Study Notes for Workers' Compensation

Chapter 3: Workers' Compensation

Copyright © 2021 by Nelson Education Ltd.

Learning Objectives

• Upon completion of this chapter, students will be able to:

  • Outline the historical roots of the workers’ compensation system in Canada.

  • Describe the goals and methods of Workers’ Compensation Boards (WCBs).

  • Discuss problems associated with compensating for psychological conditions and occupational illnesses.

  • Describe the assessment methods used by WCBs.

Opening Vignette

• Complexity of Worker’s Compensation: The topic is multifaceted, but resources are available.

• Each jurisdiction in Canada maintains a dedicated website and social media presence.

• The Association of Workers' Compensation Boards of Canada (AWCBC) serves as a central hub for WCB information.

Introduction to Workers’ Compensation

• Definition: Workers’ compensation is a form of insurance regulated by parliamentary acts designed to assist workers injured on the job in returning to work.

• Injured Workers Recieves:

  • First aid treatment

  • Benefits while recuperating at home

  • Proper treatment for injuries

  • Rehabilitation services

Historical Roots of Workers' Compensation

• Origins:

  • 1884: Concept began in Germany.

  • 1914: Established in Canada.

• Key Features:

  • Collective Liability for Employers: All employers in a classification group are jointly responsible for compensation costs.

  • No-Fault System: Compensation for workers is irrespective of the employer’s financial status and is based on lost earnings.

  • Nonadversarial: Workers have limited recourse in courts for injury compensation.

Administration of Workers’ Compensation in Canada

• State Administration: Managed by the Workers’ Compensation Board.

• Benefits for Injured Workers:

  • Coverage for medical bills and payments if the injury occurred while working.

  • Provision of pensions for permanent disabilities.

  • Benefits ensured even if the worker cannot earn previous income levels due to their injury.

Legislative Updates

• Recent changes in WCB legislation across various provinces include:

  • Saskatchewan: Expanded presumptive coverage to volunteer firefighters.

  • British Columbia: Broadened coverage for wildfire firefighters.

  • Nova Scotia: Introduced presumptive coverage for PTSD affecting emergency responders.

  • Alberta: Amended acts in eight categories involving psychological coverage and extended appeal windows.

Compensation Rates and Methods

• Methods of Compensation Calculation:

  • Various jurisdictions use compensation rates:

  • Five base compensation on roughly 90% of net earnings.

  • Others use a percentage of average earnings, which can vary.

  • Example: Nova Scotia applies both methods dependent on incident dates.

• Types of Economic Loss:

  • Economic Loss: Loss of earnings experienced when workers cannot earn the same wages due to their injury.

  • Non-Economic Loss: Compensation for loss of function or the inability to perform tasks previously possible before injury.

Medical Aid and Injury Prevention

• Compensation Scope: Employees receiving benefits for injuries include loss of function or ability, influencing daily tasks such as lifting or bending, which are deemed losses in functional capacity.

Safety Associations

• Role of Safety Associations:

  • Offer general and industry-specific safety knowledge to members.

  • Funded partially through income from the WCBs.

  • Provide training and health/safety-related services, such as safety audits and certificates of recognition.

Social Goals of Workers’ Compensation

• Main Goals:

  • Prevent workplace injuries or mitigate psychological impacts.

  • Prepare injured workers for reintegration into the workforce.

• Standard Provisions include:

  • Unlimited Medical Aid

  • Artificial Prostheses

  • Re-employment Fund (Second Injury and Enhancement Fund [SIEF])

  • Liberal Compensation Policies

  • Maintenance Income for Rehabilitation

Provisions for Second Injuries

• Second Injury Fund: Aids re-employment of disabled workers to prevent discrimination against those with prior injuries.

• Employer Liability: If a worker sustains additional injuries, employers are responsible for compensating for potentially greater disabilities than if prior injuries hadn't existed.

Rehabilitation Programs

• Types of Rehabilitation:

  • Vocational Rehabilitation: Facilitates re-employment or finding similar jobs.

  • Physical Rehabilitation: Restores physical functionality.

  • Social Rehabilitation: Provides psychological and practical aid for workers with significant disabilities.

Occupational Diseases and Workplace Stress

• Examples of Occupational Diseases:

  • Cancers

  • Skin diseases

  • Allergic reactions linked to workplace materials.

• Latent Disease Development: The latency period is the duration between exposure to harmful substances and the emergence of a disease.

• Categories of Stress-related Disabilities:

  • Physical injuries or diseases leading to mental health issues.

  • Mental stress leading to physical disabilities or traumatic occurrences.

  • Mental stress causing mental health conditions.

Claims Process

• Information Required for Claims: Claims involve input from three parties:

  • Employer

  • Employee

  • Physician

• Details and Variability: Processing details differ based on jurisdictional requirements.

Assessments

• Employer Categorization: Employers assessed according to operational type or industry.

• Categories of Employers:

  • Those contributing to a shared incident fund benefiting from collective liability.

  • Employers individually accountable for their employees' incidents.

  • Certain low-risk sectors exempted under varying acts.

Assessment Rates (Per $100 Payroll)

• Source: Association of Workers' Compensation Boards of Canada, statistics retrieved March 1, 2019.

Injury Frequency Rates

• Utility of Frequency Rates: Organizations calculate injury frequency rates for performance benchmarking.

• WCBs may provide tracking data to assist companies in improving health and safety protocols.

Calculating Injury Frequency

• Formula for Frequency:

  • Frequency is determined as:
    $ext{Frequency} = rac{ ext{Number of medical aid injuries}}{ ext{Total hours worked}} imes 200,000$

  • Some firms may use a different factor, like 1,000,000.

Experience Rating

• Purpose: This premium pricing scheme reflects the clear cost experiences of employers.

• Incentives:

  • Companies with lower-than-average incident costs benefit from lower premiums.

  • Safer companies incur reduced workers' compensation costs relative to similar firms.

Reporting Requirements

• Employer's Obligation:

  • Report all workplace injuries to WCB promptly.

  • Required reports should gather information on:

  • Nature of the employment relationship

  • Employee salary and work hours

  • Incident nature and injury details

  • Time lost and medical treatment received

• Noncompliance: Employers or employees who fail to comply with reporting obligations may face penalties.

  • Penalties can reach upwards of $50,000 without the need for court proceedings.

End-of-Chapter Activities

• Outline the current responsibilities of WCBs and evaluate how these have modified since the establishment of workers' compensation in 1914.

• For those employed, discuss with the health and safety manager regarding the company’s sector, assessment, and experience ratings. Students should consult safety personnel at their educational institution for similar inquiries.