The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The employer is appealing the decision made by the Workers Compensation Board ("WCB") that they are not entitled to cost relief due to a pre-existing condition. A file review was held on October 8, 2025 to consider the employer's appeal.

Issue

Whether or not the employer is entitled to cost relief due to a pre-existing condition.

Decision

The employer is not entitled to cost relief due to a pre-existing condition.

Background

The worker has an accepted WCB claim for injuries to their back and head that occurred at work on June 11, 2022 when a handle on a door they were closing came off, causing them to fall on their back and head. The worker sought medical treatment and was diagnosed with neck and back strains. Initially off work due to symptoms, the worker returned to work on modified duties on July 7, 2022. It was noted at that time, the worker had concurrent employment but had not returned to that employer.

On July 28, 2022, the WCB placed a memorandum to the worker’s file setting out the worker’s wage loss benefit calculations, including their concurrent employer. At the same time, a calculation was done setting out a cost relief percentage for the employer, with a decision letter sent to the employer on July 29, 2022.

A review of the medical information on the worker’s file began in early August 2022 after the worker reported symptoms of shoulder pain to their treating physiotherapist during a follow-up appointment on July 14, 2022. An MRI study of the worker’s right shoulder indicated supraspinatus and infraspinatus tendinopathy including tendinosis and low to moderate grade delaminating bursal surface tear at the tendon junction; suspected subacromial subdeltoid bursitis; and mild acromioclavicular osteoarthritis.

After reviewing the worker’s file on November 23, 2022, a WCB medical advisor opined that the findings on the MRI were not medically accounted for in relation to the June 11, 2022 workplace accident as the worker did not report any right shoulder complaints to their treating healthcare providers or the WCB until approximately 6 weeks after the accident. Further, the advisor stated that had the worker suffered an acute injury to their shoulder from the workplace accident, they would have experienced symptoms within 24 hours of that accident and noted their belief the findings on the MRI were likely degenerative in nature.

On November 29, 2022, the WCB advised the worker they were not entitled to benefits related to their right shoulder in relation to the June 11, 2022 workplace accident. In addition, the worker was advised their entitlement to benefits would end as of December 6, 2022 as it had been determined they had recovered from the workplace accident.

The employer’s representative contacted the WCB on January 29, 2024 regarding cost relief for the worker’s claim. The WCB provided the employer with a decision letter on the same date advising they were not entitled to cost relief as the worker’s claim was not significantly prolonged by their pre-existing condition as set out in the WCB’s policies.

On September 17, 2024, the employer’s representative requested reconsideration of the WCB’s decision regarding cost relief. The representative took the position that the medical information on file indicated the worker’s right shoulder was a barrier to them returning to work and noted the WCB’s medical advisor had found the worker’s right shoulder symptoms were caused by a degenerative condition and not the workplace accident. As such, it was the employer’s position that the worker’s claim was prolonged by the shoulder condition and the employer should be entitled to cost relief. In addition, the employer took the position that the worker’s pre-existing diabetes contributed to the workplace accident recovery and should also entitle them to cost relief.

On September 27, 2024, Review Office determined the employer was not entitled to cost relief due to a pre-existing condition. Review Office found the WCB conducted further investigation into the worker’s right shoulder condition, which was not completed until November 29, 2022 when the WCB medical advisor provided their opinion, and as such, the duration of the investigation did not meet the criteria for cost relief. As well, Review Office found the medical evidence did support the worker had pre-existing conditions in their neck and back; however, those conditions did not significantly prolong recovery from the June 11, 2022 compensable injuries. Review Office also determined that the worker’s diabetes did not contribute to the severity of the workplace injury or significantly prolong the recovery of the neck and back injuries.

The employer’s representative filed an appeal with the Appeal Commission on July 4, 2025 and a file review was arranged.

Reasons

Applicable Legislation and Policy

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

Section 4(1) of the Act provides compensation for injured workers when it is established that they sustained personal injury as a result of an accident at work. The compensation amounts are paid from an accident fund. Section 81(1) provides that employers are to be assessed an annual levy, for the maintenance of the accident fund.

The issue on appeal relates to the employer’s request for cost relief. Section 81(1) of the Act provided authority for the WCB to relieve an employer of responsibility for certain claim-related costs, and sets out, in part, that:

Annual assessment for accident fund

81(1) For the purpose of creating and maintaining an adequate accident fund, the board shall every year assess and levy upon and collect from the employers in each class by an assessment or by assessments made from time to time rated upon the payroll, or in such other manner as the board considers advisable or necessary, sufficient funds, according to an estimate to be made by the board in each year

…

(c) to provide a fund to meet the part of the cost of claims of workers that, in the opinion of the board, results from:

(i) pre-existing or underlying conditions…

The WCB established WCB Policy 44.10.20.10, Pre-existing Conditions (the "Pre-existing Policy") to address eligibility for compensation where a worker has a pre-existing condition. The Pre-existing Policy defines a pre-existing condition as any medical condition the worker had prior to their workplace injury.

The WCB established WCB Policy 31.05.10, Cost Relief/Cost Transfer – Class E Employers (“Cost Relief Policy”) to address situations where the employer seeks a removal of the claim costs that they may be liable for situations where, amongst other factors, a ‘worker's pre-existing condition contributes to the severity of their work-related injury or significantly prolongs their recovery’.

Schedule A - Pre-Existing Conditions of the Cost Relief Policy states, in part:

The WCB will provide Cost Relief to Accident Employers when a worker's pre-existing condition contributes to the severity of their work-related injury or significantly prolongs their recovery.

Cost Relief

When a worker's pre-existing condition:

• contributes to the severity of their work-related injury; or 

• significantly prolongs their recovery, and the worker's time loss from work is greater than 12 weeks.

the WCB will provide the Accident Employer with Cost Relief in the amount of 50% of the claim costs, exclusive of the costs of any impairment award.

Employer’s Position

The employer’s representative provided a written submission. The employer’s position is that the employer is entitled to cost relief as the worker’s pre-existing diabetes is “medically known to impair soft tissue healing” and therefore contributed to the worker’s compensable strain/sprain injuries to their cervical, thoracic and lumbar spine regions.

In addition, it is the employer’s position that the worker was not back at work due (in large part) to the right shoulder and that had there been no pre-existing condition of the right shoulder, there would have been no requirement for the WCB to investigate it and the worker would have returned to work much sooner than they did.

The employer’s representative relied on the following evidence:

- The December 7, 2022 Functional Abilities Form which noted that the worker could not fully return to work for another two weeks due to their right shoulder and neck

- The September 21, 2022 Functional Abilities Form which indicated that the worker could only work partial hours on modified duties due to their right shoulder and neck

- The September 12, 2022 physiotherapy note which references the worker reporting persistent neck and right shoulder pain.

The employer’s position, in sum, is that the reason why the worker did not return to work sooner was the direct result of their pre-existing shoulder condition and pre-existing diabetes.

Worker’s Position

The worker did not participate in the appeal.

Analysis

This appeal is in relation to the WCB’s determination that the employer is not entitled to cost relief for a pre-existing condition in respect of the worker’s claim arising out of the accident of June 11, 2022.

For the employer’s appeal to succeed, the panel must determine that the worker: (i) had a pre-existing condition; and, (ii) that the worker’s recovery was significantly prolonged by the pre-existing condition, or that the pre-existing condition contributed to the severity of their work-related injury. As outlined in the reasons that follow, the panel was unable to make such findings and therefore the employer’s appeal is denied.

(i) Diabetes

The Panel considered the employer’s submission and the evidence on file.

A medical letter dated September 21, 2022 references that the worker has Type II diabetes. Aside from this one letter, the panel was unable to find any medical records or other medical evidence referencing the worker’s diabetes.

The September 21, 2022 medical letter did not comment on diabetes as a pre-existing condition, nor does it state that the diabetes contributed to severity of the workplace injury or prolonged its recovery. Without any medical evidence to substantiate the employer's claim that: (i) diabetes is medically known to impair soft tissue healing; and (ii) in this specific case the worker’s diabetes delayed the healing of and/or affected the worker’s recovery with respect to their neck and back injury, the Panel is unable to find that the employer is entitled to cost relief with respect to the worker’s diabetes.

(ii) Shoulder Injury

The Panel considered the employer’s submission and the evidence on file. The panel was unable to find any medical records or other medical evidence to substantiate the employer’s claim that the worker’s shoulder injury contributed to the severity of the workplace injury or prolonged its recovery.

In order for the employer to be entitled to a cost recovery, the evidence must demonstrate that the worker's pre-existing condition "contributes to the severity of their work-related injury or significantly prolongs their recovery” (WCB Policy 31.05.10).

Adjudication Timeline:

- June 11, 2022: the worker reported workplace injuries to their head and back as a result of falling backward when a door handle came off. These head and back injuries are referenced in the medical reports dated June 11, 2022.

- July 7, 2022: The worker returned to work on modified duties.

- July 14, 2022: The worker relayed to their physiotherapist that they were experiencing shoulder pain. Prior to this date, there is no evidence on file referencing the worker’s shoulder pain.

- July 28, 2022: The WCB placed a memorandum to the worker’s file setting out the worker’s wage loss benefit calculations, including their concurrent employer.

- August 3, 2022: The WCB undertook a review of the medical information on the worker’s file as a result of the worker’s recent disclosure of shoulder pain.

- September 19, 2022: The worker underwent a subsequent MRI study of their right shoulder which indicated supraspinatus and infraspinatus tendinopathy including tendinosis and low to moderate grade delaminating bursal surface tear at the tendon junction; suspected subacromial subdeltoid bursitis; and mild acromioclavicular osteoarthritis.

- November 23, 2022: As part of the review of the worker’s file, a WCB medical advisor determined that the finding of the shoulder MRI were not medically accounted for in relation to the workplace accident and noted the shoulder injury was likely degenerative in nature.

- November 29, 2022: the WCB advised the worker they were not entitled to benefits related to their right shoulder in relation to the June 11, 2022 workplace accident.

There is no evidence on the file that the worker’s shoulder injury contributed to, or prolonged the recovery of, their workplace accident. The employer relies on both the September 21, 2022 and December 7, 2022 Functional Abilities Forms and the September 12, 2022 notes of the physiotherapist to support their position that the shoulder injury is a pre-existing condition that entitles them to cost relief. Although these documents reference the worker’s shoulder injury, none of them speak to the shoulder injury causing a delay in the worker’s recovery from their workplace accident or contributing to the severity of the work-related injury.

The Panel acknowledges that the worker’s disclosure of a shoulder injury on July 14, 2022 delayed the adjudication of the worker’s WCB claim by approximately (4) four months while the WCB sought additional medical evidence and opinion with respect to the shoulder pain. The Panel recognizes that the WCB followed the proper adjudication processes and that the adjudication delay was appropriate in this circumstances.

Although there was an adjudication delay in this case, the employer is not entitled to cost recovery under the Cost Relief Policy as a result of such a delay.

While the panel appreciates the arguments of the employer’s representative, the worker’s medical records do not support that the worker’s shoulder injury, or diabetes, contributed to the severity of the work-related injury or significantly prolonged the worker’s recovery.

On the basis of the totality of the evidence and on the standard of a balance of probabilities, the Panel is satisfied that the worker did not have a pre-existing condition that would have entitled the employer to cost relief under the Cost Relief Policy.

The appeal is denied.

Panel Members

N. Brown, Presiding Officer
J. Peterson, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, J. Lee

N. Brown - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 21st day of November, 2025