Decision #03/11 - Type: Workers Compensation

Preamble

A hearing was held on November 18 and 19, 2010 to consider the issues detailed below.

Issue

  1. Whether or not the worker should be reimbursed for the costs related to attending an Occupational Health and Safety program at the University of Manitoba;

  1. Whether or not the worker’s permanent partial disability awards should be deducted from his benefits;

  1. Whether or not the worker’s Canada Pension Plan Disability benefit should be taken into account when calculating his benefit entitlement as of February 1, 1999;

  1. Whether or not the Canada Pension Plan children’s benefit paid in respect of the worker’s child should be taken into account when calculating the worker’s benefits from February 1, 1999 to December 31, 2000;

  1. Whether or not the worker is entitled to special additional compensation;

  1. Whether or not the recalculation of the worker's wage loss benefit for 1997 and 1998 created an overpayment;

  1. Whether or not there was an administrative penalty applied to the worker's claim;

  1. Whether or not the worker's current benefit rate has been correctly calculated; and

  1. Whether or not the correct amount of Canada Pension Plan disability benefits have been used in the calculation of the worker's wage loss benefits.

Decision

  1. That the worker should not be reimbursed for the costs related to attending an Occupational Health and Safety program at the University of Manitoba;

  1. That the worker’s permanent partial disability awards should be deducted from his benefits;

  1. That the worker’s Canada Pension Plan disability benefit should be taken into account when calculating his benefit entitlement as of February 1, 1999;

  1. That the Canada Pension Plan children’s benefit paid in respect of the worker’s child should be taken into account when calculating the worker’s benefits from February 1, 1999 to December 31, 2000;

  1. That the worker is not entitled to special additional compensation;

  1. That the recalculation of the worker's wage loss benefit for 1997 and 1998 did not create an overpayment;

  1. That the panel is without jurisdiction to determine whether an administrative penalty should be applied to the worker's claim;

  1. That the worker's current benefit rate has been correctly calculated; and

  1. That the correct amount of Canada Pension Plan disability benefits have been used in the calculation of the worker's wage loss benefits.

Decision: Unanimous

Background

Reasons

On February 7, 1986, the worker was operating a grader when his vehicle was struck by a train at a railway crossing. As a result of the accident, the worker suffered multiple injuries, including head trauma, fractured ribs and injury to his low back. The most serious injury was the head trauma and in February 1994, a panel of medical doctors diagnosed the worker as having Organic Personality Disorder caused by the accident and opined that he would not be capable of returning to the workforce.

Since the date of the accident, the worker has been in receipt of various types of compensation pursuant to The Workmen's Compensation Act, S.M. 1970, c.W200, as amended (the "Act"). The worker has raised a number of different issues regarding his compensation entitlements and has filed appeals regarding these issues with the Appeal Commission. On April 21, 2010, the panel hearing this appeal held a pre-hearing meeting with the worker, the representative from the accident employer, and legal counsel for the WCB to discuss and define the issues. Following the pre-hearing meeting, nine issues for appeal were identified. We will address each issue separately.

Issue 1: Whether or not the worker should be reimbursed for the costs related to attending an Occupational Health & Safety program at the University of Manitoba;

Background facts:

In the first few months after the accident, while still being treated for his compensable injuries, the worker met with a WCB vocational rehabilitation counselor (“VRC”) to discuss future vocational planning. The VRC noted that the worker was interested in becoming certified by the Manitoba Society of Certified Engineering Technicians and Technologists and required a few more courses in order to do this. After meeting with a college counselor, it was decided that the worker would take a course called Machine Drafting and Engineering Design I which would be held two nights a week from April 1986 to June 1986. The VRC noted that the worker was finding his lack of activity to be frustrating and was willing to commit to the evening course. The WCB paid for the costs associated with the evening course.

In a memorandum dated July 28, 1986, the VRC documented that worker found the evening course to be extremely difficult due to his poor memory and limited ability to concentrate. The worker reported that he spent many hours going over his notes but he passed the course with a C+ average.

In August and October 1986, the worker enquired about the possibility of taking a course at the University of Manitoba (“U of M”) related to the field of occupational health and safety. In a memorandum dated October 10, 1986, the VRC advised the worker that she could not commit to further educational programs as the worker’s compensable restrictions had yet to be determined. The worker stated that he would apply for the courses anyway and would try and obtain the money back from the WCB at a later date.

In early 1987, the WCB determined that the worker was capable of alternate employment with temporary work restrictions.

On May 20, 1987, the VRC documented that the worker attended university from September 1986 to January 1987 and graduated with a B+ average from his occupational health and safety course.

On June 10, 1987, the worker commenced a graduated re-entry program position with the accident employer that involved building and yard maintenance, clerical assistance and technical aid. This position lasted until July 31, 1987 as the worker claimed he was too tired, could not concentrate and his back was very sore.

In a memorandum dated September 2, 1987, a VRC documented that the worker expressed his desire to work as a Health and Safety Officer with the accident employer and asked whether the WCB would sponsor him to attend courses related to the health and safety field. The VRC advised the worker that he could attend the classes on his own but the WCB would not sponsor him to take the courses as a light duty job was available for him with the accident employer. The VRC noted that she spoke with the treating physician who stated that the worker was quite limited by his organic problems and that the worker’s wishes to do the grandiose and complex were unrealistic.

In September 1987, the worker started another position with the accident employer that involved preparing maps and light cleaning.

In a memorandum dated January 20, 1988, the VRC stated that the worker “…is not a candidate for academic retraining as he was currently in a light duty position with the [accident employer]. He has also been advised that although he possesses a strong interest in safety and health, he will not be hired as a Safety and Health Officer with [the accident employer]”.

In a memorandum dated February 13, 1989, the VRC spoke with the worker who indicated they took his job away three days ago because “he made a mistake.” The VRC noted that the worker expressed a high level of frustration with the position as he felt he was not trusted and that he was not doing worthwhile work. The worker advised the VRC that he becomes extremely tired by 11:00 a.m. and did not feel he could work longer than 2 hours per day.

Between April and June 1989, the worker obtained a position with the accident employer that involved “measuring catch basins” between April and June 1989. In September 1989, the worker obtained another job where he was to make a record of hazardous materials that were being stored in various locations. The position involved mainly writing and collating information (October 2, 1989 memo).

In a letter dated January 30, 1991, the employer advised the WCB that the worker was attending evening courses at the U of M yet was resisting any attempts to increase his daily work hours beyond the present four hours.

On March 12, 1991, the worker advised the WCB that he stopped working on February 13, 1991 due to “administrative controls.” The worker advised that he was having compound headaches, memory lapse and sleep problems which he attributed to job related stress. The worker contended that he could not work more than four hours a day due to a lack of concentration and exhaustion. The VRC stated, “[The worker] does however work a full day when he goes to the [location] and does take Occupational Health & Safety courses at the University of Manitoba. [The worker] informed me he takes a Thursday night course which is three hours in duration. He indicated that currently he is doing a practicum for this course which requires a great deal of research and homework. He indicated he will be finished this course in April.”

In a memorandum dated May 1, 1989, the VRC documented that the worker was contending total disability due to stress. The VRC also noted that a treating neurologist suggested that the worker’s problems were more psychologically based than physically or neurologically based. He stated that the treating psychologist indicated in a recent report that the worker was unable to work as he needed some rest and a re-evaluation of his work goals and capabilities. He indicated that the worker’s position had now been terminated. In a letter dated June 20, 1991, a WCB adjudication supervisor advised the employer that the WCB was accepting the treating psychologist’s recommendation that the worker remain off work and that total temporary disability benefits would be issued.

In September 1991, the worker underwent a right frontal temporal craniotomy of the right gyrus rectus lesion. This was considered to have been caused by the work related accident.

On February 21, 1992, a VRC responded to a letter from the worker dated July 6, 1991 regarding his involvement with the Occupational Health and Safety Program through the U of M. The VRC indicated that he would be willing to review WCB responsibility regarding this program once the worker was able to participate in a rehabilitation plan.

In a letter to the VRC dated March 5, 1992, the worker indicated that he was requesting compensation for costs of a program that was work related for a WCR (Workers Compensation Rehabilitation) position he held for one year and six months. The worker stated, “…There was a paper drafted by [WCB employee] that was effective February 21, 1990. The subject was “Vocational Rehabilitation Plans”. At that time I had been working in the [employer’s] branch for 6 months and was halfway through the occupational health and safety program at the University of Manitoba. The WCB and my employer both acknowledged that the program was beneficial towards my new career path chosen. They never acknowledged my initiatives and hardships to achieve accepted results. [The accident employer] and the WCB both accept financial responsibility for their employees academic training pertaining to their employment. My academic training was also pertinent to my employment…”.

On March 19, 1992, a VRC advised the worker of the following:

“You have also submitted a letter dated March 5, 1992 in which you request further clarification about your entitlement to reimbursement for costs associated with your occupational safety and health program. I have now reviewed all available documentation and note that in 1987, when you did request approval for sponsorship, it was denied. With this in mind, you would not be entitled to reimbursement for these costs. …

Generally, an academic training program is considered as a viable rehabilitation plan when it will lead to employment/employability. Prior to authorization for any type of training, a thorough review of the labour market is completed and as well, a review of opportunities that will be created upon completion of the training program. At the time of you (sic) request for sponsorship, it was not considered as a reasonable rehabilitation measure and was therefore never pursued.”

On July 27, 1992, a VRC supervisor wrote to the worker on a number of issues. With respect to the costs associated with the health and safety program, the worker was advised that employment opportunities in the capacity of a health inspector would not be made available to him by his employer as the deficits incurred due to his compensable injury made fulfillment of those duties beyond his capacity. The VRC stated: “This was demonstrated in your limited capacity to fulfill the duties on a full-time basis with [department]. This had not been a pre-arranged, authorized plan of action by the Vocational Rehabilitation Consultant, as it was felt to be unrealistic based on your capabilities of fulfilling the job duties. Had this resulted in your successfully becoming employed in such capacity, then reimbursement for these courses could be considered.”

On February 18, 1994, a Medical Review Panel was held. It was concluded that the worker had an organic personality disorder and was not capable of working.

On September 18, 2006, the worker asked Review Office to reconsider the decisions made on February 21, 1992, March 19, 1992 and July 27, 1992 regarding the costs and expenses he incurred for his vocational education and training.

In a submission to Review Office dated January 22, 2007, the employer’s advocate outlined the view that the worker’s pursuit of health and safety courses would not likely result in employment opportunities based on the worker’s previous placement in a similar capacity and therefore there was no basis for the WCB to sponsor his training classes.

On March 22, 2007, Review Office noted the worker’s contention that WCB Policy 43.00, Vocational Rehabilitation, was not followed. Review Office indicated that this Policy did not come into effect until October 1, 1994 and had no retrospective application. Review Office indicated that the decision which the worker requested be reconsidered was made prior to the policy’s effective date. It noted that all vocational rehabilitation activity with a goal of facilitating the worker’s return to work ended before then. As such, it followed that Policy 43.00 had no application in this instance.

Review Office noted that the primary objective of vocational rehabilitation was to return the worker to a position with the accident employer. “Whether the worker was interested in the job proffered by an employer has never been an overriding concern. This is given form (sic) by Policy 43.00 states that a worker’s interests are taken into account “where possible.” Review Office noted that the worker was insured by the WCB for earnings of $596.15 per week and that the goal of vocational rehabilitation was to return him to work at that amount, notwithstanding that his pre-accident average earnings were higher. Based on the weight of evidence, Review Office concluded that there was no basis to support the worker in the health and safety program and that he should not be reimbursed for the costs in doing so.

The worker appealed Review Office’s decision to the Appeal Commission.

Analysis

The first issue concerns whether or not the actual costs which the worker paid for attending a university program should be reimbursed to the worker. The worker's submission states: “I am entitled to be reimbursed for all the costs of courses that I completed that were required for the workplace and related to the job duties I was performing for 18 months for (accident employer) safety department.” He also argues that because of his injuries and resulting work restrictions, there were very few options in his workplace which would allow him to recover his lost average earnings as a career. Without any vocational rehabilitation plan in place by the WCB or the employer, he had no choice but to self initiate and implement a plan for a new career path which would give him the opportunity to earn what he had earned in the past.

Authority for payment of vocational rehabilitation costs is found under subsection 24(16) of the Act as follows:

Vocational training

24(16) The board may provide for any injured workman, whose earning capacity in his previous occupation has been permanently impaired by the injury, such vocational training as may be deemed advisable for the purpose of preparing the injured workman for another occupation to which he may seem adapted and which is likely to increase his future earning capacity; and to that end the board may contract with an institution or institutions furnishing such vocational training, or may adapt rules and regulations for that purpose and for the payment of the training.

It is important to note that entitlement under the Act to vocational rehabilitation is discretionary. WCB Policy 43.00, Benefits Administration – Vocational Rehabilitation, (the "Vocational Rehabilitation Policy") explains the goals and describes the terms and conditions of academic, vocational, and rehabilitative assistance available to a worker under the Act. Among other things, the Vocational Rehabilitation Policy states that the goal of vocational rehabilitation is to help the worker achieve a return to sustainable employment in an occupation which reasonably takes into consideration the worker’s post-injury physical capacity, skills, aptitudes and, where possible, interests.

In order for the worker’s appeal on this issue to succeed, the panel must consider the Vocational Rehabilitation Policy, and determine whether the university program was necessary to help the worker to achieve a return to sustainable employment in an occupation which reasonably took into consideration his post-injury physical capacity, skills, and aptitudes.

On a balance of probabilities, the panel finds that the program was not necessary to help the worker achieve a return to an occupation suitable to him and therefore he is not entitled to reimbursement for the costs of attending the program.

In coming to our decision, the panel relied on the following:

· Given the nature and extent of the injuries suffered by the worker in the 1986 workplace accident, the panel is of the view that a new career in the area of occupational health and safety was not feasible. While the worker was able to complete the academic programming (and is to be commended for his success in this regard), the memory, behavioural/affective, and stamina deficits resulting from his injuries meant that sustainable employment in this new career was not likely to be realized.

· The February 1994 conclusions of the Medical Review Panel were that due to his injuries from the workplace accident, the worker was not capable of returning to work and would not be capable of a return to work at any time.

· The memorandums on file from the WCB vocational rehabilitation counsellor clearly indicate that from the time he first started taking the university courses in 1986, the worker was told that the WCB was not prepared to fund the worker for these courses until more was known about his medical status and the impact of his injuries.

The panel therefore finds that the worker is not entitled to reimbursement for the costs related to attending an Occupational Health and Safety program at the University of Manitoba. The worker's appeal on this issue is dismissed.

Issue 2: Whether or not the worker’s permanent partial disability awards should be deducted from his benefits;

Background facts

Under the Act (as it was at the time of the worker's accident), there were four categories of benefits which could be paid to injured workers:

· Temporary total disability ("TTD")

35(1) Where a temporary total disability results from the injury, the compensation shall be a periodic payment during the continuance of the temporary total disability equal to 75% of the workman's average earnings; but the compensation shall not be less than $693.00 per month, except where the average earnings of the workman are less than $693.00 per month, in which case he shall receive, as monthly compensation, the total amount of his average earnings.

· Temporary partial disability ("TPD")

36(1) Where temporary partial disability results from the injury, the compensation shall be the same as that prescribed by section 32, but shall be payable only so long as the disability lasts.

· Permanent total disability ("PTD")

29 Where a permanent total disability results from the injury, the amount of compensation shall be a periodical payment during the life of the workman equal to 75% of his average earnings; but the compensation shall not be less than $693.00 per month except where the average earnings of the workman are less than $693 per month, in which case, he shall receive as monthly compensation an amount equal to his average monthly earnings.

· Permanent partial disability ("PPD")

32(1) Where permanent partial disability results from the injury, the board shall allow compensation in periodical payments during the lifetime of the workman sufficient, in the opinion of the board, to compensate for the physical loss occasioned by the disability, but not exceeding seventy-five per cent of his average earnings.

When the worker was first injured in February 1986, he initially received TTD benefits. As his recovery progressed, it was determined that he would be left with some permanent disability as a result of the accident, and therefore would also be entitled to PPD benefits.

On November 22, 1988, the worker received his first PPD award from the WCB. The worker's impairment was assessed at 10%. The worker was given the option of receiving his PPD as a monthly pension of $193.75 or as a lump sum settlement of $36,218.33. The worker opted for the lump sum settlement. In correspondence dated November 22, 1988, the WCB payment assessor stated:

"You should be aware that, in the event you do experience a recurrence of your injury, any further benefits payable will be reduced by the amount of your monthly pension/settlement. In addition, any potential increases in benefits as provided for under Section 31 of the Workers Compensation Act will be affected."

On September 1, 1994, the worker received his second PPD award from the WCB. The worker's impairment was assessed at an additional 6% impairment. The worker was given the option of a monthly pension of $142.32 or a lump sum settlement of $24,621.36. The worker opted for the lump sum settlement.

On June 25, 1997, the worker received his third PPD award from the WCB. The worker was granted an additional 17% impairment in respect of his compensable back injury. The worker was given the option of a monthly pension of $440.44 or a lump sum settlement of $83,636.02. The worker opted for the lump sum settlement.

On March 28, 2002, the worker was advised by a payment specialist that the WCB would be deducting the value of his PPD awards from his biweekly entitlement to wage loss benefits. This was in accordance with Section 49(1) of the Act. The PPD awards were calculated as $179.21 weekly. The worker was also advised that WCB staff were instructed on June 14, 1974 that "Instead of discontinuing pensions while receiving total disability benefits, it was more practical to deduct the pension benefits from the compensation benefit. Had this direction not been given, you would not have been able to get your pension as Lump Sum Settlements as your claim was being paid on full benefits." This decision was also confirmed on March 27, 2003 by the WCB's Fair Practices advocate and a WCB case manager on July 15, 2004.

The worker disagreed with the WCB’s decision to reduce his wage loss benefits by the amount of his permanent partial disability awards.

On March 22, 2007, Review Office confirmed that the deduction of the worker’s PPD from his wage loss benefits was in keeping with the Act and policy, specifically section 49(1) of the Act and WCB policy 44.80.30.10, Establishing Post-Accident Earning Capacity. Review Office also quoted the following from Appeal Commission Decision 115/2001:

“A worker’s claim with the WCB is governed by the legislation in effect at the time of his or her compensable accident. In accordance with the 1982 legislation, an injured worker is not entitled to receive income replacement greater than 75% of his established average earnings. Therefore, we find that the amount of the partial permanent disability award must be deducted from the claimant’s income replacement benefit.”

Analysis

The second issue deals with the amount of benefits the worker is entitled to receive and whether or not his PPD awards should have been deducted from the bi-weekly benefits he received. The panel understands from the worker’s written submission that this was the first issue he appealed and he feels it is interrelated with issues 6 and 7. From his submissions at the hearing, it is also clear that this is the matter of primary concern to the worker.

The issue started in April 1999 when the employer began to reduce the worker’s bi-weekly entitlement to reflect the WCB’s practice of deducting the worker’s monthly PPD pension award from his wage loss entitlement. At the outset, it is important to clarify the administrative scheme in place with respect to payment of worker's compensation benefits to persons who are employed by this particular accident employer.

The accident employer is a self insured employer under the Act. This means that its employees who suffer work-related injuries are entitled to receive workers compensation benefits pursuant to the terms and conditions set out in the Act, and the accident employer guarantees and pays the costs of all such claims. While the accident employer is responsible for paying the costs of claims, the WCB has exclusive jurisdiction over adjudication of the claim. That means that the WCB decides all matters relating to entitlement to benefits under the Act. Stated plainly, the WCB says how much a worker is to receive, and the accident employer is required to pay that amount.

In addition to the requirement to pay the workers compensation benefits as determined by the WCB, the accident employer also has an obligation to pay its injured employees "top-up" pursuant to the collective agreement in place between the accident employer and its employees' union. The panel does not have much knowledge regarding the specific terms of the collective agreement, nor should we, as this is beyond the scope of our jurisdiction. It is sufficient for our purposes to know that under the terms of the collective agreement, the accident employer's workers are entitled to continue to receive their full pre-accident wages, rather than the legislated percentage provided for in the Act. The additional amount between the amount paid under WCB legislation and the worker's full wages is referred to as "top-up".

Pursuant to the WCB legislation in place when the worker was injured in 1986, there was a limit to the amount of compensation which may be received by an injured worker. Sections 37, 40(1), 43(1) and 44(1) of the Act all limit the compensation which can be received by a worker under the Act to an amount not exceeding seventy-five per cent of average earnings. For example, the wording of s. 32(1) dealing with PPD benefits says "compensation … to compensate for the physical loss occasioned by the disability, but not exceeding seventy-five per cent of his average earnings." S.35(1) dealing with TTD says: "compensation shall be … equal to 75% of the workman's average earnings…."

In application to the within case, this means that the worker was entitled to receive 75% of his pre-accident earnings as worker's compensation benefits, and the other 25% would be considered top-up from the accident employer. The amount that was actually paid to the worker would then be equal to 100% of what he was receiving prior to the workplace accident.

At the hearing, counsel for the WCB explained the historical evolution of the administrative scheme in place for facilitating payment of workers compensation benefits to the accident employer's workers. Initially, the 75% entitlement under the Act was paid directly by the WCB to the worker, and the 25% top-up was paid directly by the accident employer to the worker. The WCB would then contact the accident employer to advise the amount of workers compensation benefits which had been paid, and the accident employer would pay these monies back to the WCB. This was not an efficient process due to the additional calculations that were required and it was cumbersome for the accident employer to have to write two separate cheques. Eventually, a process evolved where the accident employer would just keep the worker on full salary and continue to pay 100% of pre-accident earnings. Meanwhile, the WCB would compute the worker's wage loss entitlement under the Act, then provide the figures to the accident employer on an "information only" basis. This process became known as "compute for information only" or "CFIO". The effect of this process was that no money was now actually exchanged between the WCB and the accident employer. All of the bi-weekly payments were made directly by the accident employer to the worker. The only implication of the CFIO amount was the tax-free status of the amount representing WCB entitlement. It became a very simple way of administering these claims, and everything was dealt with in an exchange between bureaucrats.

All of this background is important because in his submissions, the worker asks the panel to address a number of issues, including reduction to his wages, the characterization of his top-up, and the amounts actually paid to him by the accident employer, among other things. The worker makes a very specific distinction between deductions from his wages as opposed to deductions from his benefits. It is important to note that the Appeal Commission's jurisdiction is limited to determining the worker's entitlement to workers compensation benefits under the Act. We can only look at the figures which are calculated by the WCB, and then provided to the accident employer on a CFIO basis. So long as the worker is receiving payments from the accident employer which are consistent with the amount of benefits the worker is entitled to under the Act, our job is complete and our jurisdiction ends there. As to what additional benefits the worker may be entitled to from the accident employer under the collective agreement is a matter between the worker, his union and the employer.

Returning to the specific issue before the panel, the worker objects to the deduction of his PPD awards from his benefits. The issue was framed as deduction from "benefits", but at the hearing, the worker argued that the panel should consider whether the deduction should have been made from the worker's "wages". As outlined above, the panel's jurisdiction is limited to consideration of the worker's entitlement to benefits under the Act, and therefore we must restrict our consideration to whether the PPD awards should have been deducted from his benefits (ie. entitlement under the Act).

In order for the worker’s appeal on this issue to succeed, the panel must interpret the provisions of the Act and find that there was no justification for the reduction in the bi-weekly workers compensation benefit amount received by the worker, commencing in April 1999. We are not able to make that finding.

The explanation provided by WCB’s legal counsel for the deduction is that sections 37, 40(1), 43(1) and 44(1) of the Act provide that under no circumstances is the WCB entitled to pay benefits to a worker in excess of 75% of the worker's pre-accident earnings. A combination of PPD benefits and other disability compensation benefits cannot exceed 75% of the worker's average earnings before the accident. It was submitted by counsel that in situations where the 75% maximum was exceeded, the PPD award must be deducted from the other disability compensation benefits. Support cited for this proposition included the wording of WCB Policy, textbook authorities, and previous Appeal Commission rulings. The PPD award deduction must be made from other disability compensation benefits (whether TTD benefits, rehab benefits or SAC benefits) regardless of whether the PPD award was being received in periodic monthly payments or paid out as a lump sum settlement. To adopt any other interpretation would permit a situation where a worker could receive in excess of 75% of his or her pre-accident earnings. This concept was clearly prohibited by the Act.

The administration of the provisions of the Act is complex and can be confusing to the lay person. What is fairly straightforward and clear, however, is that the maximum amount of benefits which a worker may receive is limited to 75% of pre-accident gross earnings. "Benefits" refers to any benefit provided under the Act, whether received as temporary disability benefits or permanent disability benefits.

It is not disputed that the worker received three PPD award lump sum settlements which totalled $144,475.71. The first PPD award of $36,218.33 was equivalent to a monthly pension of $193.75 with a commutation date of December 14, 1998. The second PPD award of $24,621.36 was equivalent to a monthly pension of $142.32 with a commutation date of January 30, 1995.

The third PPD award of $83,636.02 was equivalent to a monthly pension of $440.44 with a commutation date of June 18, 1998. In total, if converted to a single monthly pension amount, the value of the three PPD's would be $776.51 per month.

The worker was given a choice between receiving a monthly pension for the rest of his life, or a single lump sum settlement. He chose the lump sum settlement. If the worker had opted for the monthly pension amounts, he would have been eligible to receive $776.51 per month. It is clear, however, that he would not have been paid both his full TTD/rehab benefits and the monthly pension, because that would have put him over the 75% statutory maximum. The fact that he chose to receive each of his PPD awards as a lump sum and spent the money on necessary expenses does not mean that he later gets to avoid including those amounts in calculating whether or not he is receiving more than 75% of his pre-accident gross earnings. The money was received by him (albeit all at one time and not periodically) and he must therefore be accountable for it.

Overall, the panel is fully satisfied that the deduction was properly taken and that it was done in what appears to be a routine administration by the WCB of the Act. There is no evidence of anything untoward in the manner in which the worker's claim was calculated and administered by the WCB. It is the panel's finding that the worker's PPD awards were properly deducted from his benefits. The worker's appeal on this issue is dismissed.

Issue 3: Whether or not the worker’s Canada Pension Plan Disability benefit should be taken into account when calculating his benefit entitlement as of February 1, 1999;

Background facts:

A WCB vocational rehabilitation supervisor advised the worker of the following in a letter dated December 29, 1998:

“…Consistent with the WCB Act (pre and post 1992) and associated policies, once your claim status is stable, Canada Pension Plan Disability Benefits are calculated as income. Effective February 1, 1999 the Workers Compensation of Manitoba will be considering your CPP disability benefits as income.”

On July 15, 2004, a WCB case manager advised the worker that the deduction of his Canada Pension Plan ("CPP") benefits was in accordance with WCB policy 44.80.30.10.

The worker thought it was inappropriate for the WCB to have his CCP deducted from his wage loss benefits as of February 1, 1999.

On March 22, 2007, Review Office upheld the decisions made in 1998 and 2004 on this issue. Review Office noted that the worker commenced receiving CPP disability benefits in 1991. On February 1, 1999, the WCB started paying the worker’s wage loss benefits as vocational rehabilitation benefits rather than TTD benefits. When they did this, they started taking into account the worker’s CPP disability benefit when calculating his wage loss benefits. Review Office indicated that WCB policy 44.80.30.10 codified the long-standing practice of taking into account the CPP disability benefit when calculating wage loss benefits in certain circumstances. As of February 1, 1999, these conditions were met on the claim.

Analysis

The third issue requires the panel to consider the provisions of the Act and WCB policy and decide whether or not the worker’s CPP disability benefit should have been taken into account when calculating his benefit entitlement as of February 1, 1999. In order for the worker’s appeal to be successful, the panel must find that the CPP disability benefits received by the worker should not have been included by the WCB when determining the worker's post-accident earnings.

The inclusion of the CPP disability amount is relevant because of the 75% statutory maximum. As the worker was already receiving compensation at the full maximum benefit level, any amounts received by him as CPP disability benefits were required to be deducted from his WCB benefits. If these amounts were not deducted, the worker's post-accident earnings would exceed the 75% ceiling imposed by the Act.

The relevant policy is WCB Policy 44.80.30.10, Wage Loss - Establishing Post Accident Earning Capacity (the "Post Accident Earnings Policy").

The Post Accident Earnings Policy describes the methods that will be used to calculate workers' post-accident earning capacity. Paragraphs 3 and 4 outline the sources to be included in actual post-accident earnings for workers injured prior to January 1, 1992. The relevant portions are as follows:

3. Sources included in Actual Post-Accident Earnings for workers injured prior to January 1, 1992

The WCB may use either actual or estimated earnings. For the purpose of this policy, actual earnings will include:

a) Earnings from Employment

…

b) Injury-related Benefits

A worker may sometimes receive insurance or other benefits from other sources as a result of his or her injury. If those benefits are not specifically excluded in section 4, they will be included in post-accident earnings if they were earned or accrued while the worker received benefits from the WCB.

4. Specific exclusions from Actual Post-Accident Earnings regardless of the Date of Accident

The principles described earlier in this policy are generally used when determining whether to include a source of income in the worker's post-accident earnings. However, there are some income sources that are excluded. These exclusions apply regardless of the date of accident. They are listed below:

a) Any type of income, such as foster parents payments, which is specifically excluded from average earning calculations.

b) Retirement pension benefits or other deferred income.

c) An annuity or pension payment from the WCB that the worker receives as a result of a previous compensable injury.

d) CPP Disability Child benefits.

e) Vacation pay cash-out or severance pay.

f) Insurance benefits that are designed for mortgage or loan payments.

In the panel's opinion, the Post Accident Earnings Policy clearly states that "injury related benefits" must be included as a source of earnings for workers with accidents occurring prior to January 1, 1992. There is provision in paragraph 4 for some income sources to be excluded, however CPP disability benefits do not fall under any of the listed exclusions. As we are bound by WCB policy, the panel finds that we must conclude that the CPP disability benefits were properly taken into account when calculating the worker's benefit entitlement as of February 1, 1999. The appeal on this issue is dismissed.

Issue 4: Whether or not the Canada Pension Plan children’s benefit paid in respect of the worker’s child should be taken into account when calculating the worker’s benefits from February 1, 1999 to December 31, 2000.

Background facts:

In a letter dated May 5, 2005, a WCB payment specialist advised the worker of the following:

“Your CPP benefits (including the child portion) was only used in our calculation of benefits due for the period February 1, 1999 to December 31, 2000 although you had been in receipt of this benefit since November, 1991. Effective January 1, 2001 a new policy was implemented which allowed us to “exclude” the child portion of CPP benefits paid to workers as post-accident income.

Prior to January 1, 2001, any CPP disability benefit (including children’s portions) paid to a worker in receipt of WCB benefits was considered to be post-accident earnings (not earned income) and used in the calculation of benefits due, refer to policy 44.80.30.20. The reason we used the full CPP benefits was that this benefit was being paid directly to you and was in part or in full a result of the same disability as your Workers Compensation Claim.”

In its decision of March 22, 2007, Review Office stated that prior to late 1995, the WCB did not differentiate between CPP disability benefit and the CPP children’s benefit when calculating wage loss benefits on any claim. “Both were taken into account. At that time the Board decided that the CPP children’s benefit should not be taken into account for accidents occurring after 1991. However, they decided to continue the practice for accidents occurring before 1992.”

It stated that an amended version of the Post Accident Earnings Policy came into effect on January 1, 2001. (It is noted that in her May 5, 2005 letter the payment specialist referenced Policy 44.80.30.20. It is assumed that this was a typographical error). Point A.4.d specifically removed the CPP children’s benefit from post accident earnings on all claims (see quote in Issue 3). As the policy was effective “for all Loss of Earning Capacity Reviews on or after January 1, 2001”, there was no retroactive application.

Review Office indicated that prior to January 1, 2001, it was the long standing practice of the WCB to take into account the CPP children’s benefit a worker received when calculating a wage loss benefit on claims for accidents occurring before 1992. Review Office indicated that when the WCB changed the practice by amending Policy 44.80.30.10, they chose not to do so retroactively. It followed that the manner in which the CPP children’s benefit the worker received was correctly taken into account when his wage loss benefits was calculated.

Analysis

The fourth issue again requires an interpretation of the provisions of the Act and WCB policy. In order for the worker’s appeal to succeed, the panel must find that for the period February 1, 1999 to December 21, 2000, the CPP child benefits received by the worker in respect of his child should not have been included by the WCB in its determination of the worker's post-accident earnings.

This issue is similar to the above issue, however it concerns a different category of CPP benefits. The Canada Pension Plan provides disability benefits to injured workers who have made sufficient contributions to the plan and whose medical condition prevents them from working at any job on a regular basis. These are the category of benefits which were addressed under Issue 3 above. The Canada Pension Plan also provides a monthly benefit to the dependant children of disabled workers. If the child is under the age of 18, the application is made by the disabled parent and the monthly benefit is paid to the parent. In addition to CPP disability benefits, CPP child benefits were being received by the worker in this case.

Paragraph 4 of the Post Accident Earnings Policy cited above under Issue 3 makes clear that CPP Disability Child benefits are to be excluded from the determination of post-accident earnings. This version of the Post Accident Earnings Policy took effect January 1, 2001 and as of that date, the WCB stopped including the CPP child benefits received by the worker when determining the worker's entitlements. Prior to January 1, 2001, however, the CPP child benefit was included as a source of earnings for the worker, and that is the matter at issue here.

According to the submission from legal counsel for the WCB, prior to January 1, 2001, it was the WCB's policy and practice not to differentiate between CPP disability benefits and CPP children's benefits payable to a worker when calculating disability benefits on claims under the Act. Both were taken into account and had the effect of reducing payments made by the WCB; whether the payments were rehab benefits or SAC. In June 2000, the WCB enacted Policy 44.80.30.10 entitled "Establishing Post-Accident Earning Capacity" (earlier defined in this decision as the Post Accident Earnings Policy). Paragraph 4(d) of the Post Accident Earnings Policy stated that CPP disability child benefits would not be considered when calculating post-accident earnings for accidents occurring prior to January 1, 1992. The effective date of the new policy was January 1, 2001. With respect to paragraph 4(d), the WCB stated:

"Effective January 1, 2001, a new policy was implemented which allowed [the WCB] to 'exclude' the child portion of CPP benefits paid to workers as opposed to accident income.

Prior to January 1, 2001, any CPP disability benefit (including children's portion) paid to a worker in receipt of WCB benefits was considered to be post-accident earnings (not earned income) and was used in the calculation of benefits due …."

The panel accepts the procedural history described in the submission of WCB legal counsel. It is notable that when the Post Accident Earnings Policy was amended in June, 2000 (effective January 1, 2001), it was not stated to have retroactive effect. It was within the power of the WCB Board of Directors to make the changes to paragraph 4(d) of the Post Accident Earnings Policy retroactive, but it declined to do so.

The panel therefore finds that the CPP child benefit was properly taken into account when calculating the worker's benefits from February 1, 1999 to December 31, 2000. This practice is consistent with the manner in which generally all WCB claims from this time period were administered. The worker's appeal on this issue is dismissed.

Issue 5: Whether or not the worker is entitled to special additional compensation.

Background facts:

In July of 1991, the worker expressed his opinion that he was entitled to special additional compensation ("SAC") benefits. In a letter dated July 27, 1992, a WCB vocational rehabilitation supervisor advised the worker of the following:

“…The intent of Special Additional Compensation is to ensure injured workers are not “frozen” at a yearly maximum level without any appreciable increase in income available to them either through further employment endeavors or yearly raises. Special Additional Compensation also provides a residual 2% pension after retirement to offset the loss of pension contributions incurred by an injured worker throughout this “frozen” income period. Those in receipt of Special Additional Compensation would receive a cost-of-living increase on a regular basis on the amount of benefits payable, ensuring some level of equity with the rising cost of living.

In the case of [accident employer] employees, they do not incur a financial loss from their base rate at the time of their injury. Regardless of the WCB’s maximum benefit level, the [accident employer’s] union/management contract ensures full benefits and salary payment. The injured worker is also entitled to and receives the yearly union/management contract increases as they would had they remained on the job. Based on this fact, [the accident employer] employees do not incur a financial loss to their base rate due to a compensable injury, nor do they lose their benefits and pension contributions. To this end, eligibility for Special Additional Compensation and the residual 2% post-retirement supplement is not warranted.”

By decision dated March 22, 2007, Review Office concurred with the adjudicator's determination. It stated that the worker was receiving the maximum benefits possible in respect of his loss of earnings resulting from his accident and Review Office could see no reason to change the manner in which that end was achieved.

Analysis

Authority for payment of SAC benefits is found under subsection 32(1.1) of the Act as follows:

Special additional compensation

32(1.1) Where the board is satisfied that an injury in respect of which it has allowed compensation under subsection (1) has occasioned a loss in earning capacity that is proportionately greater than the physical loss on the basis of which the compensation is allowed, it may

(a) during a period when the workman is taking rehabilitation training satisfactory to the board; or

(b) if the board is satisfied that rehabilitation training is not indicated; or

(c) if the board is satisfied that, after a fair and honest effort by the workman, rehabilitation has not produced an earning capacity that is reasonably equivalent to his earning capacity before the injury reduced by the physical loss on the basis of which compensation is allowed;

increase the compensation allowed under subsection (1) in such amount as it considers fair and just, but the total compensation shall not exceed seventy-five per cent of the average earnings of the workman.

It is important to note that the wording of subsection 32(1.1) is permissive, and accordingly, entitlement to SAC benefits is discretionary.

The worker requests that the rehabilitation wage loss benefits that are currently being paid to him be discontinued and changed to SAC benefits, retroactive to when he "retired" from the workplace in February 1, 1991.

This issue deals with the categorization of the disability compensation benefits which were received by the worker. The worker received "vocational rehabilitation" benefits and he feels that he ought to have been receiving "SAC" benefits. In order to assess whether the worker should have been receiving SAC benefits, it is first necessary to understand the alternatives which were available.

The submission from counsel for the WCB explains that in cases where a worker has a permanent partial disability (and presumably has been granted a PPD award) but still suffers a loss of earning capacity that is significantly greater than his physical loss, the WCB can supplement the disability compensation payable to the worker in the following ways:

  • reinstate total temporary disability ("TTD") compensation;
  • pay the worker vocational rehabilitation benefits under subsection 24(16); or
  • pay the worker special additional compensation under subsection 32(1.1)).

When a worker is first injured, the worker is paid TTD benefits, calculated as set out in subsection 35(1). By definition, TTD benefits are intended to be paid for a limited period of time. There may be cases where the worker has been granted a PPD award, has attempted a return to work, but is unable to continue because of the compensable disability. In this circumstance, the WCB will frequently reinstate TTD benefits. When the TTD benefits are reinstated, the PPD award benefits are deducted from the TTD payments to prevent overcompensation. WCB Policy 44.10.20.50.20, Recurring Effects of Injuries and Illness (Recurrences) states:

"Where a worker … is receiving a Permanent Partial Disability pension, or has received a commutation of a Permanent Partial Disability pension and where the worker subsequently suffers a recurrence of the original injury entitling him/her to Temporary Total Disability (TTD) benefits, the amount of the pension will be deducted from TTD benefits until such time as the TTD benefits are terminated."

The second option is to pay the worker vocational rehabilitation benefits pursuant to subsection 24(16), which provides as follows:

Vocational training

24(16) The board may provide for any injured workman, whose earning capacity in his previous occupation has been permanently impaired by the injury, such vocational training as may be deemed advisable for the purpose of preparing the injured workman for another occupation to which he may seem adapted and which is likely to increase his future earning capacity; and to that end the board may contract with an institution or institutions furnishing such vocational training, and may adopt rules and regulations for that purpose and for the payment of training.

Vocational rehabilitation benefits are intended to apply to those workers whose earning capacity has been "permanently impaired by injury". According to a WCB Board Order regarding "Rehabilitation Payments" dated May 31, 1985: "Subsequent to July 1, 1982, the current Board verbally indicated that payment of rehabilitation benefits be equivalent to temporary total disability and this has since been the practice." (emphasis added)

The third option is to pay SAC benefits. WCB Policy 44.60.30.01 Special Additional Compensation (the "SAC Policy") sets out guidelines as to entitlement and calculation of SAC benefits. The Policy Purpose is set out as follows:

Where the monthly pension paid to a worker for the physical loss (permanent impairment) resulting from an accident does not adequately compensate the worker for the loss of earning capacity caused by the injury, the WCB may also pay Special Additional Compensation (SAC).

As noted earlier, SAC benefits are discretionary and are intended to address situations where the worker is not adequately compensated.

The worker in this case received vocational rehabilitation benefits equivalent to his TTD entitlement. Counsel for the WCB advises that regardless of whether the worker received SAC benefits or rehabilitation benefits, he would still be getting the exact same amount from the WCB and the tax treatment of those benefits would be identical. The calculation for rehabilitation benefits is the same as the calculation for SAC. CPP is taken into account and PPDs are deducted. The one difference is that the SAC program provides for a 2% pension supplement after retirement. However, in the worker's case, the 2% post-retirement supplement would not apply as he continued to receive his full salary from the accident employer and full contributions to his pension plan with the employer. He did not suffer any diminution of his retirement pension entitlement.

The WCB's rationale for categorizing the worker under rehabilitation benefits rather than SAC benefits can be summarized as follows:

· SAC is intended to ensure that injured workers are not "frozen" at a yearly maximum level without any appreciable increase in income available to them either through further employment endeavors or yearly raises. Those in receipt of SAC would receive a cost-of-living increase on a regular basis on the amount of benefits payable, ensuring some level of equity with the rising costs of living.

· SAC also provides a residual 2% pension after retirement to offset the loss of pension contributions incurred by an injured worker.

· In the case of the accident employer's employees, they do not incur a financial loss from their base rate at the time of their injury. Regardless of the WCB's maximum benefit level, the collective agreement ensures full benefits and salary payment.

· The injured worker is also entitled to and receives the yearly union/management contract increases as they would had they remained on the job.

  • These employees do not incur a financial loss to their base rate due to a compensable injury, nor do they lose their benefits and pension contributions. To this end, eligibility for SAC and the residual 2% post retirement supplement is not warranted.

At the hearing, the worker argued that if his compensation was paid as SAC benefits rather than rehabilitation benefits, the monies would be paid directly from the WCB to him, rather than flowing through the employer and his bi-weekly entitlement would not have been subject to deductions taken by the accident employer (which deductions the panel understands were taken on account of the lump sum PPD awards previously received by the worker). This was an important point for the worker, presumably because he believed that the accident employer was making improper deductions from his bi-weekly entitlements. Both the representative from the employer and counsel for the WCB confirmed that substituting the vocational rehabilitation benefits with SAC benefits would not change the manner in which the worker was paid. Regardless of whether the worker's entitlement was paid as rehabilitation or SAC benefits, the accident employer would continue to pay the worker directly and administratively, the WCB would calculate the entitlement on a CFIO basis.

After reviewing all of the evidence, the panel can see no reason why the categorization of the worker's compensation as vocational rehabilitation benefits ought to be changed to SAC benefits. The amount of benefits paid to the worker would be no different, nor would there be any change in the way the payments were made to the worker. The worker's bi-weekly entitlement would continue to be paid to him directly by the accident employer. Given the fact that the worker's retirement pension was not negatively affected by the accident, there is no reason why he should be entitled to an additional 2% supplement after retirement. At all times, the worker continued to receive his full salary and benefits from the accident employer, and therefore it cannot be said that the worker was not adequately compensated. Overall, the panel agrees with the WCB's assessment that there is no "fair and just" reason to justify substituting SAC benefits for rehabilitation benefits, and we do not feel that the discretion to grant SAC benefits ought to be exercised. The worker's appeal on this issue is dismissed.

Issue 6: Whether or not the recalculation of the worker's wage loss benefit for 1997 and 1998 created an overpayment;

Background facts

As noted earlier in these reasons, although the worker received lump sum settlements of his PPD awards, for several years, his TTD benefits were not correspondingly decreased to reflect the receipt of these funds. In a letter dated March 29, 2005, the WCB confirmed that in March, 1999, it came to light that his TTD benefits were incorrectly calculated from January 1, 1997 and his benefits were therefore recalculated. The difference in amounts was determined to be $4,049.43. The letter states:

[The accident employer] does not receive actual pay cheques or cash from the WCB, therefore we simply adjusted the amounts paid in our system in order to balance our records and give the City credit for the surcharge of $4,049.43. This is not considered a true "overpayment" as there is no exchange of monies.

In its decision dated March 22, 2007 Review Office states:

In March 1999 it was found that for 1997 and part of 1987 (sic) the worker's PPD's were not deducted from his wage loss benefit. His wage loss was recalculated and revised documentation was sent to the worker and the employer. The WCB also made the appropriate adjusting entries on the employer's firm experience records.

The WCB made no request for restitution of any sort from the worker. Neither did the employer. Rather, they started deducting the amount of the PPD's from his wages commencing May 1999.

As Review Office understands it, the worker has asked that the difference between the two calculations be considered an overpayment. Review Office does not appreciate why he so desires, as doing so would have no affect on his entitlement from the WCB and, as Review Office understands the circumstances, the employer, as well as Canada Revenue Agency.

The manner in which the recalculation was administered was entirely consistent with the practice of the time and not contrary to any policy or Act. Review Office sees no reason for disturbing it in any way. The worker's appeal in this regard is denied.

Analysis

The sixth issue concerns whether or not an overpayment was created upon the recalculation of the worker’s wage loss benefit for 1997 and 1998. The worker in his submission alleges: “The truth is that an overpayment was created by WCB administrative errors and errors resulted in overpaying the (accident employer) excess benefit payments … the benefit payments were TTD benefits.”

In order for the worker’s appeal on this issue to succeed, there must be evidence to satisfy the panel on a balance of probabilities that the recalculation of the worker’s 1997 and 1998 wage loss benefits resulted in an overpayment to the accident employer.

The panel does not see how an overpayment to the accident employer could arise. Although the CFIO calculations for the 1997 and 1998 were initially in error (due to the failure of the WCB to deduct the worker's PPD awards from his TTD benefits) this would not have resulted in an overpayment to the accident employer. As noted earlier, the CFIO calculations are "for information only" and exist only on paper. To the extent that the numbers were in error, the records were later adjusted to show the correct figures. There was no money being exchanged between the WCB and the accident employer which would result in the accident employer being in receipt of funds that it ought not to have had. The accident employer did not receive any cheque, cash or transfer from the WCB. There was no exchange of money.

As the worker continued to be entitled to his full salary from the accident employer (consisting of 75% WCB benefits and 25% top up), any errors in CFIO calculations would not have affected the worker's bi-weekly entitlement. It is acknowledged, however, that in April, 1999, the accident employer started to reduce the worker's bi-weekly entitlement to reflect the fact that the worker had already received part of his 75% WCB benefit entitlement in the form of the PPD lump sum awards. The panel notes that the worker received the PPD lump sum settlements in 1988, 1994 and 1998, and the reductions from the 75% entitlement should properly have commenced upon receipt of the lump sum awards. It would appear that the accident employer only started to make those reductions in April 1999. Accordingly, the facts would indicate that there was a significant overpayment of monies to the worker. For many years he received his full TTD benefits without any reduction to account for the lump sum PPD awards which he also received. There is no evidence that either the accident employer or the WCB has initiated any process to recover these monies from the worker, and indeed, the excess money has never been classified or labelled as an overpayment by the WCB.

The panel finds that the recalculation of the worker's wage loss benefit for 1997 and 1998 did not create an overpayment. The worker's appeal on this issue is dismissed.

Issue 7: Whether or not there was an administrative penalty applied to the worker's claim:

Background facts

By letter dated December 11, 2007 from the worker to Review Office, the worker made the following request:

I am requesting for the Review Office to use their exclusive authority to review and rule on an administrative penalty under section 68(3); so I can appeal the Review Office's decision - if necessary to the proper people at the next level. Please reply as soon as possible.

In Review Office decision dated December 20, 2007, it states:

Regarding your second letter of December 11, 2007 requesting our review of an administrative penalty, Review Office finds no administrative penalty has been applied by the WCB on this claim. On this basis, there is no initial decision for our review. Our jurisdiction extends to the review of administrative penalties applied by Rehabilitation and Compensation Services.

Analysis

On this issue, the worker submits that the WCB has the authority and duty under the Act to penalize any person who contravenes any provisions of the Act and/or WCB policy. The worker strongly feels that the accident employer has acted improperly with respect to his WCB claim, and in particular, with respect to deductions taken from his bi-weekly entitlements. He submits that the employer has committed multiple offences under various sections of the Act, most notably, section 15 and section 109.1. The worker also claims the accident employer has committed offences under other legislation including the Criminal Code of Canada.

The worker requests that an administrative penalty be imposed on the accident employer to punish the employer for "illegally deducting WCB injury insurance monies from my wages knowing it was illegal and contravened section 15 of the WCB Act and Crimina

Panel Members

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

Recording Secretary, B. Kosc

L. Choy - Presiding Officer

Signed at Winnipeg this 18th day of January, 2011

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