The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing a decision made by Review Office of the Workers Compensation Board ("WCB") which determined that he was not entitled to a retirement annuity. A hearing was held on August 16, 2012 to consider the matter.

Issue

Whether or not the worker is entitled to an annuity.

Decision

That the worker is not entitled to an annuity.

Decision: Unanimous

Background

The worker has an accepted claim with the WCB for a work-related left knee injury that occurred on March 5, 1997.

File records show that the worker returned to work with the accident employer but ceased working for them in early 2004 as they were unable to provide him with modified employment that met his compensable restrictions. The worker was then paid vocational rehabilitation benefits and services by the WCB. File records indicate that July 14, 2005 was the worker's official release date from employment with the accident employer.

In August 2011, the worker contacted the WCB to enquire about his entitlement to a pension after age 65. In response, the WCB advised the worker that he was not entitled to a retirement annuity as information from the accident employer (Form BL18) dated May 6, 2003 indicated that at that time, the employer was making contributions to a pension plan on behalf of the worker. Reference was made to the sections of The Workers Compensation Act (the "Act") which outlined annuities.

The worker continued to communicate with the WCB stating that he was never in receipt of a letter regarding the decision on his right to an annuity, and submitted that the Act was applied incorrectly to his case.

In a letter dated November 25, 2011, the worker was advised that there would be no change to the annuity decision previously made on his claim and that there was no entitlement to an annuity contribution by the WCB. The letter stated: "Your employer's contributions to your pension plan did cease when your employment terminated, however the decision on the WCB's contribution to an annuity is fixed as soon as the worker has reached the qualifying period which occurs at 104 weeks of cumulative benefits. It is not adjusted from time to time as the employer's contribution changes or ceases. Section 42 of the Workers Compensation Act speaks to annuity contributions."

The worker appealed the above decision to Review Office. The worker's position was that he should be entitled to an annuity to replace the pension entitlement he lost as a result of being released by the employer for reasons related to his compensable accident.

On April 5, 2012, Review Office confirmed that the worker was not entitled to a retirement annuity. In making its decision, Review Office referred to Section 42 of the Act, specifically subsections 42(1), 42(2), 42(3), 42(4) and 42(5). It noted that the worker was originally considered to have met the qualifying period on May 30, 2003. The qualifying date later changed based on Appeal Commission Decision 35/04 dated March 10, 2004. Pursuant to the Appeal Commission decision, the worker was entitled to wage loss benefits from September 2001 to October 2002. This changed the date the worker met the qualifying period to July 10, 2002. At that time, the worker was working four hour days and was in receipt of partial wage loss benefits.

Review Office stated in its decision that in order to find in the worker's favour, it must conclude that entitlement to an annuity can be determined at a time other than the qualifying date. It noted that Section 42 of the Act does not specifically state whether the decision regarding a worker's entitlement to an annuity should be determined finally at a point in time or whether it should be reviewed and adjusted periodically. Review Office indicated that it considered the first option to be the correct one. As the worker was still working four hour days when he met the qualifying period on July 10, 2002, he was not entitled to an annuity. The employer confirmed that their monthly pension contribution on behalf of the worker was $27.00 multiplied by years of service and that this formula did not vary based on number of hours worked. On May 17, 2012, the worker appealed Review Office's decision to the Appeal Commission and a hearing was arranged.

Following the hearing and after discussion of the case, the appeal panel decided to write to the WCB to obtain information related to Section 42 of the Act. A response from the WCB dated

October 5, 2012 was later received and was provided to the worker for comment. On October 17, 2012, the panel met further to discuss the case and consider the worker's submission dated October 11, 2012.

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. As the worker’s claim was made in 1997, his benefits are assessed under the Act as it existed at that time (the “1997 Act”). Under subsection 4(2) of the 1997 Act, a worker who suffers a personal injury by accident is entitled to compensation for so long as the injury disables the worker.

Section 42 of the 1997 Act provides for a retirement annuity and reads as follows:

Definition of "qualifying period"

42(1) In this section, "qualifying period" means a period of 24 months.

Establishment of annuity for retirement

42(2) Subject to subsections (4) and (5), where wage loss benefits are paid to a worker for the qualifying period, the board shall invest on behalf of the worker an amount equal to 5% of future wage loss benefits payable to the worker under this Part, as the wage loss benefits are paid, and the amount with accrued interest and the worker's amount under subsection (3) shall be used to provide an annuity for the worker at retirement.

Worker may contribute to annuity

42(3) Subject to subsections (4) and (5), a worker may, in writing in a form acceptable to the board, within three months after the qualifying period, advise the board that he or she elects to contribute an amount of not more than 5% of future wage loss benefits payable to the worker, and the amount shall thereafter be deducted from the wage loss benefits paid to the worker and added to the amount under subsection (2).

Contribution where pension continues

42(4) Where contributions made by an employer to the pension plan of the employer for the benefit of a worker are less than the amount referred to under subsection (2), the amount invested by the board under subsection (2) shall be the difference between

(a) the contributions of the employer; and

(b) the amount referred to under subsection (2).

No annuity where pension contribution continues

42(5) This section does not apply to a worker where contributions of not less than the amount referred to under subsection (2) are made by the employer to the pension plan of the employer for the benefit of the worker.

Worker's Position:

The worker was self represented at the hearing. It was the worker's position that he ought to be entitled to a retirement annuity. At the hearing, the worker highlighted five points:

1. He never received a letter regarding an annuity prior to the entitlement date - Although the WCB told the worker he must have received a letter, the WCB file contains no such letter. The only correspondence on file regarding an annuity on the worker's behalf was between the WCB and the accident employer. Nothing was ever sent to the worker. The worker felt that he was being kept out of the loop regarding his entitlement to an annuity.

2. The accident employer refused to cooperate with WCB Review Office - By letter dated February 8, 2012, Review Office wrote to the accident employer asking for information regarding its pension plan. The employer never responded to the letter.

3. There was collusion between the accident employer and the WCB - The worker submitted that on four occasions, the accident employer attempted to terminate his employment. At one point, they did actually terminate the employment but the worker's job was reinstated through involvement with the Union. The worker was told by the accident employer that they were only obligated to accommodate him for a two year period as per their agreement with the WCB. The worker felt that there was collusion between the accident employer and the WCB and that there was never any intention to accommodate him beyond the 104 week mark.

4. What is the intent of an annuity - It was submitted that the annuity is there to provide workers with some sort of income once they reach age 65 and their wage loss benefits end. It is another name for a pension and the intent of the Act is to provide workers with a pension.

5. The 104 week entitlement date had been changed - the worker noted that although the original entitlement date had been established at May 30, 2003, this had later been rolled back to July 10, 2002, as a consequence of Appeal Commission decision 35/04.

Analysis:

The issue before the panel is whether or not the worker is entitled to an annuity. In order for the worker's appeal to succeed, the panel must find some authority in the Act or WCB policy which would entitle the worker to an annuity. Unfortunately, we were unable to find such authority.

This decision turns on the interpretation of the wording of section 42 of the 1997 Act. The facts are generally not in dispute. It would appear that as at the end of the worker's 24 month qualifying period (i.e. 104 weeks) the worker was in receipt of partial wage loss benefits and the employer was contributing more than 5% of the worker's wage loss benefits payable into a pension plan. This is the case regardless of whether one uses the date initially established at May 30, 2003 or the revised date of July 10, 2002. The worker continued to work for the employer until July 2005, and correspondingly, the employer continued to make contributions to a pension plan on the worker's behalf. When the employment ended in 2005, so did the employer contributions to the worker's pension plan. The worker's evidence at the hearing was that right after he was terminated, he withdrew the funds he had built up in his pension plan with the employer.

There is no question that section 42 provides for a retirement annuity for workers. The issue for the panel to decide is whether section 42 should be interpreted to:

(a) Provide a one-time determination regarding eligibility for a retirement annuity as at the 104 week mark; or

(b) Provide a retirement annuity for all workers who suffer wage loss beyond 104 weeks.

After much deliberation, the panel finds that the proper interpretation to place on section 42 is alternative (a); namely that there is only a single point in time (i.e. 104 weeks) at which to determine entitlement to a retirement annuity. In making our decision, we placed particular reliance on the WCB's October 5, 2012 response to our questions. We note:

In view of the foregoing, the panel finds that the proper interpretation of section 42 of the 1997 Act is that there is a one-time determination regarding eligibility for a retirement annuity which is made as at the 104 week mark. As the accident employer was making contributions on behalf of the worker which were greater than the amount referred to under subsection 42(2) of the 1997 Act, subsection 42(5) applies and provides that the worker is not entitled to an annuity under section 42.

With respect to the other concerns raised by the worker, the panel notes the following:

• The panel reviewed the WCB correspondence file and we agree with the worker that it would appear that he did not receive a letter from the WCB in May 2003 regarding his entitlement to an annuity. The panel does not feel, however, that this was due to an intentional scheme to keep information from the worker. We feel that this was simply because it was determined that section 42 did not apply to the worker and therefore he did not need to be informed of his option to contribute. In any event, we do not feel that the absence of a letter to the worker in May 2003 would change our decision in this matter.
• With respect to information from the employer, the panel feels that there is sufficient information on file to enable us to satisfy ourselves that the requisite contributions were being made to a pension plan on the worker's behalf as at the entitlement date of July 10, 2002 (and, for that matter, as at the entitlement date of May 30, 2003). A response to Review Office's February 8, 2012 letter is not required for us to render this decision.
• The evidence does not support a finding of any collusion between the accident employer and the WCB. The dates do not even correspond with this allegation as the worker's release from employment was in July 2005 and the 104 week mark of July 10, 2002 had long since passed. We see no correlation between the dates.

The panel therefore finds that the worker is not entitled to an annuity. The worker's appeal is dismissed.

Panel Members

L. Choy, Presiding Officer
A. Finkel, Commissioner
P. Walker, Commissioner

Recording Secretary, B. Kosc

L. Choy - Presiding Officer

Signed at Winnipeg this 27th day of November, 2012