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Bill 47 Pt. 2 - Less Compensation for Work-related Injuries

On Nov. 5, 2020, Alberta’s United Conservative government introduced Bill 47 (Ensuring Safety and Cutting Red Tape Act, 2020). Bill 47 makes substantial changes to the Occupational Health and Safety (OHS) Act and the Workers’ Compensation Act and contains new legislation creating a payment for first responders who die from work-related causes. This is the second of two blog posts examining Bill 47. This post focuses on changes to the Workers’ Compensation Act which, if passed, will come into effect Jan. 1, 2021.

Overall, Bill 47’s changes to workers’ compensation will save employers money by reducing the likelihood of workers receiving benefits when injured and reducing the value of those benefits. Bill 47 also makes it more difficult for workers to appeal decisions and reduces the likelihood they will return to their job once recovered from their injury.

Background

Alberta’s Workers’ Compensation Act provides for compensation to workers who are injured on the job. Compensation is funded by employer premiums and the act is administered by the Workers’ Compensation Board (WCB). This act was also amended in 2017 to increase wage-loss benefits and index them to inflation, require employers to return workers to their job after recovery, and make it easier for workers to navigate the WCB.

Lower Compensation for Injury

Presently, when injured workers experience a wage loss, they are eligible to receive WCB benefits of 90 per cent of any lost net income. That is to say, injured workers receive $9 from the WCB for every $10 in income they lose due to a compensable injury. Bill 47 alters this arrangement in three ways.

First, Bill 47 eliminates from the Act the 90 per cent compensation rate. In its place, Bill 47 permits the WCB to determine the rate at which compensation will be paid. The only plausible reason for the government to give the WCB this discretion is to allow the WCB to lower the compensation rate at some future point.

Second, Bill 47 allows the WCB to establish a maximum income ceiling for compensation. Prior to 2018, this maximum was set at $98,700 and any wages lost above the maximum were not compensated. In 2018, the New Democratic government eliminated this maximum to recognize many Alberta workers earned more than the maximum and should not be penalized if injured. Reinstating a cap will reduce wage-loss benefits (as well as employer premiums, which are driven by claims costs) in high-wage industries.

Third, permanent wage-loss benefits are currently indexed to the Alberta Consumer Price Index. Indexing means the purchasing power of wage-loss benefits are not eroded by inflation. Bill 47 gives the WCB the power to set the annual inflationary adjustment. The WCB is directed to maintain “approximate parity with the cost of living.”

When the WCB had this power prior to 2018, it indexed benefits to CPI minus 0.5 per cent. Workers with permanent wage losses (as well as dependents of workers killed on the job) saw their purchasing power decline over time. The longer they received benefits, the worse loss they experienced. Again, the only plausible explanation for offering the WCB this flexibility is to allow the WCB to set rates below inflation and thereby reduce the cost of employer premiums.

Limiting Psychological and Disease Claims

Generally speaking, injuries are eligible for compensation if they arise from and occur during the course of employment. Determining whether some injuries meet this “arises and occurs” test can be challenging. For example, some occupational diseases have long latency periods and murky causality. These sorts of injuries are sometimes “deemed” to be compensable by the WCB. If you have the injury and worked in a specified industry (sometimes for a specified length of time), your claim is automatically accepted.

There is a list of deemed diseases in the Workers’ Compensation Regulation. Prior to 2018, this list had not been meaningfully updated since 1982. In 2018, a committee was struck to periodically review new medical evidence and recommend changes. Bill 47 disbands this committee and simply charges the minister with a review every 10 years. Given the speed of medical research, updating the list every 10 years is unfair to workers.

Whether a psychological injury is compensable can also be tricky to determine. In 2018, the Workers’ Compensation Act was amended such that psychological injuries were deemed to be compensable if (1) a worker was exposed to a traumatic event in the course of work and (2) was diagnosed with a psychological injury unless (3) the injury was proven not to have arisen and occurred from work. Bill 47 eliminates this deeming of psychological injuries. This means workers will need to prove psychological injuries arose and occurred from work. This will be a very difficult threshold for many injured workers to meet.

Reinstatement

In 2018, the Workers’ Compensation Act was amended to create an obligation on employers to re-employ injured workers when workers were able to return to their duties. Prior to this, workers’ only recourse if their employer sacked them after an injury was a lengthy (around two years) process with the Human Rights Commission. After 2018, employers who illegitimately did not comply with their return to work obligation faced financial penalties. Bill 47 entirely does away with this obligation. This change is profoundly out of step with the Canadian norm.

Bill 47 also creates specific obligations on workers to co-operate with the WCB in vocational and other rehabilitation plans. Workers who don’t co-operate can have their benefits cut off. While this may sound reasonable, the history of vocational and other rehabilitation at the WCB suggests there is a significant risk the WCB will use this power in ways that reduce workers’ compensation (in order to lower employer premiums) or force workers to accept modified work plans that may damage their health.

Appeal System

Workers’ compensation claims are complex. Workers who are dissatisfied with the adjudication of their claim often face an uphill battle navigating a complicated set of policies and appeal steps. Further, the 2017 review of the WCB identified that the WCB had a “culture of denial” around claims and that the internal appeal process may have worked against workers’ interests. In 2018, a Fair Practices Office was set up to create some distance between the WCB and the internal appeal bodies, as well as to help workers navigate the appeal process.

Bill 47 largely scraps this new process. It also tightens the timelines on when a worker can appeal a decision and allows the appeal bodies discretion about whether to suspend the termination of wage-loss and other benefits while an appeal is under way.

Heroes Fund

Bill 47 contains within it a new act entitled the Heroes’ Compensation Act. This act provides for the payment of $100,000 to the dependents of any first responder or corrections officer who dies as a consequence of their work. This payment is in addition to the fatality payment any workers’ dependents receive when a worker dies, as well as any wage-loss payments for which those dependent may be eligible. There are, on average, 10 fatalities among first responders per year. Of these fatalities, approximately 90 per cent were firefighters who died from occupational diseases.

This new benefit broadly mirrors an existing Government of Canada program (the Memorial Grant Program for First Responders). This federal program provides $300,000 payments to families of firefighters, police officers and paramedics who die as a result of their duties. Additionally, these workers are also almost entirely unionized and, consequently, have life insurance as part of their benefit packages.

Analysis

At the beginning of the 20th century, Canadian workers gave up their right to sue their employer for work-related injuries in exchange for stable, predictable and immediate compensation. Over time, workers’ compensation has expanded to include more workers (such as women). More kinds of injuries are also compensated, as our understanding of the negative consequences of work deepens.

Alberta’s legislation long lagged behind the Canadian norm, reflecting a history of conservative governments and agencies that were essentially captured by employer lobbyists. The 2018 changes to WCB brought Alberta’s laws into alignment with the Canadian norms. Bill 47 reverses many of these changes.

Labour Minister Jason Copping suggested that Bill 47 is designed to “restor[e] balance and fairness to the workers’ compensation system to meet the needs of workers and job creators now and in the future.” This is half true. Employers will benefit from Bill 47 through lower premiums. (It is notable that Minister Copping ignores that lower premiums reduces employers’ incentives make workplaces safer.)

The cost of this will be borne by workers. Under Bill 47, workers will be less likely to have their injuries compensated, their benefits will be reduced, their access to the appeals system will be impeded, and they will be less likely to return to their pre-injury job. In effect, this is a return to the state of affairs pre-2018, where the WCB was effectively a creature of employers and had a culture of claims denial.

The Heroes Fund will benefit relatively few workers, who are mostly well insured men. The most useful way to see the Heroes Fund is as a craven PR exercise. By providing marginal increases to valorized workers, the government can deflect attention away from changes that financially benefit employers while making workplaces more dangerous for workers and reducing the compensation paid out when workers are injured.

- Bob Barnetson and Jason Foster

@bobbarnetson @ABworkprof

 

 

Bob Barnetson

Dr. Bob Barnetson is a professor of labour relations at Athabasca University. His research focuses on the political economy of workplace injury, farm workers, and child labour in Alberta. He’s the author of The Political Economy of Workplace Injury in Canada (Athabasca University Press, 2010), co-editor of Farm Workers in Western Canada: Injustices and Activism (University of Alberta Press, 2016), co-author of Health and Safety in Canadian Workplaces (Athabasca University Press, 2016), and author of Canada’s Labour Market Training System (Athabasca University Press, 2018).

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