Across Canada, worker compensation systems are in crisis

| December 15, 2014
Photo: flickr/luxomedia

Across the country, worker compensation systems are failing injured workers, say injured workers and their advocates.

Ontario's compensation system has received a lot of attention in recent weeks, after an Ontario Federation of Labour study revealed that the Workplace Safety and Insurance Board (WSIB) is rebating millions of dollars to companies that have been found guilty of safety violations that resulted in workplace fatalities.

According to the OFL, more than 50 per cent of the offending employers received millions of dollars in rebates in the same year they committed their offences. In many of these cases, the rebates received by the companies exceeded the fines they were levied as a result of their conviction.

As shocking as these revelations have been, they are not unique to Ontario.

According to the Chief Financial Officer's report, the Alberta's Workers' Compensation Board paid out $500 million in surplus distribution payments to eligible employers.

Ask any injured worker advocate why employers are being paid out and they'll tell you: it's experience rating, a form of insurance premium assessment practiced in every Canadian province and territory except for the Yukon.

Under this model of insurance premiums assessment, employers pay different premium rates depending on how dangerous their workplace is deemed to be. The premiums paid by each employer increase or decrease depending on the cost of workers' compensation benefits paid to its workers; the fewer accidents a company has, the less they have to pay in premiums to the compensation board and vice versa.

Advocates say that although these programs are intended to reward workplace safety, they often lead employers to misreport claims in order to reduce compensation costs.

"It's a real off-balance system to use when it comes to big employers," explained Gail Cumming, an Alberta lawyer who specializes in injured worker compensation issues. "Who is going to honestly report accidents when they get penalized for reporting and making claims?”

A study conducted by Manitoba's Workers' Compensation Board in 2013 found that in 6 per cent of cases, employers were using threats or coercion to convince workers not to act upon their injury claim. An additional 14 per cent of cases were being misreported.

"It is now widely accepted in Manitoba that claim suppression is a serious problem. It's also widely accepted through a number of studies that the experience rating model is part of the problem," said Manitoba Federation of Labour president Kevin Rebeck.

Since employer assessment rates go up based on the number of cases reported and the severity of those cases, the experience rating model gives employers an incentive to put injured workers back to work in order to hide the real extent of an injury.

Rebeck explains: "If a doctor says you can't lift 20 lbs of weight then they leave it up to the employer to say 'well we have a job for you that doesn't require that,' and that job might be to sit in the middle of a room and count ceiling tiles. It isn't a real job at all but it's meant to save money by not having you collect on the system, and have you back in place, and probably create peer pressure from your colleagues. So we've called for changes to that."

Although Manitoba has increased its fines for claim suppression, the board has yet to penalize a single employer.

"I'm optimistic that the changes that are happening in our system are going to result in some real consequences for when employers abuse the system," said Rebeck. Ideally, he explains, the board would scrap experience rating all together. In lieu of that, the MFL has successfully pressured the compensation board to promote and reward prevention.

According to injured worker advocates, experience rating is just one of many ills riddling our current worker compensation system.

At a conference held in Moncton last week, injured worker representatives from across the country made presentations to the Canadian Injured Workers Alliance, an organization that supports and strengthens the work of local, provincial and territorial injured workers' organizations.

"We are seeing changes being made in workers' compensation boards across the country," said CIWA's National Coordinator, Bill Chedore, "but I haven't heard anyone come forward and say that there's a positive change."

Though compensation systems fall completely under provincial jurisdictions, conference presenters from across the country are reporting the same types of problems: an increase in the number of claims denied, a decrease in the amount of benefits received, and an increasingly adversarial compensation system. 

Though legislations vary from jurisdiction to jurisdiction, almost all Canadian compensation systems are based on a no-fault model proposed by Sir William Meredith in 1913 that was supposed to appease the demands of workers at a limited and predictable cost to employers.

To that end, Meredith designed a compensation system based on the "historic compromise": workers forfeited their right to sue employers in exchange for a non-adversarial employer-funded compensation system. Independent boards were established to try the cases, effectively removing injured worker compensation from the regular court system.

Many advocates says that in their current iterations, the workers' compensation boards function more like private insurance companies than public utilities. 

"We have to go back to what the whole Meredith commission started," said Chedore. "If you read his report, you wouldn't recognize what we have now."

"Injured workers are quite simply seen as an expense," said New Brunswick advocate Mike Davidson. "And at the end of the day, these are becoming insurance boards for the employers."

Several advocates noted that while compensation boards have become increasingly fiscally minded, running austerity campaigns in the hopes of securing funding for future liabilities, injured workers are having to draw on other social assistance programs in order to survive.

"Where benefits have been reduced, people have had to resort to other social programs like disability, welfare, and food banks," explains Karl Crevar from the Ontario Network of Injured Workers. "So you've got the general public subsidizing the costs that should be covered by workers' compensation."

In many provinces, the compensation system does not account for the psychological effects of workplace injuries, advocates say. And in addition, the compensation process itself can be traumatic for claimants.

"Injured workers are degraded," said Davidson.

"They are treated like children and they are often punished like children, when these people are just looking for help. I've seen marriages fall apart, people sell everything they have just to survive, and they never recover from this."

Ella Bedard is rabble.ca's labour intern. She has written about labour issues for Dominion.ca and the Halifax Media Co-op and is the co-producer of the radio documentary The Amelie: Canadian Refugee Policy and the Story of the 1987 Boat People. 

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