Tag: sick bank benefits and icbc claims

A Creative Sick Leave Benefits Award

Reasons for judgement were released this week by the BC Supreme Court, New Westminster Registry, making an interesting award with respect to past wage loss covered by a sick leave plan.
In this week’s case (Bulpitt v. Muirhead) the Plaintiff, a firefighter, was injured in a  2007 collision.  He did not suffer an actual wage loss as “he received all of the wages he would otherwise have received had the accident not occurred as sick leave benefits to which he was entitled as an employee of the City of New Westminster“.   These benefits were subject to a subrogation agreement which was put into evidence.  The court expressed concern about whether this was a sufficient basis to make an award for past loss of wages.  Instead, the court did not award money for past wage loss but used its inherent jurisdiction to make a blanket order that the Defendant provide full indemnity to the plaintiff in respect of any amount of the judgement that the plaintiff is, or becomes, obligated to re-pay the City.  In reaching this decision Mr. Justice Weatherill provided the following reasons:
[102]     The only evidence proffered by the plaintiff during the trial in respect of a claim for past wage loss came in the form of a letter dated June 6, 2008 from a payroll clerk with the City of New Westminster to ICBC.  It states:
“Please find enclosed the completed Certificate of Earnings form for [the plaintiff].  I am also attaching a copy of the subrogation agreement from the Collective Agreement for The City Firefighters’ Union, Local 256.
The gross pay lost up to May 30, 2008 due to [the Accident] is $20,365.56.  Please be aware that his sick claim is still ongoing so this figure is not a final amount.
When a settlement has been reached, please forward to my attention the total amount of earnings lost due to this accident, plus any interest attributed to those earnings, payable to the City of New Westminster.  This will allow us to credit Mr. Bulpitt’s sick plan and return any gratuity hours that he lost due to the accident.               
[Emphasis added]
[103]     The attached “subrogation agreement” states:

Sick Leave Recovery

a) An employee may use sick leave credits for time lost through accidental injuries PROVIDED THAT prior to making a claim or commencing an action for damages against a third party in respect of such injuries, he shall notify the Employer of such claim and enable the Employer the opportunity to be represented in all proceedings or settlement discussions relating to the claim.  Any such claim shall include a claim for loss of wages including pre- and post- judgement interest, and to the extent that recovery is made, such amount will be reimbursed to the Employer.  The Employer will reimburse the employee, fifty percent (50%) of the cost of the legal fees certified by the employee’s legal counsel as being attributed to providing the wage/benefit loss claim.
[104]     During argument at trial, I expressed to plaintiff’s counsel my concern that this evidence was insufficient to prove the employer’s right to make a subrogated claim for the wage benefits it had paid to the plaintiff while he was unable to work due to his Accident-related injuries…
[108]     Regardless, it is my view that the June 6, 2008 letter and the excerpted portion of the Collective Agreement is evidence that the plaintiff’s sick leave benefits were not as they would have been but for the Accident.  Clearly, there was a benefit plan that had been negotiated by the City and the firefighters’ union the terms of which were contained in the Collective Agreement.  Further, this letter is evidence of what it will take to restore the plaintiff’s sick leave plan to its pre-Accident status.
[109]     In all cases, the court retains residual power to grant appropriate relief through its inherent jurisdiction: Anderson v. Buydens, [1998] B.C.J. No. 2675 at para.16 (S.C.).  In this case, a miscarriage of justice would result if the plaintiff was awarded nothing for past wage loss because he received benefits from his employer yet the employer was able to “claw back” those same benefits by way of a right of subrogation.  I am satisfied that there ought to be a provisional award for past wage loss in this case.  The plaintiff is entitled to full indemnity from the defendants in respect of any amount to which the plaintiff is or becomes obligated to re-pay to the City of New Westminster in respect of benefits he received as a result of the Accident.
 

BC Personal Injury Claims and Sick Leave Benefits

Imagine that you are injured through the fault of another in British Columbia.  As a result of your injuries you become disabled and are unable to return to work for a period of time.  Fortunately you have a good job and have built up a ‘sick bank’ at work and you are able to draw from this during your period of disability.  When you bring your claim against the person responsible for injuring you are you able to claim your lost wages?  Reasons for judgement were released yesterday by the BC Supreme Court addressing this issue.
In this case the Plaintiff was injured in 2005 in a motor vehicle collision.  The Plaintiff was unable to work for a few weeks as a result of injury.  The Plaintiff had built up a sick bank and drew from this.  In her ICBC claim she claimed compensation in an amount equivalent to the hours depleted from her sick bank.  In awarding the Plaintiff this money the court engaged in a very thorough and well reasoned discussion of the law addressing this topic which I am pleased to reproduce below:

[56]            This court has long recognized the loss of sick bank credits as a compensable loss (see generally: McCready v. Munroe (1965), 55 D.L.R. (2d) 338, 54 W.W.R. 65 (B.C.S.C.)).  InLavigne v. Doucet (1976), 14 N.B.R (2d) 700 at para. 12 (C.A.), the New Brunswick Court of Appeal held that the depletion of a plaintiff’s accumulated sick leave arising from injuries suffered in an accident removed a benefit that he or she would otherwise have and, therefore, constitutes a genuine loss.  That conceptual approach was approved of by McLachlin J. (now the Chief Justice) in Ratych v. Bloomer, [1990] 1 S.C.R. 940 at 972, 69 D.L.R. (4th) 25:

I accept that if an employee can establish that he or she has suffered a loss in exchange for obtaining wages during the time he or she could not work, the employee should be compensated for that loss. Thus in Lavigne v. Doucet the New Brunswick Court of Appeal quite rightly allowed damages for loss of accumulated sick benefits.

[57]            Some years later the issue was revived before the Supreme Court of Canada in Cunningham v. Wheeler, [1994] 1 S.C.R. 359, 113 DLR (4th) 1, where Cory J. confirmed at 13 that an employee who uses sick leave in order to receive wages while off work and loses those sick day credits is entitled to receive compensation.

[58]            In Roberts v. Earthy, 1995 CanLII 1421 (B.C.S.C.) [Roberts], Clancy J. held at para. 8 that it was not necessary to adduce evidence showing that any consideration was paid by the plaintiff or negotiated on the plaintiff’s behalf through a collective agreement or other employment arrangement.  He did so on the basis that the accumulation of sick days is not related to what has come to be known as the insurance exception to the compensatory principle where such supporting evidence is generally required.

[59]            The case authorities do not appear to support a universal approach to the quantification of the loss flowing from the depletion of sick leave benefits.  For example, in Collins v. Ma, 1990 CanLII 1634 (B.C.S.C.), the court endorsed a contingency calculation being applied in order to take into consideration the likelihood of an employee drawing on the lost banked sick days in the future.  That approach was followed by the court in Olson v. Nixon, [1991] B.C.J. No. 155, 1991 CarswellBC 1346 (S.C.).

[60]            In Roberts, however, Clancy J. made no deduction for contingencies.  Likewise, more recently in Choromanski v. Malaspina University College, 2002 BCSC 771, the court rejected the defence argument that there should be a  reduction of the loss taken based on the plaintiff’s work history and the rate at which he had traditionally availed himself of his sick benefits. 

[61]            In my view, whether it is appropriate to make deductions for contingencies in quantifying the loss will depend upon the presence or absence of certain factors.  Those would include, for example, whether there is a maximum limit of accumulated sick leave, whether the plaintiff is able to cash out accumulated sick leave days on termination or retirement, whether the plaintiff has several years of employment remaining in which to potentially use the sick leave or has only a few months of employment left until retirement with a significant sick leave remaining, or whether the plaintiff has left the employment in which he earned the sick day credits altogether.  It cannot be predicted with any degree of certainty whether a person who is healthy today will be so tomorrow.  Illness or injury can afflict any one of us at any time.  Placing much if any reliance on the plaintiff’s past use of sick benefits strikes me as an unsound and potentially unfair approach because it fails to adequately protect a plaintiff against an unexpected serious or catastrophic illness in the future which could occur in any otherwise healthy plaintiff, or against a future injury, which, by its nature, is unpredictable.  In neither case would those future events necessarily be related to the plaintiff’s past use of sick benefits.

[62]            I accept that had Ms. Fenwick not used her sick leave credits, she would have been entitled to transfer them from her then employer, the Vancouver School Board, to her new employer, the Coquitlam School Board.  As well I am satisfied that, pursuant to her collective agreement, any monies awarded to Ms. Fenwick on account of lost sick days is repayable to her then employer in order to replenish her sick leave bank.  Beyond that, the evidence pertaining to the details of the portability of Ms. Fenwick’s sick day credits was not well developed.  I do not have cogent evidence as to whether there is a maximum number of sick days allowable, the formula for which she has earned them or whether she is able to cash them out on retirement or termination.

[63]            As best I can decipher from the evidence, the loss that Ms. Fenwick has sustained is a potential future loss in the sense that it would only be experienced if she has insufficient sick leave credits to adequately cover a future period of absence due to illness in respect of which she could have drawn upon the lost sick bank for income continuation.

[64]            Ms. Fenwick thoroughly exhausted her accumulated sick leave as a result of the accident.  She is a relatively young woman in the early stages of her career as a teacher.  I have found that she likely will experience flare-ups of her symptoms caused by this accident from time to time in the future which may require her to miss brief intervals of time from work.  She may also suffer from other illness or medical conditions in the future which will keep her from work. 

[65]            I am satisfied that fair and reasonable damages for this loss is compensation which reflects the actual hours Ms. Fenwick missed from work and used as sick time, multiplied by her approximate average hourly rate, without deduction.  To that, I would add her wage loss stemming from fifteen hours of unpaid absences attributable to her injuries.  The total damages amount to $5,469.18.

[66]            Ms. Fenwick’s counsel raised a concern about whether damages for Ms. Fenwick’s lost sick bank entitlement could be validly characterized as pre-trial earnings or income and thereby attract a deduction for income tax pursuant to sections 95 and 98 of the Insurance (Vehicle) Act, R.S.B.C. 1996, c. 231.  In my view, this kind of loss is not in the character of past wage loss.  Accordingly, there will be no deduction for income tax

Contact

If you would like further information or require assistance, please get in touch.

ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

“Work hard, be kind and enjoy the ride!”
Erik’s Philosophy

Disclaimer