Decision #27/10 - Type: Workers Compensation
Preamble
The worker suffered an injury to his right shoulder in a work related accident on August 4, 2007 during the performance of his work duties as a field service technician. Currently, the accident employer is appealing decisions made by Review Office related to the calculations used to establish the worker’s average earnings and the decision that the worker had a loss of earning capacity beyond November 23, 2007. A hearing was held on February 3, 2010 to consider the matter.Issue
Whether or not the worker is entitled to partial wage loss benefits after November 23, 2007; and
Whether or not the worker’s average earnings have been properly calculated.
Decision
That the worker is entitled to partial wage loss benefits after November 23, 2007; and
That the worker’s average earnings have been properly calculated.
Decision: Unanimous
Background
On August 4, 2007, the worker injured his right shoulder in a work related accident. On August 20, 2007, the worker returned to work after a two week vacation period but his shoulder symptoms increased which caused him to seek medical attention. His last day of work was August 26, 2007.
The Employer’s Accident Report dated September 6, 2007 indicated that the worker’s job title at the time of accident was “Field Service Level 3”. The report further indicated that the worker’s total gross earnings for the last calendar year were $99,349.76 and that the worker’s gross earnings during the twelve months prior to the accident date were $122,467.66.
Early file information showed that the accident employer offered the worker modified duties as follows:
· August 28, 2007 - phones, filing and typing - declined by worker because of pain complaints.
· September 11, 2007 – research on a computer, key boarding/data entry, answering phones, sorting bolts – declined by worker due to pain complaints.
On September 14, 2007, the worker’s treating physiotherapist advised a Workers Compensation Board (“WCB”) adjudicator that the worker should not perform sedentary duties at this time as being seated for prolonged periods of time with his neck in a static position would be an invitation for failure.
On September 20, 2007, the worker’s claim for compensation was accepted by the WCB and wage loss benefits were issued commencing August 27, 2007.
In a telephone conversation with a WCB adjudicator on September 25, 2007, the worker indicated that he had applied for a foreman job with the accident employer in Winnipeg. The worker stated that the foreman job paid less than his current job but was less physically demanding.
On October 1, 2007, the worker advised the WCB that his doctor told him to remain off work for one month. The worker further advised that he was offered the foreman position but had not yet accepted it as he was negotiating with the employer to pay his moving costs.
On October 18, 2007, the worker met with a WCB case manager to discuss his claim. The worker indicated that he was aware his employer had modified duties but he did not feel he was capable of performing the office work as he was in too much pain to tolerate more than a couple of hours. The worker indicated that his employer put together an offer for him to move to Winnipeg in a supervisory position. He said he would review the offer and then decide what to do. The case manager noted that the job change was apparently being considered prior to the work injury. When discussing the WCB’s return to work hierarchy with the worker, the case manager noted: “explained the concept; advised that too early to be looking at alternate work, vocational rehabilitation services – employer is already offering him alternate employment for reasons unrelated to his work injury – [the worker] had indicated in our conversation that he had been considering the move anyways as he is getting older and doesn’t want to turn wrenches the rest of his life. The wages have to be substantial however as well as his moving expenses covered by his employer.”
On October 29, 2007, the worker advised his case manager that he had the papers to sign for the job offer but he was holding off until he knew the results of his MRI. The case manager suggested to the worker, “…that he should not jeopardize this job opportunity – even if he does require surgery it may be several months down the road and if he can work in the meantime especially at this new job then he should proceed with it. He wanted to know how that would work in terms of his benefits – I explained that I would have to consult a payment specialist as this job offer was in the works prior to his injury and is not being offered as a result of the work injury. It is sedentary work and he had planned to switch positions providing the employer would pay him a decent salary and the (sic) cover the cost of his move.”
On November 20, 2007, the worker advised the WCB that he would be starting his new job in Winnipeg on November 26, 2007. The case manager advised the worker that wage loss benefits would end and that the WCB would only cover time loss to attend medical treatments.
On November 20, 2007, the WCB case manager confirmed with the employer that the worker was starting his new job on November 26, 2007 as an afternoon service supervisor. The job duties included floor supervision, instruction and computer work. The salary was $61,000 per year, substantially lower than the worker’s pre-accident earnings. The employer indicated that the job was posted in June 2007 and that the worker applied for the position prior to injuring his shoulder.
In a letter dated November 26, 2007, a WCB case manager confirmed that the worker was fit to return to work with temporary restrictions related to his right shoulder which consisted of only sedentary activity with the right arm, no overhead work and the opportunity for postural variation as necessary. Given that the worker accepted his new position and was starting on November 26, 2007, wage loss benefits would be paid to November 23, 2007 inclusive and final. Any loss of earnings beyond that date were due to a change in jobs and were not related to the worker’s compensable injury.
On May 29, 2008, the worker advised a WCB case management representative that he was unable to return to his pre-accident job because of his injuries and was making less money now in his new supervisory position. The worker indicated that his pre-accident earnings were $120,000 per year and with his new position he was now making $60,000 per year.
On August 27, 2008, a WCB unit supervisor confirmed to the worker that he was not entitled to wage loss benefits beyond November 23, 2007 in relation to his WCB claim based on the following rationale:
· the worker applied for a service supervisor position in Winnipeg before he was injured on August 4, 2007.
· once the worker was considered “fit for restricted duties” he declined the employer’s offer of modified duties and chose to accept the supervisor position in Winnipeg and the attached wages;
· a physiotherapist’s report dated October 9, 2007 indicated that the worker had no intention of returning to his previous employment but wanted to work in a related field with lighter physical demands.
· the October 18, 2007 conversation with a WCB case manager wherein the worker indicated that he had been considering a move and job change for quite some time, as he was getting older and did not want to “turn wrenches the rest of his life.”
On September 23, 2008, the worker advised the WCB that the main reason he applied for the new supervisor position prior to his injury was because he had heard that the current employee performing the job would be let go and he thought this might be a better position for him and his family. He said he had no idea what the salary would be but thought that he might accept the position if the salary was similar to what he was making or even if it was just a slight bit lower. The worker said that he would not have taken the position at almost half the pay, except that the previous case manager made it sound like he had to accept the job as an accommodation given his restrictions at that time.
On October 2, 2008, a worker advisor acting on the worker’s behalf, appealed the unit supervisor’s decision dated August 27, 2008 to Review Office. The worker advisor indicated that the worker applied for the supervisor position for reasons unrelated to his injury but that his decision to accept it was based largely on the reality that he was not able to return to his pre-accident work. He submitted that the worker was therefore entitled to further wage loss benefits because the evidence confirmed that he had not recovered sufficiently to return to his pre-accident employment duties and continued to have a loss of earning capacity. While the WCB accepted that modified duties were available, the worker advisor stated that there was no file information specifying the precise duties, hours, wages, or permanency of the accommodation. There was no evidence that the worker would have been able to recover his pre-accident wages performing modified duties.
Prior to considering the above appeal, Review Office contacted the employer to obtain additional information about the job offer, salary information, etc. In a memo to file dated October 20, 2008, the Review Officer stated, in part, that the employer advised that the worker’s 12 month earnings prior to his accident ($122,467.66) would be an accurate reflection of a field service technician as they were always getting overtime. The employer indicated that the base salary for a field service technician would be approximately $75,000.00.
On October 23, 2008, Review Office determined that the worker had a loss of earning capacity after November 23, 2007 and that the acceptance of the supervisor position effective November 26, 2007 was due to his compensable injury. In making its decision, Review Office referred to the following file evidence:
· October 10, 2007 – the worker was under the impression from his doctor that he would not return to his pre-accident position as a field service technician. This information supported the need for work restrictions after November 23, 2007.
· October 29, 2007 – the case manager encouraged the worker to accept the new position of a supervisor and advised the worker “…even if he does require surgery it may be several months down the road and if he can work in the meantime especially at this new job then he should proceed with it.”
· September 23, 2008 – demonstrated that the worker applied for a supervisor position prior to his workplace accident and did not know the salary for the position.
· October 20, 2008 memo by Review Office – the employer reported that the salary for the supervisory position was not listed in the original job posting and the worker was not offered the supervisor position until after his workplace accident.
· October 22, 2008 – the employer indicated that the worker’s injury, to a degree, was considered when offering him the supervisor position. The employer did not have other long term duties planned for the worker.
On November 18, 2008, the employer advised the WCB that they did not agree with the rate used by the WCB to calculate the worker’s average earnings. The WCB then obtained copies of the worker’s income tax information from 2002 to 2007 and gathered additional information from the employer regarding other employee salaries connected with the worker’s pre-accident employment.
On March 24, 2009, the employer appealed Review Office’s decision to provide the worker with partial wage loss benefits beyond November 23, 2007. The employer stated, in part,
“The worker was interested in the position, and had full knowledge of the position and salary when he verbally accepted the position on October 2. The delay in finalizing the offer was due to discussion about moving expenses, not salary until the offer was finally accepted in mid November. In our opinion, and based on the facts we have available, the supervisory position in Winnipeg was not an accommodation but rather a position that the worker was interested in and pursued independent of his injury, with full knowledge of salary and work responsibilities. Further, the hiring supervisor was never aware of any restrictions when interviewing/hiring [the worker] for this position. His objective was in placing the best candidate for the job.”
The employer further stated,
“Employee had significant interest in this position well before incident. He accepted the position (verbally on October 2) with full knowledge of the salary of $61,000 before any restrictions were finalized and proceeded only to negotiate relocation expenses, which formed the basis of delay in formalizing and signing the offer.”
In a decision dated April 9, 2009, a WCB case manager advised the worker that his average earnings rate was being reduced to $1,914.88 per week retroactively to August 5, 2007 based on T4 income from 2006. On April 21, 2009, the worker advisor appealed the decision to Review Office. He submitted that the average earnings originally established by the WCB were reasonable, appropriate and were in accordance with WCB Policy 44.80.10.10, Average Earnings. It was suggested that the information provided by the accident employer in their request to have the worker’s benefit rate reduced, did not accurately represent the facts.
On April 23, 2009, Review Office determined that no change would be made to its previous decision dated October 23, 2008. In making its decision, Review Office considered a submission by the employer dated March 24, 2009, a submission by the worker advisor dated April 2, 2009, and a further submission by the employer dated April 17, 2009.
Review Office noted that its previous decision outlined that the worker applied for a supervisor position prior to his August 4, 2007 workplace accident. Review Office indicated that this was not a predetermination that the worker’s income would have changed as the hiring process was not completed before the workplace accident. Review Office placed weight on the file evidence that the worker’s decision to accept the supervisor position was influenced by his compensable injury and the need for restrictions.
Review Office indicated that the employer offered the worker an accommodation of temporary duties prior to November 23, 2007 which demonstrated that the employer was aware the worker had restrictions and was unable to perform his regular job duties. Instead of pursuing an accommodation in the local office, the employer offered the worker a position in Winnipeg which paid a lower salary in comparison with the worker’s pre-accident earnings. Review Office concluded that the employer’s offer of the supervisor position was reasonably related to the need for an accommodated position as a result of the worker’s compensable injury and that the difference in salary allowed for the payment of partial wage loss benefits.
On May 7, 2009, Review Office determined that the worker’s average earnings had been incorrectly calculated. Review Office pointed to the following file information to support that the worker’s average earnings, effective the date of his accident, should be calculated using the gross earnings 12 months prior to his compensable accident ($122,457.66, or $2,355.15 per week):
· The worker’s employment income from 2002 and 2003 while employed in the same position with another company demonstrated earnings over $122,457.66 per year. This evidence supported that the worker’s income level was substantiated by his employment credentials;
· There was file evidence to support that the worker’s income increased when he moved to Brandon in April 2006 and that the earnings 12 months prior to his August 2007 accident was a fair representation of his income level;
· Information obtained from the employer was that overtime was available to workers and that there were peak periods of time from September to December. On a balance of probabilities, Review Office found that if the worker had not been injured he would have worked overtime just as he had demonstrated prior to his accident.
· It did not find evidence to support that the worker would not have continued earning the average of $2,355.15 per week after his workplace accident;
· On April 17, 2009, the employer indicated that the worker’s overtime would not necessarily have been available to the worker had he stayed in his role in the current economic climate. Review Office indicated that it did not find a provision in the WCB’s average earnings policy that would allow for the worker’s benefit rate to be adjusted based on a change to the current economic climate.
On July 14, 2009, the employer appealed Review Office’s decisions to the Appeal Commission and an oral hearing was arranged.
Reasons
Applicable legislation
The Appeal Commission and its panels are bound by The Workers Compensation Act (the “Act”), regulations and policies of the Board of Directors. Under subsection 4(2) of the Act, a worker who is injured in an accident (as defined under the Act) is entitled to wage loss benefits for the loss of earning capacity resulting from the accident.
Section 45 of the Act deals with the calculation of average earnings and provides as follows:
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.
WCB Policy 44.80.10.10 Average Earnings (the “Policy”) specifically addresses 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 Policy identifies three different formulas - regular, average and probable - which may be used to calculate a worker's wage loss benefits. Definitions for the three formulas are provided in the Policy as follows:
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 the 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.
Probable Yearly Earning Capacity:
Probable yearly earning capacity is the worker’s projected earnings for the next twelve months. It is based on the worker’s regular earnings at the time of accident as applied to the worker’s established work pattern. Consistent with Section 45 of the WCA (1992), the probable yearly earning capacity must be based on the worker’s earnings before the accident, but may be based on “income from employment and employment insurance benefits, and over such period of time, as the board considers fair and just.”
Employer’s position
Two representatives from the employer appeared at the hearing. On the issue of partial wage loss benefits, it was submitted that the position the worker accepted in Winnipeg was not an accommodation, but was a career path change that was considered and acted upon independently by the worker and was not related to the workplace injury. The availability of the supervisor position occurred concurrently with the rehabilitation process of the worker, and the company did offer the worker modified work duties in the worker’s original workplace location. Those modified duties were never withdrawn and were available to the worker until well after he accepted the position in Winnipeg. There were two parallel paths being offered to the worker, one an accommodation and one a career change, and the employer’s position was that the worker chose the career change.
With respect to the worker’s average wage, it was submitted that the WCB policy allows for a fair determination of a worker’s earning potential. Recognizing that a substantial component of the worker’s income was variable in nature, basing the average earnings on a small sample is not always a fair representation. It was submitted that the 12 month pre-injury earnings did not represent a fair calculation of the worker’s earnings. In particular, the 12 month pre-injury earnings were unrealistically high. The employer asked that the worker’s average wage earnings over the employment years with the employer, being 2004 to 2007, be used.
Worker’s position
The worker was assisted by a worker advisor at the hearing. It was submitted that the worker only applied for the supervisor job before the compensable injury as a means of demonstrating a future interest in supervisory work at his present location. He had no serious interest in the position in Winnipeg, and was unaware of the salary the position paid. Had he known the salary amount, he would definitely not have been interested as it paid significantly less than his pre-accident wage. The difference came after the worker was injured. While there was some discussion about modified duties in the local office, there was no indication on file that there was any serious plan for accommodation put in place. Further, the WCB was encouraging the worker to take the position in Winnipeg, and even took the step of obtaining an opinion from the treating orthopedic surgeon to determine whether the worker could perform supervisory duties. The worker did what was reasonable to him by taking the supervisory job offered by the employer with the support of the WCB. It was submitted that by doing so, the worker was mitigating his loss of earnings, as he was required to do by the Act.
With respect to average earnings, the T4 information provided to the WCB documented the worker’s high earnings and it was submitted that the worker’s previous 12 months earnings were properly used to establish average earnings in accordance with WCB policy.
Analysis
Partial wage loss benefits after November 23, 2007
The first issue before the panel is whether or not the worker is entitled to partial wage loss benefits after November 23, 2007. November 23, 2007 is the date upon which the worker commenced a new job position with the accident employer as a supervisor. In order for the employer’s appeal on this issue to succeed, the panel must find that the worker accepted the new job position for reasons unrelated to his compensable injury. We are not able to make this finding.
While there is undisputed evidence that the worker expressed an interest in the new job position prior to his workplace accident, the panel finds that there is not enough evidence to convince us on a balance of probabilities that the worker’s acceptance of the new job position was not influenced by the effects of his compensable injury.
At the hearing, the worker’s evidence was that when he applied for the supervisor position in Winnipeg before the accident, he only did so because he wanted to let his employer know that he was interested in a managerial position. He believed that there would be changes in the local office and his intent was simply to make his employer aware that he would want to be considered for any managerial openings. He had no real intention to move to Winnipeg at the time.
The worker also indicated that he initially believed that as a supervisor or manager, he would earn comparable wages to what he was earning as a technician. A representative from the employer confirmed that this was a commonly held misconception in the company. Although supervisors are paid a higher hourly wage and participate in profit sharing bonuses, there is no overtime work available and therefore supervisors do not have the same opportunity to earn extra income, which the worker’s record showed, could be quite substantial.
The worker’s interview for the supervisor position only occurred on September 25, 2007, approximately 8 weeks after his workplace injury. He was offered the position on October 2, 2009, according to the employer. The employer also asserts that the worker verbally accepted the position on that date. The worker claims that he held off acceptance of the offer until November as he wanted to know the results of his MRI before he committed to the supervisor position. On November 19, 2007, he became aware of the results of his MRI, and was informed by his physician that he would not be able to continue to perform his previous physical work. The injury was more significant than a simple strain and there were problems with the discs in his spinal cord. Although the supervisor job paid significantly less than what he had been earning pre-accident (approximately half the amount he had earned in the 12 months prior), the worker accepted the position as he felt he had no choice.
Another factor was the worker’s evidence that his WCB case manager was advising him to take the position and that he should not jeopardize the opportunity which had presented itself. He repeatedly asked whether taking the position would affect his wage loss benefits, and he was told that a decision had not yet been made and that this would be sorted out later. This evidence is consistent with the case manager’s memos to file, and the panel accepts that the worker’s case manager was encouraging him to take the position.
Overall, the panel finds it difficult to accept that the worker’s injury did not play a significant role in his decision to accept the supervisor position. The supervisor position paid almost half of what he had previously been earning. This information was not known to him when he put in his application. When the actual job offer was made to the worker, his circumstances were quite different and the supervisor position offered him an opportunity to earn reasonable income at a job which respected his physical limitations.
At the hearing, the employer strongly argued that modified duties would have been available for the worker from the outset at the original location, but the worker consciously chose not to accept these duties. The employer was not able to specifically state what these duties would be, since they never got the stage where an accommodation had to be built for him. The employer indicated, however, that something could have been arranged for the worker, and that this would have ranged from office duties, to computer research, to performing restricted duties as a technician, with the other technicians taking on the more physical work. It was the employer’s argument that there were two parallel paths available to the worker: accommodated work at the original office or a career change to Winnipeg, and the worker chose to make the career change.
Again, the panel is not convinced that the worker’s injury had nothing to do with his choice of accepting the supervisor position. We find that at least one of the main reasons why he accepted the position was in response to the physical restrictions resulting from his workplace injury. Any modified duties which the employer could have offered him in the original location would have been limited (given the small size of the local office) and were only on an ad hoc, short term basis. The worker ultimately took the best position available to him at the time based on the jobs then available in the company and his medical prognosis. The panel feels this was a reasonable course of action to be taken by the worker. More importantly, we also feel that there is nothing to suggest that the worker would have accepted the job in Winnipeg at half the salary had he not been injured. Although the worker acknowledged that he may have been receptive to easier work, he would not be prepared to do so at half the pay.
The panel therefore finds that the worker’s reduced earning capacity after November 23, 2007 was related to his compensable injury, and therefore he is entitled to partial wage loss benefits after that date. The employer’s appeal on this issue is denied.
Calculation of average earnings
The second issue before the panel concerns whether or not the worker’s average earnings have been properly calculated. When determining the worker’s average earnings, the WCB used the worker’s actual income earned for the 12 month period prior to the workplace accident. The employer argues that this results in an unrealistically high figure which does not fairly represent the worker’s true earnings.
As noted earlier, the Policy deals with the calculation of wage loss benefits. Three different formulas - regular earnings, average yearly and probable yearly - may be used to calculate a worker's wage loss benefits. The key is to use the method that best represents the worker's loss of earnings, in a manner which is “fair and just”, as required by subsection 45(1).
In the panel’s opinion, calculating the worker’s earnings based on what he earned for the 12 month period prior to his accident does “best represent” the worker’s earning capacity at the time of the accident. The worker was earning a very high wage at the time, and this was largely due to the significant amount of overtime which he was working. The Policy allows the inclusion of overtime in the average earnings calculation so long as they are regularly paid. There was no indication that the amount of overtime being worked by the worker in the 12 months prior to the accident was an anomaly or a “blip” in the availability of overtime work. The evidence from the hearing was that the local office was busy and experienced growth over 2008. There was a major project in 2007 and 2008 which the company serviced and which made available a significant amount of overtime. There was work available which would have allowed the worker to continue to achieve the high wages he was earning at the time of the accident.
The fact that the worker had expressed an interest in a managerial position does not lead us to conclude that he could not or would not have continued to work the significant overtime hours that he was putting in prior to his injury. These were only preliminary inquiries and do not necessarily lead to the conclusion that he had a reduced earning capacity.
For the reasons outlined above, we find that that the worker’s average earnings have been properly calculated and the employer’s appeal is therefore dismissed.
Panel Members
L. Choy, Presiding OfficerA. Finkel, Commissioner
M. Day, Commissioner
Recording Secretary, B. Kosc
L. Choy - Presiding Officer
Signed at Winnipeg this 29th day of March, 2010