Workplace Health, Safety & Compensation Review Division

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1 Workplace Health, Safety & Compensation Review Division WHSCRD Case No: WHSCC Claim No: Decision Number: Marlene A. Hickey Chief Review Commissioner The Review Proceedings 1. The hearing of the review application was held at the Review Division office in Mount Pearl, NL on October 29, The worker participated in the hearing process via teleconference and was represented by Mel Strong, Appeals Officer, with the Government Members Office. 2. The Commission attended the hearing and was represented by legal counsel, Rebecca Phillipps. The employer did not participate in the hearing process. Introduction 3. The worker was originally injured in 1976 and subsequently received a Permanent Partial Disability (PPD) rating of 10% which he commuted to a lump sum payment in Following this, he began his own business and continued working up to In 1998 he filed for a recurrence and the claim was again accepted for medical aid benefits. In February, 1999 the worker was found to be unable to return to work and began receiving full Extended Earnings Loss (EEL) benefits at the maximum weekly benefit level. 5. The worker turned age 65 in March, 2010 and his EEL benefits were terminated. He subsequently applied for a Canada Pension Plan Pension (CPP) Replacement Benefit and an Employer Sponsored Pension Plan (ESPP) Pension Replacement Benefit (PRB). He was successful in the PRB for his Canada Pension Plan, however, a PRB for his ESPP was not approved as the Commission found he could not demonstrate he had incurred a pension income loss because of the compensable injury. Issue 6. The worker is requesting a review of a decision of the Commission dated March 28, The worker is requesting that I find the Commission erred in finding he is not entitled to a Pension Replacement Benefit (PRB) in relation to his Employer Sponsored Pension Plan (ESPP). 1

2 Outcome 7. The decision of the Commission dated March 28, 2012 is upheld. There is no change in the status of the worker s claim for Pension Replacement Benefits (PRB) for his Employer Sponsored Pension Plan (ESPP). Legislation and Policy 8. The jurisdiction of the Chief Review Commissioner is outlined in the Workplace Health, Safety and Compensation Act (the Act), sections 26(1) and (2), 26.1 and 28 which state, in part: Review by review commissioner 26(1) Upon receiving an application under subsection 28(1) a review commissioner may review a decision of the commission to determine if the commission, in making that decision, acted in accordance with this Act, the regulations and policy established by the commission under subsection 5(1) as they apply to (a) (a.1) (b) (c) (d) (e) compensation benefits; rehabilitation and return to work services and benefits; an employer's assessment; the assignment of an employer to a particular class or group; an employer's merit or demerit rating; and the obligations of an employer and a worker under Part VI. (2) An order or decision of a review commissioner is final and conclusive and is not open to question or review in a court of law and proceedings by or before a review commissioner shall not be restrained by injunction, prohibition or other process or proceedings in a court of law or be removable by certiorari or otherwise in a court of law. Review commissioner bound by policy 26.1 A review commissioner shall be bound by this Act, the regulations and policy. Application to a review commissioner 28(1) A worker, dependent or an employer, either personally or through an agent acting on their behalf with written consent, may apply to the chief review commissioner for the review of a decision as referred to in subsection 26(1), within 30 days of receiving the written decision of the commission. (2) A review commissioner shall not review a decision under subsection (1) except in accordance with subsection 26(1). 2

3 (4) A review commissioner to which a matter has been referred for review shall (a) (b) notify the person seeking the review and the commission of the time and place set for the review; and review the decision of the commission and determine whether it was in accordance with this Act, the regulations and policy. (4.1) Where a review commissioner determines that the decision of the commission was in accordance with this Act, the regulations and policy, he or she shall confirm the decision of the commission. (4.2) Where a review commissioner determines that the decision of the commission was not in accordance with this Act, the regulations and policy, he or she shall identify how the decision of the commission was contrary to this Act, regulations and policy, specify the contravened provision, set aside the decision of the commission and (a) (b) make a decision which is in accordance with this Act, regulations and policy; or where it is appropriate to have a new decision from the commission, refer the matter to the commission for a new decision with or without direction on an appropriate remedy. 9. Other relevant sections considered are Sections 60 and 75 of the Act. Relevant Submissions and Positions 10. Mr. Strong, on behalf of the worker, provides the historical context of the claim and notes the worker was in receipt of EEL benefits at the age of 65. He argues the Commission is in error by requiring the worker to have contributed to the ESPP after 1996 in order to be eligible for a PRB. 11. As the worker was unable to return to pre-injury employment, Mr. Strong submits that due to the restrictions resulting from the compensable injury, the worker was forced to establish his own sheet metal business in order to continue working. The worker, he notes, contributed to a Registered Retirement Plan from 1996 to 1998 as this was the only option available to him at that time for retirement contribution purposes. 12. The worker states that in 1996, when he became self-employed, he had no choice other than to contribute to his own private retirement plan. He states he was in a conflict position with the Union and could not contribute to the Union Pension Plan. He submits he has been permanently disabled due to the injury and has been completely cut-off by the Commission. He indicates, at this time, the Commission is no longer covering his medication. 3

4 13. Mr. Strong argues that the worker s status of employer did not allow him to participate in the ESPP with the Union. In fact, Mr. Strong states the worker could not have been an employer and a worker within the Union at the same time. Mr. Strong maintains that it is unreasonable for the Commission to place such conditions on the worker in order to qualify for this benefit. 14. Mr. Strong submits the Bulger vs. WHSCC Supreme Court decision is applicable to this claim as care must be taken to ensure the real justice and merits of the worker s case are fully considered in deciding this issue. 15. Ms. Phillipps, on behalf of the Commission, also notes some of the history of the claim and focuses her presentation on wording and intent of Section 75 of the Act. Ms. Phillipps notes that the Commission does not have a specific policy on this benefit and relies on what the statute directs. 16. Ms. Phillipps submits it must be recognized that the PRB is not a pension benefit, but rather is a compensation benefit provided by the Act. 17. It is noted that in 1983, annuities were introduced as retirement funds for workers who were on claim in excess of 24 months. In 1992, annuities were eliminated and the specific legislative provisions were repealed and replaced with the current wording of Section 75. The 1992 change of benefit provided the Commission with an opportunity to take a fresh look at how such benefits were to be paid after the age of 65. Due to the generous nature of this benefit, Ms. Phillipps submits, there is a high threshold to be met for an injured worker to access these benefits. 18. Ms. Phillipps argues that all the considerations outlined in Section 75 must be in place. She notes these considerations in her written submission as follows: The worker must have reached the age of 65 years of age; The worker must be in receipt of compensation from the Commission at age 65; The worker must demonstrate to the Commission that he or she has lost a benefit from an employer sponsored pension plan which is registered with and certified by the Superintendent of Pensions in accordance with the Pensions Benefits Act, 1997 as a result of the injury for which he or she is receiving compensation at age 65; AND The worker must be a member of this employer sponsored pension plan at age In this case, Ms. Phillipps acknowledges the worker meets all the above noted requirements except one. She notes that Section 75 requires the worker to demonstrate to the Commission the amount of benefit he has lost as a result of the injury. Ms. Phillipps argues this is the 4

5 point of contention in this claim, as the worker has not demonstrated he has a pension benefit loss as a result of the injury. 20. The evidence confirms that from 1996 to 1999 the worker was employed and earned an income. During this period, however, Ms. Phillipps submits, the worker chose not to contribute to his ESPP with the Union, but rather chose to direct his pension contributions to his own retirement fund. It is also noted that during this period, the worker contributed the maximum CPP contributions and subsequently did receive a PRB from the Commission, for loss of pension benefit as a result. 21. The worker, however, Ms. Phillipps argues, has not lost pension income as a result of his injury, but more likely by his choosing to place his retirement contributions in his own plan rather than the Union plan. Throughout the period of self-employment, Ms. Phillipps notes the worker did continue to contribute dues to the Union. This is confirmed by the Income Tax returns for these years up to Further, Ms. Phillipps notes that any loss the worker may have incurred as a result of his own retirement plan, is not an issue as this benefit cannot be replaced by the provisions of the Act. With respect to the worker s claim regarding a conflict of interest, Ms. Phillipps notes this was not information that was previously brought to the attention of the Commission. If this factor was significant to the worker s claim, she suggests it would likely have been forthcoming prior to the hearing. Analysis 23. The facts of this case are not in dispute. The issue in this case focuses on the requirements of Section 75(1) of the Act and whether the worker has demonstrated to the Commission his pension loss as a result of his injuries. 24. Section 75(1) is the relevant provision in the Act with respect in this matter. There are no policies related to this matter to consider. This section states: Where a worker who is eligible for benefits as a result of an injury that occurred after December 31, 1983 reaches the age of 65, an amount equal to the amount of a benefit that the worker demonstrates to the commission, that he or she has lost as a result of an injury for which he or she is receiving compensation under this Act, under the Canada Pension Plan or the Quebec Pension Plan or from a registered employer sponsored pension plan covering the worker and which is registered with and certified by the Superintendent of Pensions in accordance with the Pension Benefits Act, 1997 or an equivalent Act of another province or of the Parliament of Canada shall be paid to him or her by the commission. 25. Section 75(1) requires a worker to demonstrate his actual loss of pension benefit as a result of the injury. The onus is on the worker. If a worker produces such a demonstration and meets the remaining requirements, Pension Replacement Benefits are payable. In this case, the other requirement as, articulated by Ms. Phillipps and previously reproduced in this Decision, have been met by the worker. The only condition not met, in the Commission s 5

6 view, is the amount of a benefit that the worker demonstrates to the commission, that he or she has lost as a result of an injury. 26. I have considered the positions and have considered the evidence and circumstances of this claim. Further, I have carefully reviewed the requirements of Section 75(1), the Internal Review Specialist s decision and the worker s submission. I find the worker s position cannot be maintained in light of the requirements of Section 75(1) and the Commission s interpretation of same. 27. The worker, for the period of 1996 to 1999, was capable of working and earning. There is no evidence before me to suggest he was different than any other worker in the Union in such a way to prohibit him from contributing to the Union pension plan. Further, the evidence confirms the worker proceeded to establish his own business and as a result, suggests he consciously decided to remove himself from prospective Union work. This decision eliminated his ability to contribute to the pension plan in the way he normally had contributed by working on Union endorsed projects. This circumstance is not unlike many tradespeople who, from time to time, take work as it is available, not necessarily confining themselves to only unionized projects. This choice cannot reasonably be viewed as being due to the work injury. I do not accept the worker s view on this point. 28. In addition, Section 75(1) is clear that the onus is on the worker to demonstrate to the Commission the amount of pension benefit he has lost due to the injury. I note there is no such demonstration in the file. The only evidence before me, specifically on this point, confirmed the worker earned income for the years in question and he contributed Union dues. Further, by way of the worker s testimony he has confirmed he contributed to a registered retirement savings plan on his own without any evidence to suggest he had inquired with the Union on possibly contributing to the Union plan. 29. I note there is no confirmation from the pension plan administrators to suggest the amount of loss the worker alleges, nor is there an amount put forward by the worker. The worker appears to be seeking entitlement to this benefit in principle, without demonstrating his loss to the Commission, as required by the Section. In other words, he submits, had he not been injured he would have continued to work on unionized projects, contributed to the pension plan, and subsequently retired on a union pension plan with a greater benefit that he currently receives. This may have happened, or it may not have. It is an assumption (among many) that would have to be tested once the worker presents the basis of his claim (i.e. the extent of his loss) to the Commission. I cannot accept this as fact. Following the worker s injuries he subsequently returned to work with no loss of earning capacity. Where he worked or how he worked became his choice. Any pension loss during that time, therefore, is unrelated to his work injuries. 30. What is being addressed in Section 75(1) is not the loss of a pension, or the loss of a chance for a pension. Though it is commonly called a pension replacement benefit, it is actually a supplement that takes the form of a compensation benefit. It attempts to address the reduction in value of an actual pension by virtue of the fact that the injury reduces the worker s ability to contribute more to the existing plan than he actually did. The benefit payable under Section 75(1) is a compensation benefit, not a pension benefit, and it supplements the worker s existing pension benefit amount. In other words, it bridges the difference between what the worker already receives and what the Commission determines 6

7 he would have received, but for the effects of the injury on his ability to contribute to the Pension Plan. The worker was still apparently paying Union dues throughout, so it is not at all clear to me that his status with the Union was a barrier to his ability to contribute, or that his injury prevented contribution or continued participation in Union work. 31. It should also be noted that if the worker comes forward with confirmation from the Union pension plan administrators with a calculation of an amount he would have received had he contributed to the pension plan, this in and of itself, would still not produce entitlement to this benefit as the current evidence confirms it was the worker s choice and not the injury that accounted for the lost union pension benefits for the applicable years. 32. I acknowledge that determinations under this Section necessarily involve the inclusions of certain assumptions, as appropriate, and to the extent they are reasonable. In this case, however, the assumptions put forward by the worker are not reasonable given the evidence of earnings during these years. He did have earnings and directed them into another investment plan at that time. Further, there is no loss of earning capacity noted for these years. 33. I also note the worker claims he has lost a lot of money as a result of the injury, however, I note he was provided with the maximum entitlement to EEL benefits up to the age of 65 and he was also found to be entitled to a PRB for his loss of CPP benefits. These benefits are provided by the Act and he received them accordingly. Any other monies the worker believes he may have lost cannot be compensated for on any other basis that than which the Act permits. With respect to his entitlement to medical aid, I find it unusual that the worker claims, these benefits have also been terminated. Medical aid costs related to an injury may continue to be paid by the Commission and many of them are. I am unclear as to the worker s point on this issue and furthermore, it is not an issue within the scope of this review. I leave this with the worker and his representative for follow up if necessary. 34. The decision of the Internal Review Specialist, I note provides an overview of Section 75(1) and notes the worker s last contributions to the pension plan were in It is also noted there were no contributions for 1997 or Further, the Internal Review Specialist also notes there is no evidence of a loss of earning capacity for these years, as the period prior to 1998 was before the injury recurred. 35. With respect to the PRB generally, I accept the Commission s position put forward by Ms. Phillipps that this is a generous benefit for which specific criteria must be met. It cannot, therefore, be approved by relying on unreasonable assumptions in the absence of evidence. I acknowledge the position of Mr. Strong with respect to the direction in the Bulger vs. WHSCC decision, and I note the real justice and merits of this case have been thoroughly considered in my review. However, I have reached the conclusion that the Commission s decision, based on the evidence before it at the time, did not offend the real merits and justice, because I am not convinced that its interpretation of Section 75(1) contravened the spirit and the intent of the Act. 36. It must also be recognized the Commission has the overall responsibility for ensuring the integrity and sustainability of the Injury Fund and it must exercise its discretion reasonably. I find the Commission s decision is consistent with both the requirements of Section 75(1) and the overall spirit and intent of the Act. 7

8 Decision 37. The decision of the Commission dated March 28, 2012 is upheld. There is no change in the status of the worker s claim for Pension Replacement Benefits (PRB) for his Employer Sponsored Pension Plan (ESPP). Review Denied Marlene A. Hickey Chief Review Commissioner February 10, 2014 Date 8