Employees who drive as part of their work are at risk of becoming involved in a motor vehicle accident (“MVA”) while on the job. This post is about the interaction between Workplace Safety and Insurance Board (“WSIB”) benefits long-term disability (“LTD”) benefits.
While never simple, there is usually a binary choice: obtain WSIB benefits – which tend to pay a larger percentage of the worker’s gross weekly income – or pursue the actions for compensation against the insured’s auto carrier and / or the tortfeasor. But this decision also can have an impact on the entitlement to group disability insurance benefits.
Statutory Framework
A person who, during the course of his or her employment, is injured on the job – or the survivor of a worker who dies in an accident (“insured”) – has the right, under Section 30(2) of the Workplace Safety and Insurance Act (“WSIA”), to elect whether to claim benefits under the Act or commence a civil action. Typically the WSIB will write to the insured and let them know they have the option. While the choice can be reversed in some circumstances, as with most choices of this type, it is best to involve Counsel at an early stage.
This choice is usually relatively uncomplicated when the only considerations are WSIB on one hand or an action for compensation on the other. But what happens when Player 3 – a disability insurer – enters the arena?
WSIB vs Long-Term Disability vs. Actions for Compensation
There are provisions in most group disability insurance policies that look something like this:
The following are direct benefit offsets under the Policy:
1. The amount that the employee receives or is entitled to receive under any Worker’s Compensation Act or similar legislation;
2. The amount that the employee receives or is entitled to receive as disability payments under the Canada Pension Plan or the Quebec Pension Plan …
“Surely,” you might say, “a person who has elected to pursue an action for compensation can not be said to remain ‘entitled to receive’ WSIB benefits.”
And Shirley would respond back to you – smug look firmly plastered on her face: “Oh yes she is.”
Here’s why:
The Case Law
Madill v. Chu, 1976 [1977] 2 SCR 400 – Chu was injured while driving a taxi but did not make a claim under what was then called the Workmen’s Compensation Act. The auto policy under which he was insured contained the following exclusion:
(2) EXCLUSIONS
The insurer shall not be liable under this section for bodily injury to or death of any person …
ii) Who is entitled to receive the benefits of any workmen’s compensation law or plan… [emphasis added]
Chu had not made a claim under the Workmen’s Compensation Act but had commenced a tort claim. The case made its way to the Supreme Court of Canada, with the majority (Martland, Judson, Ritchie, Pigeon, Beetz and de Grandpré JJ) commenting as follows:
To construe the words “entitled to receive benefits” as they are used in Sch. E of The Insurance Act and in the policy as being ineffective unless the workman has elected to make a claim for compensation which the board has found to be well founded, in my opinion must mean that in a case such as the present one where the facts are admitted which entitle an insured workman to benefits, he can nevertheless elect to recover against the insurer rather than the Board by the simple process of neglecting to make a claim against the Board. I think it must follow that such a workman can by his own act successfully deprive the insurer of an advantage which it otherwise would have enjoyed under The Insurance Act and the insuring agreement. It seems to me that this would mean that the insurer’s undertaking as contained in the insuring agreement could be varied adversely to its interest after the happening of the event insured against by the independent act of the insured and such a situation in my view runs contrary to the law normally applicable in interpreting such an agreement.
It follows, in my view, that to construe the exclusionary clause as being ineffective because an award has not been claimed and allowed against the Board would involve the assumption that notwithstanding express agreement as to the existence of all the facts requisite to entitlement, the Board might refuse to make an award. In the absence of any evidence to support such an assumption, I do not think it can be entertained as a factor in determining the meaning to be assigned to the language employed in The Insurance Act and the policy here in question. [emphasis added]
Laskin C.J., Spence and Dickson J.J. dissented, saying that a person should not be regarded as entitled to receive the benefits unless he has applied for compensation and obtained an award.
Richer v. Manulife Financial, 2007 ONCA 214 – Richer was injured in the course of his employment with the City of Toronto. Manulife provide disability benefits to employees, including those who were entitled to workers’ compensation. Richer was eligible to apply for and receive WSIB benefits. The Board advised Richer that, pursuant to ss. 30(2), (4) and (5) of the WSIA, he could elect to proceed with a tort claim instead and he did so.
Manulife brought a motion for a determination of 2 issues before trial, the second of which was whether Richer’s LTD benefit was subject to an offset for the amount of WSIB benefits he would have received had he not elected to proceed with a civil action.
The Court of Appeal said yes, permitting the offset for the amount of the WSIB benefits.
Wilken v. Sun Life Assurance Company, 2017 ONSC 3609 – This was an unusual case because the Plaintiff initially elected WSIB but then retroactively chose to pursue a tort claim and seek LTD benefits. Sun Life brought a motion for summary judgment to dismiss Wilken’s claim for LTD benefits in its entirety because of the following clause in its Policy:
If you are eligible for any of the benefits or payments described above and do not apply for them, we will still consider them. We can estimate those benefits and payments and use them when we calculate your Long-Term Disability payments.
Sun Life submitted that Wilken’s eligibility for WSIB combined with this clause operated to reduce his LTD entitlement to zero.
The Court held that Sun Life was correct on two periods of eligibility, but not a third, and thus declined to dismiss the claim in its entirety. The third period of eligibility had to do with a time when Wilkens was expected to participate in a gradual return to work plan, which would have reduced his WSIB benefit. It was therefore unclear on the available evidence to how much WSIB he would have been entitled for that period, and the motion judge therefore was unable to conclude that it would wipe out his LTD entitlement.
The Implications
Many workers have group disability benefit plans available to them as part of their overall compensation packages. A worker who is injured in a MVA on the job will usually need some guidance when faced with the impending loss of regular income and reach out to a lawyer for help.
While Counsel should strive to present their clients with good advice in a timely manner, we must also be sure to have as many of the pertinent facts in hand before doing so.
Some considerations for Counsel:
- Ask the potential client at the intake phase whether they know if they are covered by a group disability plan at work.
- If so – or if they don’t know – counsel should obtain an authorization to write to the employer to obtain a copy of the benefits booklet or guide to determine the potential client’s entitlement.
- If the client elects WSIB, Counsel should follow up with the client to ensure that WSIB is meeting their needs. If not – for example, if the insured will need additional future medical rehabilitation or if attendant care needs cannot be met by WSIB payments – a re-election should be explored.
- There is no reason to believe the principles set out above are limited to WSIB. Most LTD insurance policies have clauses that allow them to estimate and apply any direct offset until the insured shows proof that s/he is not entitled to them. Counsel whose client receives CPP-Retirement benefits, for instance, should strongly consider advising their client to re-apply for CPP-Disability benefits if the Policy allows the insurer to offset it.
A Note for the Future
This issue was at the forefront of the very first mediation I conducted. Counsel were able to work together to come up with a mutually satisfactory resolution that took all of the relevant contingencies into consideration.
If you have a matter – be it LTD, Tort, or any other type of litigated dispute – which requires the services of a mediator who is well versed in the interaction of various benefits and entitlements, please get in touch.
You can find my dates and rates at https://scheduling.davieshowe.com
I hope you enjoyed this post. Leave a comment, start a discussion, maybe teach me a thing or two.
I look forward to working with you soon.