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WorkSafeNB: Restore Balance to Injured Workers

The laws that govern workers’ compensation in New Brunswick are rooted in principles outlined in a report by Justice William Meredith, who was appointed to a Royal Commission in the early 1900’s to study workers’ compensation in Canada. The Meredith Report advocated for a trade-off in which workers’ relinquish their right to sue in exchange for compensation benefits. This trade-off meant that workers could expect fair and predictable benefits, while employers collectively shared the risk of liability at a lower and more stable cost than if they had to secure insurance individually.

WorkSafeNB’s Board of Directors’ long-term fiscal strategy has two fundamental principles: full funding and recognition of all liabilities. To achieve these principles, the Board of Directors is obliged to adhere to an approach for developing and managing its long-term revenue so that the system is fully funded, meaning long-term obligations to injured workers will be met, and assessment rates are stable. This approach represents the basic premise on which Workers Compensation laws are founded; finding a balance between adequate compensation for injured workers and employers’ fiscal interests.

Over the past couple of decades the scales have been tipped in favour of keeping costs down for employers at the expense of prevention measures and benefits for injured workers. A return to balance is required. By the early 1990s the Worker’s Compensation accident fund had reached a point of underfunding and the average assessment rates employers were paying to maintain the fund were high. Due to these extenuating circumstances a decision was taken by the Board to control costs by reducing benefits to injured workers. This step was meant to be a temporary measure in order to right the fiscal situation of the time.

The 1993 changes included: reducing wage recovery from 90% of average net earnings to 80%, removing minimum benefits for permanently disabled workers, eliminating the 8% annuity payable to age 65, moving to a more aggressive “deeming” process (thereby reducing benefit payments), eliminating section that allowed for “cumulative stress” claims, introducing the “preponderance of evidence” threshold to reduce number of claims accepted, effectively preventing employers from “topping-up” compensation benefits and introducing a three-day waiting period.

In the following years the rates paid by employers to maintain the accident fund reached a point where they have remained amoung the lowest in the country. Since the early 2000s the fund has consistently sat above its target funding level with employers receiving rebates on the rates. This means they have been paying less than the actual cost of claims and WorkSafeNB administrative expenses.

Meanwhile, the benefits to injured workers that were suspended in 1993 have never been fully restored. Although wage recovery was raised from 80% to 85% of average earnings in 1998, no further increases have ever been introduced. Despite recommendations from Board members and during reviews over the years, the 3 day waiting period remains intact, employer top-ups (which many other provinces allow) are still prohibited and multiple claw backs from benefits are implemented.

During this time a culture of extreme frugality developed within WorkSafeNB. This culture became so entrenched that organizational practices, some being enshrined in new or updated policy, served to deny claims that were legitimate and/or reduce the amount of benefits awarded. Some of these practices and policies went so far as to contradict the Acts that govern Occupational Health and Safety and Workers Compensation in New Brunswick.

Over the same period, the claims appeal process had grown long and complicated, effectively acting to discourage workers who had been denied from attempting appeal. For those who did, claims decisions that were reversed and led to benefits being awarded often came after many months, if not years, with little to no income. Injured workers and their families suffered not only their injuries, but serious financial hardship.

In 2012, Wayne Douthwright, who was injured in 2002, won a case before the appeals tribunal which revealed that WorkSafeNB had repeatedly been misinterpreting the Workers’ Compensation Act by clawing back CPP retirement benefits from the compensation they paid to injured workers. The precedent set in this case had implications not only for Mr. Douthwright, but for thousands of other workers who had also seen their CPP benefits deducted from their compensation. Following the Douthwright decision and a wave of public criticism, in 2013, government announced the launch of a 3 phase comprehensive legislative review of workers compensation legislation.

Only 2 phases of consultation have occurred thus far. The progress of the review has begun to inch WorkSafeNB back towards balance between the interests of workers and employers, after decades of injustice for injured workers. However, there is still distance to cover before true balance is achieved. Following the first phase, improvements were made to streamline the appeals process and clarify language in the Act to ensure CPP claw backs would not occur. After the second phase, more workers advocates were added to the system.

In 2016, WorkSafe announced a rate increase for employers; a first after many years of decreases over a time when all other costs in society are rising. The rate increase was made to ensure the cost of the recent legislative changes and fair appeals tribunal decisions be covered, as well as to cover the cost of a rise in the frequency of workplace accidents and the length of recovery time before workers are able to return to work.  Employers were swift and loud in their criticism of the rate increase. Their outcry exaggerated the increase, labeling it as large. In reality it is below not only the high rate in 1992, but more recent rates in 2010-12 when employers were already receiving discounts on their rate because the fund was performing at a surplus. In addition, even with this increase, New Brunswick employers pay a rate that is still amoung the lowest in the country.

Despite the fact that employers’ response to the rate increase was an overreaction, Bill 15 was rushed through legislature in late 2016 on the heels of that outcry, having the effect of curbing costs. Then, in February of 2017 representatives from labour unions were invited to meeting with WorkSafeNB where they were presented with a slate of further proposed changes to legislation that the Board intended to recommend to government. Of the 10 proposals, 2 amounted to improvements that benefited injured workers, 3 were neutral in terms of their impact on workers or employers and the remainder involved increasing claw-backs on benefits and other cost saving measures for employers at the expense of injured workers. Such a proposal can hardly been seen as balanced, particularly at a time when the scales are still tipped in favour of employers over injured workers.

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