WORKPLACE SAFETY AND INSURANCE BOARD
APPEALS RESOLUTION OFFICER DECISION
DECISION NUMBER: Decision Number: 20100181
OBJECTION BY: Worker
REPRESENTATIVE: Worker
EMPLOYER: Self Employed
ISSUE
The worker objects to the decisions regarding entitlement to future-economic loss (FEL) benefits and the adjustment of the worker’s earnings basis from the personal-coverage amount to average earnings. These issues were summarized in the case manager’s letter dated November 2, 2009.
HOW THE ISSUES ARISE
The worker was employed as a self-employed tile-setter with 20 years experience. On October 9, 1990, at 41-years of age, he got up while setting tiles and felt pain in his low-back area. The initial diagnosis was acute lumbar strain.
In June 1991, the worker was assessed at a Regional Evaluation Centre (REC) and the diagnosis of lumbosacral strain was confirmed.
Standard restrictions for the low back were identified on a permanent basis. The file was referred to Vocational Rehabilitation Services and the general vocational-rehabilitation assessment report of June 1991 confirmed the worker intended to pursue the same line of work, and possibly hire an individual to do most of the heavy work while he concentrated on locating contracts. This was outlined in the vocational-rehabilitation plan of June 1991.
The adjudicator reviewed the worker’s entitlement to ongoing benefits in June 1991 and concluded the worker was entitled to temporary partial 75 per cent benefits. This was based on the percentage of work the worker said he was capable of performing.
The adjudicator’s letter dated April 24, 1992, confirmed the worker had reached maximum medical recovery and that a permanent impairment resulted form the workplace injury.
The D1 FEL decision, dated September 14, 1992, confirmed the vocational-rehabilitation objectives of messenger and light assembler, paying an average wage of $8.50 per hour. The FEL adjudicator concluded the worker suffered a future loss of earnings as his projected wage of $8.50 per hour was less than his pre-injury personal-coverage amount of $28,000.00 per year. Since he was co-operating in a WSIB approved vocational-rehabilitation program, he was also entitled to supplementary benefits while he participated in the program. The above decision became effective as of October 1, 1992. The Non Economic Loss (NEL) Adjudicator’s letter dated October 21, 1992 confirmed the worker was granted a 15% NEL award for the low back.
The FEL adjudicator’s letter of November 15, 1994 explained the R1 FEL decision. Since the worker was self-employed at the time of the accident, the FEL adjudicator requested the worker’s actual pre-accident income from his self employment work as a tile-setter having regard for the fact the worker had valid personal coverage in the amount of $28,000.00 per year. It was explained that the FEL benefits compare the worker’s current earnings capacity with his actual earnings capacity and not his personal-coverage rate.
The worker claimed he immigrated to Canada in November 1989 and had no income from employment in Canada prior to 1990. The worker’s business income, as remitted on his personal income tax returns for the year 1990, was $4,930.00 gross business income and $2,883.00 net taxable income. Since the accident date was October 9, 1990, prorated over a full year, the taxable income was prorated to be approximately $3,845.00. It was concluded that the personal-coverage amount requested was not a realistic estimate of his actual income from employment. The actual income from his business was very low when compared to his estimate.
Since the worker was unable to demonstrate that his actual pre-accident income was greater than $3,845.00 per year, the FEL adjudicator utilized this rate when calculating his entitlement to FEL benefits. The worker was considered capable of earning at least entry-level wages as a light assembler earning $14,000.00 per year. When compared with the worker’s actual pre-accident income, no ongoing wage loss was identified resulting from the workplace injury. A one-dollar sustainability FEL benefit was confirmed. The worker’s earnings basis was also adjusted for all FEL and supplement payments, to his actual earnings of $3,845.00. This resulted in a recoverable overpayment of $31,452.57.
The FEL adjudicator’s letter of January 16, 1995 later adjusted the worker’s actual pre-accident income to an estimate of $15.000.00 per year, thereby adjusting the recoverable overpayment amount to $16,097.50. The overpayment was created when recalculating the FEL benefits to reflect the worker’s actual income from employment prior to the workplace injury, rather than the personal coverage rate in effect at the time of $28,000.00 per year.
A final review of the FEL award (R2) was completed in March 1998. It was confirmed that employment as a light assembler or messenger remained suitable and with employment, would restore the worker’s pre-accident earnings profile of approximately $15,000.00 per year. Since a wage loss was not anticipated, there was no entitlement to ongoing FEL benefits.
In his letter of July 3, 2009, the worker representative acknowledged the worker’s objection to the final FEL reviews and that he took no further action on the issue at the time. The case manager was asked to review the file to determine if a wage loss had resulted because of the injury, and if further FEL benefits were applicable.
The worker representative’s letter dated August 19, 2009, explained the worker’s objection to the FEL reviews, the downward adjustment of the personal-coverage rate, and the adjustment to temporary-total benefits for the period prior to the FEL decisions.
Further, the worker representative’s letter of October 8, 2009 provided an additional submission on the issue as it relates to the calculation of the personal-coverage rate.
The case manager’s letter of November 2, 2009, acknowledged all of the submissions. It was explained that the FEL benefits were paid according to the suitable employment or business (SEB) earnings and the potential earnings, based on the chosen SEB. The case manager agreed with the vocational-rehabilitation consultant’s review and decision (letter of August 12, 1993) that confirmed further vocational-rehabilitation services were not appropriate. The chosen SEB and the FEL decisions at D1, R1, and R2, were therefore confirmed.
Regarding the earnings basis used to calculate the worker’s benefits, it was concluded the decision to change the earnings basis using average earnings and not the personal coverage originally used, was correct. It was explained that the decisions made at the time were based on WSIB Practices and Procedures that were strictly followed by the time the file reached FEL status. Once earnings were needed to calculate a FEL, the average earnings were used in replacement of the personal coverage originally used, which was common practise and required by the FEL adjudicator prior to the policy coming into effect.
With regard to the adjustment of temporary-total benefits being reduced to temporary-partial benefits, the case manager agreed the worker should have been entitled to full benefits prior to and during his co-operation in the vocational-rehabilitation program. Therefore, full temporary-total benefits were restored from June 20, 1991 to April 1, 1992.
The remaining issues were referred to the Appeals Branch for re-consideration and review.
AUTHORITY
Workplace Safety and Insurance Board Operational Policy Manual Document (OPM):
- 08-02-03 – (October 1989) – Personal Coverage;
- 11-01-03 – Merits and Justice
- 18-04-05 – Initial Determination Where Suitable and Available Employment or Business Has Been Determined
- 18-04-14 – Reviewing FEL Benefits (Prior to Final Review)
- 18-04-20 – Final FEL Benefit Review
- 18-06-01 – Calculating Temporary Total Disability Rate - This document was previously published as: 18-06-01 dated October 12, 2004, 05-02-02 dated October 22, 2001.
RESOLUTION METHOD AND PROCESS
The worker representative agreed to proceed by way of written submissions. The Objection Form, dated August 19, 2009, and the attached submissions of August 19, 2009, were submitted for review of the issues under objection.
In addition, a copy of an ARO’s decision, dated March 15, 2000, and a Memorandum from Mr. Paul Holyoke, General Counsel, WSIB, dated February 20, 1998, was also enclosed.
The worker representative also provided a further submission dated March 29, 2010. In it, he makes reference to his submission of October 8, 2009 and asked that this be considered as well.
He also submitted a fax dated August 23, 2010 further to his fax of March 29, 2010. In it, he attached a re-considered decision from the Appeals Resolution Officer’s decision of March 15, 2000.
ASSESSMENT OF THE EVIDENCE
I have reviewed the record, the submissions, and have considered the matter.
Personal-Coverage Rate
The worker representative identified Operational Policy # 08-02-03 – Personal Coverage, and references the two versions dated October 1989 and October 1992. He explained the WSIB accepted the worker’s estimate of $28,000.00 per year and then adjusted this, four years later. He explained the policies do not give the WSIB the authority to review the level of coverage after it has been accepted; only to cancel it.
He also attached a Memo from the WSIB’s general counsel, dated February 20, 1998, regarding this issue and suggests the practice was against WSIB policy.
He also attached a copy of an ARO decision dated March 15, 2000, where he suggests the ARO used the same section of the WSIB Act in a personal-coverage situation (s. 43(2)), to set a fair basis. He maintains the worker should be put back and paid based on $28,000.00 per year and follow the applicable policy at the time. The worker representative provides a further submission on this issue, as outlined in his correspondence of October 8, 2009. He referenced the R1 decision dated November 15, 1994 when the worker’s earnings basis was reduced based on his actual earnings and adjusted to $15,000.00 which in turn created a sizeable debt on the part of the worker owing to the WSIB. He maintains the adjustment was incorrect. The worker representative explained the policy in effect on the date of accident must be followed in this case. He explained this required the decision-maker to use the estimated earnings in the approved personal-coverage application which in this case, requires an adjustment back to $28,000.00 retrospectively to the accident date, and that this also applied to the R1 decision of March 15, 1998, to age 65.
He also referenced his original submission where he put forth an alternative argument and provided a copy of the ARO decision in support of his position. He explained he had since discovered that the Board of Directors did not accept the recommendation after the policy review and was withdrawing the request, as it was not in keeping with the approved policy at the time. He also referenced the Merits and Justice Policy and requests the worker’s earnings basis for temporary-total benefits and FEL benefits be reflected by the approved policy at that time, and be adjusted to $28,000.00 per year retroactively to the date of accident, having regard for policy 05-02-02, dated November 1989. He also provided a copy of an Appeals Resolution Officer’s reconsidered decision dated March 29, 2010 which reconsidered the March 15, 2000 decision/consensual agreement.
The worker representative’s submission of March 29, 2010 was submitted in response to my correspondence of March 9, 2010. The March 9, 2010 letter acknowledged copies of OPM 08‑02‑03 would be obtained for review of the issue under objection. The letter also acknowledged the August 19, 2009 Objection Form with the attached submissions.
The worker representative’s letter of March 24, 2010 identified OPM 08-02-03, dated October 1989 as the correct document applicable to this case. He maintains the policy does not give the WSIB the authority to adjust the worker’s personal-coverage rate once it is accepted.
He also referenced his submission of October 8, 2009 where he supplied further information, including the Board of Director’s minuted document which allowed the verification practice as a policy change but only for decisions occurring on or after April 1, 1998.
He explained all of the affected decisions in this case were made prior to April 1, 1998. He explained the Board of Directors did not give the authority to implement the practice as policy until then and therefore, this must apply to this case.
He went on to explain that the Operating Area put in place a practice which resulted in a new earnings basis being applied retroactively. He is of the view this was contrary to the approved policies. He maintains that the approved policies that were in effect at the time of the accident be applied, and adjust the worker’s benefits based on $28,000.00 per year.
The August 23, 2010 submission suggests the submission related solely to the issue of the earnings basis used to calculate the worker’s benefits. He attached a copy of the Appeals Resolution Officer’s reconsidered decision dated May 6, 2010 which was a reconsideration of his original decision/agreement dated March 15, 2000. He explains that on the issue of the earnings basis used to calculate the worker’s benefits, the Appeals Resolution Officer was in agreement with his interpretation of how the policies were to be implemented.
I have considered all of the arguments and discussions as reported by the worker representative as outlined above. The benefits in this claim were initially established using the claimed personal coverage amount of $28,000.00 per year as reported by the worker. When reconciled with the actual earnings information provided by the worker including Revenue Canada documentation at the time of the FEL R1 benefit review, his claimed personal coverage amount was significantly higher than his actual earnings. It is well documented and referenced by the representative that the policy in effect at the time regarding personal coverage; Operational Policy # 08-02-03 dated October 1989 does not give the WSIB the authority to review/adjust the level of coverage.
The Board’s practice at the time of the 1994 decision initiated the adjustment to actual earnings when determining the FEL benefits and not the personal coverage amount used to that point in time to pay FEL benefits. I acknowledge that at the time of the reviews, this was not yet policy. In fact, the policy was revised several years later in 1998. That being said, I am also of the view the worker should not be financially rewarded because of a policy gap which was later revised in 1998 with the Board’s practice in place during the interim. In fact, the adjustment to actual earnings should have occurred, retroactively to the D1 FEL decision at the time of the adjustment.
The applicable policy # 08-02-03 – Personal Coverage, dated October 1989 states that once personal coverage is requested, coverage is continuous until cancelled by the WSIB, or a signed request to cancel is received from the applicant. Benefits are based on the amount of coverage requested. In this case, the worker requested personal coverage in the amount of $28,000.00 per year. The policy states the amount of coverage requested must be specified, best approximating the annual earnings of the applicant. Having regard for the earnings information obtained at the time of the FEL benefit review, the worker significantly failed to approximate his annual earnings. The policy goes on to state that the amount requested for personal coverage is the amount on which the benefits are calculated for benefit purposes.
The Board’s more recent policy on this issue; Optional Insurance (Document No. 12-03-02) states that an individual applying for optional insurance or requesting an adjustment to the approved amount of insurance must provide proof of earnings that is acceptable to the WSIB. It also states that an individual’s average annual earnings are calculated from the most recent Canada Revenue Agency income tax return or audited financial statement. It further provides that the WSIB determines average earnings from net business income for the previous year as reported to Canada Revenue Agency with some listed adjustments.
I also reviewed Policy # 08-02-03 Personal Coverage dated June 16, 1992, which states that individuals applying for personal coverage had to file a statement of estimated earnings acceptable to the Board and request coverage, in writing for a specific amount that best approximated the applicant’s annual earnings. It also indicated that if personal coverage was requested prior to a work-related accident, the applicant was entitled to compensation based on the amount of coverage requested.
There was an obvious discrepancy or revision that was required in the policy having regard for the earnings basis to be used in personal coverage cases at the time of FEL determinations. This likely initiated the approach the Board took in developing the practice that ultimately led to the policy revision which suggested actual earnings were to be used (1998).
The Merits and Justice Policy states that there may be rare cases where the application of a relevant policy would lead to an absurd or unfair result that the WSIB never intended. Therefore, a decision-maker may depart from a policy if it can be shown that the case has exceptional circumstances that justify doing so. Having regard for the Merits and Justice policy, and all of the other details as described above, I find the application of the policy would lead to a result never intended by the Board as explained above.
In my view, although the policy in effect at the time of the injury suggests the personal coverage amount of $28,000.00 is applicable, the personal coverage amount does not reflect a bona fide estimate of the amount the worker earned from his employment, which was significantly less. The worker significantly failed to approximate his annual earnings. I therefore concur that the decision of 1994 remains applicable regarding the adjustment of the worker’s earnings basis from the personal coverage amount.
FEL Benefits
In his submission of August 19, 2009, the worker representative contends the laws and policies that were in effect at the time should be used. He referenced the fact that many delays were encountered when gathering the necessary information for the FEL activity. He also noted the initial vocational-rehabilitation activity from April to October 1991 was geared to the worker continuing in accommodated self employment which, he said, was not realistic given the pre-injury job and the worker’s impairment.
He then noted the worker’s vocational-rehabilitation services were reactivated in April 1992. He referenced the psychovocational assessment report of June 1992 that identified the worker’s limited education, work experience, lack of understanding of the English language (comprehension, verbal, written, et cetera), in addition to his weak maths skills. He noted the worker required upgrading in both English and math to have any hope of employment. Further, he explained the WSIB gave only six months of full-time English as a Second Language (ESL) training, even though a minimum of two years was recommended.
Reference was also made to the August 12, 1993 letter from the vocational-rehabilitation technical advisor that explained a further full-time ESL program would not be a significant benefit to warrant further vocational-rehabilitation sponsorship. The letter explained the worker did not progress to the basic level of proficiency during the 10-month period the worker was in the program. The worker representative maintains the worker was in the full-time ESL program for only six months. He suggested the worker was being setup to fail and was not given even basic skills.
The D1 FEL decision of September 14, 1992 was made based on the objectives of messenger or light assembler, paying an average wage of $8.50 per hour. The worker representative maintains these objectives were not suitable for the worker noting his lack of English and his physical restrictions. Reference was again made to the psychovocational assessment reporting where it was indicated that re-entry into the workforce was extremely guarded. He explained the reporting noted the worker needed help from specialized services to aid in a productive and concentrated job search. He noted the above was suggested with the worker having two-year ESL training, but the worker was only granted six months. He maintains the worker was not provided with adequate skills to have a chance at employment. He is of the view the worker should be considered unemployable from the D1 FEL decision and should be entitled to a full FEL award.
With regard to the FEL R1 and the R2 reviews, he maintains the WSIB did not declare an objective for the worker; only that he could work at least at a minimum-wage job. He explained this was contrary to policy as the WSIB was required to identify an objective/SEB for the worker, having regard for his skills and abilities.
The initial vocational activity in 1991 confirmed it was the worker who explained he did not intend to change jobs and was in fact, adamant to stay on in his business as a tile setter and hire someone to do the heavier work while he concentrated on obtaining contracts.
The vocational rehabilitation file was then re-opened in May 1992. The psychovocational assessment reporting of June 1992 identified the worker was illiterate in English and his vocational options were limited to light maintenance and bench assembly, most likely in the Italian community.
The vocational plan proposal of August 1992 confirmed a minimum of 6 months of English as a Second Language (ESL) training would be provided to the worker with a further extension to be considered depending on the worker’s performance at the end of the 6 month program.
He was enrolled in the ESL courses from September 1992 to March 1993. A job search program was implemented thereafter that commenced on July 28, 1993 despite the worker requesting further ESL. The Job search was extended to June 1, 1994 thereby significantly surpassing the maximum amount required for a job search program (6 months). The worker had successfully completed a Creative Job Search Techniques program in November 1993 and had satisfactorily attained job searching skills. The job search program commenced in September 1993.
The VR Technical Advisor’s letter of August 12, 1993 addressed the worker’s request for further ESL training. It was explained that under normal circumstances, it would take approximately 6 months of ESL for a beginner to reach the level of basic English proficiency. The worker had yet to reach the beginner’s level of basic English literacy at the completion of his ESL. It was concluded that further ESL training would not be of significant benefit to warrant further VR sponsorship and was therefore denied. It is unclear as to why the worker didn’t reach the basic level of literacy however, I note the October 1994 memo questioned the worker’s rehabilitation efforts and that the worker reported being quite disabled. The case record confirms the worker was provided with 6 months of ESL training. Fluency in English would not be a prerequisite to securing and maintaining employment in the fields of light maintenance or bench assembly. This would not be a barrier to securing employment in these fields.
The worker failed to secure employment as a result of the recession in addition to the fact the worker was not considered an appropriate candidate for re-training as identified obstacles. At the time, the worker also reported a deteriorating back condition and explained he found it difficult to work at any type of employment. I also note the worker’s sincerity in his job search efforts was questioned for the period December 1993 to May 1994.
Vocational services were closed as outlined in the May 30, 1994 closure report. It was found the worker was employable with his earnings capacity partially restored. They concluded he was provided with vocational services and had the necessary skills to obtain, perform and sustain employment that would partially restore his pre injury earnings and I concur with this finding. The follow up reports leading to the closure of VR services acknowledged the working claiming the recession as the main obstacle for him not securing employment. There was no mention of his lack of English or math skills at that time.
It is also interesting to note that a call was received on the case record in August 1993 alleging the worker, in his self employed tile business performed tile work in February 1991 while the worker was in receipt of benefits for a cash payment of $1500.00 for the work performed. The caller stated the worker bragged about what he was doing while in receipt of WSIB benefits. The witness happened to be a WSIB employee. He allegedly did work for another customer as well sometime in 1991, again, while in receipt of WSIB benefits. A subsequent investigation occurred and a signed statement was obtained from the witness which included the tile work the worker performed for her, and the amount of payment the worker received. Ultimately, the Special Investigations Branch (SIB) took no further action on the allegations in 1999. Charges were never pursued. I note the worker would not submit to a signed statement regarding his work activities and payment for the period of time he was in receipt of WSIB benefits. On the balance of probabilities, this evidence would lead me to conclude the worker took on some tile contracts and performed work during the time he was in receipt of benefits despite no action being taken on the issue by the Operating area or the SIB.
Also, I note the worker’s prior work experience in his self employment would entail attaining and maintaining contracts, preparing documentation required to run the business, giving estimates and quotations on potential jobs etc. The worker could utilize these skills in securing employment within the recognized SEB.
The worker was awarded a 15% NEL award in October 1992. He was in his early 40’s at the conclusion of his vocational activities. I do not find these issues to be barriers for future employment within the identified objective. His job search program was significantly extended and his efforts leading to the conclusion of the job search was questioned for the period December 1993 to May 1994. Coupled with the recession, it is not surprising the worker was unable to secure employment. The worker himself acknowledged a significant barrier to him attaining employment within the SEB was a result of the recession.
Noting the above, I find the SEB established at the time of the initial and subsequent FEL reviews were appropriate and that the FEL calculations were correct.
CONCLUSION
The worker’s objections are denied.
Dated November 19, 2010
F. Bruno
Appeals Resolution Officer
Appeals Branch