Decision #108/19 - Type: Workers Compensation
Preamble
The worker is appealing the decision made by the Workers Compensation Board ("WCB") that his average earnings have been correctly calculated. A hearing was held on February 5, 2019 to consider the worker's appeal.
Issue
Whether or not the worker's average earnings have been correctly calculated.
Decision
The worker's average earnings have not been correctly calculated.
Background
The worker reported to the WCB on February 2, 2017, that he injured his left elbow and shoulder in an incident at work on November 8, 2016. He described the incident as:
I was cutting trees. It was raining at the time. I had the chain saw over my left shoulder and as I was walking into the bush I slipped on a log. I landed on my left elbow with the chain saw under my arm.
I felt pain in my elbow and my shoulder at the time. The pain has been about the same since November but I cannot lift my arm now. I have been avoiding using my left arm.
The employer submitted an Employer's Accident Report to the WCB on February 9, 2017. The workplace accident date was revised to November 15, 2016 as it was noted by the employer that the worker's contract did not start until November 10, 2016 and ended on December 13, 2016.
On April 21, 2017, the worker was advised by the WCB that his claim was accepted however, as his contract with the employer had ended in December 2016 and his employer advised that the worker would not have been offered a further contract in March 2017, the worker was not entitled to wage loss benefits. On February 16, 2018, after a request for reconsideration of the WCB's decision to Review Office, it was determined by Review Office that the worker was entitled to wage loss benefits as of March 1, 2017.
After the February 16, 2018 decision by Review Office, the WCB Compensation Services requested and received the worker's income tax information on April 3, 2018. On April 6, 2018, the worker was advised of his weekly wage loss benefit amount, which amount was revised by a letter dated April 13, 2018. In a discussion with the worker's representative on April 20, 2018, the WCB advised that the worker's average earning calculation changed as the weekly wage loss benefit amount noted in the April 6, 2018 letter was calculated based on 52 weeks of earnings however, the February 16, 2018 Review Office decision noted that the calculation should be based on the worker's average earnings over his last five years' of earnings and resulted in the amount noted in the April 13, 2018 letter.
On May 2, 2018, the worker requested reconsideration of the WCB's decision to Review Office. In his request, the worker noted that he felt his wage loss benefits should be calculated at a higher rate.
Review Office determined on June 26, 2018 that the worker's average earnings were correctly calculated. Review Office agreed with and accepted the WCB's implementation date of March 1, 2017 for the worker's wage loss benefits. Review Office noted and agreed with the WCB's determination that the initial calculation of April 6, 2018 was incorrect. Review Office found that the calculations done on April 13, 2018, in accordance with the WCB's average earnings policy of using the worker's five year prior average earnings rate, was correct and reflected the worker's true loss of earning capacity.
The worker's representative filed an appeal with the Appeal Commission on September 5, 2018. An oral hearing was arranged.
Following the hearing, the appeal panel requested additional information prior to discussing the case further. The requested information was later received and was forwarded to the interested parties for comment. On July 29, 2019, the appeal panel met further to discuss the case and render its final decision on the issues under appeal.
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.
Subsection 39(1) of the Act provides that where an injury to a worker results in a loss of earning capacity, wage loss benefits are payable in accordance with section 40.
Subsection 40(1) provides that the loss of earning capacity of a worker is the difference between the worker's net average earnings before the accident, and the net average amount that the board determines the worker is capable of earning after the accident.
Subsection 45(1) of the Act deals with the calculation of average earnings, and reads in part as follows:
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…
Methods for calculating average earnings are set out in WCB Policy 44.80.10.10, Average Earnings (the "Average Earnings Policy"). The Average Earnings Policy directs that in establishing a worker's average earnings under section 45 of the Act, the WCB will use formulas that incorporate regular earnings at the time of accident, average yearly earnings, or probable yearly earning capacity. The Average Earnings Policy requires that the WCB use the formula which best represents the worker's loss of earnings.
"Regular Earnings" are defined in the Average Earnings Policy as:
…the amount of earnings a worker normally receives as remuneration in the occupation(s) in which he or she was employed at the time of injury. Regular earnings are based on the normal payment schedule (daily, weekly, monthly, annually, etc.) converted to a weekly amount…
"Average Yearly Earnings" are defined as including:
…any remuneration that the worker received as a result of employment or employment-insurance benefits. 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. If the WCB determines that this calculation does not produce an accurate reflection of a worker's loss of earnings, it will generally use documentable employment data from a 12-month period during, or an average of, a longer period of up to five years.
"Probable Yearly Earning Capacity" is defined as:
…the worker's projected earnings for the next twelve months. It is based on the worker's regular earnings at the time of accident as applied to the worker's established work pattern. Consistent with section 45 of the Act…the probable yearly earning capacity must be based on the worker's earnings before the accident, but may be based on income from employment and employment insurance benefits, and over such period of time, as the board considers fair and just.
Schedule D to the Average Earnings Policy provides additional explanation as to when the probable yearly earning capacity will be used. Schedule D goes on to state that:
The formula uses the worker's regular earnings or average yearly earnings adjusted to reflect the worker's employment pattern or the earnings and employment pattern of a few similarly employed workers.
WCB Policy 44.10.20.50.10, Recurring Effects of Injuries and Illness (Recurrences) hereinafter referred to as the "Recurrence Policy", deals with cases where the worker returns to work and suffers an increased impairment or relapse of their injury that results in a loss of earning capacity from the original compensable injury or illness.
Worker's Position
The worker was represented by a worker advocate and his spouse. As well, an interpreter interpreted the panel's questions and the worker's answers.
The worker's representative explained that on April 6, 2018, Compensation Services advised the worker that his initial weekly wage loss benefits were established at $236.99 per week. Then, on April 13, 2018, a week later, Compensation Services recalculated the worker's benefit rate, based upon income tax information, and set the worker's average earnings and weekly benefit rate at $49.39.
He noted that this is a big difference and said that there is no breakdown of how they arrived at $49.39 from the figure of $236.99. He stated that:
Well, $49.39, it's not even keeping up with the cost of living these days, very detrimental to their survival. And that's my argument right there.
The worker confirmed that he is only receiving $99.00 every two weeks from the WCB.
The worker's wife commented that:
That was April 6, 2018, when they established it at $236.99. And then April 13, 2018, rate was $49.39 a week after the $236.99. How did that $236.99 calculated through the years? That's what we don't understand, is how they came about that $236.99, and then a week after, the benefit rate was $49.39.
The worker confirmed that he did not have employment income in the years 2012, 2013 and 2015. His wife explained that he had another medical condition in April 2011 which prevented him from working during that period. The worker's wife confirmed that he was being treated for this condition in 2012 and 2013.
With respect to the worker's income in 2015, the worker's wife confirmed that he did not work that year but would have been able to work if there had been work.
The worker's wife confirmed that the employer is a surveying company and that the worker worked for the employer as the main cutter of survey lines. He used a chainsaw to perform his duties. At the time of the injury, the worker was working out of a survey camp. He was being paid $32.20 an hour in 2016 and worked seven days a week.
Employer's Position
The employer did not participate in the appeal.
Analysis
The worker is appealing the calculation of his average earnings. For the worker's appeal to be approved, the panel must find that his average earnings were incorrectly calculated. The panel finds that the worker's weekly wage loss benefits have not been correctly calculated.
The panel notes that Review Office decision dated February 16, 2018 determined that:
The Review Office also acknowledges the worker's work history is not consistent and he is a casual employee. We note his earnings vary widely from year to year, from approximately $2200 in 2014, no earnings in 2015 and $10,000 in 2016. The Review Office recommends the worker's earnings going back five years be obtained and his average earnings calculated from an average of his last five years.
On June 26, 2018, Review Office determined the worker's weekly wage loss benefits (average earnings) have been correctly established.
At the hearing, the worker advised that he was not able to work for the period commencing in 2012 until 2014 due to a serious non-work related medical condition. The panel sought information from the worker's medical providers regarding that condition. The panel finds that due to the medical condition, the worker was not able to work during 2012 and 2013.
The panel finds that the time missed by the worker due to the medical condition in 2012 and 2013 (104 weeks), should be removed from the calculation of the worker's average yearly earnings.
With respect to the year 2015, the worker advised that he did not work because there was no work available. He said that his health did not prevent him from working in 2015.
Accordingly, the panel calculates the worker's average earnings as follows:
2014 T4 earnings = $2,200.00
2015 No employment income
2016 T4 earnings = $10,887.50 (Income Tax Exempt)
Average earnings at Date of Accident = Average of 3 years (2014 - 2016)
$2200.00 + 0.00 + $10,887.50 = $13,087.50 divided by 3 (years) = $83.89
The worker's weekly benefits shall be adjusted as noted.
The worker's appeal is approved in part.
Panel Members
A. Scramstad, Presiding Officer
R. Campbell, Commissioner
M. Kernaghan, Commissioner
Recording Secretary, J. Lee
A. Scramstad - Presiding Officer
(on behalf of the panel)
Signed at Winnipeg this 22nd day of August, 2019