Determining Income in the Ontario Workers’ Compensation Regime

Ontario employers paying Workplace Safety and Insurance Board (WSIB) premiums will be interested in a recent Ontario Court of Appeal decision. An individual challenged the WSIB’s longstanding policy of excluding an employer’s contribution to a health and benefit plan from the calculation of “pre-accident earnings”. The outcome may affect the amount of WSIB premiums paid by employers.

Workplace Safety and Insurance Background

The Workplace Safety and Insurance Act (“WSIA”) provides benefits to a worker injured in the course of employment. The benefits compensate the worker for wage loss arising as a result of injury. The amount of the benefit is calculated as a percentage of a worker’s pre-accident earnings (also referred to as the worker’s “earnings basis”).

Historically, and in accordance with WSIB policy, the calculation of pre-accident earnings has not included contributions made by an employer on account of a health and benefit plan. The complainant challenged this. He claimed his pre-accident earnings should include his base wage rate plus the amount that his employer contributed on account of his health and benefit plan. He argued it was the government’s intention that employer contributions be included in the calculation, and referenced certain government statements to this effect. If correct, the compensation paid by the WSIB would increase by almost 15%.

The Decisions

The Tribunal rejected the argument, preferring instead the WSIB policy and practice. However, the Ontario Divisional Court sided with the complainant. The Court held the Tribunal’s failure to consider the legislative history was a “reviewable error”, and ordered the case back to the Tribunal for reconsideration.

The Divisional Court’s decision was appealed to the Ontario Court of Appeal, which, in another 2-1 split, restored the decision of the Tribunal. In summary, the Court of Appeal held that the Tribunal’s decision was neither unreasonable nor had the Tribunal committed a reviewable error in failing to consider legislative history.

Looking Forward

Neither the Divisional Court nor the Court of Appeal was able to reach consensus on the issue. At both court levels there was a strong dissenting opinion. As such, it is possible – although not likely –the Supreme Court of Canada will hear the case in an effort to set the record straight. Indeed, as at the time of writing this article, the complainant had filed a motion for leave to appeal to the Supreme Court.

The Supreme Court has a record of directing lower courts to show deference to administrative tribunals. As such, it is not likely the Supreme Court will hear this case. However, even if it doesn’t, injured workers’ advocates may try another tactic – convincing lawmakers to amend the legislation so that it clearly includes employer benefit contributions in the calculation of “pre-accident earnings”.

If successful, this may have a profound effect on the cost of WSIB premiums, as well as trigger a considerable transfer of wealth from employers to workers - the beneficiaries of the workers’ compensation system.

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