Workers' compensation system

The Canadian workers' compensation system is funded entirely through employer premium payments. Monies paid into the system are used to pay the costs of compensation benefits to workers, as well as funding the operation of the system itself.

In addition to premium dollars, employers may experience increased costs depending on their claims experience. Generally, employers which have more claims or claims that have higher associated costs will pay additional monies to their respective compensation board in the form of increased premiums or premium surcharges. As such, it makes good business sense for employers to establish an effective health and safety management system to try to prevent work-related injuries and illnesses in the first place, and to actively manage claims should they occur. Effective management techniques include engaging in a timely and safe return to work and appealing adverse and questionable entitlement decisions.

Appeal process

Every provincial workers' compensation system contains a mechanism by which employers and workers may appeal adverse decisions. These decisions can relate to:

  • initial entitlement to healthcare or wage loss benefits where the employer does not agree that an injury or illness is work-related;
  • allowance of specific areas of the body as related to the claim; or
  • ongoing entitlement to benefits.

Depending on the issue in dispute, a successful appeal may result in the elimination or significant reduction of claim costs, which can translate directly into cost savings.

When considering whether to appeal or contest a decision, employers should consider what the issue is, as well as the time limit for appeal. As each province has its own workers' compensation board (WCB), each board has its own rules surrounding time limits for contesting or appealing a decision. Those time limits range from 30 days in Quebec to 12 months in Alberta. Generally, any written decision in a WCB claim should identify whether the parties have the right to appeal the decision and the time limit for doing so. Employers must know the time limit for appeals in the relevant jurisdiction in order to ensure that they are met.

When reviewing a WCB decision, employers must consider:

  • all of the facts of the relevant case;
  • whether those facts are correct; and
  • whether the decision was made in accordance with the applicable workers' compensation legislation and any applicable WCB policies – if not, any factual concerns should be clarified so that a proper decision can be made.

If policy was not followed, employers may progress with an appeal to ensure that it is. For example, if an employer makes an offer of suitable work to a worker, but the worker does not return to work, there should be objective medical documentation to support the claim that the worker is incapable of performing the work offered. If such documentation exists, then a decision to pay wage loss benefits may be justified. If such documentation does not exist or there is a dispute about whether the information is objective or sufficient, the employer may appeal a decision that allows the payment of wage loss benefits for the relevant period. A recent appeal of an Ontario case resulted in the reversal of a decision to pay wage loss benefits for a period of two weeks. That decision resulted in a net refund to the employer of over C$82,000. While those results may not be typical of the amount that an employer may save in that type of situation, in that particular case, there was significant financial incentive for the employer to appeal the decision to pay benefits.

Comment

Because of the potential for cost savings, employers should review all decisions from their respective WCBs in order to ensure that they are correct and consistent with applicable law and policy. If employers do not understand the reason for the decision, they should contact the decision maker and request clarification. If there is still disagreement regarding the decision, employers should consider disputing or appealing it within the applicable time limits. While not every appeal may be successful, because of the costs associated with adverse WCB decisions, they should all be reviewed and evaluated to ensure that employers are not required to pay more than their fair share into the workers' compensation system.

For further information on this topic please contact David Marchione at Fasken by telephone (+1 416 366 8381) or email (dmarchione@fasken.com). The Fasken website can be accessed at www.fasken.com.

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