Office of the Ombudsman
801- 6th Ave SW
Calgary, Alberta
T2P 3W2
Feb. 26, 2019
On behalf of Mr. Smith, I wish to file a complaint against the WCB Board of Directors that has resulted in defrauding both workers and employers out of millions of dollars due to an inappropriate enactment of policy either by ignorance, misfeasance, abuse of power or an act of bad faith.
Compensation in workers compensation is supposed to be determined based on the difference between pre-injury earnings and post-injury earnings to determine a loss of earnings. Prior to Jan 1, 1995, loss of earnings was determined by using impairment ratings as a direct method of rating a loss of earnings which was found to be illegal by three different courts in three different provinces, Alberta (Penny case), Nova Scotia (Hayden case) and the Yukon, yet because of the WCB BOD enactment of policy specifying that loss of earnings was to be determined by the direct use of impairment ratings in assessing loss of earnings prior to Jan 1, 1995 this has resulted in defrauding employers and workers out of millions of dollars.
There is also the possibility that policy enacted by the WCB BOD did not direct that impairment ratings be used as a direct method of determining an earning loss. There is nothing in policy or the WCA that directs that impairment ratings be used directly as a method of rating a disability (earning loss) or that loss of earnings is derived by multiplying an impairment rating by net earnings to determine a loss of earnings so how or why did this happen. Conclusive proof that impairment ratings have nothing to do with a disability (loss of earnings) is supported by the fact that prior to one second before midnight of Jan 1, 1995 impairment ratings were used to determine an economic loss by multiplying net earnings by an impairment rating and one second after midnight of Jan 1, 1995, impairment ratings were used to determine a non economic loss questioning the mentality of the people interpreting how an economic loss (loss of earnings) should be calculated.
On review of WCB Policy 04-04 Part I it states in part; WCB provides permanent disability benefits to the worker for any measurable permanent clinical impairment “AND” for any impairment of earning capacity meaning that there are two awards referred to as dual awards. Proceeding onward, the policy then states; a worker is considered to have a permanent disability when a work injury results in a permanent clinical impairment, an impairment of earning capacity due to permanent compensable work restrictions or “BOTH” Reading to this point, there is no mention of multiplying net earnings times an impairment rating. Reading further. When an accident occurred before Jan 1, 1995 WCB provides the following permanent disability benefits: a permanent disability award in the form of a pension, to compensate the worker for the permanent clinical impairment “AND” assumed loss of earnings which results in two awards, one award is a pension for the permanent clinical impairment and another award for an assumed loss of earnings. On further analysis, there is nothing to indicate that net earnings have to be multiplied by an impairment rating to determine a loss of earnings, although upon further analysis of Policy 04-04 Part II Application 5, Question 1 and 2 which upon analysis does attempt to explain how an earning loss is calculated by using impairment ratings but confuse the issue by equating a disability(loss of earnings to an impairment. You cannot call a disability an impairment or an impairment a disability any more than you can call a cat a dog or a dog a cat as both words are totally different. Regardless of how the BOD or WCB attempt o explain how to assess a loss of earnings, you cannot determine a loss of earnings by multiplying 90% of net earnings by an impairment rating unless the impairment rating was converted to a disability rating and then multiplying the disability rating by 90% of net earnings. For example if a worker was assessed a 20% PCI rating, this would have to be converted to a disability rating by factoring in each individuals unique characteristics such as their skills, education, job history,adaptability, age, environmental requirements and modifications. In other words you cannot equate an impairment rating to a disability rating without taking all the factors of an individual that are unique to the individual into consideration.
Impairment ratings have no correlation to earnings at all as an impairment rating excludes work as a component in the assessment of an impairment. Impairment ratings measure a workers ability to perform simple basic activities of daily living which are presented in Table 1-2 of the AMA Guides. Impairment ratings are assessed based on such medical conditions that involve minor difficulties in urinating, defecating, brushing teeth, eating getting an erection, ejaculating, orgasm, sleeping etc., which has got nothing to do with work or calculating an earning loss. Clearly using impairment ratings as a direct method of determining an earning loss questions the mentality of the WCB BOD and the people who adjudicate claims who obviously never did question how or why impairment ratings could be used when an impairment rating had nothing to do with work, a disability or loss of earnings. Note: there is nothing in the WCA that directs that WCB pay lifetime pensions for an impairment. The WCA does direct that WCB pay lifetime pensions based on a disability (loss of earnings) In fact, prior to 2018, there was no legislative requirement for WCB to pay any award for an impairment as that remained discretionary prior to 2018. Obviously if you multiply a PCI percentage rating times any numerical figure, the result would be equal to an impairment award not a disability (loss of earnings) award. You do not multiply apples times oranges and expect to get a banana.
On Feb.20, 2019, I attended and represented Mr. Smith on Judicial Review which was specific to the illegal use of impairment ratings being used as a direct method of rating a loss of earnings. It was acknowledged by the Court, WCB Legal Counsel and the Appeals Commission Legal Counsel that doing so was not in compliance with the WCA and contrary to the directives of the AMA Guides that specified that the AMA Guides cannot be used as a direct method of determining a loss of earnings. The AMA Guides are very specific and states per verbatim;
Impairment percentages derived from the “Guides” criteria should not be used as direct estimates of disability. Impairment percentages estimate the extent of the impairment on whole person functioning and account for basic activities of daily living, not including work. The complexity of work activities requires individual analysis. Impairment assessment is the necessary first step for determining disability.
It was agreed that the blame for the fraud was the WCB BOD and according to the WCA Section 6(a)(i) the WCB BOD has jurisdiction to enact policy determining compensation, thus adjudicators were forced by statute to support defrauding workers and employers. This then leaves only the Government who can direct that the WCB BOD rescind their pre Jan. 1, 1995 policy where impairment ratings were used illegally to determine an earning loss, re-adjudicate all claims prior to this date basing a loss of earnings on calculating pre-injury to post-injury earnings. Not doing anything would bring the administration of justice into disrepute.
Despite the directive of the AMA Guides, the WCB BOD enacted policy that resulted in using impairment ratings as a direct method of rating a disability that has resulted in criminal fraud as determined by the Calgary Commercial Crimes Unit after investigation into the illegal use of the impairment ratings being used as a direct method of rating a loss of earnings.
Being that this is a systemic problem, I have advised other workers to also file complaints. According to Section 27 of the WCA, the Ombudsman after an investigation can recommend to the Government that an injustice or hardship to a worker or workers has resulted and it most certainly has, the Government may direct the “Board” to pay the worker or workers from the accident fund or refer the matter to the Court of Queens Bench for an assessment of damages and to pay the worker or workers the amount of damages assessed.
An example of how the inappropriate or illegal use of using impairment ratings as a direct method of rating a loss of earnings resulted in defrauding workers was presented in the Judicial Review based on defrauding Mr. Smith entitlement to compensation using impairment ratings as a direct method of rating a loss of earnings.
In 1988, Mr. Smiths pre-injury gross earnings were $18,469.02 . Referring to Appendix E of WCB policies, 90% of his net earnings according to Appendix E would be approximately $14,376.20. Because he was unable to work (total disability) he would have had zero earnings which should have resulted in a life time pension of $14,376.20 annually. By using impairment ratings (20% impairment rating) as a direct method of rating a loss of earnings rather than basing his pension on pre-injury earnings to post injury earnings, Mr. Smith inappropriately received $2875.24 net a year based on multiplying $14,376.20 by 20% resulting in defrauding Mr. Smith of $11,500.96 net annually from 1988 onward.
By using impairment ratings as a direct method of rating an earning loss, if a worker did not receive an impairment rating and had a total loss of earnings or a partial loss of earnings, a worker would not receive a lifetime pension as legislated in WCA Section 56 (11). (WCB defines a disability in terms of a loss of earnings) Using common sense and logic and the ability to read would result in any one knowing that one size does not fit all. An impairment rating of any percentage would result in a PPD (loss of earnings) anywhere from a 0% PPD to a 100% disability (PTD) depending on the unique characteristics of each individual as is explained in Chapter 1 of the AMA Guides.
As well as workers being defrauded, employers also were defrauded by using impairment ratings as a direct method of rating a loss of earnings. Using the same gross earnings as an example, a worker who did not have a loss of earnings but received a 20% impairment rating would receive $2875.24 annually for the rest of their lives, thereby defrauding employers by having to pay lifetime pensions even though the worker had no loss of earnings but would receive a lifetime pension because the worker had minor difficulties urinating, defecating, brushing their teeth, combing their hair, getting an erection, ejaculating, reaching an orgasm etc which are simple basic activities of daily living. Why would WCB force employers to pay workers with no loss of earnings lifetime pensions because they had minor difficulties urinating, defecating, getting an erection, ejaculating etc. Of course, employers when the accident fund is in a surplus situation, they receive dividends in the billions of dollars as opposed to workers who receive nothing and has resulted in Alberta employers having the lowest premiums in North America on the backs of workers and therefore probably should not be paid restitution.
Question is, why would the Alberta Government, knowing that impairment ratings cannot be used as a direct method of rating a loss of earnings, not have directed the WCB BOD to rescind the policy, re-adjudicate all the claims prior to Jan 1, 1995 based on the correct method of determining an earning loss which was by using a workers pre-injury earnings and compared to a worker’s post-injury earnings to determine an earning loss, especially after the Penny decision by the Alberta Court of Queens Bench and upheld by the Alberta Court of Appeal as well as the courts in Nova Scotia and the Yukon. This questions whether the Government were complicit in criminal fraud which would be reasonable to suggest.
I would suggest that all workers whose injuries occur prior to Jan 1, 1995 and had their PPD lifetime pensions calculated directly on impairment ratings file a complaint with the Office of the Ombudsman using this e-mail as a template which can be edited for each individual’s own use.
Gerald for Mr. J. Smith
