Alberta (Workers' Compensation Board) v Alberta (Appeals Commission for Alberta Workers Compensation), 2017 ABQB 127

Court of Queen’s Bench of Alberta Citation: Alberta (Workers' Compensation Board) v Alberta (Appeals Commission for Alberta Workers Compensation), 2017 ABQB 127 Date: 20170223 Docket: 1503 17320 Registry: Edmonton Between: The Workers’ Compensation Board Appellant - and - Appeals Commission for Alberta Workers’ Compensation Respondents _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Don J. Manderscheid _______________________________________________________ Introduction [ 1 ] The Workers’ Compensation Board (WCB) seeks judicial review of the Appeals Commission for Alberta Workers’ Compensation Board’s (AC) decision that: (

a) The worker’s earning loss supplement (ELS) should be calculated by subtracting 75% of his gross post-accident earnings from 75% of his gross pre-accident earnings, without further reducing that total to 90% of his net post-accident earnings; (

b) The worker’s ELS for 1986 should be adjusted by applying the 8% cost of living adjustment (COLA) for 1986. Standard of Review

[ 2 ] It is common ground that the standard of review of the AC decision is reasonableness, as the AC was interpreting and applying WCB legislation and policy: Gahir v. Alberta (Workers' Compensation Appeals Commission) , 2009 ABCA 59 at para 13 . [ 3 ] The reasonableness standard is a deferential standard that recognizes that questions before administrative tribunals do not give rise to one specific and particular result, and there may be a range or acceptable and rational decisions. As the Supreme Court of Canada indicated in Dunsmuir v.

New Brunswick , 2008 SCC 9 at para 47 , the Court on judicial review is to assess whether the decision demonstrates justification, transparency and intelligibility and falls within the acceptable outcomes that are defensible in respect of the facts and law. [ 4 ] Further, the reasonableness standard recognizes that specialized tribunals have, at an institutional level, significant expertise in interpreting their “home” legislation, expertise that may be greater than the Court’s: Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd ., 2016 SCC 47 at para 33 . [ 5 ] There may be competing, reasonable

interpretations of tribunal’s home statute, but the Supreme Court has held that the existence of another reasonable

interpretation is not enough to justify setting aside a decision maker’s decision; an applicant on judicial review must show that the decision is unreasonable: McLean v. British Columbia (Securities Commission), 2013 SCC 67 at para 40 , stating: The bottom line here, then, is that the Commission holds the interpretative upper hand: under reasonableness review , we defer to any reasonable

interpretation adopted by an administrative decision maker, even if other reasonable

interpretations may exist. Because the legislature charged the administrative decision maker rather than the courts with "administer[ing] and apply[ing]" its home statute ( Pezim , at p. 596), it is the decision maker, first and foremost, that has the discretion to resolve a statutory uncertainty by adopting any

interpretation that the statutory language can reasonably bear . Judicial deference in such instances is itself a principle of modern statutory

interpretation. (Emphasis added) Facts [ 6 ] The specific facts here are not of central importance except to say that the worker, Mr. Skorpack, was injured in two accidents, one in 1976 and one in 1979. The WCB accepted both claims and Mr. Skorpack received as part of his compensation an ELS. Mr. Skorpack appealed the WCB’s calculation of the ELS to the Dispute Resolution and Decision Review Body (DRB) and then appealed that decision to the AC. The Legislation and policy provisions in question [ 7 ] Section 57(2) of the Workers’ Compensation Act , RSA 2000 c W-15 (WCA 2000) provides:

(2) A worker receiving compensation for permanent total disability or permanent partial disability under this Act or any predecessor of this Act shall be granted an additional payment of compensation sufficient to increase the monthly payment to that worker to, (

a) on and after July 1, 1986 , the greater of (i) $730 per month in the case of permanent total disability, or, in the case of permanent partial disability, a proportionate part of $730 per month based on the Board’s estimate of the impairment of earning capacity from the nature and degree of disability, and (ii) the amount of the worker’s pension on June 30, 1986, plus 8% of that amount, not to exceed an amount equal to the maximum pension payable under

section 56... (Emphasis added) [ 8 ]

Section 59 of the WCA 2000 provides: 59

(1) The Board may by order, for the purpose of maintaining approximate parity with the cost of living, make adjustments in the amounts payable as compensation to persons who are receiving compensation under this Act or any predecessor of this Act in respect of permanent total disability, permanent partial disability or death of a worker. [ 9 ]

Section 66 of the WCA 2000 provides: 66 ( 1) In the case of an accident causing permanent partial disability, if the Board is satisfied that the worker’s net earnings after the accident together with any compensation the worker is receiving with respect to that accident are less than the worker’s net earnings calculated under

section 56 the Board may, in addition to the compensation payable under that section, pay compensation in an amount up to 90% of the earnings loss, according to what percentage of the earnings loss is, in the Board’s opinion, caused by the residual disability. (2) Subsection (1) applies regardless of whether the accident that gave rise to the right to compensation occurred before or after the coming into force of this Act, but in the case of an accident that occurred before January 1, 1982 section 56(4) does not apply and the calculation of net earnings shall be based on the maximum allowable earnings in effect at the time of the accident. (emphasis added) [ 10 ]

Section 158 of the WCA 2000 provides: 158

(1) Except where this Act specifically states otherwise, it applies only to accidents that occur on or after January 1, 1982 and to benefits, rights and privileges arising out of them.

(2) Except where this Act specifically states otherwise , claims in respect of accidents occurring before January 1, 1982 must be administered in accordance with the law in effect at the time the accident occurred and, for that purpose, the predecessors of this Act are deemed to be of full force and effect insofar as they relate to those accidents and the benefits and other rights and privileges related to them, except to the extent that those benefits, rights or privileges are expressly modified or revoked by any subsequent Workers’ Compensation Act or by this Act, or by amendments to any of those Acts indicating their application to those benefits, rights or privileges. [ 11 ] The legislation in effect at the time of the worker’s accidents was the Workers Compensation Act, SA 1973, c 87 (WCA 1973).

The

section of that Act relied on by the AC is: Compensation for permanent partial disability 43(1) Where permanent partial disability results from the injury, the WCB shall estimate the impairment of earning capacity from the nature and degree of disability by reason of the injury and shall award compensation accordingly based upon 75% of the worker’s average weekly earnings computed in accordance with sections 47 or 49, subsection (1), and the compensation, subject to

section 28, is payable during his lifetime. (Emphasis added) [ 12 ] The AC also relied on a number of WCB policies, as follows: Policy 04-01,

Part II, Addendum A (at para 102 of decision) Compensation for claims with a date of accident prior to January 1, 1982 is calculated as 75% of gross earnings. Compensation for claims on or after January 1, 1982 is calculated as 90% of net earnings. Policy 04-04,

Part I, Permanent Disability (at para. 65 and 128 of decision) A worker is considered to have a permanent disability when a work injury results in: • A permanent measurable clinical impairment, or • An impairment of earning capacity due to permanent compensable work restrictions, or • both. Policy 04-04,

Part I,

Interpretation 4, “ Permanent Disability Benefits ” (at para 130 of decision) The method of calculating permanent disability benefits was revised effective January 1, 1995, and depends on whether the date of accidents was before January 1, 1995, or on or after January 1, 1995. ...

Injuries Occurring Before January 1, 1995 When an accident occurred before January 1, 1995 , the WCB provides the following permanent disability benefits : 1) when there is a permanent clinical impairment, • A permanent disability award in the form of a pension to compensate the worker for the permanent clinical impairment and assumed loss of earnings, and • Consideration of an earnings loss supplement if the actual loss of earning capacity due to compensable permanent work restrictions exceeds the value of the permanent disability award. 2) when there are compensable permanent work restrictions with no measurable permanent clinical impairment, • Consideration of an earnings loss supplement if the compensable permanent work restrictions impair the worker’s earning capacity. (emphasis added) Policy 04-04,

Part II, Application 5, Question 1 (at para 131 of decision) Earnings Loss Supplements (ELS) are discretionary compensation payments made when a permanent disability award (pension) does not fully compensate the worker for the loss of earning capacity caused by the compensable injury. Policy 04-01,

Part II, Cost of Living Adjustments (excerpt) (at para 132 of decision) Year Effective Date % Increase 1986** July 1, 1986 8% 1986 ** Cost-of-living adjustment does not apply to temporary disability benefits. The AC Decision

[ 13 ] The AC Decision addressed four issues, but only two issues are the subject of this judicial review: (

a) How do the WCB legislation in effect at the time of the worker’s accident and the WCB policy stipulate post-accident earnings are determined when calculating the worker’s ELS? (

b) Does the WCB legislation and policy allow for a COLA of 8% on the worker’s ELS benefits for 1986? Calculating the ELS [ 14 ] The AC considered the policy in effect at the time the ELS was first implemented, noting that Policy Statement Com-13 “Earnings Loss Supplement” dated August 21, 1990 provides that ELS is calculated by subtracting the worker’s post-accident annual net earnings from his pre-accident annual net earnings.

It further noted that the Policy also provides that any supplement be calculated up to 90% of the earnings loss according to what percentage of the earnings loss was caused by the disability or condition.

But the AC went on to note that this Policy was made under the authority of the 1981 WCA and made no provisions for accidents that occurred before 1981. [ 15 ] The AC further noted that WCB Policy 04-04 was made under the authority of WCA 2000, and that while it notes that ELS is only available for claims with an accident date before January 1, 1995, it does not provide any express provisions on how to deal with ELS in cases where the accident was before 1981 (unlike Policy 04-01).

It concludes that it will only rely on the WCA 1973 and any relevant current WCB legislation or policy. [ 16 ] The AC first addressed the question of whether the ELS should be calculated by deducting 75% of the worker’s post-accident gross earnings, rather than 90% of net post-accident earnings from 75% of his gross pre-accident earnings, as calculated by the DRB. It noted, in particular ss 66 and 158(2) of the WCA 2000, concluding that s 66 does not provide any specific overriding provisions superseding the WCA 1973 in regards to calculating the ELS for accidents before January 1, 1982.

The AC further noted that while s 66 makes one reference to claims regarding accidents before January 1, 1982, it does so only in relation to the application of COLA on net earnings. [ 17 ] The AC finds further support for its

interpretation in WCB Policy 04-01,

Part II, Addendum A which states that compensation for claims with a date of accident before January 1, 1982 is calculated as 75% of gross earnings, while compensation for claims on or after January 1, 1982 is calculated as 90% of net earnings.

It concludes that the legislation in effect at the time of the accident provides that ELS compensation should be calculated at 75% of gross earnings for both the pre-accident and post-accident earnings. [ 18 ] The AC further concludes that the annual earnings loss should not be further reduced to 90% because the earnings were already reduced to 75% of gross earnings. 1986 8% COLA [ 19 ] The AC acknowledges that the current COLA provisions were established under Workers’ Compensation legislation and policies that postdated the accidents.

Citing ss 59 and 66 of the WCA 2000 and the WCB policies quoted above, the AC set out the issues it must determine as: • Does the worker’s ELS represent temporary disability benefits or permanent disability benefits? And • Does the policy and legislation allow for an 8% cost of living adjustment to be applied effective July 1, 1986? [ 20 ] The DRB decision on appeal before the AC stated that the 8% COLA only applied to pensions. However, the AC disagreed, finding that ELS payments are permanent, not temporary, disability benefits, referencing Policy 04-04,

Part I,

Interpretation 4, which defines earnings loss supplements as a permanent disability benefit. Further, s 43(1) of the WCA 1973 contains the heading “Compensation for permanent partial disability”. [ 21 ] Having determined that the ELS is a permanent disability benefit, the AC then turned to Policy 04-01,

Part II, Addendum B, which the AC asserts is the only WCB policy that speaks to the application of the COLA. The AC decision notes that the asterisk by the July 1, 1986 date provides that the 1986 COLA does not apply to temporary disability benefits. As a result, the AC concludes that the 1986 CLA should be applied to the worker’s ELS as a permanent disability benefit. Analysis The ELS calculation [ 22 ] The AC decision on whether the 90% limit should be applied to ELS benefits is clear and intelligible. The AC sets out the basis for its

interpretation of the legislative and policy provisions. It is not enough that I might decide the questions differently; the decision can only be set aside if the Applicant can prove that the decision does not represent an acceptable outcome or its reasoning was not justified, transparent and intelligible. [ 23 ] The WCB asserts that the decision is unreasonable because: (

a) The decision contravenes the WCA 2000 and WCB Policy 04-04; and (

b) Opposite

interpretations of legislation cannot be reasonable.

[ 24 ] Awarding an ELS in excess of 90% of the earnings loss, the WCB argues, is contrary to s 66 of the WCA 2000, suggesting that the AC ignored the two step process to calculating the ELS: first calculate the earnings loss attributable to the accident and then pay compensation up to the 90% of the earnings loss. [ 25 ] The AC did not ignore this two

part calculation, but took it into account, concluding that since s 158 of the WCA 2000 required that the 1973 legislation be applied, unless expressly stated otherwise, that the ELS was to be calculated on the 75% of gross earnings, not 90%. It further concluded that s 66 only referred to pre-1982 accidents for the purpose of COLA calculations and therefore did not apply to this worker’s accident. [ 26 ] In further support of its

interpretation, it held that the 90% calculation should not be applied to further reduce the ELS, since the 1973 legislation calculation was based on the reduced value of 75%, unlike the more current calculations which were based on 90%, [ 27 ] I might not have interpreted s 66 in this way. Clearly, the WCB does not think it should be interpreted this way. But that is not the test. The AC set out clearly and reasonably its approach to interpreting the provision. [ 28 ] The WCB argues that opposite

interpretations of legislation cannot be reasonable. The Supreme Court of Canada in McLean held that (at para 40 ): ... it is the decision maker, first and foremost, that has the discretion to resolve a statutory uncertainty by adopting any

interpretation that the statutory language can reasonably bear. Judicial deference in such instances is itself a principle of modern statutory

interpretation. [ 29 ] The Court goes on at para 41 to say: Accordingly, the appellant's burden here is not only to show that her competing

interpretation is reasonable, but also that the Commission's

interpretation is unreasonable . And that she has not done. Here, the Commission, with the benefit of its expertise, chose the

interpretation it did. And because that

interpretation has not been shown to be an unreasonable one, there is no basis for us to interfere on judicial review -- even in the face of a competing reasonable

interpretation. (emphasis added) [ 30 ] Similarly here, the Applicant has not demonstrated that the AC decision was unreasonable. This is further exemplified by its argument that “a careful reading of s 66(2)” shows that the AC misinterpreted the end of the first sentence in the

section which expressly referenced accidents pre-dating July 1, 1982. The AC, the WCB argues, should have interpreted this as merely stating that s 56(4) does not apply. The fact that this requires “careful reading” suggests that there is nothing unreasonable in the AC’s

interpretation. [ 31 ] The AC concluded that s 66(2) should be interpreted as limiting the application of s 66(1) to accidents after July 1, 1982. Taking into account the ambiguity created by the use of the word “but” in the last phrase of the sentence, this was a possible

interpretation. COLA for 1986 [ 32 ] On the other hand, the AC decision in regards to the 1986 COLA clearly ignores the express language of s 57(2) of WCA 2000. In fact, the AC did not cite s 57 at all. As the DRB decision indicates, the 1986 COLA was applied to pensions only. Section 57(2) states: A worker ... shall be granted an additional payment of compensation sufficient to increase the monthly payment to that worker to... (

a) on and after July 1, 1986... (ii) the amount of the worker’s pension on June 30, 1986, plus 8%. (Emphasis added) [ 33 ] The failure to address the applicable WCA 2000 legislation and to rely instead only on Policy 04-01,

Part II, Cost of Living Adjustments, renders the decision unreasonable. The policy merely indicated that the 1986 increase would not be applied to temporary disability payments, not that they were payable to all permanent disability payments. [ 34 ] In its written and oral submissions, the WCB set out a narrative framework of how the COLA program was historically implemented. Much, if not all, of those facts was not before the AC, since the WCB did not participate in the AC hearing (see paras 48 and 50). There was some reference to this history in Osborn v.

Alberta (Appeals Commission for Alberta Workers' Compensation), 2009 ABQB 661 , aff’d 2011 ABCA 44 ; although the references were about how ELS was to be calculated. At one point Verville J notes (at para 8): Prior to 1990, increases to pensions were effected by way of legislative amendments to the WCA directing the WCB to observe a floor in setting temporary partial disability and to increase pensions by certain set percentages. Pre-1990, s. 66 (then s. 60) did not allow for an increase in the net earnings used to calculate the ELS.

As a result, once a pension was increased by way of legislative increase, the ELS was automatically decreased by the same amount due to the above equation, resulting in no overall increase in the amounts payable to the worker. Thus, the legislative increase for an individual receiving both a pension and an ELS was largely illusory. [ 35 ] The Record before the AC is all that the Court can consider in assessing the reasonableness of the decision. On the other hand, statutory provisions like s 57 of the WCA 2000 (and similar predecessors in earlier legislation) are legislative facts that I can rely on.

While the Osborn decision lends some support for the WCB’s assertions about the historical implementation of COLA to ELS, I rely primarily on s 57(2) in concluding that the AC decision was unreasonable. The AC is presumed to have expertise in the

interpretation and application of its home statute. Its failure to refer to the express statutory provision implementing the COLA increase for 1986 was unreasonable and lead to an unreasonable decision.

Conclusion [ 36 ] I dismiss the WCB’s application to quash the AC decision refusing to apply the 90% limit under s 66 to the worker’s ELS. Furthermore, I quash the AC decision applying the 8% COLA to the worker’s ELS, as it was unreasonable in the face of the express language of s 57(2). Costs [ 37 ] If the parties are unable to agree on costs, they can be spoken to within 30 days of the date of this Decision. Heard on the 2 nd day of December, 2016. Dated at the City of Edmonton, Alberta this 23 rd day of February, 2017. Don J. Manderscheid J.C.Q.B.A. Appearances: Curtis B. R.

Craig Director Legal Services for the Workers’ Compensation Board Dale P. Wispinski General Counsel for the Appeals Commission