not know when benefits were payable to and advised that he did call in the summer to inquire about this. CM [case manager] advised that his call had been returned, but we were unable to get a hold of one another. [the worker] advised that he called again the following week and CM was on vacation. He remembers speaking to some one named Greg for info on his benefits. [the worker] inquired if benefits are payable past 65th birthday. Worker was informed that WCB does pay pensions pat (sic) age 65 so it was assumed that is what worker was receiving. Based on this conversation, [the worker] thought his benefits were to continue. He figured that if there would be a change, he would be notified.”
In a letter dated December 19, 2008, the worker was advised that he had been overpaid benefits in the amount of $14,002.07 due to a WCB administrative error and that he would not be responsible for repaying the overpayment.
On January 9, 2009, the accident employer appealed the above decision to Review Office. The employer argued that the firm should not be responsible for the $14,002.07 overpayment as the overpayment occurred due to WCB administrative error.
On January 21, 2009, Review Office determined that collection of the overpayment should be suspended and that the overpayment should remain as a claims cost on the employer’s claims experience. Review Office noted that the worker did attempt to clarify as to whether he was entitled to benefits beyond the age of 65; however, he was given incorrect information by the WCB. As the employer was self-insured, there were no provisions in The Workers Compensation Act (the “Act”) or board policy that would allow for the overpayment to be removed from the employer’s claims experience.
On January 26, 2009, the employer inquired whether it could recover the overpayment directly from the worker.
In a response dated January 30, 2009, a WCB sector services manager wrote the employer to advise that the requested recovery action could not be carried out. This was based on the inability of a self-insured employer to collect an overpayment that the WCB determined was unrecoverable. The manager referred to Policy 35.40.50, Overpayments of Benefits, in his decision which stated:
“If a self-insured employer has paid workers compensation benefits directly to the worker by means of salary continuance, and an overpayment occurs which the WCB would attempt to recover under this policy, the WCB may authorize the employer to attempt to recover the payment from the worker. The recovery process must conform with the principles and intent of this policy. The employer must report to the WCB the amounts that are recovered from the worker.”
The sector manager indicated that if an overpayment occurred which the WCB would not attempt to recover under this policy, it would not authorize the employer to attempt to recover it.
On May 12, 2009, Review Office confirmed that authorization should not be given to the employer to pursue recovery of the overpayment from the worker. Review Office noted that the overpayment in this situation occurred due to the worker receiving wage loss benefits directly from the WCB and not by means of salary continuance from the employer. Review Office found that the intent of WCB policy 35.40.50, Overpayments of Benefits, was that the WCB may authorize the employer to attempt to recover the overpayment if the overpayment was one that the WCB would attempt to recover. It confirmed its earlier decision of January 21, 2009 that the overpayment should not be recovered.
The employer appealed Review Office’s decisions to the Appeal Commission and a file review was arranged.
Reasons
Employer’s submission:
The employer’s position, as noted in its notice of appeal and elsewhere on the file in its discussions with WCB staff, is that the WCB is fully responsible for the error that created the overpayment and the employer should not be held responsible for those costs. Also, if the WCB is not going to pursue recovery of the overpayment, that it should be able to recover the overpayment.
Applicable Legislation:
The Appeal Commission and its panels are bound by the Act, regulations and policies of the WCB’s Board of Directors.
Section 109.2 of the Act provides;
109.2 Where a person receives an overpayment of compensation, being an amount that the board determines is in excess of that to which the person is entitled, the board may recover the overpayment from the person, or from the executors or administrators of the person, as a debt due to the board. (emphasis added)
WCB Policy 35.40.50, Overpayments of Benefits, (the “Overpayments Policy”) provides the principles established to guide the WCB in its recovery of overpayments to workers. It provides that:
Overpayment Recovery Criteria
3. All overpayments receivable will be pursued for recovery, unless:
(ii.) they resulted from either an administrative error by the WCB, ….
The Overpayments Policy further provides that:
Effects of Overpayments on Employers
14. For self-insured employers (all classes except Class “E”), overpayments are included as a claims cost for the applicable employer. Overpayment recoveries are credited to the claims cost of the applicable employer.
15. If a self-insured employer has paid workers compensation benefits directly to the worker by means of salary continuance, and an overpayment occurs which the WCB would attempt to recover under this policy, the WCB may authorize the employer to attempt to recover the payment from the worker. The recovery process must conform with the principles and intent of this policy. The employer must report to the WCB the amounts that are recovered from the worker.
WCB Policy 31.05.10, Cost Relief/Cost Transfers (the “Cost Relief Policy”) describes the circumstances under which cost relief/cost transfer is provided to eligible employers through the assessment rate setting process. The Schedules form an integral part of the Cost Relief Policy. The Cost Relief Policy provides that:
3. Eligibility for Cost Relief/Cost Transfers.
Class E employers are eligible for cost relief and cost transfers as provided in all Schedules. Self-insured employers who do not contribute to the Cost Apportionment
Fund are not eligible for cost relief, except in the case of claims filed by participants in recognized work-experience programs.
Self-insured employers are eligible for cost transfers under Schedules E and F.
Schedule E provides that:
Schedule E Occupational Disease, Cumulative Trauma
Cost transfers for occupational disease and cumulative trauma are available to employers in all Classes, except as noted below.
Where an accident employer is a self-insurer, the employer will be responsible for the cost associated with any out-of-province exposure. The self-insured employer will receive credit for any cost reimbursed by another jurisdiction under any interprovincial cost sharing agreements.
Schedule F provides that:
Schedule F Negligence
Cost transfers or cost relief may be provided under subsections 82(4)(a) and (b) (only for accidents occurring on or after January 1, 1992) or under Section 82(5) (for all claims), where the worker of one employer is injured as a result of negligence of another employer of the worker(s) of another employer, as follows:
1. Cost transfers will be provided to the accident employer where:
(i) The accident involves only workers and/or employers within Class E; and
The injury results in costs of $5,000 or more; or
(ii) The accident involves workers and/or employers in different classes or self-insured employers in the same class and
The injury results in costs of $1,500 or more.
Analysis:
For the employer to succeed on its appeal, the panel would have to find that there is legal authority within the Act and Policies that would allow the employer to collect the overpayment and have the claims cost removed from their claims experience. The panel is unable to make these findings.
The employer in this instance is a self-insured employer and does not pay into the accident fund based on a rate of their assessable payroll but is obligated to pay the entire cost of all claims plus an administration fee.
In comparison, Class E employers are “pooled” and have access to a Cost Apportionment Fund to handle overpayment errors. The costs associated with this fund are shared by all Class E employers. Self-insured employers do not in any way contribute to the Cost Apportionment Fund.
As such, cost relief provisions available to Class E employers will not apply to this employer or to the issue before us.
There are two issues to be considered and both have differing applicable sections of the Act and policies. The issue of recovery of overpayment will be dealt with first, followed by the removal of claims cost from their experience.
In respect to the recovery of overpayments the panel finds that:
- Section 109.2 of the Act gives the WCB the discretion to decide if an overpayment will be collected and to collect overpayments as a debt due. In this case, the WCB has made a decision in accordance with WCB Policy that the overpayment will not be collected.
- Section 3 of the Overpayments Policy provides that overpayments will be recovered unless they result from an administrative error. In this case the panel finds, according to the evidence on the file, that the overpayment resulted from an administrative error on the part of the WCB, and therefore recovery of the overpayment is not authorized by the Overpayments Policy.
- Although Section 15 of the Overpayments Policy allows the WCB to authorize an employer who pays benefits directly to their workers by salary continuance to attempt recovery under the policy, we find that this employer did not participate in salary continuance.
In respect to the issue of removal of claims cost from the employer’s claims experience, the panel finds that:
- Section 14 of the Overpayment Policy provides that only overpayment recoveries may be credited to the claims cost of the employer. As the overpayment will not be recovered, claim costs can not be credited to the employer. There is no provision for crediting a payment made in error.
- The Cost Relief Policy only allows cost transfers to self-insured employers as a result of either occupational disease, cumulative trauma or negligence, none of which we find is applicable in the appeal before us.
The panel has carefully reviewed the legislative framework contained in the Act and Policies and have found no pertinent sections that would allow this self-insured employer to recover the overpayment from either the WCB or the worker. Further, there is also no section of the Act or Policies that allow for the claims cost to be removed or transferred from the employer’s experience. The employer’s appeal is denied.
Panel Members
L. Choy, Presiding Officer
A. Finkel, Commissioner
P. Walker, Commissioner
Recording Secretary, B. Kosc
P. Walker - Presiding Officer
Signed at Winnipeg this 5th day of November, 2009