The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing decisions made by the Workers Compensation Board ("WCB") concerning the effective date of his Special Additional Compensation benefits and the indexing of his post-accident deemed earning capacity. A file review was held on May 22, 2014 to consider the matter.

Issue

Whether or not the October 29, 1996 effective date for Special Additional Compensation benefits has been correctly established; and

Whether or not the worker's post-accident deemed earning capacity has been correctly indexed.

Decision

That the October 29, 1996 effective date for Special Additional Compensation benefits has been correctly established; and

That the worker's post-accident deemed earning capacity has been correctly indexed.

Decision: Unanimous

Background

The worker has an accepted claim with the WCB for injury to his right wrist suffered in a work-related accident on February 18, 1988.

As the worker's right wrist condition prevented him from returning to his pre-accident employment, a vocational rehabilitation plan was developed for the worker in 1992. The vocational goal was to retrain the worker to employment in the areas of NOC 1472, Parts Person/ Inventory Clerk. Due to non-compensable reasons, the worker did not complete the training program and he was deemed to have an earning capacity of $6.40 per hour effective July 18, 1993 (see Appeal Commission Decision No. 6/95 for further details).

On October 10, 1996, a WCB employment specialist noted to the claim file that the average salary increment was 2.3% for NOC 1472 and the earning capacity was subject to annual cost of living indexing. The worker was then referred to Long Term Wage Loss ("LTWL") and active vocational rehabilitation involvement discontinued.

Effective September 1, 1998, Special Additional Compensation ("SAC") was implemented using the established earning capacity of $240.00 per week.

In April 2013, the WCB began some preliminary inquiries into whether or not the worker would be entitled to a 2% supplemental SAC benefits after he reached age 65. After a series of investigations, the WCB advised the worker, by letter dated September 9, 2013, that at age 65 he would be entitled to the 2% SAC supplement. As a result of this determination, the method for calculating the worker's future wage loss benefits to age 65 was revised. An explanation for those changes was provided.

With respect to the 2% supplemental SAC benefits the worker would receive after his date of anticipated retirement, the WCB advised:

"I also ask that you keep in mind that your 2% SAC supplement cannot be estimated or confirmed to you at the present time; As you approach age 65 the process will begin to calculate the months you've received SAC benefits (retro to Sept 1998) and what your ongoing monthly 2% entitlement will be"

On October 30, 2013, the worker appealed the September 9, 2013 decision and stated: "I do not agree with the year WCB is paying my pension. Their (sic) paying me from 1998 till now and that is not fair."

On December 19, 2013, Review Office determined that the worker was entitled to SAC effective October 29, 1996. Review Office noted that the implementation of SAC is based on a worker's Maximum Earning Capacity Date. Under the WCB's SAC policy, this was defined as "date the worker has completed any vocational rehabilitation training provided (including training on the job, apprenticeship training and job search) and will be offered no significant additional employment-related services."

Review Office noted that on October 29, 1996, the worker was referred to LTWL as he was no longer actively involved in a vocational rehabilitation program. It was therefore concluded that the effective date of SAC should be October 29, 1996 as this was when the worker had achieved his Maximum Earning Capacity.

Review Office further noted in its decision that it had found errors in the calculation of the worker's deemed earning capacity. It noted that the Industrial Average Wage indexing factor was incorrectly used to increase the worker's earning capacity in 1996 when the Consumer Price Index was the applicable indexing factor for claims for accidents occurring before 1992. The two were different amounts.

Review Office also found that the deem amount of $240.00 per week used as the starting point in the calculation of the worker's SAC was incorrect. Review Office recalculated the worker's deem using the deem of $256.00 per week indexed to October 29, 1996. The NOC increment factor of 2.3% and applicable Consumer Price Index percentages increases were applied annually. It was determined that the worker's established earning capacity effective October 29, 1996 was $293.60 per week. Review Office provided the worker with calculations to support its decision. The file was then returned to primary adjudication to make adjustments to the worker's SAC.

On January 22, 2013, the worker appealed Review Office's decision to the Appeal Commission and a file review was held.

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.

For accidents that occurred before January 1, 1992, SAC benefits are payable to workers pursuant to former subsection 40(2) of the Act, which provided as follows:

Special additional compensation

40(2) 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 … increase the compensation allowed under subsection (1) in such amount as it considers fair and just, but the total compensation shall not exceed 75% of the average earnings of the worker.

The Act has since been amended and for accidents that occur after January 1, 1992, SAC awards are no longer granted.

WCB Policy 44.60.30, Special Additional Compensation (the “SAC Policy”) deals with administration of wage loss benefits and describes when SAC will be paid, for how long, and in what amount.

Section 3 of the SAC Policy addresses "Duration of Entitlement" and provides the general rule that SAC will continue until the worker's anticipated retirement date. Section 6 of the SAC Policy creates an exception to the general rule and provides for SAC Benefits after retirement in certain circumstances. These additional SAC benefits after retirement are referred to as the "2% supplemental SAC benefits" or are sometimes called the "2% retirement pension."

WCB Policy 44.80.80.20, Loss of Earning Capacity Reviews (the "Earnings Review Policy") describes how, and under what circumstances a worker's loss of earning capacity will be reviewed and adjusted.

Worker’s submission:

The worker was self-represented in the appeal. The Appeal of Claims Decision form submitted by the worker asked the panel to review everything regarding his pension, including when it should have started and where the money is supposed to go. The worker submitted that his pension should be started from day one and that "there is nothing in the Guidelines that says when my pension should start."

When the worker refers to his "pension." the panel understands him to be referring to the 2% supplemental SAC benefits. By letter dated September 9, 2013, the WCB advised the worker that when he reaches age 65, he will be entitled to the 2% supplemental SAC benefits and that the amount of this entitlement will be calculated based on the months he received SAC benefits, retroactive to September 1998. The worker disputed this date and on review, the Review Office changed the effective date to October 29, 1996. The panel understands the worker to be asking for a further review of this effective date to be used in the calculation of his 2% supplemental SAC benefits or "pension" which he will start to receive after he reaches age 65 in the year 2027.

Analysis:

In order to decide the worker’s appeal, the panel must interpret the Act and WCB Policy to determine whether it has been properly applied to the worker's situation. We find that there has been no error in applying the Act and WCB Policy.

With respect to establishment of the effective date for SAC benefits, section 6 of the SAC Policy provides as follows:

6. SAC Benefits after retirement
...

These additional benefits will be based on 2% of the monthly SAC being paid at the time of the retirement date. This amount will be multiplied by the number of years between the time that the WCB determines that the worker has reached maximal earning capacity and the time that the worker retired. This additional benefit will be paid for the life of the worker.

The amount of the 2% supplemental SAC benefit a worker will receive will be affected by the multiplier used. The multiplier is determined by the number of years between the time the worker has reached "maximal earning capacity" and the date of retirement. The maximal earning capacity date therefore becomes very important, and essentially this is the issue appealed by the worker.

The SAC Policy defines Maximal Earning Capacity Date as follows:

Maximal Earning Capacity Date is the later of:

(i) the date the worker has completed any vocational rehabilitation training provided (including any training on the job, apprenticeship training provided by the employer, and job search) and will be offered no significant additional employment-related services, and

(ii) the date the injury has stabilized to the point where a permanent partial disability has been established.

In the worker's case, the WCB file material shows that on October 29, 1996, the worker's vocational rehabilitation file was closed and a new file in long term wage loss was opened for him. On that date, a letter was sent to the worker informing him of his deemed earning capacity and advising him that further job search assistance and vocational rehabilitation services would not be provided at that time. Medically, the worker's wrist injury had long since stabilized. On a balance of probabilities, the panel finds that October 29, 1996 was the worker's Maximal Earning Capacity Date and is the proper effective date for calculating the number of years to be used in establishing the worker's 2% supplemental SAC benefits.

With respect to the indexing of the worker's post-accident deemed earning capacity, the Earnings Review Policy provides as follows:

6. Estimating the new loss of earning capacity for the next year's benefits

The factors that determine the new loss of earning capacity are the worker's pre-accident earnings and the worker's post-accident earning capacity. The worker's pre-accident average earnings will be adjusted according to the indexing provisions of the Act. The worker's post-accident earning capacity may be adjusted in any of the following ways:

...

• If the WCB believes that the worker's earning capacity will remain stable until the next review, it will increase the earning capacity by the indexing factor used to index pre-accident average earnings ... For workers injured prior to January 1, 1992, this will be an amount equivalent to the annual change in the Consumer Price Index.

In its decision, the Review Office showed the calculations it used to recalculate the worker's deemed earning capacity. They were as follows:

1994

$6.40 x 2.3% x 2.76679% = $6.73 per hour

1995

$6.73 x. 2.3% x 1.07692% = $6.95 per hour

1996

$6.95 x 2.3% x 3.19634% = $7.34 per hour

Basically, the formula used by Review Office was:

(worker's deemed earning capacity for that year) x (NOC 1472 increment factor of 2.3%) x (annual change in the Consumer Price Index)

The panel finds that this was the correct formula to apply and that the calculations were properly performed.

The NOC 1472 increment factor of 2.3% was identified in an October 10, 1996 memo by a WCB employment specialist and the panel accepts this information as the best available evidence as to the increment factor applicable to the NOC 1472 (parts order desk clerk). With respect to the indexing factor used, as the worker was injured prior to January 1, 1992, the annual change in the Consumer Price Index was the proper figure to apply. We therefore find that the worker's post-accident deemed earning capacity was correctly indexed.

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 15th day of July, 2014