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 overpaid $2,137.14 in 2017, and that he is responsible for repayment of the overpayment. A videoconference hearing was held on September 1, 2021 to consider the worker's appeal.

Issue

1. Whether or not the worker was overpaid $2,137.14 in 2017; and

2. Whether or not the worker is responsible for the repayment of the overpayment.

Decision

1. That the worker was overpaid $2,137.14 in 2017; and

2. That the worker is responsible for the repayment of the overpayment.

Background

The worker has an accepted WCB claim for an injury to his left lower leg and ankle sustained at work on September 3, 2014. The incident was described by the worker as "I was backing up out of the washroom, stepping backwards, tripped on the pylon and landed backwards. I fell on (sic) a weird way and came down hard on my back. I twisted my left ankle when I fell. I could not put any weight on my foot and didn't even try to stand." The worker was transported to a local hospital and underwent surgery for a left medial malleolar fracture and a masoneuve type fibula fracture.

The worker received various benefits from the WCB including physiotherapy and personal care and independent living assistance. On August 19, 2015, the worker attended at the WCB for a call-in examination with a WCB orthopedic consultant. The consultant noted the worker had "Steady improvement in comfort and function…" and that it was expected he would be seeing his orthopedic surgeon on September 8, 2015, after which it was hoped he would be able to return to his regular job duties without restrictions.

On September 11, 2015, the worker's orthopedic surgeon recommended the worker return to work on modified duties or modified hours but on a graduated return to work basis, and noted that if these options were not available, a work hardening program was recommended. On September 28, 2015, the worker's file was reviewed by a WCB physiotherapy consultant, who noted the employer was not able to accommodate modified duties or modified hours and advised that the worker met the WCB criteria for funding of a four-week daily reconditioning program, which was approved and commenced on October 6, 2015.

The worker was discharged from the reconditioning program on November 4, 2015, at which time the treating physiotherapist noted the worker was capable of returning to work full-time and full duties, but had decreased range of motion in the left ankle, could not run for more than 30 seconds and would not be pain free. As a result, and at the recommendation of the WCB orthopedic consultant, a Functional Capacity Evaluation (FCE) was arranged. The worker underwent the FCE on November 27, 2015, and on December 16, 2015, the WCB orthopedic consultant recommended permanent restrictions of no prolonged standing; no prolonged walking especially over rough ground; no repetitive stair and ladder climbing; no lifting and carrying more than 50 lbs occasionally, 20 lbs frequently; and no pushing and pulling more than 40 lbs. The restrictions were provided to the employer, who advised the WCB on December 18, 2015, that they could not accommodate them.

On December 23, 2015, the WCB initiated vocational rehabilitation ("VR") services for the worker. A VR Plan was developed with a duration of March 29, 2016 to July 8, 2016, after which the worker would be deemed capable of earning $440.00 per week, and his benefits would be reduced on that basis. By the end of the VR Plan, the worker had not secured employment, and by letter dated August 3, 2016 the WCB's Compensation Services confirmed that the worker's benefits had been reduced, based on his established earning capacity of $440.00 per week, and that effective July 9, 2016, his biweekly partial wage loss benefits would be $144.36.

On September 22, 2016, the worker advised the WCB case manager that he had obtained employment as of September 21, 2016 and would advise the WCB of the hours and pay rate once he had that information. On October 24, 2016, the case manager contacted the worker, who advised he had stopped working at that job but would possibly be starting a new job and would provide the WCB with his paystubs. On November 1, 2016, the WCB received paystubs from the worker for earnings from September 21, 2016 to October 18, 2016.

On November 7, 2016, a WCB payment assessor calculated the worker's weekly earnings starting September 21, 2016. In a conversation with the WCB case manager on November 14, 2016, the worker advised he had started a new job the previous week, and would provide his paystubs the following day. The case manager did not hear back from the worker and left a voicemail message for the worker on January 18, 2017. On February 22, 2017, the worker contacted the WCB and advised he had worked from September 2016 to December 2016 but had "…no significant earnings…"

On May 16, 2017, a WCB payment assessor requested a copy of the worker's 2016 income tax information, which was received on June 20, 2017. The information was reviewed by the payment assessor on June 27, 2017, who noted "Actual earnings exceed the ECA (earning capacity assessment) used by more than 5%" and requested the worker's WCB case manager advise regarding calculation of the overpayment. On June 29, 2017, the case manager asked the payment assessor to proceed with calculating the overpayment and that they would contact the worker for his year-to-date earnings. On July 6, 2017, the payment assessor advised the worker that his post-accident earnings exceeded his pre-accident earnings, and no partial wage loss was due. On July 20, 2017, the worker's overpayment for 2016 was calculated to be $1,970.45.

On August 23, 2017, the WCB case manager advised the worker that his partial wage loss payments would be suspended until an earnings review was completed as there was a potential overpayment on his file. The worker confirmed that when he is working, he is paid at a higher rate and may earn more than he did prior to the workplace accident but his employment hours fluctuated over the year. On October 11, 2017, the worker provided the WCB with his paystubs from January 1, 2017 to September 23, 2017. An earnings review was conducted, and on October 19, 2017, the worker's overpayment for 2017 was calculated to be $2,137.14. By letter dated October 20, 2017, Compensation Services advised the worker that the overpayment for 2016 was in the amount of $1,970.45 and the overpayment for 2017 was in the amount of $2,137.14, and that the worker was responsible for the full amount of the overpayments.

On May 4, 2018, the worker requested that Review Office reconsider the Compensation Services' decision. The worker submitted that he had provided the WCB with all the requested pay information in a timely manner and should not be required to repay the overpayment. On June 6, 2018, Review Office returned the worker's file to the WCB's Compensation Services for further investigation into the worker's average earnings.

The WCB requested additional income tax information for the worker for the years 2009 to 2011 and 2017, which information was received on July 16, 2018 and reviewed on July 20, 2018. The WCB payment assessor noted in that review that the worker had no employment income in 2009 to 2011, therefore, the average earnings decision dated November 12, 2014, which was based on the worker's earnings for 2012 and 2013 as the best reflection of his earnings, remained unchanged. On July 25, 2018, Compensation Services advised the worker that there was no change in the average earnings, and the overpayment amounts of $1,970.45 for 2016 and $2,137.14 for 2017 remained unchanged. On October 9, 2018, the worker requested that Review Office reconsider Compensation Services' decision.

On December 7, 2018, Review Office determined that the worker was not responsible to repay the overpayment of his 2016 wage loss benefits. Review Office found that the worker's actual earnings fluctuate and are dependent on the availability of employment. Review Office found that the overpayment of benefits could have been prevented or recovered in a timely manner had it been communicated for 2016 when it was first discovered by primary adjudication. Review Office noted the WCB's overpayment policy stated that the WCB will "…implement reasonable measures to prevent overpayments" and that an overpayment will not be recovered if "…available information was not collected or used when establishing the amount payable." Review Office found the WCB was aware of the worker being in an overpayment situation in November 2016, but continued to pay the worker partial wage loss benefits and did not advise of the overpayment until August 2017.

With respect to 2017, Review Office noted that the 2017 overpayment was not based on the full year's earnings for that year, and returned the worker's file to Compensation Services to determine whether the worker was overpaid wage loss benefits in 2017.

The worker's file was reviewed by the WCB case manager, and on December 17, 2018, Compensation Services advised the worker that the review confirmed he was overpaid in 2017, as his average weekly earnings for 2017 were higher than pre-accident earnings, and the total overpayment amount for 2017 remained $2,137.14. On March 13, 2019, the worker requested that Review Office reconsider the Compensation Services' decision, relying on his previous Review Office submission to Review Office, and noting that based on his calculations, he was not overpaid in 2017.

On April 17, 2019, Review Office upheld the Compensation Services' decision and determined the worker was overpaid in 2017 in the amount of $2,137.14 and was responsible for repaying that overpayment. Review Office found the majority of his weekly net earnings were significantly higher than his weekly deemed earning capacity, and that this was so material and obvious that the worker should have recognized it. Review Office found that the case manager's difficulty contacting the worker in 2017, and the worker's delay in providing income information when requested, constituted withholding of key information, and that had it been provided when it was requested, the overpayment situation could have been avoided. Review Office concluded that as the worker's earnings exceeded his pre-accident income, he was not due any wage loss benefits in 2017 and was responsible for repayment of the overpayment.

On October 3, 2019, the worker appealed the Review Office decision to the Appeal Commission and a videoconference hearing was arranged.

Reasons

Applicable Legislation and Policy

The Appeal Commission and its panels are bound by The Workers Compensation Act (the "Act"), the regulations under the Act and the policies established by the WCB's Board of Directors.

Subsection 4(1) of the Act provides that where a worker suffers personal injury by accident arising out of and in the course of employment, compensation shall be paid.

Subsection 4(2) of the Act provides that a worker who is injured in an accident is entitled to wage loss benefits for the loss of earning capacity resulting from the accident, but no wage loss benefits are payable where the injury does not result in a loss of earning capacity during any period after the day on which the accident happens.

With respect to the calculation of loss of earning capacity, subsection 40(1) of the Act provides:

40(1) The loss of earning capacity of a worker is the difference between

(a) the worker's net average earnings before the accident; and 

(b) the net average amount that the board determines the worker is capable of earning after the accident; 

which amount shall not be less than zero.

WCB Policy 44.80.80.20, Loss of Earning Capacity Reviews (the "Earning Capacity Policy"), provides that the WCB will establish an overpayment when a worker receives actual post-accident earnings that are more than 5% greater than the worker's estimated earning capacity.

WCB Policy 35.40.50, Overpayment of Benefits (the "Overpayment Policy"), establishes the framework of preventing, recovering and writing off overpayments. Part B to the Overpayment Policy, relating to the recovery of overpayments, provides in part that:

All overpayments will be pursued for recovery when:

… 

2. there is evidence of fraud, deliberate misrepresentation, delays in providing or withholding of key information by the injured worker…affecting benefit entitlement…

Worker's Position

The worker was self-represented at the hearing. The worker made a presentation to the panel, relying in part on the written submissions he had provided to Review Office, and responded to questions from the panel.

The worker stated that he did not believe there was an overpayment made to him by the WCB in the 2017 calendar year.

The worker submitted that the WCB made a mistake in the calculation of his earnings for the period of time from January 1, 2017 to June 27, 2017, a 26-week period. He submitted his actual earnings for that period of time were $8,174.68 or $314.41 per week, which was well below the weekly deemed earning capacity or the maximum allowed during that period, as set by the WCB, of $440.00 per week. The worker stated that in calculating his earnings for this 26 week period of time, the WCB included earnings to September 2017, and thus erroneously arrived at the much higher amount of $776.83 per week. He submitted that in fact, his actual earnings between January 1, 2017 and June 27, 2017 were well within the original guidelines set by the WCB, and there was no overpayment for this period of time.

The worker submitted that the WCB mailed two letters to him in January and February 2017, with income information forms attached, and indicated he was required to respond to them to prevent a disruption in his claim. The worker indicated he responded by telephone to his case manager. They discussed the status of his claim and his case manager told him it was not necessary to report any more earnings until the end of September, at which time the WCB would look at it all in a yearly review. The worker said he did not report his earnings from March to April 2017 as per the instructions and assurances given to him by the case manager in their telephone conversation, and noted there was no disruption in his claim.

The worker further submitted that any overpayment could have been prevented. He said the WCB already had information on two jobs he had worked in 2016, and knew he had actual earnings, so they could have made a decision sooner.

In conclusion, the worker stated that he never intended to withhold information from the WCB or to intentionally deceive them. He said he was only following the instructions that were given to him by his case manager at the time, and indicated that if there was an overpayment, he should not be responsible for repaying it.

Employer's Position

The employer did not participate in the appeal.

Analysis

Issue 1: Whether or not the worker was overpaid $2,137.14 in 2017.

For the worker's appeal on this issue to be successful, the panel must find that the worker was not overpaid wage loss benefits in 2017. The panel is unable to make that finding, for the reasons that follow.

The panel does not accept the worker's argument that the WCB erred in its calculations; that only his earnings between January and June 2017 should have been taken into account when calculating whether there was an overpayment; and that on a proper calculation, he was not overpaid. The worker was unable to satisfactorily explain, however, in response to questions from the panel, why his wages should have been averaged over a six month period, as he had suggested, as opposed to a 12-month period or the calendar year, particularly where the availability of work and his income would fluctuate.

Based on our review of all of the information which is before us, the panel is satisfied that the worker was aware of his obligation to report changes in his employment status and any income received to the WCB and to have this reviewed.

On August 3, 2016, the VR Plan having been completed, Compensation Services wrote to the worker to confirm that effective July 8 2016, his wage loss benefits were reduced by his established earning capacity of $440.00 and that his biweekly benefits would be $144.36; that his capacity would be reviewed on a regular basis to reflect his earning potential; and that to make sure he received the right benefit amount, it was very important he notify the WCB if "You obtain any paid employment."

While the worker has argued that his 2017 earnings were within the original guidelines set by the WCB, the panel finds that the majority of paystubs from 2017 were significantly in excess of the worker's deemed earning capacity of $440.00 that was established at the completion of the VR Plan or process.

The panel notes, in particular, that four paystubs for work performed in March and April 2017 show that the worker had net earnings of over $700.00 per week, with two of those paystubs showing net earnings of over $1,000.00 per week ($1,094.93 for the week ending April 1, 2017 and $1,148.54 for the week ending April 22, 2017). Information on file shows that the March and April 2017 paystubs were not provided to the WCB until October 11, 2017.

The panel finds that the worker's March and April 2017 earnings alone were so significant and obvious that the worker would and should have known that he was required to report that income to the WCB in a timely manner, not six or seven months later.

The panel notes that on several occasions during the course of the claim, including in 2017, the worker was provided with written documentation which referred to his responsibility to report changes in income to the WCB to avoid an overpayment situation. He was also provided with Other Income Information forms in January and February 2017, which he did not complete or return.

While the worker stated he had been told by the case manager that he did not have to provide paystubs until the end of September 2017, the panel finds that statement is not supported by, and is inconsistent with, the evidence on file. In a Note to File of a telephone conversation on March 7, 2017, the case manager thus documented that the worker had called and indicated he had done a bit of work between September 2016 and the end of that year, but there were no significant changes. The case manager further specifically documented at that time that the worker would advise if any significant changes occurred.

In conclusion, the panel has also reviewed the WCB's calculation of the worker's overpayment, and is satisfied that the amount has been properly calculated.

Based on the foregoing, the panel is therefore satisfied that the worker was overpaid wage loss benefits of $2,137.14 in 2017.

The worker's appeal on this issue is denied

Issue 2: Whether or not the worker is responsible for the repayment of the overpayment.

For the worker's appeal on this issue to be successful, the panel must find that the wage loss benefits paid to the worker for 2017 should not be pursued for recovery. The panel is unable to make that finding, for the reasons that follow.

As indicated above, Part B to the Overpayment Policy, relating to the recovery of overpayments, states that payments will be pursued for recovery when "there is evidence of fraud, deliberate misrepresentation, delays in providing or withholding of key information by the injured worker…affecting benefit entitlement…"

Based on the foregoing, the panel is satisfied that the worker's delay in submitting his paystubs for 2017 and in providing the WCB with the requisite information constituted withholding of key information, as contemplated under Part B to the Overpayment Policy. As a result, the panel finds that the wage loss benefits paid to the worker for 2017 should be pursued for recovery, and that the worker is responsible for the repayment of the overpayment.

The worker's appeal is denied.

Panel Members

M. L. Harrison, Presiding Officer
J. Peterson, Commissioner
S. Briscoe, Commissioner

Recording Secretary, J. Lee

M. L. Harrison - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 29th day of October, 2021