The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker appealed the Workers Compensation Board ("WCB") decision that their average earnings are correct. A hearing took place on January 27, 2026 to consider the worker's appeal.

Issue

Are the average earnings correct?

Decision

The average earnings are correct.

Background

The WCB accepted the worker's claim for injuries arising out of an accident at work on September 10, 2023 and provided wage loss benefits to the worker effective September 16, 2023. Initially, the wage loss benefits were calculated based on information from the employer as to the worker's pre-accident earnings. The employer also confirmed the worker’s hours varied and that they were considered a 7-day worker.

When the claim continued beyond twelve weeks, the WCB’s Compensation Services reviewed the worker’s average earnings to determine if the initial calculations were accurate. Effective December 3, 2023, the WCB determined the worker’s average earnings based on an average of their 2021 and 2022 earnings and advised the worker of the weekly benefit. After a further review and recalculation, on January 4, 2023, the WCB provided an updated weekly benefit amount to the worker, which was revised on January 11, 2024 based on the worker’s previous five years of income.

The worker submitted additional financial information on May 7, 2024 and requested Review Office reconsider the WCB’s decision. On May 14, 2024, Review Office returned the worker’s file to the WCB’s Compensation Services for further adjudication and consideration of the new financial information provided by the worker. On May 17, 2024, the WCB sent the worker a letter confirming the previous decision on their average earnings.

On May 27, 2024, the worker again submitted further financial information and requested Review Office reconsider the WCB’s decision. On June 5, 2024, Review Office again returned the worker’s file to Compensation Services noting that the worker’s concerns regarding their five-year average earnings calculations and the medical information provided in support of their pre-existing health condition was not considered by Compensation Services in responding to the worker. Review Office again requested further adjudication of the worker’s file.

On August 6, 2024, the WCB’s payment assessor received copies of the worker’s complete 2018-2022 income tax returns and using that information, calculated a revised average earnings amount. On August 14, 2024, the WCB requested additional income information from the worker. On October 2, 2024, the WCB received the worker's 2023 income tax information. The WCB’s payment assessor noted on November 7, 2024 that the worker’s average earnings for 2020 were revised as previous calculations incorrectly included a benefit provided to the worker because of the COVID-19 pandemic. On November 21, 2024, the WCB wrote to the worker setting out a revised average earnings amount and confirming that the previous calculations included a federal benefit that should not have been used in the calculation.

The worker’s representative submitted additional information to the WCB on April 7, 2025 and requested recalculation of the worker’s average earnings. The representative proposed that the most appropriate formula to calculate the worker’s average earnings is the Probable Yearly Earning Capacity formula. The representative outlined that a previous employer approached the worker in August 2023 and offered a position to begin in December 2023, which the worker accepted, but when that employer attempted to contact the worker in November 2023, the worker was unable to accept the position due to the September 10, 2023 workplace accident. The representative provided the WCB with a copy of a January 16, 2025 letter from the employer confirming they offered employment to the worker. The representative argued that but for the workplace accident, the worker would have accepted this position, and as such, the Probable Yearly Earning Capacity formula was most appropriate as it would capture a future change in the worker’s earning capacity. On May 5, 2025, the WCB’s payment assessor requested the worker provide a copy of the referenced job offer, and the representative advised on May 9, 2025 that the offer was verbal, not in writing. 

On July 9, 2025, the WCB advised the worker of a further recalculation of their average earnings resulting in a revised weekly wage loss benefit amount effective December 3, 2023. On August 14, 2025, the worker’s representative requested Review Office reconsider the WCB’s decision as to the calculation of the worker’s average earnings.

On August 22, 2025, Review Office determined the worker’s average earnings were calculated correctly. The worker’s representative filed an appeal with the Appeal Commission and a hearing took place on January 27, 2026. The worker appeared in the hearing represented by a worker advisor. The employer also participated, represented by an advocate. A previous and potential employer of the worker appeared in the hearing and provided testimony as to the worker's future earning capacity at the time of the accident.

Reasons

Applicable Legislation and Policy

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

The Act provides in s 4(1) that a worker is entitled to benefits when it is established that they have sustained a personal injury arising out of and in the course of employment. Under s 4(2), 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. When the WCB determines that a worker has sustained a loss of earning capacity, an impairment or requires medical aid as a result of an accident, compensation is payable under s 37 of the Act. Section 39(2) of the Act sets out that wage loss benefits are payable until the worker's loss of earning capacity ends or the worker attains the age of 65 years.

Section 45 of the Act outlines how the WCB calculates a worker’s average pre-accident earnings, which include income from employment and employment insurance benefits, determined over such time as the WCB "considers fair and just". Section 40 further outlines how net average earning are calculated, noting probable deductions for income tax, Canada Pension Plan and Employment Insurance premiums.

The WCB established Policy 44.80.10.10, Average Earnings (the “Policy”) which outlines how a worker’s average earnings at the time of a compensable injury are calculated. The Policy outlines three approaches and sets out that the formula the WCB will use is the one that “best represents the worker’s employment and earnings pattern before the accident.” The regular earnings formula calculates the worker’s average earnings based on the amount of earnings they would normally receive as remuneration in all employment as of the date of accident, if their ability to earn income from such employment was affected by the compensable injury. This formula normally excludes overtime, special reimbursements, allowances, and bonuses. The average yearly earnings formula is used when a worker has an irregular earnings pattern due to the nature of their work, for example, as a seasonal worker, contract worker, pieceworker, or with fluctuating overtime. Average yearly earnings include all verifiable remuneration from employment and employment insurance benefits, including overtime, special reimbursements, allowances, and/or bonuses. Under this formula, the WCB will generally rely on data from any consecutive 12-month period occurring during the one or two years before the date of the accident but rely on one or more consecutive 12-month periods from any of the previous five calendar years if that would more accurately reflect the worker’s employment and earnings pattern before the accident. The probable yearly earning capacity formula forecasts what a worker might be expected to earn for a consecutive 12-month period after the day of accident. Although based on the worker’s earnings before the accident, this formula uses the worker’s regular earnings or average yearly earnings and adjusts them to reflect the worker’s probable employment and earnings pattern going forward, or alternatively, the employment and earnings pattern of a representative sample of similarly employed workers. It also may include presumed employment insurance benefits. This formula is used when the formulas for regular earnings and average yearly earnings do not accurately reflect what the worker’s average earnings likely would have been, but for the accident, such as when there is sufficient evidence to demonstrate the worker would have experienced a future change in earning capacity due to an upcoming change in job or new job.

Worker’s Position

The worker's position is that the WCB incorrectly calculated their average earnings by relying on the average of their pre-accident income for the years 2018 - 2022, and that instead, the worker's average earnings should be calculated applying the probable yearly earning capacity formula. The worker's representative relied on evidence of an offer of employment to begin in or about December 2023 at a wage of $55.00 per hour working fulltime over the course of a year, as well as the testimony of the witness who offered that employment and previously employed the worker and a January 2025 letter from the witness as supporting a finding there was an accepted offer of employment on the stated terms. The worker's representative noted the Policy explicitly does not require a written employment contract to be in place. Further, the worker relied on evidence of the wages paid to the individual who took on the job that the worker could not do due to their injury. Alternatively, the worker's representative submitted that if the panel finds the average earnings formula best reflects the worker's earning pattern before the accident, that formula should exclude the worker's earnings from 2020-2022, due to government policies requiring work shutdowns, employer policies relating to the pandemic, and the worker's particular vulnerability to Covid-19 due to their pre-existing health conditions as supported by evidence from their treating family physician. The worker representative pointed to WCB vocational rehabilitation practices during the pandemic whereby job search periods were extended and expectations reduced and argued that the panel could extrapolate from those exceptions to exclude the pandemic years from the calculation of average earnings.

Employer's Position

The employer's position is that the worker's average earnings are correctly calculated as the verifiable evidence shows the worker is a contract worker with a history of irregular earnings. Furthermore, the employer submits that the worker's assertion that their probable earnings would have exceeded their past earning capacity is not borne out by verifiable evidence. The employer advocate urged the panel to give little weight to the evidence as to the worker's future earning capacity, noting the witness testified the proposed project work was expected to begin in late 2023 and did not actually begin until 2024, with subsequent interruptions, and that this offer of employment was not confirmed until November 2023. While the employer confirmed verbal offers of employment are common in their industry for short-term projects, typically formal processes are used for long-term hires. The employer representative submitted that the very nature of work in their industry is unpredictability and inconsistency, as supported by the testimony of the witness and the employer representative. The employer advocate noted that one of the paystubs submitted for the employee who filled the job when the worker could not, is for work before the project began and the other paystub does not indicate earnings outside the range of the worker's average earnings. Further, the advocate noted that employee had different qualifications than the worker, and as such is not an accurate comparison in any case. In response to the worker's position that their pre-existing non-compensable health conditions adversely impacted their income in the years 2020-2022, the employer's representative noted it is likely that those same health conditions would have impacted the worker after the accident claim as well, playing an ongoing role in the worker's fluctuating earnings both pre- and post-claim. The employer representative also submitted that the effect of eliminating the years 2020-2022, when the Covid-19 pandemic was ongoing, would place an economic burden on the employer for a period well before the worker was employed by the employer, and that this would be inherently unfair.

Analysis

The question in this appeal is whether the WCB correctly calculated the worker’s average earnings effective December 3, 2023. For the worker’s appeal to succeed, the panel would have to determine that the WCB did not apply the correct formula in calculating the worker’s average earnings, or that in applying the formula, the WCB erred in applying the provisions of the Average Earnings Policy. As detailed in the reasons that follow, the panel found that the average earnings formula best reflects the worker's earning pattern and capacity, and that the WCB did not err in applying the Policy provisions. In the result, the worker’s appeal is denied.

The panel reviewed the evidence as to the nature of the worker’s employment prior and following the workplace accident. We noted the evidence reveals that the worker retired from a fulltime position in 2018 and then began working for a variety of employers over the course of the years that followed. In 2018, the worker worked with two employers after retiring. In 2019, the worker worked with three employers, including the witness' business. In 2020, the worker worked only for the witness. In 2021, the worker was not employed. In 2022, the worker was again employed by three employers and in 2023, prior to the accident, the worker was employed by two employers. The evidence indicates the worker also received government benefits at various times through these years. The witness testified the worker typically would work a few weeks or a few months and then took time off. The worker did not agree with this characterization of their pre-accident work pattern but acknowledged being selective as to the work they would take on, preferring jobs that paid higher wages and where employers sought the worker out. The panel also reviewed the worker's pattern of earnings from employment and employment insurance benefits over this period, as determined by the WCB, and outlined in correspondence of July 9, 2025:

Year      Employment and EI Income      Weeks      Weekly Average 

2018     $93,430.80                                52              $1,796.75 

2019     $69,900.97                                52              $1,344.25 

2020     $36,471.00                                33              $1,105.18 

2021      $22,347.00                               52              $429.75 

2022      $56,251.50                               52              $1,081.57

The panel noted that in 2020 the worker received a pandemic-related benefit for a period of 19 weeks and that this benefit and the period in which it was paid were excluded by the WCB in its calculations of the worker's weekly average earnings in that year. The WCB also set out in a file memorandum dated July 16, 2025, that in the 12 months prior to the date of accident, the worker's weekly average income was $617.48. The panel noted that this was based on $32,108.74 in employment and employment insurance income earned only in 2023 over the course of 33 weeks, from the beginning of the year through mid-September, which corresponds to a weekly average in 2023 of $972.99.

The panel finds that the regular earnings formula is not appropriate in these circumstances where the evidence confirms that the worker, at the time of the accident, was employed on a short-term contract and over the course of the worker's job history since leaving their full-time employment in 2018, the worker's pattern of employment and earnings was not regular. Based on the evidence of the worker's employment history and earnings pattern, the panel finds that the worker has an irregular earnings pattern due to the nature of their work in the industry in which they have been employed for more than 40 years. Applying the provisions of the Policy, we are satisfied that the average yearly earnings formula “best represents the worker’s employment and earnings pattern before the accident.”

The panel also considered whether the probable yearly earning capacity formula is the one that best represents the worker's pre-accident employment and earnings pattern, as argued by the worker. While we accept the evidence of the witness in respect of their intention to hire the worker for a project to begin in or about December 2023 at the rate indicated, we also noted their testimony that in August 2023, the discussion with the worker took place in the context of preparing to make a bid on a project, but that the bid was not accepted until some time later, after the worker was injured. The witness testified that on confirming their project bid was successful, they learned that the worker was not available due to their injury and as a result, moved another employee into that role. The panel noted the WCB's focus on the lack of a formal contract of employment to verify the worker's future income but finds this is not germane given the evidence that this job opportunity was not confirmed when the worker sustained their compensable injury. As such, while the evidence shows that the worker could have experienced a future job change, it does not confirm that the worker would have experienced such a change. We find that the offer of employment was contingent, and as such, at the time of the accident, could not be confirmed. Given this finding and our finding that the average yearly earnings formula does accurately reflect what the worker's average earnings would have been, but for the accident, the panel is satisfied the probable yearly earnings formula should not be used.

The panel is satisfied that under the Policy, the formula that best represents the worker’s employment and earnings pattern before the accident is the average yearly earnings formula which addresses the irregularity in the worker's pre-accident earnings pattern.

The panel also considered the worker's submissions that their pre-accident earning pattern was significantly affected by the pandemic and resulting restrictions and limitations on workers and workplaces. The worker pointed to the April 25, 2024 letter from their treating family physician as confirming the worker's vulnerability to Covid-19 due to their pre-existing health conditions. The panel also noted the worker's submission that their 2020 and 2021 income should be excluded from the average earnings calculation due to the impact of the pandemic on availability of work and the specific impacts on the worker, in particular. The worker's representative also noted that in 2022 the worker was unable to work for some ten weeks due to contracting the virus and as such urged the panel to also exclude the worker's 2022 earnings from any average earnings calculation. The panel is not persuaded by the worker's position that these years should be excluded due to the actual or potential impacts of the pandemic upon employment prospects and the worker's own health. We note the Policy provides discretion in selecting any one or more consecutive 12-month period before the accident, up to a total of five years that may be included in the averaging. Here the WCB included five years leading up to the date of accident and considered that the average income for these years as calculated best represents the worker's pre-accident employment and earnings pattern. This includes both years such as 2018, when the worker's income was high, and 2021 when their income was lower. To exclude the worker's most recent three full years of income but include their last year (2018) of "regular" employment, would not best reflect the worker's employment and earnings pattern. The panel finds no fault with the WCB's decision to include five years in the average earnings calculation, nor do we find fault with the application of the Policy in these circumstances.

Based on totality of the evidence before the panel, and applying the standard of a balance of probabilities, we are satisfied that the worker's average earnings are correct. The worker's appeal is therefore denied.

Panel Members

K. Dyck, Presiding Officer
J. Peterson, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, J. Lee

K. Dyck - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 6th day of February, 2026