Insult to Injury

Critics say Alberta’s workers compensation system has become more about protecting employers than injured employees.

By David Climenhaga

On October 21, 2009, a man with a high-powered rifle took several hostages and held them for nine hours at the Edmonton offices of the Workers’ Compensation Board (WCB). Patrick Clayton was an injured construction worker and a disgruntled WCB claimant. Thankfully, the siege ended with a whimper, not a bang. The hostages were released unharmed, Clayton turned himself over to police and was charged, and the story soon faded from most people’s memories.

But before the story completely disappeared, Alberta’s daily newspapers briefly acknowledged serious concerns with the WCB. “The outrage from injured workers who feel they have been dealt with unfairly by the WCB is legendary among media outlets in this province,” a Calgary Herald editorial acknowledged on October 24. “Few topics generate more letters, commentary and pleas for help.” The Edmonton Journal website published examples of such letters online, many of which expressed outrage at the WCB even before denouncing the gunman’s actions. The Journal noted that provincial politicians spend a lot of their time meeting with injured workers. “There’s not an MLA that doesn’t on a monthly basis deal with extremely frustrated, and in some cases very aggressive, individuals who feel they have been treated unfairly and unjustly at the WCB and the Appeals Commission,” Liberal MLA and WCB critic Hugh MacDonald told the newspaper.

The Herald editorial concluded, however, based on a survey conducted for the WCB, that everything is just fine with the way the board operates, that Albertans who suffer an injury on the job are treated fairly and that ordinary citizens need not be unduly disturbed. Hector Goudreau, employment minister at the time, told media he would continue to press the WCB to improve the way it works, but said the provincial government wouldn’t seek any major changes. And with that, the story pretty well passed out of most Albertans’ minds. But the problems that helped contribute to the October hostage-taking in Edmonton, and to other incidents like it, continue to fester.

Worker advocates help to fill the dialogue gap between the sometimes incoherent outrage of injured Albertans and official WCB reassurances that “all’s well.” Many were not surprised by the October incident—only that it’s been so long since the last one. (A similar peacefully resolved hostage-taking took place at the WCB offices in Calgary in 1993, and a man suicided there two years before that. Sundry other incidents of minor violence take place at WCB offices from time to time.) And notwithstanding improved security at the board’s Edmonton headquarters, many worker advocates believe that without changes at the WCB, it’s only a matter of time before a similar incident happens again—possibly with tragic results.

Each province and territory in Canada has its own workers’ compensation board. The Alberta WCB manages workers’ compensation insurance based on legislation; employers currently pay an average of $1.32 per $100 of payroll in premiums—the lowest in Canada. The WCB is employer-funded, not-for-profit and independent of government.

When functioning properly, the WCB compensates workers for lost income, healthcare and other costs related to an injury suffered on the job. Fully 92 per cent of Alberta employees are covered under workers’ compensation (farm workers are notably excepted). There were 167,896 injury claims in 2008; approximately two out of every 100 Alberta workers missed time due to injury, while approximately three out of every 100 suffered a disabling injury on the job. The most common types of injuries were sprains, strains and superficial and open wounds to the back, fingers, hands and wrists.

It sometimes takes workers months or even years to recover from a serious injury. Fair and prompt compensation payments are supposed to cover them in the meantime. And when a worker can’t go back to their job, the WCB is supposed to help them retrain.

It rarely works as neatly as this. The problem, says Randy Corbett, a former WCB case officer and now a workers’ compensation specialist for the Alberta Union of Provincial Employees, is fundamental in nature. The WCB has “gone off the rails”—forgetting the historic compromise that led to the creation of the workers compensation system in Canada in the first place, and acting as if the board is, and should be, a private, for-profit insurance company.

“The Alberta WCB puts people through a mental meat grinder,” he says. “It shouldn’t be this way. They act like a privatized insurance company. They should say, ‘We’re a workers compensation board. We’ll do anything we can to assist injured workers.’”

There’s nothing wrong with the original concept of workers’ compensation as it was introduced in Canada in 1913, argues Rick Vermette of the United Food & Commercial Workers union, who like Corbett works with union members struggling with the WCB. The idea—developed in other countries and refined in the 1913 Royal Commission report of Sir William Ralph Meredith, Chief Justice of Ontario—was based on a historic compromise. Workers compensation guaranteed medical care and income replacement for workers injured in the course of their jobs. In exchange, workers gave up their right to sue their employer for negligence.

The judge’s final report, known to this day as the Meredith Report, called for no-fault insurance, collective liability among all employers, independent administration of the system at arm’s length from the government, the promise of prompt income replacement for injured workers and exclusive jurisdiction for the board.

“But the Alberta board has really lost sight of its mission,” Corbett argues. He says that the philosophical shift began in the early 1990s. Prior to 1991, Alberta legislation and the WCB focused on workers’ rights. The system worked fairly well—no-one was at fault in the event of an injury, and workers and employers alike benefited from employees receiving help. In fact, one of the biggest problems with workers’ compensation was arguably “unfunded liability”: the difference between probable future funding to the WCB and its probable future obligations to injured claimants. If anything, this pointed to the already low cost of premiums to employers.

In 1991, however, a major policy change “balancing” employer and employee rights was announced. The WCB stated that if workers had a right to file a claim, employers had a right to “manage” claims, including the right to challenge them. Unions argued that pitting workers against employers was contrary to the WCB’s original purpose, and further charged that the WCB was simply obeying the Ralph Klein government’s orders to trim costs to the province’s employers.

Then-WCB CEO John Cowell dubbed critics of the new policy “voices in the wilderness.” A 1996 Herald opinion piece noted that those voices “quickly [became] a large noisy chorus demanding a full inquiry into the operations of the WCB [and] the draconian reduction of services and entitlements to injured workers.” Workers and unions charged that the historic compromise had been undermined in favour of one side: “Employers benefit by getting huge assessment rebate cheques and the WCB itself is running a huge surplus it doesn’t know what to do with. All conveniently done on the backs of injured workers. Instead of guaranteed coverage, injured workers are turned away. Claims are denied, services and entitlements reduced or cut off.” Two decades later, many Albertans accept the now often antagonistic relationship between injured workers and employers as a given.

A previous decision by the WCB and the government to suspend the safety-promotion aspect of the board’s work exacerbated the trend, Corbett adds, since the board was no longer making the obvious connections between workplace safety and reduction of workplace injuries. Occupational Health & Safety (OH&S) was moved out of the WCB and into the Department of Labour (now Alberta Immigration & Employment) in the 1970s. Although WCB continues to have an OH&S aspect to its work and directly funds some safety initiatives, Corbett says that since the split the WCB has put less emphasis on injury prevention and more on cost reduction. “WCB doesn’t see accident prevention in the light it did before,” he says. “It’s there, but it’s not the priority it was.”

The problem is that the WCB “has gone off the rails”acting like a private, for-profit insurance company.

Instead, the WCB today offers incentives in the form of discounted premiums to employers who report low numbers of incidents—a perverse motivation for employers to encourage their employees not to report minor injuries. This, in turn, creates conditions that can result in more serious workplace injuries. For example, small businesses in Alberta are eligible for a 5 per cent discount in their premiums after five years if they file no time-lost claims, but they’re hit with a 5 per cent surcharge as soon as they record five or more claims. Rick Vermette remembers a worksite where workers were told they would all get expensive leather coats if they went a certain period without a claim. When a worker was injured a few days before the closing date on the “contest,” he came under severe pressure from his co-workers not to report it. After all, they all wanted a nice leather coat!

Another impact of this private-insurance mindset, both Corbett and Vermette argue, is that it led the WCB to start acting as if all applicants for compensation were malingerers or cheats. They argue that WCB case managers now set out to disprove claims rather than put their focus on compensation or retraining. “To achieve this, they abdicate responsibility to their medical department,” says Corbett. “The message to them is, ‘Hold the line, we have to keep costs down.’ ”

A major role of the workers compensation process is to get injured Albertans back to work. Critics argue that the WCB is now less concerned with workers’ best interests and more with reducing temporary total disability payments (a low number of which the board uses as a principal measure of success). “They pride themselves on reducing the numbers of time-lost days,” says Corbett. Another reason to rush employees back is that injured workers who are off the job for more than two years have a less than 5 per cent chance of ever returning to work.

The result of the WCB’s suspicion of injured workers is that many legitimate claims are denied.

One way to reduce “time loss” is to encourage injured workers to return to the workplace doing “modified duties.” Modified duties programs make sense in theory. They can foster a constructive relationship between injured worker and employer. They can assist with a transition back to either full duties or duties in an alternative job. Unfortunately, however, insiders say many of these programs don’t work well, and that the WCB often determines that a worker is capable of returning to modified duties before they’re medically ready. This can result in relapses or new injuries that are more severe than the original ones.

The WCB has also been criticized for failing to properly monitor the return to work to make sure job duties are appropriate. “I often hear complaints about workers returning to modified duties only to have their employers push them into doing heavier work because they’re short-handed,” says Corbett. The WCB advises injured workers in writing to do what they recommend, or risk seeing their benefits cut off. Corbett equates this to economic blackmail, and says it ignores the need for a relationship with the injured worker to get him/her to actually participate in the program. It also serves to create suspicion of and hostility toward the WCB.

Another criticism widely voiced in worker advocacy circles is that the WCB and employers often behave as though the return-to-work plan is carved in stone. People recover from injuries at different rates and this needs to be reflected in whatever rehab plan is followed. To ensure a successful return to work, the plan should be adjusted to address problems.

In addition, there’s often a disconnect between the WCB and the injured worker’s physician. The WCB is known to occasionally secure additional medical reporting such as MRI and CT scans and not share the information with the worker’s doctor. The WCB will ask a doctor for an opinion, then criticize the opinion on the basis of medical information the physician was not shown. The result is that injured workers and their families aren’t the only people fed up with the WCB meatgrinder: Corbett says that many physicians refuse to deal with WCB claims, as they’re simply too frustrating and too complicated.

The result of the WCB’s operational philosophy—suspicion of workers coupled with a zeal for keeping employers’ costs down—is that many legitimate claims are denied. As they lack the ability to sue, injured workers’ only recourse is to contend with a complicated appeal process that is stacked against them.

The average worker returns to their job no more than a few weeks after suffering a light injury. But more seriously injured workers are out of commission for longer periods. When a serious injury claim is not disputed by the WCB, it takes an average of three to four weeks from injury to first compensation payment. Many workers can go a month without a paycheque. But when a serious injury claim is disputed, the system can grind to a virtual halt.

The process works like this: an injured worker has one year to appeal a WCB case manager’s decision. The appeal is reviewed within the claims unit by WCB staff to see if there’s anything wrong. It’s unusual for decisions to be overturned at this level.

The matter is then referred to the first formal level of appeal, called the Dispute Resolution & Decision Review Body (DRB). The DRB, which is also staffed by WCB employees, upholds approximately 90 per cent of the decisions made by the claims department staff, says Corbett. He adds that any DRB staffer who upholds too many appeals will soon be looking for a new job. “It can’t be proved, but [I’d argue] that for WCB case officers, it’s a career-limiting move to uphold an appeal,” he says.

Even if they uphold an appeal, DRB staffers can’t impose decisions on the WCB claims department. Rather, they must convince them that their decision is wrong. “Needless to say, this happens only rarely,” says Corbett. Worker representatives consider representation at this level a waste of time. “The decision is simply a rubber stamp of the original verdict rendered by the case manager,” Corbett says.

Once a decision is made, the injured worker has one year to appeal to the second (and final) level, the Appeals Commission (AC), a government entity reporting to the Minister of Employment & Immigration. Commissioners who sit on appeal panels are order-in-council appointments by the provincial cabinet and include three representatives from each of business, labour and the public. The process at this level is supposed to be unbiased toward the WCB. The AC overturns about 40 per cent of appealed WCB rulings. It’s no coincidence that the number of appeals soared after the WCB adopted its “private insurance” mindset; the AC has heard approximately 13,000 appeals since 1990.

However, this doesn’t reflect the true number of workers who slip through the cracks at the WCB—only the number that filed an appeal. “The board rewrote its policies in the 1990s and it’s far too complicated now for many workers to present a case,” says Vermette. Filing an appeal is also a notoriously long and stressful process; many workers have no income all the while, which can be months—in extreme cases, years.

Another impact of the for-profit mindset was the policy by the WCB to cap compensation, no matter how much the worker was earning before his or her injury (the cap in 2010 is $77,000). Arguably, says Corbett, this cap has done as much as anything else to undo the historic compromise behind workers compensation—the assumption that the injured worker can expect full compensation for his loss of employment. This can hardly be said if a skilled tradesperson earning, say $150,000 a year, with commensurate family and professional expenses, is reduced to 53 per cent of his normal take-home pay.

Critics point out that Manitoba pays injured workers 90 per cent of net on their actual earnings, and this has not caused serious financial problems for its WCB. Considering the economic advantages enjoyed by Alberta, Corbett says, it’s worth asking: why can’t we do the same thing here?

Don’t look to the board to reform itself. Worker advocates say that the private insurance mentality and resulting culture of suspicion has taken root too deeply for reform to be led internally. The most likely way to fix the WCB, they say, is to engage political power holders to impose change.

The WCB, while operating independently, is governed by provincial legislation. Any major reform of the WCB, by necessity, will have to originate in the Legislature. Worker advocates argue that Alberta’s elected representatives need to pledge their commitment to injured workers, not simply to employers’ bottom lines. They’re worried, however, that most politicians try to keep WCB issues at arm’s length because of their extremely contentious nature—and the potential for political and financial fallout that any reforms represent. For example, if the government concluded that workers who should have received support did not receive it, retroactive payments could run into the tens or hundreds of millions of dollars. Easier for the Legislature—and all parties—to stay the hell away.

How to fix the WCB, then? First, there needs to be a swing back to the Meredith principles, which, notwithstanding the fact they’ll be 100 years old in three years, still make sense. To do that, Alberta needs a board committed to the principles—which should be appointed by the Legislature, not cabinet. Their guiding philosophy should clarify that the WCB exists first and foremost to provide a financial cushion to injured workers, and not to pad employers’ bottom lines.

In the short term, the WCB needs an ombudsman that meets two essential criteria: they must be independent of the WCB executive and they must have real power—that is, he or she must be able to compel the WCB executive to respond when a ruling goes against the WCB appeals process. One great advantage of an ombudsman is that they could significantly reduce one of the biggest sources of complaints to MLAs.

Until the WCB is reformed, the pressure on injured workers and their families will continue to grow. The compensation process will continue to be long, stressful, confusing and too often crushingly disappointing. Happily, most injured workers eventually recover and manage—even if seriously disillusioned about the WCB—to put the experience behind them. A few who are disabled become bitter, however—and bitter people can act crazily, even if they have a legitimate grievance. The result is occasional explosions and potentially tragic consequences.

“In the 1960s and 1970s, injured workers could think the WCB would take care of them. You can’t say that any more,” Corbett says. “I can understand why the [hostage-taking] happened and I wasn’t surprised when it happened. I predict that incidents like that will happen again unless the WCB improves the way it treats people.”

David Climenhaga is a journalist, teacher, author and communications director of the Alberta Union of Provincial Employees.

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