The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing the decision made by the Workers Compensation Board ("WCB") that he was not entitled to further wage loss benefits in relation to his compensable accident. A hearing was held on April 10, 2014 to consider the matter.

Issue

Whether or not the worker is entitled to further wage loss benefits.

Decision

That the worker is not entitled to further wage loss benefits.

Decision: Unanimous

Background

The worker has an accepted claim with the WCB for thoracic and lumbar injuries related to his job duties as an equipment operator occurring on February 16, 2010.

On February 14 and September 17, 2012, the WCB determined that the worker's ongoing symptoms were no longer related to his workplace accident and that he was not entitled to benefits beyond February 17, 2012. The worker appealed the decision to the Appeal Commission and the appeal panel determined that the worker was entitled to benefits due to his sacrum and sacroiliac joints beyond February 17, 2012. For complete details of the panel's decision, please refer to Appeal Commission Decision No. 25/13 dated February 21, 2013.

The worker's file was then returned to the WCB to determine his entitlement to benefits beyond February 17, 2012. Following receipt of medical information and contact with the worker and his employer, primary adjudication determined on May 8, 2013 that the worker was entitled to wage loss benefits and medical treatment up to and including April 9, 2013. The WCB also asked the worker to provide financial statements regarding his self-employment from 2008 to 2012 to determine his benefit rate and to determine whether he suffered a loss of earnings from his self-employment as a result of his 2010 work injury.

The WCB obtained income tax information for the period 2008 to 2012. On June 26, 2013, the WCB determined that the worker suffered no loss of earning capacity due to his work injury as of April 9, 2013. The adjudicator stated:

"When we spoke March 8, 2013 you advised that you have suffered a loss of earnings from your self-employment business since the date of injury. In order to determine any loss related to your self-employment we have collected and reviewed your income tax information from 2008-2012...The analysis of your self-employment earnings shows some losses in 2010 but we recognize the losses claimed were due to your decision to invest your revenues and acquire assets to grow your business. The information clearly shows your gross business income has increased substantially since 2010....We have determined your net income from 2010-2012 represents your choice to re-invest in your business and not your inability to earn income due to your February 2010 work injury. Also, when we look at the growth of your business up to and including 2012 where your gross income doubled it is clear that you are no longer suffering a loss of earnings related to your work injury, therefore, you are no longer eligible for wage loss benefits from the WCB."

On August 26, 2013, the worker filed an appeal with Review Office as he disagreed with the case manager's decision of June 26, 2013.

On October 31, 2013, Review Office determined that the worker was entitled to medical aid benefits after April 9, 2013 based on the treating chiropractor's report in relation to the worker's sacrum/sacroiliac joint. Review Office also determined that the worker was not entitled to wage loss benefits based on its review of the worker's income tax and statement information. Review Office noted that the worker's gross business earnings in 2009 were $144,397.51. They had increased by 165% in 2010, increased another 204% in 2011, and decreased by 11% in 2012 to $436,054.84. Although the net business income reported to CRA from 2010 to 2012 demonstrated either a loss or minimal net income, Review Office found this did not reflect the worker's actual earning capacity. This was because net business income was a function of decisions such as whether to purchase capital assets and how much capital cost allowance to claim for income tax purposes. By April 10, 2013, Review Office felt the worker had the skill set required to earn well in excess of the total of his T4 and his business earnings at the time of his accident. He was therefore not entitled to further wage loss benefits. On December 1, 2013, the worker appealed Review Office's decision that he was not entitled to wage loss benefits and an oral hearing was held on April 10, 2014.

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.

The worker has an accepted claim. He is seeking wage loss beyond April 9, 2013. Under subsection 4(1) of the Act, where a worker suffers personal injury by accident arising out of and in the course of employment, compensation shall be paid to the worker by the WCB.

Subsection 39(1) of the Act provides that wage loss benefits will be paid: “…where an injury to a worker results in a loss of earning capacity…” Subsection 39(2) of the Act provides that the WCB will pay wage loss benefits until such a time as the worker’s loss of earning capacity ends, or the worker attains the age of 65 years.

Worker's Position

The worker was self-represented. The worker made a brief submission and answered questions from the panel. The worker advised that after his last appeal, the WCB paid him wage loss benefits up to April 9, 2013 and has not paid him since. He said the WCB virtually cut him off. He indicated that doctors say he is not capable of modified duties. He said that he cannot operate a truck or heavy equipment.

The worker said that he attended the chiropractor selected by the WCB but that WCB has not looked at his recommendations. He has returned to his chiropractor for treatment.

Regarding the business, the worker said that before the injury he had two trucks. The trucks did haulage work for a company associated with his employer and for other companies. After the injury, he purchased two more trucks and his son became involved in the business and did much of the servicing. He said that around July or August 2012, his son decided to leave and as a result he sold two of the trucks. He said the business was not viable when the trucks had to go to an external shop for servicing. When his son was working they did 30 to 50% of the service, now 80 to 85% is done by an external shop. Since 2012, a driver has been helping him by doing servicing on weekends. He said he had three trucks going in 2013. At the time of the hearing, he was only running two trucks. He advised that "And since I can't look after them properly myself, I'm thinking probably by the end of this year I'm going to get rid of my other two trucks too."

In answer to a question about the increase in gross business income in 2012, the worker attributed the increase to the addition of extra equipment and his son's involvement. He said his son has subsequently left the business. He advised that at the time of the hearing his son was 21 years old.

The worker said that he used to make the rounds talking to different businesses. Now that his back is deteriorating he is not mobile and cannot come to the city often. He said that his doctor has told him to keep away from trucks.

The worker said that he has 32 to 35 years experience in the trucking industry. In answer to a question, he said that he and his business have good reputations.

Regarding the information the worker has provided to the WCB on his business, he said "I don't understand where they're getting their numbers from. Basically the numbers that I have submitted are actual numbers. Depreciation on the units are very minimal. What they're saying, like how they come up with their numbers, I don't understand it."

The worker said that he does not do bookkeeping or payroll calculations but uses a bookkeeper to perform these tasks.

In a letter attached to the worker's Notice of Appeal, the worker questioned the WCB's use of his business income in determining his entitlement to benefits. He wrote "My question is why are they focusing on my investments, which I have had prior to my accident, and not the matter at hand, my back."

Employer's Position

The employer was represented by its General Manager. He indicated that he has focused on wage loss benefits. He noted the worker's "transition from being an operator with us during one off season, his employment with us was around approximately six months in our slow season, and is now running a successful growing business." He said that the information on file demonstrates that the worker was able to transition to running a business quite successfully. He said that while growing the company, the salary was kept low because the worker was investing capital in the company.

He noted that the worker advised the WCB that he was able to run his business over his cell phone and commented that the employer had a no cell phone policy when the worker was in their employ.

Analysis

The issue before the panel is whether the worker is entitled to further wage loss benefits. The worker was paid to April 9, 2013. For the worker's appeal to be successful, the panel must find that the worker has a loss of earning capacity due to his workplace injury. In other words, the panel must find that the worker is unable to work as a result of the accident or to earn some or all of his pre-accident income after April 9, 2013. The panel was not able to make this finding.

The worker filed a claim for a low back injury in 2010. In addition to his work with the employer, the worker operated a trucking business. Concurrent income from this business was not included by the WCB in calculating the worker's loss of earning capacity as this income was not negatively impacted. Subsequently it was determined that the worker was able to return to work subject to restrictions. Unfortunately the employer was not able to provide the worker with an appropriate position. However, while off work the worker was able to expand his trucking business. The panel finds that it is appropriate to consider the worker's efforts in expanding his business, including the income generated, in determining his employability and loss of earning capacity.

The financial records for the worker's business demonstrate that in 2010, the year of the workplace injury, the business had gross earnings of approximately $239,000.00. In 2011, the year following the workplace injury when the worker was on full wage loss benefits, the business had gross earnings of approximately $489,000.00. The worker attributed the increase in the gross earnings to the purchase of another vehicle and hiring another driver. At the hearing, he said that the addition of his son as a partner also impacted the gross earnings. With respect to his personal involvement with the business, he said that it did not change; he did not perform more work for the business than he did before the injury.

From the panel's perspective, the above information demonstrates that the worker is able to operate and increase his business. He also has much to offer a potential employer: significant knowledge of the trucking and gravel hauling business garnered over more than 30 years in the industry, including the ability to manage a trucking business and develop business contacts and clients, a good reputation and a personable demeanor. The panel finds that the worker has the abilities to find employment beyond the physical work as a truck driver or heavy equipment operator.

Regarding his loss of earning capacity, the panel finds that the worker did not sustain a loss of earning capacity. In reviewing the financial records of the worker's business, it is evident that the worker's business incurred a significant increase in gross business income following his injury. The panel finds that the increase was due primarily to the efforts by the worker in expanding the number of vehicles and his successful marketing of the services of the business. The worker told the panel that he found work for the vehicles "Basically from contacts that I knew, a few phone calls." The panel is not able to attach weight to the worker's evidence that he did not expend greater effort on running his business in 2011 as compared to 2010. By this time he was running 3 to 4 vehicles and finding work for the vehicles, as evidenced by the dramatic increase in gross income after 2010.

The panel also attaches no weight to the worker's comments that participation by his son was a key factor in the growth of his business. The panel notes that in 2011 the worker's son was approximately 18 years old and had a full-time job away from the business. The worker confirmed that his son never worked full time 40 hours per week for the business.

A review of the business income of the worker's company shows that in 2011 its gross business income was approximately $489,000.00 When adjusted using the net business income formula under WCB Average Earnings Policy, 44.80.10.10, Schedule "A", the adjusted net earnings for WCB benefit entitlement purposes are approximately $52,000.00 which is significantly higher than the worker's pre-accident earnings. As to the worker's assertions that he is being required to wind down the business, the panel finds that these are business and self-limiting decisions by the worker; the medical evidence does not disclose changes in the worker's condition that would render him unable to operate his business as in previous years as a manager and marketer, or unable to operate in management or business development positions with another employer.

The worker's appeal is dismissed.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
P. Walker, Commissioner

Recording Secretary, B. Ko

A. Scramstad - Presiding Officer

Signed at Winnipeg this 2nd day of May, 2014