A 2003 Supreme Court of Canada decision is causing headaches at the Nova Scotia’s Workers’ Compensation Board, and driving up premiums that are already among the highest in the country, according to a Nova Scotia employers group.
The Supreme Court ruled it was a violation of the Charter of Rights and Freedoms to in any way restrict the right to workers’ compensation benefits for anyone suffering from chronic pain.
Previously Nova Scotia limited benefits for chronic pain to four weeks.
The decision forced the province to change its workers’ compensation regulations last summer, changes that came into effect last fall. Workers suffering injuries resulting in chronic pain, going back to 1985 (the effective date of section one of the Charter), were then able to file claims for benefits.
The provinces WCB is facing serious issues, all of which could lead to increases in premiums, raising the costs of doing business in Nova Scotia, and putting employers at a disadvantage relative to neighbouring provinces, said Dick Smyth, vice-president of the Nova Scotia division of the Canadian Manufacturers and Exporters (CME).
A little more than six months after the changes came into effect, more than 4,700 claims for benefits have now been filed with the board.
To manage the claims, the WCB created a new group and hired more staff but, to date, the group has settled fewer than 100 claims. What’s more by the time the backlog is cleared, actuaries estimate the board could be facing anywhere from $198 million to $217 million in new benefits liabilities. Future claims are expected to add about $11 million per year in benefits at a time when the board already has an unfunded liability of about $400 million.
The CME also has been vocal about three recent resignations from the board. The three complained about actions by the chair of the board and interference from the government.
The three members feel they had become irrelevant because the chair was bypassing the board to make decisions, said Leo Glavine, member of the opposition Liberals in the legislative assembly and a member the legislature’s Human Resources Committee (which reviews matters relating to the Ministry of Labour). The committee conducted interviews with the three resigned members in late March.
Losing three members of the board, who each had the ability to make enlightened contributions to the running of the organization, is counterproductive, he said. “The one thing that can not happen in Nova Scotia, is that we can’t let premiums rise higher,” he said, adding it will be difficult to keep premiums down when the WCB is having problems running efficiently.
The Liberals intend to challenge the government on the functioning of the board and the inefficient manner in which chronic pain claims are being administered once the legislature resumes sitting, he said.
But Mary Kingston, director of communications and marketing for the WCB, said the resignations have had no impact on the day-to-day operations of the board. The board still has a quorum and staff continue to hear chronic pain claims as they did before the resignations.
As for the backlog of chronic pain claims, she said the WCB has acknowledged improvements need to be made. “We know that it is taking us to long,” she said. “We have (completed) less than 100 cases and we have said that is just not acceptable from a customer service perspective.”
The board has committed to present a plan to make the process more efficient and improve the rate at which claims are heard, she added. (The plan was not completed at press time but was expected by the end of April.)
However, she also said that the each claim will take time to process because the first steps with a new claim are to explore return-to-work strategies and look for ways to help the claimant alleviate the chronic pain, she said. “This isn’t an issue of just cutting a cheque.”
Though fewer than 100 of the claimants have been awarded benefits at least another 500 cases are under active review by case workers, she said. Of the 22 people hired into the new Transition Services Team created to deal with the new chronic pain claims, 12 are case workers, she said.
As for rate increases, Kingston agreed further increases could be coming. The WCB doesn’t feel current actuarial assumptions paint a true picture of future costs and once more claims are processed a better sense of the final tally will be possible.
In January 2004, the premium rate went from $2.54 per $100 of payroll to $2.57 and chronic pain costs were partially covered by another three-per-cent increase raising the rate to $2.65 as of Jan. 1, 2005. Employers should know if another increase is coming by September.
Chronic pain is partly to blame for cost increases but there are factors driving up premiums, she said. For example, Nova Scotia has one of the worst workplace accident rates in the country, workers tend to stay on short-term benefits longer than in other jurisdictions, and more workers go on to receive permanent benefits. Employers say they want rate relief but if something could be done about the injury rate and workers could be returned to work in a safe and timely manner, rate relief might be possible.
Most employers are sincerely dedicated to maintaining a safe workplace, she said. But there are about 200 employers whose injury rates are significantly higher than most, she added.
The board also plans to introduce new surcharges for organizations with high injury rates by 2006, she said.
Meanwhile, one Ontario employment lawyer said the Supreme Court decision could yet have an effect in other provinces.
In Ontario, chronic pain is dealt with just like any other compensable injury, explained Kristen Lopes, a partner in the Toronto office of Ogilvy Renault’s labour and employment practice. So the Supreme Court ruling doesn’t have any impact on the current system.
But the act in Ontario also only allows workers to make claims for traumatic stress while preventing them from making claims for mental stress for employer actions or decisions.
Thus employees can’t make claims for stress arising from disciplinary actions, demotions or productivity expectations, for example. “We might see this provision being challenged,” she said. “Why is there a limit for stress claims when the Supreme Court has said there should be no limit for chronic pain claims?”
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