The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing the decision made by the Workers Compensation Board ("WCB") that their average earnings have been correctly calculated. A teleconference hearing was held on January 23, 2024 to consider the worker's appeal.

Issue

Whether or not the worker’s average earnings have been correctly calculated.

Decision

The worker’s average earnings have been correctly calculated.

Background

The worker has an accepted WCB claim for injuries to their right upper leg and right shoulder sustained in a workplace accident on March 11, 2019, when they slipped and fell from a wall. The worker’s claim was accepted on March 18, 2019 and the payment of various benefits commenced. In speaking with the worker, the WCB confirmed the worker had started full time employment with the employer on October 24, 2018, subject to the availability of work and weather conditions. When the WCB accepted the worker’s claim, the WCB payment assessor calculated the worker’s weekly earnings and the worker was paid those earnings for the first 12 weeks of their claim.

Pursuant to WCB policy, income tax information for the years 2017 and 2018 and additional information from the worker and employer was gathered to establish the worker’s average earnings rate after the worker’s claim had gone beyond 12 weeks in duration. On June 4, 2019, a temporary average earnings calculation was completed based on the worker’s earnings from October 24, 2018 to March 11, 2019 as the income tax information had not yet been received. A letter setting out the worker’s new benefit rate was sent to the worker on June 17, 2019. On September 23, 2019, the worker’s average weekly earnings rate was updated as the employer had advised the WCB the worker’s hours were higher than previously provided and the worker was provided with an adjustment payment from June 4, 2019 to September 13, 2019.

On November 9, 2020, the worker provided the WCB with a copy of an October 29, 2018 Wage Agreement between themselves and the employer indicating that after 6 months of employment, the worker would receive a wage increase. The WCB contacted the employer who, on November 10, 2020 confirmed they had entered into the agreement with the worker. On November 13, 2020, the WCB Payment Assessor contacted the worker and advised, based on the Wage Agreement, their weekly average earnings would be adjusted to reflect the wage increase effective April 25, 2019.

The worker submitted an additional Wage Agreement, dated December 16, 2018, to the WCB on February 23, 2021. The Agreement noted once the worker had been employed with the employer for one year, they would receive the commercial rate for a journeyman position in Manitoba. In a discussion with the WCB Payment Assessor on February 16, 2021, the worker was advised as the date of implementation of the wage increase noted on the Agreement was in October 2019, which was after the date of their WCB accident, the WCB would not implement the increase as their wage was now subject to annual indexing pursuant to the WCB’s policies. A further conversation took place between the worker and the WCB to clarify the WCB’s policy on March 10, 2021, with a formal letter sent to the worker on March 11, 2021. A further letter was provided to the worker on April 20, 2021.

The worker requested reconsideration of the WCB’s decision on their weekly average earnings to Review Office on June 29, 2023. In their submission, the worker noted they entered into a probationary wage agreement with the employer that provided for a wage increase at 6 months employment as well as a further wage increase at one year employment. Review Office determined on July 17, 2023, the worker’s average earnings were correctly calculated. Review Office found the WCB Payment Assessor correctly calculated the worker’s average earnings, pursuant to the WCB’s policies. Further, Review Office found the Payment Assessor also correctly advised the worker the wage increase noted in the December 16, 2018 wage agreement with the employer would not be considered by the WCB as per WCB policies, the worker’s wages were indexed annually as the increase would have occurred after the March 11, 2019 workplace accident.

The worker filed an appeal with the Appeal Commission on November 27, 2023 and a hearing was arranged.

Reasons

Applicable Legislation and Policy

The Appeal Commission is 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 provisions of the Act in effect as of the date of the worker’s accident are applicable.

Subsection 39(1) of the Act provides that where an injury to a worker results in a loss of earning capacity, wage loss benefits are payable in accordance with section 40. Subsection 40(1) sets out that loss of earning capacity of a worker is the difference between the worker's net average earnings before the accident, and the net average amount that the board determines the worker is capable of earning after the accident.

Subsection 45(1) explains that "… [t]he board shall calculate a worker's average earnings before the accident on such income from employment and employment insurance benefits, and over such period of time, as the board considers fair and just…."

WCB Policy 44.80.10.10, Average Earnings (the "Policy"), outlines the process for determining a worker's average earnings. The Policy provides that in calculating a worker's average earnings under section 45 of the Act, the WCB will use formulas that incorporate regular earnings at the time of accident, average yearly earnings or probable yearly earning capacity. The Policy requires that the WCB use the formula that best represents the worker's employment and earnings pattern.

"Regular earnings" are defined in the Policy as:

"… the amount of earnings they would normally receive as remuneration in all occupation(s) in which they were employed on the date of the accident, as long as their ability to earn income from each of these occupations was affected by the compensable injury."

Regular earnings are based on the pay period converted to a weekly amount. A worker’s overtime, special reimbursements, allowances, and/or bonuses that are not regularly paid are not normally included when calculating a worker’s regular earnings.

“Average yearly earnings” are defined in the Policy as including any verifiable remuneration that the worker received as a result of employment and employment insurance benefits, as determined generally by documentable employment data from any consecutive 12-month period occurring during the one or two years before the compensable accident.

"Probable yearly earning capacity" is defined in the Policy as what a worker might be expected to earn for a consecutive 12-month period after the day of the accident. The 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. 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. The Policy goes on to provide additional explanation for when the probable yearly earning capacity will be used; for example, when a worker does not have a history of prior employment, or when the worker’s employment circumstances at the time of the accident differ significantly from past employment circumstances, or when the worker is an apprentice, youthful worker or probationary employee, or when the evidence demonstrates that the worker would have experienced a future change in earning capacity but for their workplace accident (i.e. there is sufficient evidence of an upcoming change in job or new job).

Worker's Position

The worker was self-represented and participated in the hearing by teleconference. The worker's position was that they were a probationary employee and that the WCB incorrectly calculated their probable yearly earning capacity by neglecting to consider the wage agreement that the worker had with his employer.

The worker submitted that the wage agreement was such that the worker was to start at an hourly wage of $25/hour and that the worker would receive raises to his hourly wage after 6 months and after 1 year whereby the worker would be earning $31.00 after one year. The worker stated that he was to receive a raise of $3 after 6 months and another raise of $3 after 1 year.

It was submitted by the worker that the wage of $31/hour was based off the ICI Manitoba Journeyman Carpenter rate at the time of $31.60 per hour.

The worker's position was that he ought to be considered a probationary employee and that his average earnings should be calculated based on the wage of $31/per hour that he was going to receive had he not been injured.

Employer's Position

The employer did not participate in the appeal.

Analysis

The issue before the panel is whether or not the worker's average earnings have been correctly calculated. In order to find that the worker's average earnings have not been correctly calculated, the panel must find that the wrong formula has been used to calculate the worker’s loss of earnings. The panel has determined that the formula that best represents the worker’s loss of earnings has been used and therefore the worker’s average earnings have been correctly calculated.

The WCB has developed and approved a comprehensive policy that sets out how such calculations are to be carried out. The Policy sets out three options for determining the worker’s average earnings: the regular earnings formula; the average yearly earnings formula; and the probable yearly earning capacity formula. The Policy explicitly requires that the formula that best represents the worker's loss of earnings be used to calculate and determine a worker’s average earnings.

The WCB used the probable yearly earning capacity formula to calculate the worker's average earnings. The panel accepts that this is the correct formula as the worker was a probationary employee which is a circumstance, as laid out in the Policy, in which the WCB uses the probable yearly earning capacity formula.

A memorandum to file dated October 27, 2020 indicates that the employer advised the WCB that there was an agreement to provide a raise to the worker after a number of months and that this was a verbal agreement. The worker however indicated to the WCB that there was a written agreement which stated that the worker was to receive a raise after a few months of working. The panel notes that the worker commenced work on October 24, 2018. A wage agreement dated October 29, 2018 and signed by the worker and employer was provided by the worker to WCB on November 9, 2020 (the "Wage Agreement"). A second agreement dated December 16, 2018 entitled Wage Agreement was provided by the worker to the WCB on February 23, 2021. This second agreement contemplated another raise after one year of employment.

The Wage Agreement provides that there would be a job performance assessment after 4 months of employment and if satisfactory the worker would receive a wage increase of $3 to occur after the 6th month of employment. The worker's evidence was that he never received the wage increase as he was injured between the 4th and 6th month of employment. The worker's evidence at the hearing was that no job performance assessment occurred but that he remained employed.

The panel finds, on a balance of probabilities, that the worker was a probationary employee and accepts that although no performance review occurred and although the raise did not occur at the 6-month point as the worker was no longer working, there is evidence from the worker and the employer that the increase was earned and would have occurred if the worker had not been injured and had continued employment. The panel accepts the evidence that the worker would have continued to work but for his injury.

The panel does not accept the worker's position that his average earnings should take into account a raise the worker may have received months after his injury. The panel finds that, pursuant to the Policy, only the earnings at the time of the accident must be considered.

There are circumstances when the WCB adjusts the worker's average earnings if satisfied that the average earnings before the accident do not fairly represent the worker's earning capacity and where there may be salary increases in the future (such as with an apprentice or a youthful worker). Those circumstances are not applicable to the facts at hand and the panel is unable to find that it is appropriate to make an adjustment in this instance.

The probable yearly earning capacity formula set out in the Policy is based on the worker’s regular earnings at the time of the accident. At the time of the accident the worker was earning $25/hour but based on the evidence had earned the contemplated raise as set out in the Wage Agreement.

In the circumstances, based on our review of all of the evidence which is before us, on file and as presented at the hearing, the panel is unable to find that the calculation of the worker's average earnings is incorrect. The panel therefore finds that the worker's average earnings have been calculated correctly.

The worker's appeal on this issue is dismissed.

Panel Members

R. Lemieux Howard, Presiding Officer
J. Peterson, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, J. Lee

R. Lemieux Howard - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 20th day of March, 2024