Neutral Citation: 1995 ONICDRG 72
File No. A-013676
ONTARIO INSURANCE COMMISSION
BETWEEN:
DIANA C. WESSELS
Applicant
and
CAA INSURANCE COMPANY (ONTARIO)
Insurer
DECISION
Issues:
The Applicant, Diana C. Wessels, was injured in a motor vehicle accident on March 19, 1992. She applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. The parties disagree about the amount of weekly income benefit which should be paid to Ms. Wessels. They were unable to resolve their disputes through mediation and the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The issue in this hearing is:
What is the correct amount of weekly income benefit to be paid to Ms. Wessels?
The Applicant also claims interest on any amounts owing, and her expenses incurred in the hearing.
Result:
- The correct amount of weekly income benefit is $207.63
Hearing:
The hearing was held in North York on May 4, 1995, before me, K. Julaine Palmer, arbitrator.
Present at the Hearing:
Applicant's Representative:
Michael F. Boland Barrister and Solicitor
Insurer's Representative:
Lee Samis Barrister and Solicitor
The parties filed an Agreed Statement of Fact and two other exhibits. No witnesses testified, but submissions were made by both lawyers. The cases referred to by the parties are set out at Schedule A to this decision.
Evidence and Findings:
Ms. Wessels was not employed on March 19, 1992, the date she was injured in the accident. I understand that she last worked on November 15, 1991. During the 52 weeks preceding the accident, she worked for 36 weeks and earned $13,301.26, plus vacation pay of $194.67, plus "severance" of $1,616.00 for a total of $15,111.93.
Section 12(7) of the Schedule sets out the rules for calculating a person's gross weekly income.
12(7) The following rules apply to the calculation of gross weekly income:
- A person's gross weekly income shall be deemed to be the greatest of,
i. his or her average gross weekly income from his or her occupation or employment for the four weeks preceding the accident,
ii. his or her average gross weekly income from his or her occupation or employment for the fifty-two weeks preceding the accident,
iii. $232.
The arbitration cases concerning the calculation of weekly income benefit for insured persons who are claiming section 12 benefits, but who did not work the entire year prior to the accident, are thoroughly analysed in the decision of Arbitrator Draper in Chuong Vo and Maplex General Insurance Company, October 4, 1993, OIC File No. A-002777. I agree with Arbitrator Draper's reasoning. I concur that the ordinary meaning of section 12(7) of the Schedule appears to be that an applicant's average gross weekly income is to be calculated over a four-week and 52-week period before the accident, even if she had no income from her occupation or employment during some of those weeks.
In Mr. Vo's case, he was indefinitely laid off from his employment in January 1992, and was receiving unemployment insurance benefits at the time of his accident, the following June. In the case of Joseph N. Bush and Pilot Insurance Company, April 25, 1994, OIC File No. A-004687, I heard evidence that, at the time of the accident, Mr. Bush was receiving temporary total disability benefits from the Workers' Compensation Board. I calculated his entitlement to weekly income benefits based on the amounts he earned in the 52 weeks preceding his accident, divided by 52 weeks.
In Ms. Wessels' case, she earned $13,301.26 plus $194.67 vacation pay for a subtotal of $13,495.93.
When this subtotal is divided by 52 and 80 per cent of the result ($259.54) is taken, a weekly income benefit amount of $207.63 results. In my view, the vacation pay accrued over the period that Ms. Wessels worked and should be included in her gross weekly income. This result is consistent with the approach followed by Senior Arbitrator Naylor in Yen V. Nguyen and Progressive Casualty Insurance Company, August 31, 1994, OIC File No. A-004698, and by Justice Forget in his April 21, 1995 decision in Michel Descarie v. The Personal Insurance Company of Canada, Ontario Court General Division, unreported decision.
However, I do not include the "severance" of $1,616.00 which Ms. Wessels also received as part of her "average gross weekly income from ... her occupation or employment for the fifty-two weeks preceding the accident". This "severance" was received presumably pursuant to the statutory obligations set out in the Employment Standards Act, R.S.O. 1990, c.E.14, as amended.
Senior Arbitrator Naylor discussed the issue of severance pay in the case of Branden K. Hui and Security National Insurance Company, November 15, 1991, OIC File No. A-000055, and I agree with her characterization of such payments:
Both termination pay and severance pay are payable on the termination of employment. Both are designed to cushion the economic effects of loss of employment by continuing an employee's flow of income for a period. The common purpose of the statutory requirements to pay termination and severance pay is to afford an employee the opportunity to find another job. Although such payments are intended to cushion economic dislocation following termination, they are payable regardless of whether, or when, the individual employee obtains re-employment.
Weekly income benefits under s. 12 are intended to compensate an applicant for loss of income arising from his or her inability to work as a result of an automobile accident. Payments for loss of income from the sources specified in s. 12(4)(b) must be deducted from such benefits. In order for payments to represent payments for loss of income, the payments must be predicated upon the occurrence of loss, and made for that loss. The loss for which the payment is made is not loss of employment, per se, but loss of income. Generally, one would expect payments of this kind to terminate when the loss to which they pertain is made good.
In my view, therefore, the payment made to the Applicant is not a payment for loss of income, as that term is properly construed under s. 12(4)(b). It was paid to the Applicant, whether or not he got another job. The payment did not depend in any way upon the Applicant's incurring a loss of income as a result of the loss of his employment. The payment was payable even if the Applicant had obtained a better paying job the next day.
Expenses
The parties are expected to return for a hearing with respect to other issues in dispute between them. I will deal with the question of expenses after that hearing.
Order:
The Applicant's gross weekly income from employment is $259.54. She is entitled to weekly income benefits in the sum of $207.63 per week, less any applicable deductions, as set out in the Schedule.
Expenses will be dealt with following the next hearing.
June 15, 1995
K. Julaine Palmer Arbitrator
Date
SCHEDULE A
Joseph N. Bush and Pilot Insurance Company, April 25, 1994, OIC File No. A-004687;
Antonio Ferrari and Royal Insurance Company of Canada, September 8, 1994, OIC File No. A-007313 (under appeal);
Branden K. Hui and Security National Insurance Company, November 15, 1991, OIC File No. A-000055;
Baraket (Ben) Mouawad and Alpina Insurance Company Limited, June 30, 1994, OIC File No. A-003226 (under appeal);
Yen V. Nguyen and Progressive Casualty Insurance Company, August 31, 1994, OIC File No. A-004698;
Vincenzo Scavuzzo and Canadian Home Assurance Company, June 19, 1992, OIC File No. P-000626;
Chuong Vo and Maplex General Insurance Company, October 4, 1993, OIC File No. A-002777, appeal decision dated March 11, 1994;
Descarie v. The Personal Insurance Company of Canada, Ontario Court General Division, unreported decision.