Decision #109/16 - Type: Workers Compensation
Preamble
The worker is appealing the decision made by the Workers Compensation Board ("WCB") regarding the calculation of his average earnings and benefit rate. A file review was held on June 8, 2016 to consider the worker's appeal.
Issue
Whether or not the worker's average earnings and benefit rate have been correctly calculated.
Decision
That the worker's average earnings and benefit rate have been correctly calculated.
Decision: Unanimous
Background
The worker has an accepted claim with the WCB for a left wrist injury that occurred on March 25, 2013 during the course of his employment as a healthcare aide.
On October 19, 2015, Compensation Services wrote the worker advising that a review of his benefit rate had been completed on September 22, 2015. The letter stated:
"Your new benefit rate has been decreased to $176.84 net per week starting June 18, 2013. This was amended from a previous decision entered on February 27, 2015, where your benefit rate was decreased to $137.34 net per week.
The following information was reviewed at the time of the initial average earnings review, which was completed in 2014:
Regular earnings = 27.5 hours x $21.40/hr = $588.50 per week (obtained from the Worker's Incident Report)
Regular earnings = $1245.70 bi-weekly ÷ 2 = $622.85 per week (obtained from the Employer's Incident Report)
A review of two 2 pay stubs on file, was completed:
Jan. 25, 2013 = $755.65 gross bi-weekly ÷ 2 = $377.83 per week
Mar. 15, 2013 = $1245.70 bi-weekly ÷ 2 = $625.74 per week
Following review of this worker's income tax, it appears that the paystubs provided were not bi-weekly earnings, but rather from the period Jan. 1 - Mar. 15, 2013.
On September 3, 2015, we requested your income tax information from CRA following confirmation of your receipt of a Notice of Re-Assessment.
Following a review of the amended income tax information, the following relevant information was obtained:
T4 earnings in 2012 with employer… = $4,778.00
T4 earnings in 2013 with employer… = $4,411.96
Period of employment earnings Apr. 16, 2012 - Mar. 25, 2013 = $9,189.96 ÷ 49.14 weeks = $187.02 per week
Effective June 18, 2013, average earnings will be established using a period of employment earnings of $187.02 per week as this best reflects your loss of earning capacity prior to the date of injury as they represent all actual earnings from start date to date of injury.
On December 14, 2015, the Worker Advisor Office wrote Review Office requesting a reversal of the October 19, 2015 decision to retroactively establish the worker's weekly benefit rate (now $187.02 effective June 18, 2013) based upon gross income earned from employment during the period April 16, 2012 through to March 25, 2013. The worker advisor stated:
"…it is our position that utilizing this particular period of earnings to calculate the worker's benefit rating does not properly compensate him for his loss of earnings. Rather, as was done initially, we submit that projecting pre-accident earnings forward (i.e. probable yearly earning capacity) is the proper formula to use in [the worker's] case as it best represents his loss of earnings at the time of his March 26, 2013 workplace accident.
If Review Office concurs with using the probable yearly earning capacity formula, we assert that the worker's current weekly benefit rate (established as $187.02 effective June 18, 2013) is incorrect, and he is therefore owed a retroactive adjustment."
In a decision dated February 4, 2016, Review Office referred to specific file information from a WCB payment assessor dated April 2015 to support its position that the worker's average earnings effective June 18, 2013 had been correctly calculated at $187.02 per week and was in accordance with The Workers Compensation Act (the "Act") and Board policy 44.80.10.10, Average Earnings. Review Office also determined that the worker's weekly wage loss benefit rate had been correctly calculated at $176.84 per week when applying the legislated probable deductions and applicable tax credits.
The Worker Advisor Office appealed Review Office's decision to the Appeal Commission and a file review was arranged.
Reasons
Applicable Legislation and Policy
The Appeal Commission and its panels are bound by The Workers Compensation Act (the “Act”), regulations and policies of the WCB's Board of Directors.
The worker is appealing the calculation of his average earnings used in setting his wage loss benefits.
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.
Section 45 of the Act deals with the calculation of average earnings. Subsection 45(1) of the Act provides:
Calculation of Average earnings
45(1) The board shall calculate a worker’s average earnings before the accident on such income from employment and employment insurance benefits, and over such period of time, as the board considers fair and just, but the amount of average earnings shall not exceed the maximum annual earnings established under section 46.
WCB Policy 44.80.10.10, Average Earnings (the “Average Earnings Policy”) addresses how the WCB initially establishes average earnings. The wage loss benefits which are paid to injured workers are based on an average earnings figure. The Average Earnings Policy sets out a number of different methods which may be used to calculate a worker’s average earnings, depending on the circumstances and states that: "The method used will always be the one that best reflects the worker’s actual loss of earnings."
The formulas which may be used to establish a worker's average earnings are detailed in the Average Earnings Policy. These formulas incorporate either regular earnings at the time of the accident, average yearly earnings or probable yearly earning capacity.
Worker's Submission
The worker was represented by a worker advisor who provided a written submission for consideration by the panel. The submission provided, in part, that:
At the outset, we wish to express that as far as the worker's current wage loss benefit rate (set at $176.84 net per week effective June 18, 2013) is concerned, our position is that if the panel determines that the worker's average earnings have not been properly calculated, it follows that his current benefit rate is incorrect and will need to be adjusted.
If however the panel determines that the period of earnings used to calculate the current benefit rate best represents the worker's loss of earnings at the time of his workplace accident, we take no specific position on this issue other than to say that this wage rate would be effective on June 25, 2013. This is because the average earnings policy states that an adjustment resulting in a decrease in a worker's average earnings will take effect at 13 weeks. By our account 13 week from the accident date (March 25, 2013) is June 25, 2013...
We concur with the simplified job description provided by the Review Office. It is also true that the employer's level of care was reviewed periodically and adjusted based on his personal needs. An example of such an adjustment was made on March 15, 2013 as evidenced by the amended care plan completed by the employer's case coordinator.
Where we disagree with the Review Office is the comment about the employer's level of care fluctuating. To our understanding, the word fluctuate means an irregular change, both up and down. In the employer's case, his health seemingly deteriorated to a point that, as of the beginning of 2013, he required an increased level of care (as evidenced by the worker's increased earnings in 2013) which was further increased on March 15, 2013 for the same reasons. Based on this, we submit that the employer's required level of care did not fluctuate, but simply increased as time passed and his health worsened.
Furthermore, while the file does not contain specific medical information about the employer's condition, it is noted within the worker's accident report that the employer was a paraplegic, as well within the file's correspondence section that the employer had [medical condition]…this condition is a terminal disease that does not have an effective cure or treatment. Considering this described prognosis, we submit it is reasonable to conclude that the employer's required level of care would not have decreased following the worker's accident.
In regards to the comment about the employer's passing, we submit this should have no bearing on the issues before the panel. Regardless of the formula used to calculate a worker's wage loss benefit rate, each one is based on remuneration earned prior to the accident date…
On a final note, we attach for the panel's consideration Appeal Commission Public Decision No. 54/2015…
As can be seen from the attached decision, despite the worker in that case having T4 earnings from the previous calendar year…the panel elected to use the probable earnings formula based upon 3 weeks of earnings in the period immediately prior to the accident.
We believe this decision supports our request to use the worker's earnings in the 2-week period immediately prior to his accident projected forward. While 2 weeks is also a short period of time, we submit that because the employer suffered from a condition which is said to be incurable and, is essentially untreatable, it is clear that his requirement for personal care was not going to decrease. Moreover, the employer's March 15, 2013 personal care plan also supports that, but for the workplace accident, [worker] would likely have continued working a consistent amount of hours…and therefore earned wages comparable to that earned between March 15 and 25, 2013.
If the panel does not concur with us on this point, as expressed within our December 14, 2015 letter, we then ask that it consider using the worker's 2013 calendar earnings averaged over the amount of weeks that encompass that time period.
Employer Position
The accident employer has passed away. He and his executrix provided information to the WCB.
Analysis
The issue before the panel is whether or not the worker's average earnings have been correctly calculated. The Average Earnings Policy directs that the method used to establish a worker's average earnings will be the one that best reflects the worker’s actual loss of earnings. Accordingly, in order for the worker's appeal to succeed, the panel must find that the method used by the WCB to establish the worker's average earnings does not best reflect the worker's actual loss of earnings and should be replaced by a difference method. We are not able to make that finding.
The panel notes that the worker's average earnings have been calculated on the basis of the worker's earnings for the 12 month period immediately before the accident, April 16, 2012 to March 25, 2013. This formula is mandated in the Average Earnings Policy which provides that "To determine a worker's true loss of earnings, the WCB will generally use documentable employment data from any consecutive 12 month period during the one or two years before the compensable accident." The panel finds that this was the appropriate period and that the earnings fairly represent the worker's average earnings.
Under the Average Earnings Policy, average earnings are generally based on past earnings information as was done in this case. The panel notes there are some exceptions to the use of past earnings information. These are set out in subsection 45(3) and (4) of the Act which deal with apprentices and young workers.
Based on the submissions the panel considered the various options provided under Schedule "D" of the Average Earnings Policy which deals with probable yearly earning capacity. The policy provides examples of when it is appropriate to use this approach:
the first example is for cases where the worker does not have a history of prior employment. The panel finds that the worker does not fall into this category, as he has a 2 year history of providing care to the employer.
the second example applies to cases where the employment circumstances at the time of the accident are significantly different from the past employment circumstances (eg. experienced a career change or occupational change or some other change in circumstances that is likely to affect future earnings.) The panel finds that this exception does not apply to the worker's case. The panel finds that the worker was working for the same employer, performing the same work but with increased hours. The increased hours did not amount to a career or occupational change.
the third example is an apprentice or youthful worker. The worker is not in this category.
the fourth example is a probationary employee. The worker is not in this category.
The panel has considered the worker's submission that his average earnings should be based on the worker's earnings in the 2-week period immediately prior to his accident or alternatively, that his average earnings be based on his 2013 calendar year earnings averaged over the amount of weeks that encompass that time period. The panel finds that neither of these methods best represents the worker's actual loss of earning capacity.
While the panel acknowledges that the worker's earnings increased, particularly in the weeks before the accident, the panel is not able to find that this increase was of a permanent or long term nature given the nature of the employer's health issues.
The worker's appeal is dismissed.
Panel Members
A. Scramstad, Presiding OfficerA. Finkel, Commissioner
P. Walker, Commissioner
Recording Secretary, B. Kosc
A. Scramstad - Presiding Officer
Signed at Winnipeg this 20th day of July, 2016