Worker's Compensation in Manitoba

For readers who may have a limited knowledge of the worker’s compensation system in Manitoba, this section provides a simple overview of this system. ^[4]

History

The modern Canadian workers’ compensation system is rooted in what is commonly known as “the historic compromise” proposed by Sir William R. Meredith, an Ontario judge who conducted an inquiry into workers’ compensation from 1910-13. Meredith proposed the creation of a system in which employers collectively fund the cost of compensating workers for workplace injuries. Workers forfeited their right to sue employers, but gained guaranteed no-fault compensation for injuries whether or not the injury was caused or exacerbated by worker negligence. ^[5]

The Workers Compensation Board of Manitoba ^[6] was established in 1917. Most other provinces also established workers’ compensation boards during the years of World War One.

Coverage

In 1999, approximately 325,000 employees of 22,000 Manitoba employers were eligible for compensation under the Manitoba government’s Workers Compensation Act and Regulations (WCB of Manitoba, 2000a). Approximately 40 per cent of Manitoba workers work in industries which are exempt from this legislation, and are therefore not eligible to receive WCB benefits and services if they are injured at work. ^[7]

Injury Statistics

During 1999, there were 45,652 injury claims8 reported in Manitoba, and 39,233 of these claims were accepted by the WCB (WCB of Manitoba, 2000b: 48). Approximately half of the accepted claims (19,243) were for injuries or diseases which resulted in absences from work. ^[9]

According to the WCB’s 1998-2003 Five Year Plan, approximately 80 per cent of claimants recover from their injuries and return to work with their pre-accident employers within 12 weeks (Workers Compensation Board of Manitoba, 1999b: 16).

Funding

The WCB is funded by employers. Most pay an assessment rate calculated as a percentage of their total payroll costs. Assessment rates are calculated according to the accident rates for each industry category. In other words, industries with high accident rates pay higher assessments than industries with lower accident rates.

Within each industry category, individual employers’ assessment rates may vary according to their individual claims histories. The process of adjusting assessments according to individual employers’ claims histories is known as “experience rating.” Employers with lower workers’ compensation claims costs can pay up to 40 per cent below the assessment rate for their industry category. Employers with high claims costs can pay up 40 per cent above the category assessment rate (Workers Compensation Board of Manitoba, undated3).

A small number of large employers do not pay a payroll assessment. Instead, they pay the WCB for the actual costs of the benefits and services awarded to their injured workers and their dependents, plus the cost of administering their claims. These employers are usually referred to as “self-insured” employers.

The 1992 Workers’ Compensation Act ^[10] provides various benefits and services to Manitoba workers who are injured at work. The three most significant financial benefits are:

• wage loss benefits
• permanent impairment awards
• medical aid ^[11]

Wage Loss Benefits

The purpose of wage loss benefits is to compensate injured workers for the employment income they lose when they are injured. Wage loss benefits are calculated as a percentage of the difference between an injured worker’s (1) income at the time he or she is injured and (2) the amount he or she is capable of earning after being injured. This difference is called loss of earning capacity.

Wage loss benefits are calculated as 90 per cent of the claimant’s net loss of earning capacity for the first two years. During the first two years of their claims:

• Claimants whom the WCB regards as incapable of earning any employment income receive 90 per cent of the net income they earned at the time of their accidents.
• Claimants who are earning some employment income receive 90 per cent of the difference between their net pre-accident employment income and their net post-accident earnings.
• In some cases, the WCB may “deem” a worker capable of earning income he or she is not actually earning, and deduct this amount when calculating his or her lost earning capacity. (“Deemed earning capacity” is discussed in greater detail later in this section.)

After two years, wage loss benefits are reduced to 80 per cent of net loss of earning capacity.

In most cases, the calculation of wage loss benefits is based on a worker’s regular earnings at the time of accident. In cases where documentation indicates an irregular earnings pattern, the WCB may base wage loss benefits on the worker’s average annual earnings if the WCB feels that average annual earnings provide a more accurate representation of the injured worker’s actual lost earnings.

The calculation of net loss of earning capacity and the resulting wage loss benefits also takes into account the tax savings resulting from WCB benefits not being taxable. Benefits a claimant may be receiving from other sources are also deducted. (Other benefits include Canada Pension Plan, private insurance, and payments made by employers to top up a worker’s compensation earnings to his or her full pre-accident earnings.)

Wage loss benefits are limited to a maximum amount. In 1999, maximum compensable earnings were $51,460.

Permanent Impairment Awards

Most injured workers recover fully from their injuries, but others do not. In addition to wage loss benefits, injured workers whose injuries result in permanent disabilities may also receive lump sum permanent impairment awards which the WCB grants to claimants having permanent physical or functional abnormalities or losses as the result of workplace accidents. These awards are rated on loss of range of motion of body parts, loss of function of a body part, and psychological effects.

In 1999, the dollar value of permanent impairment awards were calculated on the following basis:

• impairments assessed as greater than one per cent and less than five per cent receive $570
• impairments assessed between five and less than ten per cent receive $1,130
• impairments of ten per cent or greater receive $1,130 plus $1,130 for each one per cent of impairment above ten per cent

In 1999, the highest award (100 per cent) amount was $102,830.

The dollar values of permanent impairment awards granted to claimants over the age of 45 are reduced by two per cent for every year that the claimant is over the age of 45. If the claimant has a pre-existing condition, the WCB may also reduce the award.

According to unpublished statistics provided by WCB staff, 104 permanent impairment awards were granted in 1999. ^[12] The majority of these awards were for impairments assessed at less than ten per cent, and only nine were for impairments assessed as greater than twenty per cent.^[13]