The Appeal CommissionThe Workers Compensation Act of Manitoba

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. Subsection 39(2) of the Act provides that the WCB will pay wage loss benefits until such a time as the worker’s loss of earning capacity ends, or the worker attains the age of 65 years. Subsection 27(1) provides that medical aid will be paid by the WCB for so long as is necessary to cure and provide relief from the injury.

WCB Board Policy 35.40.50 (the “Overpayments Policy”) deals with recovery of overpayments of benefits. The purpose of this policy is to describe the principles that the WCB Board of Directors has established to guide the WCB in its recovery of overpayments. The principles attempt to strike a fair balance between the WCB’s fiscal responsibilities and the interests of injured workers. Section 3 of the Overpayments Policy sets out some criteria regarding recovery of overpayments. It provides as follows:

3. All overpayments receivable will be pursued for recovery, unless:

(i) They resulted from an adjudicative reversal or a reconsideration decision by the WCB, or from a decision of the Appeal Commission; or

(ii) They resulted from either an administrative error by the WCB, or the receipt of incorrect information from an employer that affected eligibility or the amount payable. The exception to this provision is that the overpayment will be pursued if the WCB considers that the error or incorrect information was so material or obvious that the worker should have recognized it and reported it to the WCB; or

(iii) New information relevant to entitlement was known to the worker and was not provided to the WCB but it resulted in an overpayment of less than $50; or

(iv) The amount receivable is not cost-effective to pursue; or

(v) Recovery of the overpayment, in whole or in part, would create financial hardship for the worker and/or the worker's dependants; or

(vi) The worker has died, unless it is clear that the estate has sufficient funds available to repay the overpayment; or

(vii) The overpayment occurred more than three years prior to its discovery by the WCB.

Worker's Position

The worker was assisted by a worker advisor at the hearing. It was submitted that the panel should direct that the overpayment on the worker's claim be written off as an administrative error on the part of the WCB, in accordance with the Overpayments Policy. It was noted that the worker did meet his obligations to inform the WCB of the change in his income. After he provided the information to the WCB, it was submitted that it was reasonable for the worker to presume that the WCB had acted on that information in making an adjustment to his benefits. The WCB was remiss in deciding not to request further payroll information when the worker first informed his case manager about his wage increase. The overpayment would have been avoided if the WCB had acted promptly on the information provided by the worker, instead of waiting for five full months. This inaction by the WCB led to the worker being in an overpayment situation of $3,329.18. The worker should not be made to accept responsibility for the WCB's unreasonable delay in acting on the information he made available to it.

Analysis:

The Appeal Commission and its panels are bound by the policies of the WCB Board of Directors. As outlined above, the Overpayments Policy sets out limited circumstances where overpayments will not be pursued. In the panel’s opinion, none of the limited circumstances apply and therefore we find that the worker is responsible to repay the overpayment on his claim.

It was submitted that the exception outlined in section 3(ii) of the Overpayments Policy applies to this case. The panel does not agree. In our opinion, there was no administrative error on the part of the WCB. Rather, on January 25, 2008, the case manager made a deliberate decision to wait until June or July before determining whether or not an adjustment to the worker's benefit entitlement was required. According to the worker's testimony given at the hearing, the case manager told him this was the approach she was taking to the information he had given her regarding his new position, and so he was (or should have been) aware that the recalculation would not occur until six months later.

It is notable that a pay stub outlining the worker's new rate of pay was not asked for by nor provided to the WCB until July 2008. In January, 2008, the information regarding the worker's new higher wage position was provided verbally during a telephone conversation between the worker and the case manager on January 25, 2008.

There is discrepancy between the memorandum notes recorded by the case manager on file and the recollections of the worker as to the content of that conversation. The worker's evidence was that he distinctly recalled telling the case manager that in addition to a higher hourly rate, he also earned an evening shift premium of $2.85 per hour every two weeks out of six. He recalled the conversation because of a comment which the case manager made which compared the amount of the shift premium he earned to the amount of shift premium paid to workers in another occupation. The case manager's memorandum, on the other hand, only reflects that the worker reported that his current earnings were $15.00 per hour. The memorandum also indicates that in 2007 the worker's earnings were approximately $25,000 and that he completed a 6 month training program where he was paid $9.00 per hour during training.

The panel notes that while it would be unusual for the case manager to neglect to record important discussions regarding shift premium, we also acknowledge that the worker's explanation as to why he recalled having the conversation is credible. Our impression of the worker at the hearing was that he was a straight-forward individual and we did not view him as trying to manipulate the system.

In the panel's opinion, the question of whether or not the worker informed the case manager about the shift premium is not critical to our decision. We find that the creation of the overpayment was caused by a number of factors, and the payment of shift premium was only one part of the equation. In particular, the panel notes the following:

• The worker's paystub for the pay period ending June 29, 2008 indicates that his rate of pay was $15.49 per hour. At the hearing, the worker advised that in February 2008, a retroactive pay increase was applied to the worker's wages which extended back to April, 2007. This information would not have been known when the worker spoke with his case manager in January, but nevertheless would have contributed to the creation of the overpayment.
• The paystub also indicates that the amount of overtime earned by the worker in the first half of 2008 was $1,296.72. The amount of shift premium was $1,062.97. It would appear that overtime contributed to the overpayment to a greater degree than did the amount paid for shift premium;
• The worker's evidence at the hearing was that in May and June, 2008, he also worked a number of Saturdays for a concurrent employer. The T4 slip for 2008 indicates that the worker earned $742.40 from this employer.

Overall, the creation of the overpayment of $3,329.18 was not from one source, but rather resulted from a number of sources of income. The retroactive pay increase, overtime hours and concurrent employment would not have been known on January 25, 2008, when the worker and the case manager discussed whether an adjustment to his partial wage loss benefits was required. In the panel's opinion, based on information that she was given (ie. that the worker was now earning $15.00 per hour, and possibly, that the worker would be earning some shift premium), it was not unreasonable for the case manager to decide to wait six months before determining whether or not an adjustment to the worker's benefit entitlement was necessary. We do not view her decision to defer the adjustment as being an administrative error. It was only when the $0.50 per hour retroactive wage increase, overtime and concurrent employment are taken into account does it become more obvious that an adjustment would be required. As noted earlier, these were not factors which would have been known when the decision to defer the adjustment to June was made.

At the hearing, the worker indicated that the letters he received from the WCB were confusing. He stated that his deemed earning capacity was never expressed in terms of dollars per hour. It would have been far more helpful to understand how much income he was permitted to earn if he was given an hourly amount, as opposed to a gross weekly figure. This was compounded by the fact that he was paid on a net, biweekly basis, and his tendency would be to just look at the bottom line on his paystub and hope that he could meet all of his expenses. The panel does have some sympathy for this position. We agree that the information provided to workers by the WCB requires careful reading and the calculation of wage loss benefit entitlement is not easy to understand. Nevertheless, we feel that the WCB's overall message that it must be notified of any changes to income, including bonuses, overtime, vacation pay, profit sharing, CPP/retirement benefits or private insurance benefits was clearly communicated. Further, in the present case, the worker acknowledged that he was acutely aware of the need to report additional income, since he had encountered an overpayment situation in the past when he had worked some overtime hours.

Given the worker's past familiarity with overpayment issues, the panel is of the view that even if the worker did inform the case manager about the shift premium in January 2008, he also should have subsequently contacted the WCB to inform it about the retroactive wage increase, additional overtime hours worked, and his concurrent employment. Had he done so, there would have been more reason for the case manager to initiate the adjustment calculation sooner than she did in June 2008, and the position of overpayment would have been detected at an earlier time.