October 22, 2021 - No. 98

In Defence of the Rights of Injured Workers

Workers and Advocates in Ontario Condemn Plan to Enrich Employers and
Impoverish Workers

Friday, October 29 – 11:00 am
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• Injured Workers Community Legal Clinic Demands Restitution for Injured Workers

In Defence of the Rights of Injured Workers

Workers and Advocates in Ontario Condemn Plan
to Enrich Employers and Impoverish Workers

Before the end of October, Ontario's Minister of Labour, Training and Skills Development, Monte McNaughton, plans to introduce legislation that will "allow" the Workplace Safety and Insurance Board (WSIB) to distribute the Insurance Fund Surplus to employers when the fund exceeds 115 per cent and to "require" this distribution when it reaches 125 per cent.

Talk of surpluses is bogus to say the least and at the base of the fraud the government has perpetrated against the interests of injured workers. Massive cuts to workers' benefits and other measures have resulted in what is  called  the "surplus" in the insurance fund. Since the "surplus" was created through denial of claims and cuts to benefits to injured workers, the only legitimate way to now use those funds is to make immediate restitution to injured workers who are being pushed into poverty and desperation.

The legislation will be based on two of the 25 recommendations of two consultants who submitted an Operational Review Report in November 2020, the Speer-Dykeman Report. The recommendations are that "the government should adopt a regulation that prescribes a sufficiency ratio corridor between 115 and 125 per cent for the Workplace Safety and Insurance Board from 2020 to 2025" and that "the government should prescribe the parameters for surplus distribution -- namely, instructing the Workplace Safety and Insurance Board to consider surplus distribution when the insurance fund exceeds 115 per cent and to require it distributes surpluses if the sufficiency ratio hits or exceeds 125 per cent."

Between July 15 and August 10 this year the WSIB conducted a "consultation," the Workplace Safety and Insurance Board Insurance Fund Surplus Distribution Model Consultation. This was not announced publicly. Injured Workers' Groups, advocates and unions were not informed but nonetheless found out and were able to submit briefs.

The plan has been soundly denounced by the Ontario Federation of Labour, several unions, injured workers groups across the province, and advocacy organizations. It is a straight-forward scheme to pay the rich with funds stolen from injured workers over the years. Cuts to workers' compensation were justified on the basis of the fraud that the system could not have an "unfunded liability." It is self-serving accounting and propaganda to divert funds to pay the rich. 

Workers' Forum is reprinting below a summary and excerpts from the submission of the Injured Workers Community Legal Clinic from August 10, 2021.

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 Injured Workers Community Legal Clinic Demands Restitution for Injured Workers

The Injured Workers Community Legal Clinic (IWC) begins its submission by rejecting the premise of the consultation and demanding that the government "return to injured workers what was taken away from them in the name of eliminating the unfunded liability (UFL)." The IWC and others have always pointed out that there is no reason for a public system like the WSIB to require a permanent state of full funding, i.e. that the ‘unfunded liability' is a ruse.

The IWC points out that the consultation itself was flawed because it was based on an Operational Review Report commissioned by the Minister of Labour in 2019, the Speer-Dykeman report of November 2020, which did not look at the history of the unfunded liability and who paid for it. By doing so, the IWC argues, "the report released itself from the responsibility of looking at what created the unfunded liability in the first place (artificially low premiums) and who paid for its elimination (injured workers)" and asserts that that history "is not only an important part of understanding what the government and WSIB should do at this historic juncture, but that it is the most important element of creating a path forward."

Significant Historical Events

The Mike Harris government made cuts in the 1990s including $15.2 billion with Bill 99 in 1996 which reduced cost of living adjustments, reduced Loss of Earnings benefits from 90 per to 85 per cent of net, halved the loss of retirement income benefit and cut chronic pain entitlement.

In the 2000s the Dalton McGuinty government imposed further reductions in benefits to reduce the "unfunded liability" through extending the process of "deeming" which "pretends that workers have a job that they do not have, and reduced their benefits by the wages that they are imagined to be earning in this phantom employment," by reducing compensation based on "pre-existing conditions," and by ignoring the opinion of injured workers' treating doctors. The person in charge of this assault on injured workers' rights to compensation, David Marshall, openly said that he would introduce "tough, tough, tough" measures and would challenge his team to "reduce the rate of long term (compensation) recipients by half."

The IWC points out that "At the time of these cuts, however, injured workers were unambiguously told that once the UFL was eliminated, some of these cut benefits would begin to return. [...]

"Finally, in the two years prior to the report alone, employers were already rewarded a 47.1 per cent reduction in premium rates since 2019, which has already saved them billions of dollars.

"A reasonable observer might conclude that since employers have already been rewarded with massive premium rate cuts, there should only be one kind of consultation now: how to return some of the benefits to the injured workers who were forced to make the sacrifices that eliminated the unfunded liability." 

The IWC explains that the WSIB created the surplus by not providing benefits to workers. It reports that "WSIB's own Annual Financial Reports reveal that between 2010 and 2015 alone, the benefits paid out to injured workers were cut in half, from $4,809 million to $2,332 million," all through cuts which the IWC analyses in detail. These include deeming, failure to compensate for work-related chronic mental stress injuries despite 2016 legislative changes that required that these injuries be covered in the same way as other injuries, the rejection of occupational disease claims, and a 65 per cent reduction in permanent injury settlements with no corresponding reduction in injury rates.

Claim suppression, efforts by employers through intimidation or more subtle means to stop workers from making claims, is also a factor, permitted by the lack of effective auditing and investigation of claim suppression. The IWC points out that:

"We know that the WSIB does not hesitate to flag, escalate, and thoroughly investigate any behaviour they deem as ‘suspicious' on the worker side of things, up to and including hiring expensive and invasive private investigators to tail workers. Again, it is anecdotal, but we simply don't see or hear of that level of effort, resources, and responsiveness when it comes to investigating suspicious employer behaviour. [...]

"A suppressed claim, at bottom, is one that the WSIB does not have to pay for, resulting in potentially massive levels of savings for the Board. Returning premium "surplus" to employers before adequately equipping Board staff with strong investigative mandates and resources is another reason injured workers are feeling ‘kicked while they are down' by this consultation process."

The IWC proposes that, "in the wake of increased funding at the WSIB, the government should make the following legislative changes to prioritize injured workers, aimed at returning the system at least to the level it was before UFL related cuts began in the 1990s."

The proposed legislative changes include:

- Increase the Loss of Earnings rate from 85 per cent back to 90 per cent

- Full retroactive replacement of benefits related to cost of living adjustment

- Increase of the Loss of Retirement Income benefit percentage, currently at five per cent, reduced from 10 per cent by Bill 99 in 1996

- An increase in the Non-economic Loss Benefit rate through the establishment of an appropriate "base rate" more in line with awards in personal injury cases or by private insurance

- Arms-length funding for the Ontario Network of Injured Workers' Groups to enable them to participate in consultations on how best to fund the WSIB

In conclusion, calling for immediate restitution to workers, the IWC says:

"This consultation is hampered by the Speer-Dykeman's report's unwillingness to examine how the unfunded liability was eliminated and who paid for it. As a result, it therefore asks the wrong questions and sets out to reward the wrong party for the so-called "victory" over the unfunded liability. Said another way: the Minister of Labour received lop-sided and incomplete advice, and should show dignity and respect for injured workers who surrendered so much for over two decades, by returning the benefits that were cut over time. Above, we have listed some measures that could be undertaken to begin to redress the cuts that have been made to the compensation system, and begin to restore the trust of injured workers.

"Finally, try to imagine yourselves in the position of injured workers, who collectively have watched literally billions of dollars get shaved off of their benefit cheques for decades alongside a promise that "things will get better when we are funded," only to see that the reward for their sacrifices is a consultation about how to divide their lost benefits up amongst employers. The same employers who injured them. Many of whom may have suppressed and managed their claims and those of their community. Who are protected from lawsuits whether they are neglectful for not. Who fight publicly for a system that does less for injured workers.

"We don't make these submissions only because we are on the side of workers. We make them because we are on the side of fairness. We believe we have made the case that rushing to return money to employers is not a fair approach to the elimination of the unfunded liability."

For the Injured Workers Community Clinic's full submission click here.

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Website:  www.cpcml.ca   Email:  office@cpcml.ca