Rodrigues v. Workplace Safety and Insurance Appeals Tribunal, and Workplace Safety and Insurance Board, Intervenor [Indexed as: Rodrigues v. Workplace Safety and Insurance Appeals Tribunal]
87 O.R. (3d) 71
Ontario Superior Court of Justice, Divisional Court,
Jennings, Lederman and Swinton JJ.
September 10, 2007
Workers compensation -- Benefits -- Calculation -- Employer making contributions to worker's union's health and pension plans before worker was permanently injured -- Worker granted Future Economic Loss benefits award after accident -- Board excluding employer's contributions to health and pension plans from worker's pre-injury earnings in calculating benefit -- Vice-Chair of Workplace Safety and Insurance Appeals Tribunal affirming that decision -- Vice-Chair's decision patently unreasonable as she failed to consider legislative history and government's explanation for applicable provisions -- Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16.
The applicant suffered a serious back injury in a work- related accident and was forced to stop working. He was granted a Future Economic Loss benefits award, calculated at 85 per cent of the difference between entry level wages and his pre-injury earnings. Before the applicant's injury, his employer had been making contributions to the applicant's unions health and pension plans on his behalf. The Workplace Safety and Insurance Board calculated the applicant's pre- injury earnings based only on his hourly rate and vacation pay, and did not include the contributions made on his behalf to the health and pension plans. The applicant applied to the Board to have the employer's contributions included in his earning. The request was denied, and the Appeals Resolution Officer affirmed that decision. The applicant appealed to the Workplace Safety and Insurance Appeals Tribunal. The Vice-Chair of the Tribunal found that the contributions were not "earnings" within the meaning of s. 2 of the Workplace Safety and Insurance Act, 1997 and were not to be included in the existing base salary for the purpose of calculating benefits. The applicant applied for judicial review of that decision.
Held, the application should be granted.
Per Lederman J. (Jennings J. concurring): The Vice-Chair failed to take the legislative history of the applicable provisions and the government's explanation for various amendments to the Act into consideration. The failure to consider it, as it was in evidence before her, and to assess its overall weight in the context of the factual and legal matrix rendered the decision patently unreasonable.
Per Swinton J. (dissenting): The failure to reference the legislative history did not render the decision patently unreasonable. The legislative history relied upon by the applicant was not determinative of the meaning of "earnings" in the Act. Whether or not a particular payment for benefits is included in earnings has been treated by the Board in its Policy and by the Tribunal in its decisions as a fact-based inquiry as to whether the payment is part of the remuneration paid to the worker. That is a reasonable interpretation of "earnings". [page72 ]
APPLICATION for judicial review of a decision of the Workplace Safety and Insurance Appeals Tribunal.
Cases referred to Rizzo & Rizzo Shoes Ltd. (Re), 1998 SCC 837, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 36 O.R. (3d) 418n, 154 D.L.R. (4th) 193, 221 N.R. 241, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 C.L.L.C. Â210-006 (sub nom. Ontario Ministry of Labour v. Rizzo & Rizzo Shoes Ltd., Adrien v. Ontario Ministry of Labour); Roach v. Ontario (Workplace Safety and Insurance Appeals Tribunal), [2005] O.J. No. 1295, 138 A.C.W.S. (3d) 587 (C.A.); Trotter v. College of Nurses of Ontario, [1991] O.J. No. 348, 44 O.A.C. 302, 25 A.C.W.S. (3d) 1328 (Div. Ct.) Authorities referred to Workers' Compensation Amendment Act, S.O. 1989, c. 47 (Bill 162), s. 1(2) Workmen's Compensation Act, R.S.O. 1980, c. 539, ss. 1(1), 5(a) [as am. by S.O. 1984, c. 58, s. 44(1)] Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A, ss. 2(1) "earnings" [as am.], 25 [as am.], 126
Jerry Raso, for applicant. Daniel S. Revington, for respondent. Jean-Denis Bélec, for intervenor.
LEDERMAN J. (JENNINGS J. concurring):--
Nature of Proceeding
[1] This is an application for judicial review of the decision of Vice-Chair Sutherland of the Workplace Safety and Insurance Appeals Tribunal ("WSIAT") dated November 15, 2005 wherein she denied the claim of the applicant to have his pre- injury earnings recalculated after March 1999 to include the pre-injury contributions to the Health and Welfare Plan and to the Pension Plan of the Sheet Metal Workers' International Association, Local 30.
Background Facts
[2] The applicant suffered a serious back injury on March 11, 1998 as a result of a work-related accident. He was forced to stop working because of his injury. His employer had been making contributions for employment benefits on his behalf when the injury occurred. Pursuant to s. 25 of the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A (the "Act"), the applicant did continue to receive the pension contributions and health and welfare benefits for one year after the injury. These were not paid by the employer, however. Rather, s. 25 of the Act requires that, for multi-employer plans, the plans themselves are required to provide the benefits under the plans to the worker for a maximum of one year from the date of the injury. [page73 ]
[3] The applicant applied to the Workplace Safety and Insurance Board (the "WSIB") and was granted a Future Economic Loss benefits award. It was calculated at 85 per cent of the difference between entry level wages of $7 per hour and his pre-injury earnings. The WSIB calculated his pre-injury earnings based only on his hourly rate and vacation pay. It did not include the contributions made on his behalf to the health and welfare plan and to the pension plan.
[4] After the one year, on March 11, 1999, the two plans ceased their obligations under s. 25 and stopped providing the applicant with the benefits and contributions under the plans.
[5] The applicant applied to the WSIB to have the employer's contributions to his health and welfare and pension plans included in his earnings basis for the period commencing March 12, 1999. The Claims Adjudicator of the WSIB denied his request.
[6] This decision was appealed to the next level, the Appeals Resolution Officer, who upheld the Claims Adjudicator's decision. The applicant then appealed to the WSIAT. Vice-Chair Sutherland found that the hourly contributions to the health and welfare plan and pension plan by the employer were not "earnings" within the meaning of s. 2 of the Act and, therefore, were not included in the existing salary base for the purpose of calculating the applicant's entitlement to benefits. Section 2 of the Act defines "earnings" as including "any remuneration capable of being estimated in terms of money but does not include contributions made under section 25 for employment benefits".
The Issue
[7] Before the accident which gave rise to his injury, the applicant's employer made contributions to cover certain employment benefits for the applicant. After the accident, the applicant claimed that the employer's contributions for these employment benefits should be included when calculating his pre-accident earnings. If these contributions were included in the calculation it would make his pre-accident earnings higher. If the pre-accident earnings were higher, the applicant could claim he suffered a larger wage loss because of the accident, so he could claim higher compensation benefits.
[8] Given the applicable standard of review of the decision of the Vice-Chair of the WSIAT, which all parties agree upon as being one of patent unreasonableness, the sole question is whether or not the WSIAT's decision that these contributions should not be included in the applicant's pre-accident earnings was so irrational as to be patently unreasonable. [page74 ]
The Vice-Chair's Decision
[9] In her reasons, the Vice-Chair commenced her analysis by citing the relevant sections of the Act. She cited WSIB policy and noted that the Act requires the Tribunal to apply Board policy.
[10] The relevant Board policy was Operational Policy 4.1. This policy includes a comprehensive list of the kind of payments to be included in the long term earnings basis. The Vice-Chair concluded that employment benefit payments and pension plan contributions are not included in that list and are, therefore, not included in the earnings basis.
[11] The Vice-Chair also took note of prior Tribunal decisions which on virtually identical facts, had already found employer's contributions to plans were not earnings under the Act.
[12] She also noted that if an employer had made payments to a worker in lieu of benefits, the Board policy would characterize such pay in lieu as being included in earnings. However, there were no payments to the worker in lieu of benefits here. To the contrary, the employer paid a specified amount to the union which the union distributed among a number of funds, some of which were in the applicant's name.
[13] The Vice-Chair considered the fact that no direct payment would be made to the applicant unless the trust funds were discontinued and, accordingly, found that the money remitted by the employer to the funds is not part of the worker's earnings.
[14] In further reference to the Board policy, the Vice-Chair also noted that the list of benefits included in the Board's policy were all taxable. However, in the case before her the contributions made by the employer to the union for employment benefits were not taxable for the applicant. The tax-free nature of the employer contributions was another indication to the Vice-Chair that the contributions were not intended to be earnings of the applicant.
[15] The Vice-Chair found that if contributions by an employer for benefits were included in the applicant's earnings, it must follow that all Ontario workers with benefit packages would have the cost of those benefits included in their earnings basis. The Vice-Chair found that, quite apart from the impact this would have on the overall Workplace Safety and Insurance system by increasing the pre-accident earnings basis, this would result in non-taxable earnings being included in that earnings basis. The Vice-Chair held that this could not be what the legislature intended.
[16] In conclusion, the Vice-Chair found, at para. 115 of her reasons, that "the inclusion of the employer's benefits contributions [in the applicant's earnings basis] would be contrary to the real merits and justice for the broader public". [page75 ]
Legislative History
[17] Prior to 1990, the definition of "earnings" and "wages" was broad and included any remuneration capable of being estimated in terms of money without reference to contributions for employment benefits: Workmen's Compensation Act, R.S.O. 1980, c. 539, s. 1(1)(i).
[18] In 1984, the Workmen's Compensation Act was amended by S.O. 1984, c. 58, s. 44(1). At that time, the notion of "net average earnings" was introduced and the Board was then required to deduct the probable Canada Pension Plan ("CPP") and Employment Insurance ("EI") premiums payable by the worker as well as the probable amount of income tax from his or her earnings.
[19] In 1990, the Workmen's Compensation Act was amended again by the Workers' Compensation Amendment Act, S.O. 1989, c. 47, otherwise known as Bill 162.
[20] In its First Reading, Bill 162 included s. 1(2) which amended the definition of "earnings". It contained the phrase, "but does not include contributions for employment benefits". Therefore, the proposed amendment at First Reading would exclude all contributions for employment benefits.
[21] This was not the final version of the Bill that passed, however. Section 1(2) of Bill 162 was then itself amended at Second Reading in May 1989 with the phrase, "but does not include contributions made under section 5(a) for employment benefits".
[22] The amendment was accompanied by the following statement by the government. It explained that the exclusion was intended to be restricted to contributions made under s. 5(a) only, which is limited to one year, commencing from the date of the injury:
Subsection 1(2)
Purpose
This amendment will correct an oversight in Bill 162. Under the current Act, employers are to report to the WCB their costs of any calculable benefits extended to the worker. Since Bill 162 extends the actual benefit protection to the worker for certain benefits, the employer was relieved from the obligation to include them in the wage or salary calculation. Thus the employer would not have to bear the cost twice. But what the Bill does as drafted is delete the obligation to report those costs even after the obligation to continue the benefit protection expires.
This amendment will correct that oversight by restricting the exclusion for the costs of those benefits just to the required period of benefit maintenance.
For example if the inured worker remains on temporary compensation for 18 months, then during the first 12 months, the employer will not include as [page76 ]part of the worker's wages or salary reported to the WCB the employer's costs associated with those benefits being maintained as a result of Bill 162. But, during the last 6 months the employer would report the value of the employer's costs for those benefits which he had previously maintained for the injured worker. These would then be reflected in the temporary compensation paid to injured worker.
[23] Section 5(a) was the clause in the Act that required employers or multi-employer benefit plans to maintain the contributions that had been made by the employer prior to the injury, for one year from the date of the injury. The exclusion of s. 5(a) contributions in the definition of earnings, according to applicant's counsel, was meant to avoid an employer from paying twice -- once by the employer under s. 5(a) and secondly, by having the same contributions included in the earnings basis.
[24] Section 5(a) is the present s. 25 of the Act which reads, in part, as follows:
Employment Benefits
25(1) Throughout the first year after a worker is injured, the employer shall make contributions for employment benefits in respect of the worker when the worker is absent from work because of the injury. However, the contributions are required only if,
(a) the employer was making contributions for employment benefits in respect of the worker when the injury occurred; and
(b) the worker continues to pay his or her contributions, if any, for the employment benefits while the worker is absent from work.
Multi-employer benefit plans
(4) Subsection (1) does not apply to an employer who participates in a multi-employer benefit plan in respect of the worker if, when the worker is absent from work because of the injury during the first year after it occurs,
(a) the plan continues to provide the worker with the benefits to which he or she would otherwise be entitled; and
(b) the plan does not require the employer to make contributions during the worker's absence and does not require the worker to draw upon his or her benefit credits, if any, under the plan during the absence.
Definition
(7) In this section,
"contributions for employment benefits" means amounts paid in whole or in part by an employer on behalf of a worker or the worker's spouse, child or dependant for health care, life insurance and pension benefits. [page77 ]
[25] Applicant's counsel submits that Bill 162 as enacted -- restricting exclusion from earnings only those contributions for benefits made for one year under s. 5(a) (now s. 25) -- clearly establishes that the definition of earnings does not exclude the contribution for employment benefits at issue in this case as they were no longer being paid on behalf of the applicant as s. 25 benefits.
Failure by the Vice Chair to Consider the Legislative History
[26] This legislative history and the government's explanatory purpose of the amendment was put before the Vice- Chair, as evidence, but no consideration is given to it in her reasons or analysis.
[27] The Vice-Chair purported to follow Board policy, but it is unclear whether the Board was aware of or considered this legislative history and explanation in formulating its policy on employer contributions.
[28] The use of legislative history as a tool for determining the intention of the legislature is an entirely appropriate exercise and one which has often been employed by the Supreme Court of Canada: see Re Rizzo & Rizzo Shoes Ltd., 1998 SCC 837, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 31. Having said that, however, one must be very careful in utilizing it for the purposes of statutory interpretation and must consider its context before placing too much weight and reliability upon it.
[29] What is striking in this case is the total failure by either the WSIB or the WSIAT to take the legislative history and the government's explanatory purpose into account in any way. The Vice-Chair was engaged in an exercise of statutory interpretation and she considered a variety of factors in determining the purpose of the statutory provision and the nature of the legislature's intention. She specifically found that it could not have been the legislature's intention to turn the employment contributions into non-taxable pre-accident earnings or intended the result of the legislation to be that workers would receive non-taxable earnings. Having considered a multitude of factors with respect to legislative purpose and intention, she also should have weighed the evidence of the government's explanatory purpose which on its face makes it clear that the definition of earnings would not exclude the contribution for employment benefits at issue in this case. That is not to say that had the legislative history and purpose been considered, the Vice-Chair might not have found it determinative and given it less weight in comparison to the other factors that she did consider. She erred in ignoring the stated purpose altogether, particularly since it plainly suggests an [page78 ]interpretation opposite to the conclusion at which she arrived. The failure to consider it, as it was evidence before her, and to assess its overall weight in the context of the factual and legal matrix is a legal error which deprives the decision of deference.
[30] Accordingly, in these circumstances, I must conclude that the failure to consider relevant evidence that might have had a significant impact on the Vice-Chair's findings renders her decision patently unreasonable.
[31] Therefore, the decision of the Vice-Chair of the WSIAT is set aside and the matter is remitted back for a re-hearing in accordance with these reasons.
[32] At the conclusion of a hearing, counsel for the applicant indicated that if successful he would be seeking costs in the approximate amount of $4,000 against the WSIAT and WSIB. Counsel for the WSIAT and WSIB did not take issue with the quantum sought. This amount is appropriate and, accordingly, there will be a costs order to this effect.
[33] SWINTON J. (dissenting): -- The standard of review of a decision of the Workplace Safety and Insurance Appeals Tribunal (the "Tribunal") is patent unreasonableness. A court on judicial review should set aside the decision only if it is clearly irrational (Roach v. Ontario (Workplace Safety and Insurance Appeals Tribunal), [2005] O.J. No. 1295, 138 A.C.W.S. (3d) 587 (C.A.), at para. 18).
[34] An injured worker who suffers a loss of earnings is entitled to 85 per cent of the difference between the worker's net average earnings before the injury and the net average earnings the worker is able to earn after the injury. Therefore, in this case, the Tribunal was required to determine whether the employer contributions to union benefit and pension funds were "earnings" within the meaning of s. 2(1) of the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A (the "Act"). "Earnings" or "wages" are defined to "include any remuneration capable of being estimated in terms of money, but does not include contributions made under section 25 for employment benefits".
[35] The determination of earnings in a particular case is a matter within the specialized jurisdiction of the Tribunal. In this case, the Tribunal treated the determination of earnings as a fact-based inquiry. This was the approach that had been taken in other cases that it considered.
[36] Section 126(1) of the Act requires the Tribunal to apply any applicable policy of the Workplace Safety and Insurance Board with respect to the subject matter of an appeal. Pursuant to s. 126(2), the Board must state in writing the applicable [page79 ]policies, and it did so in this case. If the Tribunal concludes that a policy is not authorized by or is inconsistent with the Act or is not applicable, it must refer the policy to the Board with its reasons for its conclusion (ss. 126(4) and (5)).
[37] In this case, the Tribunal applied Operational Policy 4.1, "Determining a Worker's Average Earnings". It does not appear that any of the submissions made to the Tribunal claimed that the Policy was in conflict with the legislation.
[38] The Tribunal concluded that the Appendix to that Policy set out a comprehensive list of the type of benefits to be included in the long term earnings calculation. The Appendix included a percentage of base pay paid to a worker in lieu of benefits, but did not include payments for benefits plans or pension plans.
[39] The Tribunal also considered the nature of the employer contributions and the relationship between the employer contributions and the benefits received by the worker. Because workers do not receive any excess funds left in their benefit account at year end, the Tribunal concluded that the employer contributions were not earnings (reasons, paras. 107-08). The Tribunal was also influenced by the terms of the collective agreement, which provided that the moneys in the funds are not remitted to the worker unless the trust fund is discontinued (reasons, para. 109). Moreover, the Tribunal found that only a portion of the funds remitted to the union was directed to the health and welfare and pension funds (at paras. 143-44, 148, 151).
[40] The Tribunal was also influenced by the fact that the employer contributions were not subject to income tax, whereas the benefits included in earnings in Policy 4.1 are taxable.
[41] The Tribunal's decision was consistent with an earlier Tribunal decision, 2118/01, which involved a virtually identical fact situation. The worker in that case was in the same union as the applicant, and the employer made contributions to the same union-administered trust fund. The same issue was under appeal -- that is, whether the employer contributions were "earnings". That decision found the employer's contributions to the benefit trust fund were not "earnings" or "wages" within the Act. A request to reconsider the decision was denied, and a panel of the Tribunal confirmed that the employment contributions were not "remuneration" (Decision 2118/01R).
[42] The Tribunal did not make reference to the legislative history included in the submissions of Tribunal Counsel. In my view, the failure to do so does not render its decision patently unreasonable or "clearly irrational".
[43] The submissions before the Tribunal appear to have focused on the meaning of earnings, the prior decisions of the [page80 ]Tribunal and the nature of the payments in this case, rather than the legislative history. While Tribunal Counsel made reference to the legislative history, this does not appear to have been a major issue before the Board, nor a concern raised in other submissions.
[44] Moreover, a failure to mention certain evidence is not necessarily fatal to the decision of an administrative tribunal (Trotter v. College of Nurses of Ontario, [1991] O.J. No. 348, 44 O.A.C. 302 (Div. Ct.)).
[45] Legislative history can be used to determine the mischief or purpose at which legislation is aimed, but the Supreme Court has recognized that material from legislative debates plays a limited role in the interpretation of legislation because of concern about its reliability (Rizzo & Rizzo Shoes Ltd. (Re), 1998 SCC 837, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 35).
[46] In my view, the legislative history relied upon by the applicant in this application for judicial review is not determinative of the meaning of "earnings" in the Act, and therefore, there is no need to refer this matter back to the Tribunal. The explanatory material set out in para. 22 of the reasons of Lederman J. shows that the purpose of the legislative amendment in 1989 was to require the employer to continue to provide benefits to an injured worker for up to one year and to ensure that the benefits were not included in reported earnings in that period, so as to avoid having the employer bear the cost twice. However, the definition of earnings in the Act does not specifically include the employer's costs of benefits. Whether or not a particular payment for benefits is included in earnings has been treated by the Board in its Policy and the Tribunal in its decisions as a fact-based inquiry as to whether the payment is part of the remuneration paid to the worker (see for example, Decision 2118/01R). That is a reasonable interpretation of "earnings".
[47] In this particular case, the Tribunal's task was to determine the meaning of "earnings" in light of the language used in the Act and policy considerations, as well as evidence about the nature of the actual benefit payments. The Tribunal undertook extensive investigation to obtain relevant evidence on earnings and made a decision that is squarely within the Tribunal's specialized expertise. The decision was consistent with an earlier case with similar facts.
[48] In my view, the Tribunal's decision was not patently unreasonable. Therefore, I would dismiss the application for judicial review.
Application granted.