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WSIAT: “Unfair” to calculate average earnings of injured worker by taking into account non-earning period that was due to voluntary quit


When a worker suffers a compensable workplace accident, the level of benefits he or she receives under the Workplace Safety and Insurance Act, 1997  (“WSIA”) depends on a calculation of the worker’s “average earnings”.

The Workplace Safety and Insurance Board (“WSIB”) determines average earnings by taking into account a number of factors set out under the WSIA and WSIB policy. Section 53(1) of the WSIA provides that these include (a) the rate per week at which the worker was remunerated by each of the employers for whom he or she worked at the time of the injury; (b) any pattern of employment that results in a variation in the worker’s earnings; and (c) such other information as the WSIB considers appropriate.

WSIB policy recognizes that some workers are employed in non-permanent or irregular employment such that their earnings typically fluctuate, which may impact on the calculation of average earnings. Accordingly, when calculating average earnings, the WSIB typically takes into account such things as periods of unemployment and fluctuations in wage levels by looking at earnings over an extended period of time. This is especially the approach taken in the case of seasonal or cyclical workers, temporary agency workers, workers whose salary is based solely on commissions, or drivers paid per mileage driven.

The WSIB’s considering periods of unemployment  in this way generally has the effect of lowering average earnings  for workers in non-permanent or irregular employment who, due to no fault of their own, suffer lay-offs, terminations, seasonality of employment, or unavailability of work. This may be mitigated somewhat when such workers are able to collect employment insurance (EI) benefits, which are included in the calculation of average earnings.

Interestingly, WSIB policy seems to factor these non-earning periods into the calculation of average earnings because they are seen a part of an employment pattern, what is normal for such non-permanent and irregular workers to experience. By contrast, WSIB policy considers such things as  maternity/parental leave  as non-earning periods that are not part of the employment pattern so they are factored out of the calculation of average earnings.

It is against this background that a recent decision of the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”) stands out. In Decision No. 1207/12, a truck driver who was paid according to mileage driven suffered a workplace accident and was entitled to WSIB benefits. However, at the time of the accident, he had only been employed for just over a month at the accident employer. Immediately prior to commencing that employment, he had been unemployed for roughly six months following his voluntary decision to quit his previous employer to find better work.

Although the WSIB factored into the calculation of the worker’s average earnings the period of voluntary unemployment, the WSIAT allowed the worker’s appeal and found that it was “unfair” to do so. In the WSIAT’s view  “to factor in the period of unemployment in this case would unduly penalize the worker and would also not be a fair representation of the worker’s long-term earnings since there is no evidence that the worker’s approximate six month unemployment in 2002 was part of an employment pattern in the past or in the future had the worker not been injured.”

The WSIAT determined that a fairer approach was to consider the worker’s earnings in the year of the accident and the previous year but factoring out the period of his unemployment.

It is interesting, to say the least, that workers who are laid off for their very first time just prior to a workplace accident may end up with lower average earnings than those who quit paying employment just prior to a workplace accident.  In the former case, a first time layoff of a non-permanent or irregular worker can be deemed under WSIB policy to be part of a pattern of employment. In the latter case the worker can argue “no evidence” of such a pattern. Moreover, in the former case the layoff is beyond the worker’s control whereas in the latter case it is a voluntary act. Perhaps workers in the former case could argue the “merits and justice” of their case to have the period of a first time lay-off removed from the calculation of their average earnings. Then again, maybe they are stuck with what appears to be a fairly clear WSIB policy statement. Time may tell.

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