Royal Commission on Workers' Compensation in British Columbia · 25-67% allow rate with 1-1.5 years...

Royal Commission on Workers' Compensation in British Columbia:

Chapter Summaries and Comments

Prepared by WCB Staff

February 1999 - Short version

Note: The following pages contain commentary, analysis and policy advice to the Senior Executive and Panel of Administrators of the Workers' Compensation Board of BC.

Royal Commission on Workers’ Compensation in British Columbia: Chapter Summaries and Comments Prepared by WCB Staff February 1999 - Short version Note: The following pages contain commentary, analysis and policy advice to the Senior Executive and Panel of Administrators of the Workers’ Compensation Board of BC.

Notes

This document is designed to accompany the full report. In preparing a one to two page summary of each chapter and adding commentary, much of the detail and description relating to the main points has been condensed or eliminated. Selection of "Major Points" is of necessity a subjective process.

Summaries are organized along the same lines as the Royal Commission's final report. Each chapter summary is limited to a maximum of two pages (two sides of a single sheet of paper) so the pages are not numbered. The document may be kept intact or chapter summaries may be inserted into the Royal Commission final report binder at the beginning of each chapter. The following list provides the outline for the summaries. The section responsible for the primary authorship of the chapter summary is listed in parenthesis following each chapter heading.

Volume I Chapter 1 - Introduction (Corporate Planning and Development)

Volume I Chapter 2 - The Challenge of Research (Corporate Planning and Development)

Volume I Chapter 3 - Governance and Accountability (Policy & Regulation Development Bureau)

Volume I Chapter 4 - Information and Decision Making (Corporate Planning and Development)

Volume I Chapter 5 - Operations: Prevention Div. (Prevention Division)

Volume I Chapter 6 - Operations: Rehabilitation Div. (Compensation & Rehabilitation Divisions)

Volume I Chapter 7 - Operations: Compensation Div. (Compensation & Rehabilitation Divisions)

Volume I Chapter 8 - Compensation Adjudication (Compensation & Rehabilitation Divisions)

Volume I Chapter 9 - Comp. & Assessment Appeals (Appeal Division)

Volume I Chapter 10 - Disclosures (Legal)

Volume I Chapter 11 - Board's Internal Ombudsman (Corporate Planning and Development)

Volume II Chapter 1 -Adequacy of Benefits (Policy Bureau / Compensations Services)

Volume II Chapter 2 - Fatality Benefits (Policy & Regulation Development Bureau)

Volume II Chapter 3 - Scope of Coverage: Who is Covered (Policy & Regulation Development Bureau)

Volume II Chapter 4 -Scope of Coverage: Determining Work-Relatedness (Policy & Regulation Development Bureau)

Volume II Chapter 5 -Section 10 and 11 (Legal)

Volume II Chapter 6 -Fatality Investigations (Prevention Division)

Volume II Chapter 7 -Performance Indicators (Finance Division)

Volume II Chapter 8 -Operational Capacity (Human Resources)

Volume II Chapter 9 - Funding (Policy Bureau / Assessments)

Document Integration (Co rporate Planning and Development)

ROYAL COMMISSION ON WORKERS' COMPENSATION IN BC - WCB CHAPTER SUMMARIES 09/12/02

Volume I Chapter 1 - Introduction

Overview The historical and current economic/demographic context for the report is recapped with a strong emphasis on the recent history of the WCB leading to the appointment of the Royal Commission. The Report characterizes the post 1972 era as a time of “P oliticizing the Board” and the period following th e 1991 Governors structure as “New Struc ture, New Turmoil”. T he ec onomic and employment data emphasize the shift away from forestry as the prime driver in the economy and point out the growth of the service sector, the in creased participation of wom en in the workf orce and the g rowth in self -employment. T he ro le of part time employment and the impact of older workers are also discussed. There are no recommendations in this chapter.

Major Points

Introduction Injuries considered by Meredith were primarily acute, traumatic and the product of discrete

observable incidents. “Occupational Injury” moves workers’ compensation far beyond its original vision. Workers’ Compensation is now part of a social safety net in which the decisions made by one

agency affect the operations and resources of others.

A Brief History of Workers’ Compensation in BC The origins of workers’ compensation are traced back through Bismarck. The common law defences of contributory negligence, assumption of risk and fellow-servant

rule made it difficult for workers to receive compensation through the courts. The Historic Compromise is traced from Meredith through Pineo to the Royal Commissions

Sloa n 1941/42 Sloa n 1949/52 Tysoe 1962/65

The more recent history of the WCB begins with the appointment of Ison by the NDP and changes to the legislation seen to favour labour. This was followed by the review and changes by the subsequent Social Credit government and the following three 1980’s legal cases were we seen to contribute to the politicization of the WCB. Guadagni - the court ruled the WCB had to implement the Review Board decisions in full

and with interest Napoli - required the WCB to make claim file information open to workers Banks - required the WCB to implement and pay a Review Board ruling even if appealed

and ruled that the worker could keep the payment even if the case was lost on appeal. The Munroe Committee report of 1988 which lead to the Governance structure is

characterized as ushering a period of new turmoil culminating with the dismissal of the Governors and the appointment of the Royal Commission.

Population, Employment and Trends in Injury and Industrial Disease Economic and demographic data are required to give context to epidemiology of injury and

disease. The BC economy is shifting from forestry to service and its population profile is aging. The rate of entrants to the workforce will slow over the next 20 years with women and older

workers participation in the economy growing the most. Unemployment rates have been following an upward trend over time.



Service sector employment is rising and now represents 76% of employment with the greatest growth in business services, finance, insurance, real estate and public administration.

Part-time employment is increasing while job tenure is surprisingly also increasing. Self-employment is growing in BC faster than in other parts of Canada. Small business accounts for the creates increase in labour unit utilization.

Comment: There are no recommendations in this chapter and the linkage to the rest of the report is primarily scene setting. Th e choice of m easure and historical incidents to include a nd emphasize supp ort su bsequent re commendations for g reater re search, universal coverage and a continuation of support for the historic compromise.

Volume I Chapter 2 - The Challenge of Research

Overview Obtaining accurate data on which to make decisions prompted the Royal Commission to analyze all the submissions made to it, initiate th e “Cohort” project (which tracked individuals injured in a given year (mainly 1994) through the WCB system), and support the “Data Integration Project” which indicates how WCB claimants utilize other aspects of the social safety net. M uch of t he chapter is devoted to data and research design descriptions. Two main findings of the Cohort study confirm high allow rates on appeal and lengthy delays in the system. Inju red workers are more li kely t o utili ze non-WCB services when com pared to control po pulations i n th e Data Integration Project.

Major Points

Introduction Better information will lead to better decisions. Accurate, supportable information may lead to a general reduction in the heat of debates that rage

around compensation issues. Research will foster cooperation between agencies. Analysis of Public Presentations and Submissions All submissions were classified according to 18 themes and 161 sub issues were identified by the

commission to produce a “Frequency and Intensity Matrix” (Volume 3 Chapter 3).

Comment: The Re port do es not inc lude an ind ex as to th e de tailed iss ues so which iss ue received t he most sub missions i s not i mmediately e vident f rom t he m aterials in th e rep ort. Contact Terry Bogyo if you require and index.

The Cohort Project The Cohort project is an attempt to follow the progress of three groups of workers (each group

defined by year of injury) through the system. ISD “committed a great deal of time, effort and creativity to retrieving useful data from a variety of

systems” in support of this project. Claim and Benefits Results:

15% of claimants filed two or more claims in one year (10 claims by 1 worker) 70% of claimants have filed previous claims (median 4) 75% were male in their mid 30s largest groups by occupation are healthcare workers and truck drivers Health care costs for no time loss claims averaged $130, STD claims $820, LTD claims $4400-$8300 50% of first payments were made within 12 days Average time loss was 32-37 days paid but the median was only 9 days 50% involve sprain or strain type injuries Average LTD -functional costs were $20,700 and LTD-LOE were $196,900 (1994 cohort) 3% received disclosure and 90% of these received their disclosure within 90 days

Review Board Results

Less than 3% of claims registered were appealed (only 10 employer appeals were entered) Most common appeal issues: entitlement, duration of wage-loss benefits and re-opening decisions 90% of appeals are filed within 90 days 25% of worker and 50% of employer issues appeals are withdrawn or abandoned



75% of worker and 40% of employer appeals are by way of oral hearing Workers are represented 65-75% of the time with employers represented 50-75% of the time 37-45% of worker and 26-37% of employer appeals are allowed with oral hearings having a slightly higher

allow rate Generally it takes 1 year from appeal filing to decision

Appeal Division Results

1% of claims registered appealed to appeal division by the end of 1997 with 80% of these worker initiated 10% are withdrawn or abandoned less than 10% have an extension of time problem Most common appealed issues: initial adjudication of personal injury and temporary disability benefits Less than 5% proceed by way of oral hearing 83% of workers are represented (mostly by unions) and 52% of employers are represented (mostly by

consultants) Approximately 1/3 of workers appeals were allowed rising to 49% in 1996 cohort with an additions 5 to 10%

partially allowed 50% of appeals were completed within 90 days of commencement with overall elapse time of roughly 5

months on average

Medical Review Panel Results:

95-100% worker initiated Initial adjudication of personal injury the most frequently appealed issue with strains and sprains the most

common injury type 10% rejected as not bona fide medical disputes and another 10% were withdrawn 25-67% allow rate with 1-1.5 years from enabling certificate to MRP certificate

Dissallowed/Rejected Claims Results

Only 5-6% of claims are rejected or disallowed but the Review Board allows 35-45% of these 42% of appealed rejected claims are eventually accepted or about 6.4% of all rejected or disallowed claims

Conclusions Decision-making process is neither straightforward nor efficient. Submissions support that the system is too slow and delays cause emotional and financial hardship. Accurate, supportable information may lead to a general reduction in the heat of debates that rage

around compensation issues.

Comment: This section makes a strong case for continuing the research.

Data Integration Project Project headed by UBC Centre for Health Services and Policy research links six provincial databases in a

way approved by the provincial Information and Privacy Commissioner Merges data for individuals from 1986-96 Results

30% of worker files occur within 5 months of employment in a given job (50% within 18 months likelihood of injury within 1 month: 2% for health care, 41% for construction 80% of individuals filing a WCB claim had more than 1 claim in the 12 year period Injured workers are high users of non-WCB-funded resources with a 50% greater frequency of GP and

specialist visits 23% of 1991 injury cohort received welfare benefits in 1991-1997 as compared to only 10% for the

age/sex matched control group. Maintaining and building on the Data Integration project will take a high degree of commitment and

cooperation but the commission believes the WCB and other agencies can meet the challenge

Comment: The Data Integration Project is ongoing but fu rther analysis is necessary before conclusions ca n be draw n from the data. While the chapter does no t contain a formal recommendation, implicit in the co mmentary is a belief that b oth t he Cohort and Data Integration projects should continue to be developed and maintained. Thi s will have funding, responsibility and resource implications for the Panel and Administration.

Volume I Chapter 3 - Governance and Accountability in the Workers’ Compensation System

Overview This chapter deals with the mandate of the workers’ compensation system, the need for periodic system review, the governance model, governance practices, policy making and regulation review. All of the recommendations, except those dealing with the framework for regulation review, would require legislative amendment.

Major Points

Mandate Commission recommends a purpose statement be included in the Act. Specific wording is proposed.

Comment: Purpose statement was recommended in the Korbin/O’Callaghan report.

System Review Commission recommends an independent review of the workers’ compensation system every

ten years.

Role of Governing Body Commission recommends a governing body with: a core function of stewardship; and a fiduciary responsibility to govern in the best interests of the system. Governance Structure Commission recommends: a governing body composed of 10 governors, with equal representation from workers,

employers and the public plus a neutral chair; and the president and CEO sit as an ex officio non voting member. Full Time Appointments Commission recommends 4 of the governors be full time (the chair plus 1 worker, 1 employer

and 1 public interest governor) in order to effectively manage volume of work. These governors would constitute the priority committee, which would have primary

responsibility for policy development, but governors would also be responsible for “procedures”.

Appointment Process Commission recommends: governor candidates be recruited using a profile describing desirable skills, abilities and

experience; candidates be sought through advertisements and consultation with interested parties; short-listing of candidates be done by the Deputy Minister; and Cabinet appoint governors from the short-list.

Term of Office Commission recommends:



governors be appointed for terms of not more than 3 years and be restricted to two terms totalling 6 years;

initial governors be appointed for staggered terms that provide parity across constituencies; no more than 4 appointments, including a maximum of 2 full time appointments, expire in any

one year; and appointments be revoked only for cause. Quorum and Voting Commission recommends a quorum of 5 governors and the Chair. However, policy decisions would require approval by 5 governors.

Accountability Commission makes a number of recommendations dealing with performance monitoring and

reporting requirements. These include a recommendation that the Auditor General review and attest to of all

performance information in the Annual Report.

Volume I Chapter 4 - Information & Decision Making

Overview Information i s critical to decision-making and i n o rder for d ecision-makers to m ake d efensible decisions, they must have high quality information. The commission concludes that the evaluation capacity of the WCB is lacking in several respects and that these gaps in its piloting and evaluation of major initiatives weaken accountability. The Administrative Inventories and the manner in which they were produced, used and responded to f orm the focus of t his Chapter’s examination of th e WCB’s information and decision-making processes. After describing the research process used by the royal commission, the report summarizes the Administrative Inventories noting the strengths and weaknesses of the methodology, the findings of each report and the organization’s response to the rep orts. While noting th e ge neral u sefulness of the Admi nistrative Inve ntories from a descriptive point of view and acknowledging the commission’s reliance on their content in their own research, th ey co nclude t hat the B oard ina ppropriately used t he Administrative Invent ories t o address major performance issues and that this model should not be used in this context. There are no recommendations contained in this Chapter.

Major Points

Information and Decision Making Governing bodies must define the principles that will guide the information they receive. The commission was told about the weaknesses of the information flow and reviewed the KPI

document, and annual business plans, minutes of ISRC and Panel/Governor meetings and relied heavily on the Auditor General’s report.

Evaluation Capacity The magnitude of and reliance on the major initiatives of the WCB prompted the commission

to review the way in which the board evaluates specific initiatives before and after implementation.

The commission acknowledges that the WCB recognized the need for and acted to obtain credible information evaluations of its major initiatives but notes “critical gaps” in the board’s evaluation capacity.

Internal Audit reports highlight the problems with “double counting” of benefits of major initiatives.

The recognized need for piloting and evaluation of initiatives before full roll-out was not always acted on.

Projects, pilots and phases do not have consistent, clearly stated and measurable objectives and evaluations were not well planned designed or conducted.

The capacity of the organization to carry out effective evaluation is questioned. The commission concludes that these gaps in evaluation could lead the board to “commit

millions of dollars on a board-wide rollout of a major initiative with insufficient evidence or assurances as to the likely affect of those expenditures and without knowing whether they have a positive or negative effect on board performance and on services to employers and injured workers”.

Accountability at all levels is weakened by this lack of clarity. Administrative Inventories The commission examined the Administrative Inventories in the context of “organizational

performance” tools. Although the commission found no standards against which to measure the methodology, they

found that the Administrative Inventories had the following strengths: Independence, relevant skills in the “experts”, the use of a wide variety of data sources.



The reports contain valid and relevant activity and input measured as well as useful descriptions of the system.

The commission found the following weaknesses detracted from the overall usefulness of the Administrative Inventories:

Unclear objectives, lack of clarity over performance, lack of input from key sources (notably injured workers)

The use of implicit and possibly contentious criteria and theories particularly in Prevention Administrative Inventories

They raise concerns over the reliability and credibility of the studies noting the lack of a “pre and post” research design and the lack of precision (and use of sweeping generalizations) in some parts of the Administrative Inventories.

The commission notes the major findings of the most recent Administrative Inventories including the positive quotes of the authors acknowledging that these may well be correct but the evidence supporting them are not contained in the Administrative Inventories.

The Commission notes lists the Administrative Inventories “credible attention points” on the future direction of the board noting the need for: stability at the top, clear outcome-focused direction, timeliness the right skills for staff to be accountable and empowered research and evaluation, and better links to other agencies with common goals

The commission found that the WCB’s responses to the Administrative Inventories was stronger in the first round of studies but much of the follow-up was seen as a paper exercise.

They acknowledge that the Administrative Inventories did result in study if not in actual change by increasing the level of planning, consulting and major initiatives.

Conclusions The Administrative Inventory model was not an appropriate tool for the SEC or governance to

rely on for reporting organizational performance. There are no direct recommendations in this chapter.

Volume I Chapter 5 - Operations: Prevention Division

Overview The October, 1997, Interim Report of the Royal Commission dealt with the statutory and regulatory structure under which the Board operates. This was followed by the enactment of Bill 14. Chapter 5 of Volume I of the Final Report of the Royal Commission is primarily concerned with the Prevention Division’s administration of the existing statute and regulations. It discusses the goals, strategies and programs the Prevention Division adopts, how it adopts them, how it carries them out and how it evaluates performance and effectiveness. The recommendations in these areas have significant short and long term administrative implications but do not require amendment to the Act or regulations.

Major Points

Who should administer occupational health and safety in B.C? The Interim Report left this question open. Recommendation 33 in the Final Report proposes that the Board continue its present role. The Commission comments that, if upon future review, it is found that “the same or a similar

level of fragmentation is found to dominate” the Board or the Board has not achieved its legislative mandate under Bill 14, its functions should be transferred to a separate agency.

Comments on current administration There is a lack of clear strategies shown by, for example, fluctuations over the years between

enforcement and consultation, and penalty and order numbers. New projects are implemented without prior needs analysis and a proper supporting structure,

notably communication, training, quality control, research and evaluation capacities. Much data is unreliable, for example, concerning additional assessments, and there is an

absence of data in several key areas, for example, numbers of worksites and workers covered, firms with effective programs, violations contributing to accidents and follow ups on enforcement activity.

There is a lack of research to support programs and regulations. There has been a decline in field activity and sampling and lack of follow up after orders,

warning letters and penalties. There is no process for ensuring consistency or quality of inspections or that targets are

followed. There is a failure to assess programs to determine their effectiveness. Existing data and performance indicators do not provide a sufficient basis for judging the

effectiveness of programs. There is a failure to use data other than claims data as performance indicators. There is a tendency to jump to conclusions about the Board’s contribution to reductions in the

injury rate without proper evidence or analysis. Recommendation 32 The Workers’ Compensation Board:

a) develop a mechanism to monitor and evaluate the effectiveness of its prevention programs and services;

b) incorporate the results of the evaluations in the program planning process in an open and consistent manner; and

c) report the results of the evaluations and their use publicly in the Annual Report.


Volume I Chapter 6 - Operations: Rehabilitation Division

Overview This Ch apter reviews th e fo ur pro gram ar eas th e b oard relies o n to me et its physical and vocational rehabilitation responsibilities. The Commission made 6 fo rmal recommendations (R34 to 39) all pertaining to v ocational rehabilitation: two would require legislative change, one would require policy clarification and three suggest administrative changes. No formal recommendations were m ade for the M edical S ervices, Psychol ogy Servi ces a nd the L eslie R. Pete rson Rehabilitation Centre.

Major Points

The Effectiveness of Rehabilitation The com mission en dorses retu rn to work a s “on e of the mo st important obj ectives of the

workers’ compensation system” but identifies difficulties inherent in using it as a performance measure.

Vocational Rehabilitation Legislation Commi ssion recommended in their October 1997 report that vocational rehabilitation (training,

counseling, placement) be provided to surviving spouses and dependents on request Commission recommends the Act be amended to make clear the primary objective of

vocational rehabilitation is to restore earning capacity (R34) Commission recommends the Act be amended to list the factors to be considered in

determining whether vocational retraining is to be provided (R34) The Vocational Rehabilitation Process The commission endorses the five phases of vocational rehabilitation Goals, policy, purpose, process and procedure are identified in the Manual and Handbook but

practice is not always consistent There is a lack of information for injured workers on vocational rehabilitation services. Employability Assessments The commission expresses the view that “deeming is necessary in appropriate and prescribed

circumstances” but it should not occur until after interventions have been completed and assessed

The Board should ensure through policy that deeming of unrealistic occupations does not occur (R35)

The Board should ensure that the policy addressing post-injury earning emphasizes the development of employable skills (R35)

Income Continuity The Act should be amended so that workers have continuity of income from conclusion of

short-term wage loss benefits until commencement of the loss of earnings pension award (R36)

In addition, workers who are actively participating in vocational rehabilitation should receive “participation benefits” (see Volume II: Chapter 1 The Adequacy of Benefits)



Third-Party Service Providers The Board should monitor and evaluate the competence and quality of rehabilitation services

provided by third-parties (R37) The recommendation states that workers should be provided with a list of preferred providers

(R38). The discussion states that workers should be entitled to choose a provider from a number of alternatives.

VR Performance Measures and Accountability The commission recommends the Board adopt clear, consistent and rational indicators of the

success of vocation rehabilitation and internal performance (R39) The commission suggests annual cost-benefit analyses to justify expenditures on vocational

rehabilitation services and identify which programs and services are having the greatest impacts and are most cost-effective

Medical Services Any outstanding concerns within the medical community (e.g. nurse advisers) should be

addressed by the board and the BCMA The mandate of the board should be examined and emphasis on the clinical care of the injured

worker must be reinforced The board should assess the implications of the changing role of the medical adviser Psychology Department Commission states “a comprehensive review of policies, procedures and practices in

compensation services as they relate to psychological impairment and treatment would greatly assist to alleviate inconsistencies, improve service levels in both psychology and compensation services, and make practices understandable to the stakeholders and clients alike.”

Referral trends, caseload indicators, and research appear to support management’s efforts to use resources effectively and to reach informed decisions but the “true costs” of services remains a matter for investigation

The Lester R. Peterson Rehabilitation Centre The Centre has a history of effective planning and reports provide evidence of the success of

the centre’s programs. Weaknesses include inadequate management information and lack of information with which

to determine cost-effectiveness.

Volume I Chapter 7 - Operations: Compensation Division

Overview This chapter focuses on the se rvices and pr ograms pr ovided b y the Co mpensation Ser vices Division. The new initiatives and programs introduced by the Board are assessed in terms of their impact on the Division’s mandate, mission goals and structure. As well, the Division’s response through human resources and training i s evaluated. Commission mainly highlighted issues tha t have administrative implications.

Major Points

Compensation Services Goals and Strategies The Commission made only one recommendation in this chapter which was that s.54(1) of the

Act be amended to state “An employer must report to the board within three days of the date that the employer is notified of the occurrence of an …”

The Commission commented on the Division’s goals and strategic initiatives. They noted that the Division’s goals were developed with little, if any advance consultation with staff or stakeholders. As such, the Division cannot be assured of the support required to attain goals.

The Commission commented that the number, timing (quick pace), scope and coordination of the various Board initiatives is applying extreme pressure to the system and may be resulting in inappropriate decisions and inefficiencies. Commission also noted that the board’s ability to evaluate the impact of each initiative on its own may be compromised, as each will to some extent be affected by the others.

Human Resources and Staff Training The Commission identified several concerns in t his section, however no recommendations were made.

Based on the data provided by the Division, the Commission was unable to comment on the Division’s effectiveness in assigning claims and monitoring workloads in the new business model.

The Commission questioned whether the Division is actually incorporating a “quality management program into every level of the new compensation services business model”.

The Commission found that the documenting of new business processes and the accompanying training has not kept up with the pace of change, threatening continuity, consistency and institutional memory.

Commission noted that the training initiatives that do exist, such as the Learning Center, highlight the disparity in resources between divisions and the lack of a corporate human resources plan. (discussed further in Vol. 3. Organizational Capacity).

Commission commented “there is less emphasis on the principles of workers’ compensation, the fundamentals of quality adjudication and skills needed to reach the right decision” in the various training programs. Training concentrated on technology and soft skills.

Service Delivery Strategy: Training The Commission commented on the quality of training related to each level of the service delivery strategy, however, no formal recommendations were made.



Commission quoted the BC Tel report on the Call Centre which noted that “formal coaching and knowledge skills derived from core competencies is non-existent”.

The Commission noted that the Board should adopt a process that enables proper screening and selection of suitable claims adjudicator candidates. As well, the Commission commented that Compensation Services staff raised the issue of additional medical training to aid in the adjudication of ASTD claims.

The Commission commented that it was unable to find any evaluation of the Performance Management Program initiated by the Division in 1995. Commissioners concerned that the board’s senior decision-makers have implemented similar management programs in the Prevention Division and Rehabilitation Centre despite the lack of objective evaluation.

Volume I Chapter 8 - Compensation Adjudication

Overview This chapter covers the process by which rules are applied in the adjudication of claims as well as a n umber of issue s related t o a djudication. M ost of the re commendations are f ramed a s amendments to th e Workers Compensation Act; h owever, ma ny concern c larification or redefinition of existing policies and practices. Thus, they ma y be described as codification of the existing process.

Major Points

Inquiry- Based Adjudication. The Commission recommends: amendments to clarify the structure by expressly providing for the inquiry model of adjudication. amendments to ensure consistency and predictability in decision-making by expressly stating the responsibilities of adjudicators in a manner that makes their decisions and actions reviewable as well as amendments that specify the role of rules, guidelines, and procedures. that the board develop and implement a quality assurance program. amendments to ensure timely decision-making; including timely implementation of appeal decisions. amendments that codify item #99.20 regarding the content of decision letters. amendments requiring interest to be paid in accordance with the Court Order Interest Act where there has been delay beyond 60 days that would have been in the control of the board. Other Issues Related to Compensation Adjudication. The Commission recommends: Workers’ and Employers’ Advisers programs be subject to performance audits and sufficiently

funded to allow them to fulfill their mandate. Budgets would be dependent on meeting performance objectives.

an amendment to Section 57(1) to provide that the board would suspend benefits only if a worker unreasonably fails to attend a medical examination or unreasonably obstructs an examination.

amendments to Section 57(2)(a) to impose a duty on a worker to mitigate permanent impairment and loss of earnings and to refrain from practices that may impede recovery; give the board recourse if the duty is not met; and to incorporate the procedural safeguards currently in policy in this regard.

Section 35(1) be replaced to allow the board to pay benefits to a representative authorized by law to receive payments where a worker is a minor or of unsound mind.

amendments to Section 98(3) to ensure that the recommended non-economic loss award not be subject to cancellation upon incarceration.

a minor amendment to Section 98(4) regarding diversion of benefits to dependants.


Volume I Chapter 9 - Compensation and Assessment Appeals

Overview The Royal Commission recommends a new legislative framework for appeals from decisions of the Workers’ Compensation Board re lating to workers’ compensation claims, employer assessment and classification matters, and employer prevention penalties. The current appeal system consists of three separate appeal bodies: the Workers’ Compensation Review Board, the Appeal Division of the Workers’ Compensation Board, and the Medical Review Panel.

The Royal Commission i s of the vie w that the current multi -level appeal sy stem evolv ed i n response to poor initial adj udication of claims by the b oard. The commission expressed the view that if the initi al claims adjudicators “get it right ”, this will significantly reduce appeal volumes. The Commission recommends a new legislative framework for the appeal process that focuses, firstly, on improving the internal board claims decision-making process through mandatory re-adjudication and internal review, and, secondly, on establishing a new one-level external appeal tribunal which would include a “medical issues adjudication branch”.

Major Points

Mandatory re-adjudication Commission recommends that, where either the worker or employer requests a re-adjudication of a claims adjudicator’s decision respecting a worker’s claim within 90 days of the original decision, a re-adjudication mu st be u ndertaken by the initi al deci sion-maker who may set aside the i nitial decision, re-investigate, an d issu e a ne w d ecision. No time limit proposed fo r iss uing a re -adjudication decision.

Internal review Commission recommends that an internal decision review is required where, within 30 days of the re-adjudication decision, (a) the p arty filing objection previously objected to t he initial adjudication and re-adjudication did not change the in itial decision, or (b) re-adj udication provided a different decision.

External appeal tribunal Commission recommends a new appeal tribunal having the following key features: one-level appeal system; inquiry-based model; external tribunal independent of the board; de novo jurisdiction to hear appeals on claims matters, employer appeals on assessment, classification, prevention and occupational health and safety matters; jurisdiction to make section 11 determinations; includes a “medical issues adjudication branch” within the tribunal that makes decisions relating to medical issues in claims matters and comprised of independent physicians and whose decisions on medical issues are binding on the tribunal; retains jurisdiction over the board’s implementation of its decisions; upon application, may reconsider on one occasion its decision on a claims matter; no statutory time-limit for issuing decisions; no authority to make binding decision that a board rule or guideline is contrary to the Workers Compensation Act, but must refer the rule or guideline to the board of governors for binding determination within 90 days; where tribunal determines no rule or guideline exists, or exists but is vague or ambiguous, tribunal decides appeals and refers issue to governors for consideration; tribunal can declare legislation, rule, guideline or procedure to be contrary to the Canadian Charter of Rights and Freedoms; chair of governors may apply to B.C. Court of Appeal for ruling on legality of a rule or guideline or the


constitutionality of a provision; tribunal is responsible for making determinations as to what may be disclosed from the workers’ and employers’ files on an appeal.


Volume I Chapter 10 - Disclosure

Overview Many of the Commission’s re commendations ab out di sclosure re quire n o acti on because they reflect the current state of affairs, or because the Board is already in the process of implementing the sub stance of the re commendations. Howeve r, several re commendations, i n orde r to b e properly im plemented, would require that the Bo ard commit to establi shing and f unding a true “Records Ma nagement” department st affed by persons with the a ppropriate e xpertise and background to pr ovide ap propriate advice to th e Bo ard. Tw o o f the Commission’s recommendations involve significant changes to the process for disclosure of claim files on appeal - legislative change is not needed to implement these recommendations as they could be effected by poli cy changes t o t he Rehabilitation Servi ces & Claims Manual. These ap peal di sclosure changes would involve high cost, a sig nificant change to administrative structure (i.e. a ne w o r expanded department) to administer, and inevitable delays in the appeal process, no matter how efficient the disclosure process.

Major Points

Recommendation 114. All Prevention information about an employer to be stored or referenced in one master file Recommendation 116. The WCB should develop clear policies which direct where the variety of information which it collects and uses will be stored

Recommendations 123 and 124: Appeal Disclosure of Claim Files The Commission recommended a significant change to the current process whereby an

employer is entitled to full disclosure of a worker’s claim file after an appeal has been initiated on the claim. A worker would be entitled to notice that an employer has requested a copy of the claim for appeal purposes, and the worker would be entitled to object to the release of “specific medical information”. Both the worker and employer would be entitled to present submissions on the issue of disclosure of the information for appeal purposes, with either an internal review officer of the WCB, or of the Appeal tribunal, rendering a decision on the issue. That disclosure decision would itself be appealable.

Recommendation 125: Appeal Disclosure of Prevention and Assessment Files The Commission recommended that employers be similarly entitled to object to disclosure of

their Prevention and Assessment records on appeal disclosure relating to Prevention and Assessment appeals.


Volume I Chapter 11 - The Board's Internal Ombudsman

Overview

The cre ation and ma ndate of th e Bo ard’s I nternal O mbudsman i s note d and t he commission summarizes t he submissions it received co ncerning t he WCBO. Whi le some supported th e Ombudsman and the service it provi des, others raised concerns about communication difficulties with t he office. The la rgest set of comments q uestioned th e i ndependence of th e office. T he commission limits its comments to a suggestion that inclusion of confidentiality and other provisions regarding th e WCB O within th e l egislation would significantly e nhance th e p ublic’s vi ew of th e impartiality of this office. The commission acknowledges the recent provincial ombudsman’s report on the WCBO but makes no formal recommendations concerning this office.

Major Points

Submissions on the WCB Ombudsman were both supportive of the job done and critical of communications and potential impartiality.

Workload and the location of the WCBO within the WCB offices were the source of most complaints

The commission found No statutory and little administrative authority for the internal ombudsman No powers for the WCBO to investigate complaints concerning the Workers’ and Employers’

Advisers or the Review Board, Criminal Injuries or Workplace Act issues. A lack of protection for those who complain to the WCBO No legislative authority to support the claim of neutrality for the position Limited powers to resolve or publicly report on issues

The commission concluded “a statutory foundation for the board’s internal ombudsman” and the inclusion of certain key features of the classical ombudsman would “go a long way to improve the internal ombudsman’s image” and “…significantly enhance the public’s view of the impartiality and neutrality of the board’s ombudsman”.

The audit by the provincial ombudsman is acknowledged but no formal recommendations are included in this chapter.


Volume II Chapter 1 - The Adequacy of Benefits

Overview This ch apter dea ls with gu iding pri nciples an d the struct ure for p roviding ad equate benefits. Together, the recomm endations constitute a ma jor overhaul of th e pe nsion and rate making systems. T he ma jority of the recommendations req uire le gislative am endment. If ado pted, consideration would have to be given to transitional provisions to accommodate the new system as well as consequential policy changes.

Major Points

Compensation for Permanent Disability

The Commission recommends:

Discontinuing the “functional” method of estimating impairment of earning capacity under Sections 23(1) and (2).

An amendment providing for a lump sum award, inversely proportional to the age of the worker, to recognize non-economic loss.

Compensating permanent loss of earning capacity with reference to net average earnings before the injury and the net average amount the worker is able to earn after the injury.

An amendment requiring a review of loss of earnings awards at 2 and 4 years, with adjustments made where there is material change in circumstance.

The Structure of Benefits Adjudication

A) The Commission recommends:

The development of policies to ensure discretion in Section 33(3) to establish average pre-injury earnings is appropriately and consistently applied.

An amendment to index time-of-injury earnings to reflect current dollars when pensions are set.

An amendment to expressly allow an initial wage rate to be based on actual earnings. An amendment to expressly allow for a rate review (the Board to conduct a study to determine

when such a review should be done e.g., at 8 or 13 weeks).

B) The Commission recommends:

Amendments to Sections 22, 23, 29, and 30, to base benefits on net earnings calculated by deducting EI, CPP, and income tax. The earnings replacement rate would be based on 90% of net average earnings.

Amendments to include EI income in average earnings in certain cases. A study to be conducted by the Board to ensure that the CPI is an appropriate inflationary

index under Section 25. Amendments establishing a statutory minimum for permanent total disability at minimum wage

and for permanent partial, temporary total, and temporary partial disability, where actual earnings are less than minimum wage, compensation would equal net average earnings. [Sections 22(2), 23(4), 29(2) and 30(2) respectively.]

Maximum wage rate under Sections 33(1) and (6) be adjusted annually to an amount equal to 200% of the average industrial wage in BC for the 12 months prior.

An amendment to require an employer to pay wages for the first day of injury.



Amendments to allow stacking of certain supplementary disability benefits and “top-up” paid by the employer as well as integration of certain CPP benefits. Social assistance benefits payable to a worker would not be deducted from compensation.

Amendments to provide for a retirement annuity at age 65 (with a rebuttable presumption) at which time the loss of earning award would cease. The annuity would be payable for life and would be based on the size of the worker’s earnings loss award and the number of years the worker received the benefit.

Re-employment Obligations & Employer Maintenance of Benefit Plans

The Commission recommends:

Amendments to mandate re-employment and accommodation obligations with consequential penalties on employers and reduced or suspended benefits to workers for failure to accommodate or co-operate. Workplaces with 20 or more people would have to keep a position open for at least two years following the date of injury.

Amendments so that employers fund certain existing benefit plans for injured workers for 12 months or earlier if the worker returns to work.

The Board would create and maintain a schedule designating those benefit plans to which the employer must maintain contributions.

Volume II Chapter 2 - Fatality Benefits

Overview The i ssue of fatality benefits was a ddressed i n t he Royal Commission’s I nterim Rep ort. This Chapter deals with fatality b enefit issues that interact with issues dealt with in the fi nal report (i.e., compensation level s, a ge distinctions, a nd t ermination of b enefits up on a su rviving spouse’s remarriage). All five re commendations in the chapter would require l egislative ame ndment. Corresponding am endments t o the RSCM would be required fo r th e majority of t he recommendations and, in one or two cases, new policies may need to be drafted.

Major Points

Current Calculation of Benefits for Surviving Spouses and Children Commission recommends that calculation of pension entitlement for surviving spouses and

other dependants under s.17 of the Act continue to be calculated as a percentage of the pension the deceased worker would have received had he or she sustained permanent total disability.

Commission recommends no change to statutory minimums. Distinctions Based on Age of Surviving Spouse Commission recommends that s.17(3)(c), (d) and (e) be repealed to eliminate age-related

distinctions, and that all surviving spouses receive pensions. Pensions for Life Commission recommends that with one exception (surviving spouses of workers whose work-

related disability did not arise until after the worker retired) pensions be payable to surviving spouses for the latter’s lifetime.

Lump Sum Payments for Surviving Spouses Commission recommends a lump sum payment to all surviving spouses calculated

independently of earnings and varied according to the spouse’s age at the time of the worker’s death ($5000 for a spouse aged 50 years or older and increased by $1000 for each year the spouse is younger than 50 years, to a maximum of $75 000). Payment to be periodically adjusted for changes in the consumer price index.

Stacking and Integration of Federal Benefits Commission recommends that periodic benefits payable as a result of the death of a worker

be integrated with survivor benefits payable under the Act; and that CPP periodic benefits payable as a result of the dependant’s contribution to the plan not be integrated with survivor benefits payable under the Act.

Dissent: This would transfer some of the costs of the work-related injury or illness to the worker and, following the worker’s death, to his or her family.



Effect of Remarriage of a Common Law Marital Relationship on Benefits. Commission recommends that pension benefits payable to surviving spouses continue

regardless of changes in the surviving spouses’ marital status.

Volume II Chapter 3 - The Scope of Compensation Coverage: Who is Covered?

Overview The Commission supports the p rinciple of universal cove rage a nd recommends l egislative amendments to a llow for broader co mpulsory coverage. In a ddition, th e Commission mak es recommendations a bout e mployer liability that w ould in crease the rol e of prime cont ractors in collecting and remitting assessments. Also, it re commends legislative amendments for the fishing industry, which would make owner/operators of fishing boats the “employer” of the crew. Finally, it proposes legislative amendments to extend coverage for out-of-province workers.

Major Points

Universal Coverage The Commission recommends the Act state explicitly the principle of universal coverage of

workers and employers, and authorize the Board of Governors to exempt and admit parties from coverage.

Definitions of Workplace Parties The Commission recommends:

The Act define the following terms: “employer” and “worker” to include any person(s) deemed as such by the Board; “independent operator” to mean a self-employed person who is not a worker or an employer, or deemed as such by the Board; and, “public interest” as it relates to volunteers.

The Board develop industry-specific guidelines for determining workplace status for problematic occupations.

The Act be amended to authorize the Board to identify, and designate through Regulations promulgated by Cabinet, those industries requiring compulsory coverage for labour contractors and independent operators, and to increase the current minimum amount of personal coverage required.

Principals of Incorporated Businesses The Commission recommends the Act be amended so that principals of incorporated

companies should not automatically be regarded as workers; and that personal optional protection be made available to proprietors, partners and executive officers and directors of a corporation as per the Ontario Act.

Employer Liability Commission recommends that the Act be amended to allow prime contractors to deduct and

remit to the Board the estimated payroll assessments of their contractors and subcontractors. The Board should inform employers of their potential liabilities under the Act. The Fishing Industry The Commission recommends:



The definition of “employer” in the Act be amended to include the owner or operator of a boat, and the definition of “worker” be amended to include crew members of a fishing vessel who are in a profit-sharing arrangement.

Owner/operators in the fishing industry be required to register as “employers”, be required to pay assessments, and be primarily responsible for safety on their boats.

Commercial fish purchasers be responsible for collecting assessments from fishers selling to them, for fish bought in BC. Owner/operators be required to remit directly to the Board assessments for off-shore sales.

Experience rating would apply to owner/operators. Fishers who are independent operators or employers working on fishboats be required to

purchase coverage from the Board. Out-of-Province Workers The Commission recommends the Act be amended so that employers can apply to the Board

to extend out-of province coverage to workers for up to 12 months.

Volume II Chapter 4 - Determining Work Relatedness

Overview This Chapter deals with t he p rocess fo r det ermining t he work-relatedness of inj ury, death and disease. T he Chapter contains 19 recommendations and a number of additional observations. Fifteen reco mmendations wou ld req uire le gislative ame ndment. The remai ning fo ur recommendations would have medium to long-term administrative and/or policy implications.

Major Points

Causation Commission recommends that: The Act be amended to set out the objective of compensating for work-related injuries, disease

and death and the industry’s obligation to fully fund compensation for such. Section 5(5) be amended to do away with proportionate entitlement and make compensation

payable for the period between the date on which the disability occurred and the date on which it would have occurred in the absence of the workplace disease or injury.

Methods for Recognizing Occupational Disease Commission recommends that:

The Act clarify that occupational diseases can be recognized under s.6(4)(b), as well as by inclusion in Schedule B, by regulation of general application and by order dealing with a specific case.

The Board retain its current authority to revise Schedule B. An Occupational Disease Standing Committee (ODSC) be established as a committee of the

governors.

The Act require gazetting of additions to and deletions from Schedule B before they take effect.

The Board undertake a study of factors which should guide additions to and deletions from Schedule B.

Periodic reviews of Schedule B be undertaken (results to be included in Annual Report).

The Act allow parties to request that the ODSC reconsider a relationship recognized in Schedule B.

The presumption in s.6(3) apply unless there is clear and convincing evidence to the contrary. Dissent: This could effectively remove the presumption.

Length of Time between Exposure and Onset of Disease Commission recommends that the Board be authorized to either depart from the “at or

immediately before” time requirement in s.6(3) in the case of diseases with long latency periods or specify the time interval associated with this phrase.

Suspended Claims Commission recommends that the Board undertake a more detailed analysis and reporting of

“suspended” occupational disease claims. Exposures Commission recommends that:

The Board investigate the merits of recording exposures.



The Act require that, under certain conditions, employers be obligated to protectively reassign workers whose health is placed at risk as a result of accumulated workplace exposure to designated contaminants.

The Act be amended to require compensation for a loss of earnings caused by an underlying

work-related sensitization or allergy which is medically diagnosed and results solely from accumulated exposure to a workplace contaminant that has been designated by the Board in a schedule.

The Act be amended to authorize the Board to prescribe policies governing the provision of

prophylactic healthcare, notwithstanding that the workplace exposure has not yet produced an injury or occupational disease.

“Stress” or Psychological Injury Claims

Commission recommends definition of “personal injury” be amended to include both physical and mental or psychological harm and provides conditions upon which non-physical conditions arising from non-physical or non-traumatic stimuli or stressors are compensable including a new standard of proof of clear and convincing evidence.

Volume II Chapter 5 - Section 10: Limitation of Actions Elections Subrogations Section 11: Certification to Court

Overview Section 10 contains th e “hist oric com promise” which i s the fou nding principle of workers’ compensation, i.e .: workers are en titled to co mpensation be nefits on a n o fau lt bas is and employers are immune from legal action. When a worker is injured by a non employer or non-worker they must elect to sue on their own or claim compensation benefits. If th ey do the latter their cause of action against the party who caused the injuries is subrogated to the Board. If the Board mai ntains a legal action against the non-employer/worker a nd re covers dam ages the monies go to refund the Board plus an administration fee and any excess goes to the worker. The only recommendation made in regard to Section 10 pertains to the administration fee, ie: it should be calculated in a different manner than it is now. This is a relatively minor policy matter.

Section 11 gives t he B oard ju risdiction t o ce rtify to th e cou rt whether t he parties are workers, employers an d othe r m atters rel evant to the leg al a ction. Th e co mmission re commended n o changes be made to the certification process as set out in Section 11.

Major Points

Limitation of Actions against Workers worker/worker bar introduced in 1974 Commission believes worker/worker bar should be preserved Commission finds that at least part of the funding of the no-fault system is shifted to workers

and it is therefore reasonable that workers should also acquire the benefit of immunity from legal action obtained by employers at the system’s inception.

Exception to Limitation of Actions Relating from Use or Operation of Motor Vehicles This is discussed and rejected Three Month Time for Electing to Claim Compensation Under the Act or Bring an Action This is discussed and the present legislation and practice approved Section 10(6) and 10(11): Costs and Administration Charges on Subrogated Actions present practice of charging 29% of claims costs as an administration fee is rejected Commission recommends administration fee be calculated in a manner more equitable to the

Board and injured workers and not be based on Board’s overall administration costs recommendation is a policy matter and is not of major financial or other significance Apportionment of Damages no recommendation in regard to Section 10(7) Certification to Court no changes to the certification process as set out in Section 11


Volume II Chapter 6 - Fatalities Investigations

Overview This chapter deals with

how fatalities are reported to the Board, how they are investigated and followed up, how the Board relates to survivors and other concerned agencies such as the Coroner, and how the information gained from fatalities is used to prevent further fatalities by new

regulations or otherwise. The Commission makes no suggestions for amendment to the Act or regulations. It ma kes four recommendations t hat would generally requ ire t he B oard to set up a Bo ard wi de, separate program to coordinate all information and activities concerning fatalities, and ensure that follow up activity occurs to prevent recurrence.

Major Points

Collecting, managing and distributing of data The Board should be the primary public body responsible for investigating work deaths but is

unable to provide meaningful information on them. The Board keeps fatalities information in a fragmented manner. For example, it does not track out of jurisdiction deaths, sometimes fatalities are not reported to Prevention and if an accident involves more than one fatality, the Board will track the investigation, not the deaths. The existing Prevention database does not use consistent coding of data and is claims focussed.

The Board should locate all existing sources of information and create a comprehensive fatalities information management system by consulting with staff and external interest groups. This should be available for use by internal and external users. (Recommendation 198)

The Board should provide a full and accurate account in its Annual Report of its efforts to eliminate workplace fatalities. (Recommendation 200)

Relationship to survivors and agencies There is no electronic tracking of coroners’ reports and recommendations. The Board has no official position in relation to deceased workers’ families beyond its

obligation to provide benefits to dependents. There are no agreements with other agencies regarding the reporting of deaths. The Board should develop and implement protocols with the BC Coroner’s Service, the

Department of Vital Statistics, the BC Ambulance Service and any other relevant agency (i.e., federal and municipal police forces). (Recommendations 198 and 199)

Prevention of future fatalities There should be a process for examining the effectiveness and consistency of enforcement

and educational activities with respect to fatalities, and the training of officers should include a component on fatalities. (Recommendation 199)

The Board in co-operation with interest groups should establish the manner in which work-related fatalities information can be used to aid in ongoing regulatory review and the development of other regulatory and non-regulatory instruments. (Recommendation 201)


Volume II Chapter 7 - Performance Indicators

Overview This chapter covers the principle of performance management using performance measurement indicators. The Commission had reservations about the Board’s current performance indicators but acknowledged the progress the Board has made in this area and noted the Board has shown concern with making improvements to performance measures. Throughout the Chapter, the Commission suggests "questions" the Divisions might ask to enhance performance management information.

Major points

The Commission recommends (202) that the Board complete the implementation of the recommendations of the Auditor General’s accountability review.

The Commission commented on the need for continuing evolution of performance measurements.

The Commission says the current macro indicators do not sufficiently address the Board’s mission of improved safety, return-to-work, and fair compensation. These deficiencies are attributed to the lack of timely and descriptive measures of performance against those objectives. The Board’s press release (April 11, 1998) contained reference to performance improvement - “….eliminated its unfunded liability last year, the result of fewer injuries, a successful return-to-work program and strong investment returns….”. The Commission found that in fact, the Board was unable to reliably say how many workers returned to work after Board intervention.

The Prevention division is currently working on its ability to link effort to result by improving its data gathering and analysis functions. In particular, it has a dedicated team working on the corporate data Warehouse project to better correlate its data on activities with those of other divisions. The Board’s system for claims management currently does not clearly define and track claims inventory as it moves through the system. Without proper inventory tracking, the Board’s return-to-work efforts cannot be properly measured. This issue is being addressed on a number of fronts within Finance and Compensation Services. The Finance division (in ESS) is working on improving claim cost estimation while the Compensation Services division is moving forward with its Claim M.I.S. system.


Volume II Chapter 8 - Organizational Capacity

Overview This section relates to t he Hu man Re sources strategies a nd i ssues f acing the Boa rd. T he commentary and recom mendations are enti rely adm inistrative i n n ature, req uiring no l egislative change and little change in policy.

Major Points:

Human Resource Planning: Commission reported that each division is responsible for planning their Human Resource

requirements and that this leads to a “crisis management” approach according to “interviews with staff.” They suggest that a formal system of “Human Resource Planning” would solve these problems.

They report that the need for a modern Human Resource Information System had been identified, but had not “ met the 35% return on investment hurdle rate “ and had not been approved. The “ HR Division has confirmed that the current system did not provide the necessary information to support timely decision making and support strategic initiatives.”

They report that in a decentralized model, such as that employed by the WCB, line divisions

require adequate human, financial and information sources to address a changing workforce internally and externally. “This lack of information is exacerbated by a high level of turnover amongst managers, who are largely recruited externally.”

They acknowledge that the HR Division has identified HR Planning as a priority, but “note little

activity to date.” The formal recommendation is that the Board adopt a Human Resource Planning Model.

Centralized versus Line responsibility for Human Resources: They comment upon the relative strengths and weaknesses of a decentralized model of Human

Resource Management, in which the line has “strategic responsibility for its human resources”. They cite as weaknesses - a potential “lack of corporate consistency resulting from different management philosophies and resources and inadequate cross-functional coordination” , then as strengths, they cite “flexibility, the use of specialists and ability to accommodate diverse program needs”, although noting that “ its unclear these positive aspects are real.”

Staff and Management Scans They comment on the Staff Scan and Management Scan ( incorrectly identifying the

“Management Scans” as “360’s” – the latter being confidential reports of one’s behaviour as observed by one’s boss, peers and subordinates ). They quote the highest and lowest scores and comments from both scans. They then quote a May 1996 SEC discussion of the “360” process in which it is recorded that the SEC had agreed that “360’s were a reality check on behaviour rather than a measurement of performance ”, implying the SEC were dismissing the importance of the Management Scan results.

They acknowledge that the division “has demonstrated some progress – but would benefit from more on-going follow up and evaluation” and formally recommend that “ The Board of Governors evaluate the relevance and effectiveness of HR programs and resources”



Labour Relations: They comment that there have been significant improvements in the Labour Relations area –

noting that grievances have decreased by 50%-60% - but pointing out that two thirds of the remaining grievances are related to recruitment & selection , which they describe as a “still a Human Resources activity.”

The SEC : They describe the history of the SEC structure, citing that the “collegial style selected in 1993 led

to bottlenecks…tension…unhealthy… imbalanced accountability, capacity and authority…” – which then led to the current approach. “ While the current administration has made some progress in advancing a management philosophy – further work is required.” They note little record of SEC members ever disagreeing with one another – a function of the continuation of a collegial approach to decision making.

Responsibility of the Governing Body …and the CEO: They describe the role of the HR Committee, commenting that problems include – the part-time nature

of Panel appointments and high turnover rates – which produces unstable leadership ( ? ), “ the Board appears to face a number of challenges recruiting executives (? ), no comprehensive T&D plans, Presidents succession plans only recently implemented, - they then make their major observation – “no terms of reference or procedural bylaws for the SEC”.

They report that the Human Resource strategies included in early drafts of the Strategic Plan were downplayed in subsequent published versions, suggesting that the strategies were abandoned.

They comment that “ In a system where the internal accountability is diffuse, the VP and Division appear to be largely reactive to the …divisional VPs with clearer mandates and lines of authority.”

The Commission is of the view that the current management structure is not conducive to an integrated organizational model. “ Given the diversity of opinion and approach ( note - this appears to contradict their earlier observation of an absence of healthy disagreement at SEC meetings), a lack of terms of reference and the diffusion of HR responsibility throughout the organization – it is unlikely the Board will achieve many of its stated HR goals. …terms of reference would go a long way to addressing this problem”. Formal recommendation – adopt Terms of Reference for the SEC.

Finally they address the issue of accountability to the Panel and reproduce and recommend, as a formal recommendation, that the Board adopt, (virtually word for word) the existing Terms of Reference for the HR Committee of the Panel,

Volume II Chapter 9 - Funding

Overview This chapter covers the issue of “funding” from assessments to reserve setting, to legislative matters, to experience rating and finally to the management of the Accident Fund’s investment activities. There is support for the ongoing reclassification project and for experience rating, although suggestions for further work on the experience rating proposals. The Commission had 15 recommendation to make on these areas:

Assessment 3 Reserve setting 2 Legislative 2 Experience rating 6 Investing 2

15 The highest profile recommendations suggest certain retroactive benefits be paid our of the provincial treasury, a rate stabilization amendment, and raising the experience rating limits to greater than 33 1/3 %.

Major points

Assessments: The Commission endorses full funding policy rather than pay-as-you-go and recommends legislation be amended to be explicit in that regard. It also recommends amendments to section 10(8) to allow transfer of costs between classes or subclasses in circumstances that would enhance fairness and behavior modification of employers. Finally it recommends that any assessment rate capping policy be accompanied by an amortization plan that retires the subclass’ deficit. Reserve setting: The Commission recommended that the Act be amended to require the Board to set aside a reserve for latent occupational diseases as well as to include reference to benefits and employer rate stabilization. Legislative: The Commission recommends that where eligibility or increased entitlement for benefits is determined to apply retroactively, the Provincial legislature should determine whether and to what extent the benefits should be funded by society at large as opposed to solely by the accident fund. To the extent the accident fund is responsible for the cost, the Commission recommends that a schedule for the retirement of any deficit be put in place.

Transfer of Costs: The commission recommends a legislative amendment to allow transfers of costs between a class or subclass.

Experience Rating: The Commission has endorsed most of the recommendation of ESS (Employer Service Strategy) as they relate to experience rating of employers. Specifically, that ER be continued and that fuller claim cost attribution be applied (longer window of claim history), that ER limits be greater than



33%. The Commission recommended a new factor be taken into account in experience rating – frequency of lost time claims. The Commission recommended certain housekeeping matter relating to the tracking and performance of the investment portfolio. No legislative amendments were recommended.

Royal Commission on Workers' Compensation in British Columbia · 25-67% allow rate with 1-1.5 years...

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Transcript of Royal Commission on Workers' Compensation in British Columbia · 25-67% allow rate with 1-1.5 years...