The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker and the accident employer are appealing decisions made by the Workers Compensation Board ("WCB") with respect to the worker's compensation benefits. A hearing was held on October 7, 2013 to consider these matters.

Issue

Worker Issues: Whether or not the correct average earnings were used in the calculation of the worker's permanent partial disability awards; and

Whether or not there has been a contravention of section 15 of The Workers Compensation Act for which an offense and administrative penalty under section 16 can be levied.

Employer issue: Whether or not the worker is entitled to wage loss benefits while receiving a retirement pension from the accident employer.

Decision

Worker Issues: That the correct average earnings were used in the calculation of the worker's permanent partial disability awards; and

That there has not been a contravention of section 15 of The Workers Compensation Act for which an offense and administrative penalty under section 16 can be levied.

Employer issue: That the worker is entitled to wage loss benefits while receiving a retirement pension from the accident employer.

Decision: Unanimous

Background

On February 7, 1986, the worker was operating a grader when he was struck by a train at a railway crossing. The worker suffered multiple injuries as a result which included head trauma, fractured ribs and a low back injury. The most serious injury was the head trauma and in 1994, the worker was diagnosed as having suffered Organic Personality Disorder and was deemed incapable of returning to the workforce.

On January 18, 2011, this claim was considered by the Appeal Commission with respect to a number of issues brought forward by the worker. For complete details, please refer to Appeal Commission Decision No. 03/11.

Worker's Issues:

The worker is currently appealing two decisions that were made by the WCB. The first issue relates to whether or not the correct average earnings were used in the calculation of his permanent partial disability ("PPD") awards.

With respect to the above issue, file records showed that the WCB awarded the worker PPD awards with respect to his compensable accident. In 1995, the worker received a 1% PPD award for photophobia with the effective date being the date of his accident. The award was based on the average earnings of $31,000, which was the maximum amount for accidents occurring in 1986. In 1997, the worker was awarded a 17% PPD award for his back condition with the effective date of the award being the date of the accident. This award was also calculated based on average earnings of $31,000.

In January 2012, the worker asked Review Office to determine whether his PPD awards for photophobia and his back condition were calculated using the correct average earnings. The worker's position to Review Office was: "I am appealing the fact that the payment specialists used the 1986 maximum amount of $31,000 as my average earnings instead of using the legislative 1991 max of $38,000 that was indexed in 1994."

On March 8, 2012, Review Office determined that the correct average earnings were used in the calculation of the worker's PPD awards. Review Office noted that in previous Review Office decisions, it was confirmed that the worker's average earnings as of the date of his accident were $31,000. This fact was also confirmed by Appeal Commission Decision No. 03/11. Review Office stated that the date a PPD is calculated was not determinative of the amount of the average earnings used. The average earnings used are those in effect as of the effective date of the PPD. It followed that the correct average earnings were used in the calculation of the PPDs in question.

The second issue being appealed by the worker is whether there has been a contravention of section 15 of The Workers Compensation Act (the "Act") for which an offence and administrative penalty under section 16 can be levied. This issue was brought forward by the worker during the 2011 appeal panel hearing. At that time, the appeal panel advised the worker that it did not have the jurisdiction to consider this issue as no initial decision had been made by the other WCB adjudicative levels (primary adjudication or Review Office). The appeal panel did state in Appeal Commission Decision No. 03/11 that:

The panel notes that even if we did have jurisdiction, we would decline to grant the worker's request as we feel that sections 15 and 109.1 have no application to this situation. Section 15 is meant to apply to situations where employers take deductions from the wages of active employed workers, and essentially make the workers pay for their own WCB premiums. Section 15 is meant to address improper deductions which are taken in respect of premiums, well prior to any workplace injury and has no application to the worker's situation.

With respect to section 109.1, the worker alleges that both the accident employer and WCB staff are making false and misleading statements to suppress his claim and WCB entitlements. We see no evidence of this and further, it would appear that due to the oversights, the worker in fact received more than he was entitled to under the Act and WCB policies. The panel in its extensive review of the file and submissions does not view the worker as having been wrongfully deprived of any of his compensation entitlements under the Act.

The worker asked Review Office to determine whether section 15 of the Act had been breached and whether an administrative penalty under section 16 should be levied in respect of that breach. On November 1, 2011, Review Office wrote the worker and stated:

Your argument in respect of section 15 is that the [employer's] deduction of your permanent partial disability awards from your wages contravenes it. The Review Office's finding (confirmed by the Appeal Commission's January 18, 2011 decision no. 03/11, issue 2) that the deductions in respect of your permanent partial disability awards were in compliance with the Act means there was no breach of section 15. In this regard, note that section 1 begins with, "Except as provided in this Act… ." The aforementioned decision of the Appeal Commission detailed what sections of the Act allow for the deductions made by the [employer].

While it is true that a specific decision has not been made regarding an administrative penalty under section 16, it has application only when there is a contravention of section 15. Since both the Review Office and the Appeal Commission have determined that there were no improper deductions - so no breach of section 15 - it follows that an administrative penalty under section 16 cannot be levied."

In 2012, the worker disagreed with the decisions made by Review Office and an appeal was filed with the Appeal Commission.

Employer's issue:

In 2006, the worker asked the WCB to clarify what impact it would have on his claim should he choose to retire from employment with the accident employer. On February 22, 2006, the WCB provided the worker with the following information:

…I can assure that the WCB of Manitoba would no longer pay you wage loss benefits should you voluntarily retire from your employment with the [employer].

The rationale for this decision is that your financial loss would be considered to be the result of a voluntary election to remove yourself from the labor force rather than a consequence of your compensable injury(s). Given this, it follows that you would no longer be eligible for temporary disability payments or rehabilitation payments.

On March 22, 2007, the WCB's Review Office considered a number of issues brought forward by the worker with respect to his WCB claim. One of the issues considered by Review Office was as stated: "Whether or not the worker would be entitled to a wage loss benefit to age 65 if he retired prior to then."

Review Office determined that the worker would be entitled to a wage loss benefit to age 65 if he retired prior to then. Review Office referred to WCB policy and legislation to support its opinion that the worker could receive a retirement pension and in doing so would not affect his entitlement to a wage loss benefit given that the worker was considered unemployable by reason of his compensable injuries. Review Office indicated that everything being equal, his wage loss benefit would end when he reached 65 years of age.

On March 8, 2013, the employer appealed Review Office's decision of March 22, 2007 pertaining to the worker's entitlement to wage loss benefits while receiving a retirement pension. The employer commented that the decision made by Review Office did not reflect the spirit and intent of WCB legislation. On September 19, 2013, the employer provided the Appeal Commission with copies of documents that he intended to reference at the hearing. A hearing to consider the worker's appeal and the employer's appeal was held at the Appeal Commission on October 7, 2013.

Reasons

Worker Issue 1: Whether or not the correct average earnings were used in the calculation of the worker's permanent partial disability awards.

Analysis

The first issue concerns whether or not the correct average earnings were used in the calculation of the worker's permanent partial disability awards. The figure the WCB used as the worker's average earnings was $31,000. This amount was the legislated maximum amount under the Act in 1986, which is when the accident occurred. The worker's position is that the amount of $38,000 should have been used, as he submits that this was the legislated maximum amount in place at the time his PPD award was calculated in 1991. Overall, the worker's position was that the correct average earnings figure to be used should be an adjusted figure based on the legislated maximum amount in place at the time any particular PPD award was calculated, and increased by one thousand dollars on a yearly basis. The example given by the worker at the hearing was that when he received a PPD award in 1988, the maximum average earnings should have been $33,000, which would be the base amount of $31,000 for 1986, then adjusted upwards by $2,000 for 1987 and 1988.

WCB Policy 44.40.20, Maximum Compensation - Temporary Partial Disability, (the "Policy") provides:

For the purposes of calculation under The Workers Compensation Act, the "average earnings" to be used in the calculation of compensation entitlement for temporary partial disability and loss of earning capacity at the time of the accident will be governed by the maximum annual earnings established under section 46.

Section 46 of the Act creates a maximum for annual earnings which are payable under the Act. The predecessor provisions to section 46 which were in place at the time of the worker's accident in 1986 were sections 37 and 37.1. Section 37 established that average earnings were not to exceed a maximum average earnings amount and section 37.1 set out a method for yearly review and establishment of the maximum average earnings amount.

The Administrative Guidelines to the Policy further provide:

The WCB does not collect premiums from employers or insure workers' earnings above the maximum annual earnings established under Section 46 of the Act

The following compensation benefits are subject to the maximum annual earnings at the time of the accident or at the onset of disability, whichever is applicable:

• Temporary total disability (TTD) compensation …
• A permanent partial disability (PPD) award ….

The question the panel must determine essentially concerns whether the effective date for the maximum average earnings should be the date of accident, or the date the PPD award is calculated. The panel finds that the Administrative Guidelines to the Policy are quite clear that compensation benefits are subject to the maximum annual earnings in place at the time of the accident or onset of disability. For the worker, this was on February 7, 1986 when the accident occurred. The maximum average earnings amount in 1986 was $31,000. We therefore find that the correct average earnings were used in the calculation of the worker's PPD awards. The worker's appeal on this issue is dismissed.

Worker Issue 2: Whether or not there has been a contravention of section 15 of The Worker's Compensation Act for which an offense and administrative penalty under section 16 can be levied.

The second issue is essentially the same as issue 7 in Appeal Commission Decision 03/11. In that decision, the panel declined to address the issue on the grounds that we lacked jurisdiction because there had been no initial decision by the WCB. The worker has since requested the WCB to fully consider the issue and on November 11, 2011, a Review Office decision was rendered. We now have jurisdiction to consider the worker's appeal of this issue.

The panel understands that the worker feels very strongly about this issue, but the remedy he seeks is simply not available. Sections 15 and 16 have no application to the worker's circumstances. Section 15 is meant to apply to situations where employers take deductions from the wages of active employed workers, and essentially make the workers pay for their own WCB premiums. Section 15 is meant to address improper deductions which are taken in respect of premiums, well prior to any workplace injury and has no application to the worker's situation.

As the panel finds that there has not been a contravention of section 15, there is no basis for finding that an offence has occurred or for levying an administrative penalty under section 16.

The worker's appeal on this issue is dismissed.

Employer issue: Whether or not the worker is entitled to wage loss benefits while receiving a retirement pension from the accident employer.

The employer submitted that the worker voluntarily retired from his position with the employer effective December 20, 2008 and in so doing, he reduced his earning capacity to zero. In the employer's opinion, it was obvious that the worker had taken that action solely to negate the deduction being made by the employer from his pay. By so doing, the worker then received his wage loss benefits directly from the WCB, rather than through the employer as agent, and effectively put a stop to the employer's deduction of the worker's permanent impairment awards from his bi-weekly earnings. The panel was asked to discontinue the provision of wage loss to the worker as it was submitted that there ought to be no wage loss entitlement where the worker voluntarily reduces his earning capacity to zero.

In the panel's opinion, the fact that the worker elected to start drawing on his pension benefits did not change the reality that his earning capacity was permanently and totally impaired by the effects of his workplace accident. In 1994, a Medical Review Panel determined that the worker would not be able to return to the workforce at that time or in the future. The panel agrees with the Review Office's view that all things being equal, the worker's entitlement to wage loss benefits will only end when he reaches 65 years of age.

The panel does not accept the employer's argument as being applicable to the facts at hand. This is not a situation where a worker has the capacity to earn income then voluntarily chooses to disengage from the workplace. In this case, there was no material change to the worker's earning capacity. He remained unemployable and this loss of earning capacity was established well before the time when the worker elected to draw a retirement pension.

The panel therefore finds that the worker is entitled to wage loss benefits while receiving a retirement pension from the accident employer. The employer's appeal is dismissed.

Panel Members

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

Recording Secretary, B. Kosc

L. Choy - Presiding Officer

Signed at Winnipeg this 3rd day of December, 2013