CANADIAN AUTO WORKERS, LOCAL 27
GLASS, MOLDERS, POTTERY, PLASTICS AND ALLIED WORKERS UNION
CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 255
WATERLOO REGIONAL LABOUR COUNCIL
CHATHAM AND DISTRICT LABOUR COUNCIL
GARY THOMPSON
JOHN LECHICKY
RICK THRASHER
CANADIAN AUTO WORKERS, LOCAL 1520
INJURED WORKERS IN NEED (LONDON) INC
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793
CONTENTS
Tuesday 30 August 1994
Workers' Compensation and Occupational Health and Safety Amendment Act, 1994, Bill 165, Mr Mackenzie / Loi de 1994 modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail, projet de loi 165, M. Mackenzie
Guelph Chamber of Commerce
Michael Annable, member
Canadian Auto Workers, Local 27
Tim Caire, vice-president
Ellis-Don Construction Ltd
Denise Peters, corporate manager, workers' compensation
Glass, Molders, Pottery, Plastics and Allied Workers Union
Melvin Rice, vice-president
Andrew Duffy, injured worker
Canadian Union of Public Employees, Local 255
John Adams, secretary-treasurer
Waterloo Regional Labour Council
Larry Batista, president
Rick Corin; Jason Mandlowitz
Chatham and District Labour Council
Aaron De Meester, president
Accuride Canada Inc
George Dendias, human resources manager
Gary Thompson; John Lechicky; Rick Thrasher
Ontario Federation of Labour
Gordon Wilson, president
Jim Paré, director, organization services
Canadian Auto Workers, Local 1520
Rick Witherspoon, president
Peter de Ryk, benefits representative
Injured Workers in Need (London) Inc
Anthony Barbato, executive director
International Union of Operating Engineers, Local 793
Terry O'Neil, business manager, London District Building and Construction Trades Council
Marnie Niemi, compensation representative, Local 793
STANDING COMMITTEE ON RESOURCES DEVELOPMENT
Chair / Président: Vacant
*Vice-Chair / Vice-Président: Cooper, Mike (Kitchener-Wilmot ND)
*Acting Chair / Président suppléant: Klopp, Paul (Huron ND)
Conway, Sean G. (Renfrew North/-Nord L)
*Fawcett, Joan M. (Northumberland L)
*Ferguson, Will, (Kitchener NDP)
Huget, Bob (Sarnia ND)
Jordan, Leo (Lanark-Renfrew PC)
*Murdock, Sharon (Sudbury ND)
*Offer, Steven (Mississauga North/-Nord L)
Turnbull, David (York Mills PC)
Wood, Len (Cochrane North/-Nord ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Cunningham, Dianne (London North/-Nord PC) for Mr Turnbull
Fletcher, Derek (Guelph ND) for Mr Huget
Hope, Randy R. (Chatham-Kent ND) for Mr Wood
Mahoney, Steven W. (Mississauga West/-Ouest L) for Mr Conway
Winninger, David (London South/-Sud ND) for Mr Waters
Witmer, Elizabeth (Waterloo North/-Nord PC) for Mr Jordan
Clerk / Greffière: Manikel, Tannis
Staff / Personnel: Richmond, Jerry, research officer, Legislative Research Service
The committee met at 0904 in the Radisson Hotel, London.
WORKERS' COMPENSATION AND OCCUPATIONAL HEALTH AND SAFETY AMENDMENT ACT, 1994 / LOI DE 1994 MODIFIANT LA LOI SUR LES ACCIDENTS DU TRAVAIL ET LA LOI SUR LA SANTÉ ET LA SÉCURITÉ AU TRAVAIL
Consideration of Bill 165, An Act to amend the Workers' Compensation Act and the Occupational Health and Safety Act / Projet de loi 165, Loi modifiant la Loi sur les accidents du travail et la Loi sur la santé et la sécurité au travail.
GUELPH CHAMBER OF COMMERCE
The Vice-Chair (Mr Mike Cooper): I call our first presenter, from the Guelph Chamber of Commerce. Good morning and welcome to the committee. Just a reminder, you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you would keep your remarks somewhat briefer to allow time for questions and comments from each of the caucuses. Please identify yourself for the record and then proceed.
Mr Michael Annable: My name is Michael Annable. I'm here representing the Guelph Chamber of Commerce, business out of Guelph. We're making a presentation today on behalf of local business in Guelph in regard to Bill 165. I apologize for not having a written format for the committee members, but we were a last-minute stand-in so we'll forward one in the next couple of days.
In reviewing Bill 165 and the history behind it, one of the greatest disappointments on our part was the fact that most of the amendments contained in Bill 165 ignore the recommendations that came out of the business caucus of the Premier's Labour-Management Advisory Committee on the workers' compensation process. We're hoping that this standing committee will be open and listen to the communication. I'm sure they will take an honest and effective look at Bill 165 and the effects it has both on the system as well as the worker.
We're hoping that any changes that are made to the act will be done after considering the overall impact of those changes. Will they reduce administration time and improve the Workers' Compensation Act? Will they encourage the reduction of work-related accidents? Will they require the board to be financially responsible and will they require the board to be accountable to all stakeholders?
We don't think the current changes under Bill 165 will accomplish this. The proposed changes, as we see them, appear to give the government more direct control over the Workers' Compensation Board and policy development. It will result in the payout of more money when the board is already paying out more money than it is taking in. It will increase the total unfunded liability. It will force the WCB to expand worker entitlement and increase overall compensation costs.
Proposed modifications to the incentive program, the NEER program, seem somewhat abstract. This NEER program is the only opportunity for business and the board to reduce overall compensation costs. An example we've seen in there is the fact that the board is looking at being able to penalize employers who do not have an effective health and safety policy, yet the board continues to pay out claims when employees are injured when they violate the health and safety act as well as company health and safety policies. So on one hand, they seem to want to enforce health and safety programs, yet on the other they do not support it by just paying out benefits regardless of the reason for injuries. It's also proposing -- the changes will increase the complexity of re-employment cases. It would be nice if they would just deal with re-employment the way it is and deal with the backlog of cases they have, as opposed to trying to make it more complex.
The Guelph Chamber of Commerce supports the basic PLMAC recommendations from the business caucus. We would like to see the unfunded liability eliminated, that loopholes in the proposed pension index formula be eliminated and that the Friedland formula is applied across the board on pensions. We'd like to see benefit levels reduced; ensure fair compensation, but also encourage the worker to return to work more quickly -- in some cases, where workers are off in the short term for less than six weeks, their take-home and compensation is greater than what they take home at work; that's hardly an incentive for an employee to return to work -- reduce costs of the future economic loss awards; and maintain and build on the success of the current NEER program.
In closing, the presentation is short but we have some clear recommendations that we think need to be considered. We feel that Bill 165 should be withdrawn immediately; that legislation should be developed that will ensure that the Workers' Compensation Board is financially viable, accountable to all stakeholders; ensure the system is more responsible to its stakeholders and more responsive; that the purpose section of the act have a clearly defined statement regarding the financial accountability of the system and the board of directors; and that a stringent requirement be put into the act that all future changes should be required to pass a detailed cost-benefit analysis prior to being considered.
Our final recommendation is that employers be allowed to opt out of WCB in favour of carrying identical insurance through a private carrier. Most companies have experienced through their own weekly income and long-term disability plans that their premiums are far less than what they currently pay to support the Workers' Compensation Board. Thank you.
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The Vice-Chair: Thank you. Questions and comments, about five minutes each.
Mr Steven W. Mahoney (Mississauga West): I'll start with your last point. If employers were allowed to opt out, as you put it, what would you recommend we do with the unfunded liability?
Mr Annable: That's one point that has to be considered, but revenues would have to be generated for that to be dealt with and that may have to be a portion of what employers pay -- their per cent to opt out of the plan.
Mr Mahoney: I've seen some studies, from Alberta particularly, done by private sector consultants on privatization. It clearly showed that premiums would go up and benefits would go down, because insurance companies wouldn't touch the program with its current level of benefits, so it would impact injured workers. Your premiums would go up, according to the study that I've seen, which was a pretty reputable study.
The problem I have is that if you allow employers to opt out, in essence what you're doing is allowing the WCB to compete with other private insurance companies, and on the surface that seems attractive. The problem is, the WCB would then become the Facility, similar to what we have in auto, where only the real bad actors who couldn't get coverage, by Zurich or whoever else was in the business, would wind up at the WCB. Your WCB claims would shoot through the roof, in my estimation, and I don't think you'd solve that problem. In any event, I appreciate the suggestion. I've certainly heard it from many different people in the business community.
I want to ask you about small business. The small business, let's say under 20 -- and particularly under 20 because that's the threshold where they're exempted from the health and safety requirements under the act -- the small business under 20. If a WCB police officer was to walk in to determine the health and safety practices and other programs of that employer to reduce injuries and occupational diseases he likely wouldn't find very much. The large business, of course -- the plants, the GMs, whatever -- they can afford to have full-time health and safety instructors and teachers and everything on staff; they do. It's not a problem for them; they see it as a good investment.
The small business person, I think, is the one who is really going to take it in the neck with this type of bill and with this attitude because they're trying to survive, they're literally hanging on by their fingernails. While health and safety is critical, whether you've got 19 employees or 119 employees, the fact of the matter is the small business doesn't have the facilities, the wherewithal, the money, the time to devote to health and safety.
I can see them generating fine revenue in the hundreds of thousands and maybe even millions of dollars out of 103.1, subsection (2), (a), (b), (c) and (d); (d) being, "such other matters as the board considers appropriate." Pretty broad-sweeping powers they're going to get.
As a representative of small business in many ways, I'm sure, do you have any comments on that?
Mr Annable: There's a lot of concern with that section, both small and large employers because, in essence, you end up with two or three people judging the effectiveness of your health and safety program if you have one in place. Currently, that responsibility rests pretty much with the Ministry of Labour in their workplace inspection program. If they take the role that they're taking as a consultant versus an enforcer, then you're going to see changes in health and safety.
I think a lot of smaller companies, if the pressure goes on, are going to go out, either out of business or out of the area. In the company I work for, we've seen a lot of pressure in those areas in comments from suppliers and other people we deal with that they just can't afford to do the things they're being asked to do, as well as stay in business.
I think the act, both the health and safety and the Ministry of Labour, need to look at playing a supportive role as opposed to a punitive role. Behaviour modification's not going to come from the form of penalties, it's going to come from the form of being there and helping them and giving them some programs to work with. That's where the NEER program comes in, because there is financial incentive for the employer to have an effective health and safety program.
Mrs Elizabeth Witmer (Waterloo North): Thank you very much for your presentation. It's always good to see the Guelph chamber.
You mentioned the privatization, and I guess that was an option our party had considered at one time. However, the biggest obstacle does seem to be what do you do with the unfunded liability. Of course, that's growing daily and we're up to $11.7 billion now. You talked about the need for privatization, but have you looked at what could be done, how it could be achieved?
Mr Annable: I think within the Guelph area there's been lots of talk between some of the prominent local businesses about privatization, just based on looking at our own experiences with short-term and long-term disability and the premiums. We haven't addressed the overall issue of the unfunded liability, but perhaps that's one area we'd be happy to provide some input on and I'd bring that back to them and hopefully we can provide some input in our written submission.
Mrs Witmer: I guess if that is a serious option for this province, there needs to be a lot of research done because, unfortunately, I've come across some of the same information as Steve has indicated he has, that it might not be a totally viable alternative.
What are the major concerns of the small business community in Guelph at the present time surrounding WCB? Where are they facing the biggest obstacles?
Mr Annable: I think the return-to-work provision that we see -- as much as it seems to point the finger that employers aren't responding. It's a difficulty in working with the board and actually getting people back to work, as much as our employers who don't want to bring people back and workers who do not want to return to work either. That's where a lot of frustration comes in when medical evidence appears to show that the person's capable of modified work, yet trying to deal with the board and get someone involved can take months, as well as the appeals, any decision reviews that have to go on. It seems to take -- I guess, the backlog now for the hearings branch is close to a year. If you do have an issue, it takes for ever to be resolved and from a company perspective those costs continue to be charged to you and you feel that the claim is not justified. That's a real deterrent.
I've spent numerous years working with Employment and Immigration and the UI system, which is far bigger than comp is and their mandate's to hear appeals within 31 days. That's how they're rewarded from a management perspective. It seems almost ludicrous that someone can have a claim that's not valid and take eight to nine months before you get a chance to really voice your opinion to a quasi-neutral party.
Mrs Witmer: That substantiates, I think, a lot of the concerns that we certainly hear from the small business community, as well as from the employee who can't get redress as quickly as he or she would like. I just recently heard from a small employer who would not have his case heard -- and it was right in the letter -- until 1996. That seems to be grossly unfair.
I guess if we take a look at the Alberta system, that's one thing they've been able to do. They have someone in place now, a new CEO, and they've managed to facilitate the process, a much more timely return to work and expedition of all of the claims, and they've reduced the cost of the system. That's what we need to take a look at. Unfortunately, this bill, I believe, is simply going to make for more bureaucracy, more process. It's not going to help the injured worker; it's not going to help the employer.
Mr Annable: We agree with that.
Mr Will Ferguson (Kitchener): Thank you for attending this morning. I have one question. A number of groups have made the erroneous claim that this bill totally ignores the Premier's labour-management accord when in fact the very cornerstone of that accord was adoption of the Friedland formula, and that's embodied in the bill which will ensure the financial viability of the board to the year 2014. As you well know, the business community supported that accord, supported the Friedland formula and supported that the board ought to be, by the year 2014, at 55% of the unfunded liability. Well, this bill does exactly that when you look at the financial game plan that's been laid out.
I guess I get a little confused when individuals then, like yourself, appear before the committee and say, "Wow, you know, the Workers' Compensation Board is going to hell in a hand basket," and nothing short of drastic measures, such as immediate reduction in benefits, as well as taking and adopting the Friedland formula and applying that to all injured workers, would resolve the problem. I'm just wondering how you reconcile that.
Mr Annable: My understanding, from what I've heard on the business caucus side of the PLMAC, is that they agreed to the Friedland formula being applied in a broader spectrum than it is in Bill 165.
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The second thing is that a lot of the financial accountability that's written into the act was excluded from the purpose statement, and the purpose statement that was agreed to by both sides. I think I know fairly well that when politicians or bureaucrats look at a piece of legislation in amending it, it's the purpose of the act that overrides all the other changes, and unless that financial accountability gets rolled into the purpose behind the Workers' Compensation Act or the initial purpose clause, that's not going to happen.
Mr Ferguson: Given your statement, obviously you don't agree -- and the majority of players in this bill certainly do agree -- that it would be financially responsible if the board ended up at a ratio of 55% unfunded liability by the year 2014. Of course, previously the business community agreed with that. They said, "Yeah, that makes perfect sense." Could you tell me, in your view, where you think the board ought to be by the year 2014 if 55% obviously to you is not acceptable?
Mr Annable: I think they have to make a bigger stride towards reducing the unfunded liability to zero. I think they have to have a balanced balance, or a balanced budget. They have to take in what they spend and build up to cover their future costs. From a business perspective, if we lost $2 million a day, the banks aren't going to support us very long.
What's happening is that business is looking at global competition, and the more global we have to be, the more we have to look at our own internal costs. Compensation is one of the largest employee benefit costs that employers have and the one that we have the least control over. If things like NEER are taken away, we have absolutely no control over our workers' compensation costs. That's a real concern. We need to have some way of being rewarded for good performance from compensation so that we can see some improvement in that overall program, but we really believe the unfunded liability must be reduced to zero.
Mr Ferguson: By the year 2014?
Mr Annable: As soon as possible.
Mrs Dianne Cunningham (London North): Maybe sooner.
The Vice-Chair: On behalf of this committee, I'd like to thank the Guelph Chamber of Commerce for their presentation this morning.
CANADIAN AUTO WORKERS, LOCAL 27
Mr Tim Caire: My name is Tim Caire, vice-president, Local 27, here in London. Sitting beside me is Randy Mason, recording secretary. Local 27 represents over 4,000 members in London, with 19 different workplaces. Before we start, we're fully aware that Local 444 yesterday presented the brief that was prepared by our national union and we go on record as supporting the brief by our national union. So we thought it would be best today to discuss some experiences that we're having in the London area with workers' compensation and with injured workers. I hold the position of a workers' representative as far as WCB and Local 27, and Randy has dealt with many situations.
First of all, I've heard the previous presentation and I've heard the question of unfunded liability and so on. We can address those issues later, but there's one thing that we want to go on record. There is no way this union is going to support reducing the liability on the backs of injured workers, and we have a real concern that the Friedland formula does that. After all, whether the unfunded liability is caused by injuries in the workplace or mismanagement by the board, it certainly is not caused by injured workers in the province of Ontario.
We have had several experiences in the past year in early return to work and I'd like to kind of put a human face on what we see. I see workers like John, Cindy, Manuel, Richard, Bill, Paul, Maria, workers who are returned to work early under the VR plan, who have returned to work on so-called modified jobs, who are returned to work because maybe a regional medical adviser at the board deemed that this worker was so-called fit to return to this type of work, and the worker, after attempting to do that work, has ended up going back off and into a lengthy appeal system because the board is of the opinion that the worker was capable of performing the work and the worker's doctor is of the opinion that the worker was not. We end up going through all the way at times to a hearing, which could take up to a year, and that worker suffers needlessly because I can definitely show that the majority of the times that we go in front of a hearings officer, the award is brought forward in favour of the worker that the job indeed was not suitable based on the medical evidence from the worker's doctors or specialists.
The other problem we have in that area is that it could take up to a year. The worker is not informed. The worker who's cut off compensation benefits is more often than not maybe seeking social assistance. The worker is not informed by the board that what they should be doing is seeking work elsewhere or so on while they're waiting for their appeal to be heard. The worker feels they should be going back to work with their accident employer; they can do some work in there. But the board does not inform the worker of this, so when we do have successful decisions in favour of workers, what that ends up is that the worker is paid for a certain period of time and not paid or reduced to 50% because the worker should have been seeking work elsewhere.
Workers are not aware of these technicalities in regard to payment for lost time and we end up going through a whole other appeal, once again starting right from the adjudicator and right up into the hearings level. Now, if you want to talk about cost, there's some cost management: appeals that really in a lot of ways would not be necessary if injured workers were informed properly of their obligations. We have paid specific attention to the pressure on the bill as far as even increasing the early return to work, to get workers back to work early. We think the concept is a good concept, but how is that worker going to be returned? Case workers have a tendency not to get hold of worker representatives in unionized workplaces in order to identify the suitability of a job, to aid the worker in whether that job's suitable. The board does not, in our mind, have the skill ergonomically to study jobs, whether or not that job would be suitable to an injured worker. So we have a real fear that we'll even be going back sooner and we'll be right back to the same problems that we're still dealing with today.
We want workers to get back to work and workers want to get back to work. I've heard some innuendos that workers would rather stay home. Well, I can tell you honestly that in my experiences dealing with injured workers that is not what I've seen. I've seen workers who are bored, who have lost what they believe is a very, very important part of their life, their job. They are not saying, "I don't want to go back." They're saying, "I want to go back, but I want to go back to a job that I can do with my disabilities." I think at times people are away from dealing with the workers on a one-to-one basis like Randy and myself have dealt with. We have seen the pain and the suffering that injured workers are going through in this province.
Employers are talking about wanting to reduce the costs. Well, we say you can't have it both ways. In order to reduce the costs, I think employers have to really take a look at what we do as far as health and safety in the workplaces. It's been our experiences with this globalization, this competitiveness attitude, this lean-and-mean production, that workers are being asked to do more due to workforce reductions and that the accident rates per capita have not been reduced. Workers are still getting injured on the job, a vast majority of it on repetitive strain injuries, which signifies an increase in the type of work and the work that workers have to do in order, as the corporations put it, to become lean and mean and competitive in this world environment. We may say that employers were fully in support of some of the things that are in place now in this country, like the free trade agreement, which brought in this lean-and-mean mentality of survival of the fittest.
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We have some concerns with the experience rating, that it really only deals with workers who are going off.
I have come from a workplace that I've worked at in London here for 15 years, which I see will be making a presentation later today. I have seen more workers, what we call the walking wounded, in the last year and a half than I've ever seen in my prior 13 years in that workplace, workers who all of a sudden have jobs of licking envelopes and mailing little forms and so on in order that it does not affect the employer's liability. We consider that sort of an area a good way of hiding real accidents and the severity of accidents, but it definitely is not an indication of how safe an employer's workplace is.
We suggest that in returning workers to work in organized workplaces, employers and unions form committees in order to properly identify jobs that workers are returning to and that the goal should be of returning the worker to their pre-injury job. Way too often we've seen in our experience that the first thing they do is look for a suitable job elsewhere, rather than looking at the pre-injury job and, if necessary, making modifications to that pre-injury job in order to accommodate the worker in that pre-injury job.
The whole idea of suitability causes problems in the workplace in that workers are placed into certain other what they call easier jobs. It causes disruptions as far as other workers feeling that injured workers are going into these what they call easier jobs and there's not enough onus to put the worker back to the pre-injury job.
My understanding of the legislation and my understanding of the human rights laws in this province are that the company can accommodate a worker in a pre-injury job with modifications to that job provided it does not cause an undue hardship to the employer. There are many employers in this city where an undue hardship would be the substantial, substantial amount of money in order to accommodate a worker to their pre-injury job.
That's about all we have for our presentation.
The Vice-Chair: Thank you. We have about three minutes for each caucus.
Mrs Cunningham: Thank you very much. I really appreciate you coming before the committee today. What I learned in listening to you were some pretty good specifics, which I jotted down. I hope you do make some notes for us. What you've really told the whole committee, I think, is that this is a very complicated system.
There are many areas where you've talked about the need for some experts to make decisions in the health area, or maybe non-medical area, as we heard yesterday; that the board isn't always helpful in giving people options for their return to work or otherwise; that the case workers are often not good communicators. I'm just writing down what I think you've told us. And most of the first part of your presentation said to me that this is day-to-day management, lack of communication, lack of trained people, maybe lack of caring on behalf of both, not just the board but sometimes the employers themselves.
So I'm totally convinced now that if we changed nothing, we could probably improve the performance of the Workers' Compensation Board and of the system itself by making people more accountable. You used that word yourself.
Mr Caire: I wouldn't necessarily agree with changing nothing. There are definitely some areas, and several areas in the bill --
Mrs Cunningham: I didn't say change nothing. I said if we changed nothing and worked better with the areas that you brought to our attention today, which I wrote down because they affect the people who come into my office, many of these workers. About 50% of the time of one of my employees is spent on these cases, working for people who have been injured.
Mr Caire: The only thing I would be concerned with is the statement of not caring. I think in all fairness to many of the workers at the board, it's not a situation of not caring; it's a situation of a real case overload. I've dealt with many adjudicators and case workers through the board and there's no doubt that the case overload is great.
Mrs Cunningham: But you also mentioned that the system takes too much time, and actually in this particular legislation we have four or five areas of the whole process where there will be more processes to follow.
Mr Caire: The one area that impresses me, which I hope works, is that the case worker can now bring forward an appeal on reinstatement on their own rather than it being worker-driven. This is quite important to us, provided the case worker does do it, because we have had experiences in workers not knowing that they can file a complaint. It's worker-driven, at this point, reinstatements.
Mrs Cunningham: Okay. The only other point I'd like to make basically, and you probably know it, but we heard yesterday from representatives of the construction industry, and I thought all of us were pleased to know that both in compensable injuries, medical aid cases, and fatalities, the fatalities/aid injuries have dropped sometimes more than 68%, considerably, since 1965. I think that's good for families and also good for Ontario. I just wanted to point it out because you were talking about an increase, but in that industry we were all made very much aware with the statistics and I wanted to bring it to your attention. But I thank you.
Mr Derek Fletcher (Guelph): Thanks, Tim. That was a pretty good presentation.
One of the things you talked about, the committee as far as finding suitable work for an injured employee returning to work -- I've been on comp myself and I know what it's like to go back to work when you're not ready to go back to work, and some of the jobs that are given just aggravate the injury a little more. I know that my doctor played an important role as far as I was concerned in going back to work after an injury. He got involved to the extent that he was saying, "No, that is not suitable work." Do you think that physicians should have a role? You talk about having a workplace committee, but should the chiropractors, physicians, doctors have a role in deciding what is suitable work?
Mr Caire: I think it's very important, especially the physician who is attending to the worker having a role in it. Much too often some of these decisions are made by an RMA who really hasn't even seen the worker. So I think it would be very helpful for the physicians to have a role in it.
Mr Fletcher: It should be the physician who is attending the patient, not just the company doctor or something like that?
Mr Caire: The company doctors do tend to have a bias.
Mr Fletcher: I don't know. I just think it's someone who does attend. Is that putting an undue burden on the medical association, on doctors? I know in Guelph -- the reason I say this is because my doctor and a few other doctors really do want to get involved in finding work because they're tired of seeing these people coming back in with aggravated injuries.
Mr Caire: Several of the workers I deal with, their doctors and insurance specialists have been more than helpful and more than willing to help on several occasions because they see the toil that this is placing on the worker. So I believe the medical community, based on my experiences, is more than willing to help patients get back to some meaningful employment, because you also cause some major psychological problems here which compound the whole situation.
Mr Fletcher: I don't know if it's like this where you're employed, but I remember that if a person hurt himself at home and went on weekly indemnity, that was fine, but if he was injured at work and on workers' comp, there was suitable employment. There were other jobs, alternative jobs, that wouldn't be found if it were not a WCB case.
Mr Caire: Yes, and my experience has been especially if they can get to the worker before he or she gets out of the plant. A lot of times, once they're out and they're already getting the benefits, they're not as quick to bring them back. But if they can get them before they're out that door, all of a sudden all of these jobs appear that weren't there before.
Mr Mahoney: You referred to the presentation by Local 444 of the CAW and said you agreed with their presentation. Just a question; it's curious to me. There are 36 sections in this bill. Eleven of them are housekeeping of the nature of section 7, where it says, "The English version of subsection 43(11) of the act is amended by striking out `industrial disease'...and substituting `occupational disease'." So it's a housekeeping matter. There are 11 of those.
That leaves 25 which I might call substantive sections. Local 444 strongly in their presentation disagreed with 17 of them. That leaves eight sections of this bill that they support. They do not support 17 of them. How can you ask that this bill be passed, if you agree with their presentation, and you're opposed to such a huge number of the sections of this bill?
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Mr Caire: I believe we'd be doing an injustice to workers if we did not put forward our deep concerns and our opposition to certain aspects, but we'd also be doing an injustice to workers if we did not support the things that are going to help them. We believe that Bill 165 is really at this point the best we can get, although there are a lot of areas that we have major concerns with.
Mr Mahoney: I could appreciate that position if you said: "Out of 36 sections of the bill, there are eight that we support. We've got a problem. Can we not go back to the drawing board? Can we not sit down with the government and try to rewrite this bill? Can you, committee, not make recommendations to support our concerns?"
I could understand that, but to just say that even though you support eight out of a total of 36, it just leaves me shaking my head and wondering if there aren't some strong, partisan politics involved in all of this and not necessarily concern for injured workers.
The statement in the Local 444 presentation that I'm assuming you agree with -- since we don't have a written document from you, I'll use theirs -- says: "Are the employers who are complaining loud and long about the current unfunded liability proposing to pay more money towards the board's fund to ensure full funding? No, of course not. They rather seek to cut pensions and other entitlements through the Friedland formula, which erodes indexing."
The employers are not implementing the Friedland formula; this government is, in this bill. If you support their statement, strongly opposed to implementation of the Friedland formula, how can you ask that this bill be passed?
Mr Caire: Well, Mr Mahoney, if you're going to go forward and fight very strongly to oppose that part of the Friedland formula, you'll have our full support.
Mr Mahoney: No, you don't understand. What I'm supporting --
Mr Paul Klopp (Huron): He understands very well.
Mr Mahoney: What I'm supporting is not the issue here. In fact, we recommend the Friedland formula, but that it be used to pay down the unfunded liability, not that it be spent again. What I want to know is, how can you, and Local 444, who purport to represent injured workers, justify the position of saying that you support this bill but you're opposed to the de-indexation, which I will openly admit takes money away from current injured workers and gives it to other injured workers? Rather than taking money away from all injured workers and paying down the unfunded liability, it gives it to other workers. It's a complete juxtaposition that would indicate to me that this is just pure partisan nonsense.
Mr Caire: My understanding is that the Friedland formula does not take money away from current injured workers and give it to other injured workers but that the Friedland formula saves money for employers in the province of Ontario, and not so much --
Mr Mahoney: If it does take money away from injured workers, would you support it?
Mr Caire: We don't support the Friedland formula.
Mr Mahoney: You see my point? It does take money away because it de-indexes their pension, which is money right out of their pocket, and it goes to other workers.
Mr Caire: Right.
The Vice-Chair: I'd like to thank the Canadian Auto Workers, Local 27, for their presentation this morning.
Interjection.
Mr Mahoney: I'm not bitter. I don't know how you can say "on the one hand" and "on the other hand."
The Vice-Chair: Order, please.
Mr Mahoney: I know how you do it. You guys have been doing it for four years.
ELLIS-DON CONSTRUCTION LTD
Ms Denise Peters: Good morning, Mr Vice-Chair, members of the standing resources committee and, though I have my back to them, fellow stakeholders. I'm Denise Peters, the corporate manager of workers' compensation for Ellis-Don. My presentation today speaks not only to my own personal interest with regard to Bill 165 but it speaks to Ellis-Don's concerns with 165, as well as to a multi-employer presentation and their concerns with regard to 165.
In particular, we are 15 employers encompassing 26,000 to 27,000 employees in the London geographic area. The interindustries related to are the hospital sector, the municipalities and related service sectors, transportation, manufacturing and of course construction.
I'm going to specifically speak to issues dealing with return to work. Noting that, I have highlighted the issues that are common between the interindustries, and then in the not-as-dark print I have put down my concerns and those of Ellis-Don. I am not going to read verbatim everything I have presented to you. I'm going to draw your attention to what I consider to be the highlights and request that you give the due consideration to peruse the document in its entirety at a later time.
To that end, I would like to introduce Dawn Janveaux, who's sitting to my left. She is the health and safety director of Cuddy Foods Products, Canada operations. If there are going to be any inquiries with regard to the non-construction sectors, Dawn has kindly volunteered to respond to those queries.
I would like to start with my opening comments, because they're important with regard to the entire contents of the submission. Prior to commencing, I want to say however that as an employer representative I am disappointed with the current situation of the workers' compensation system as implemented by the board, as interpreted by the Workers' Compensation Appeals Tribunal and as directed by the government through past and current legislation. However, my disappointment, I can say, is and has been partially tempered by the fact that I've had the true pleasure of working with a few knowledgeable, rational and professional individuals at the board.
However, the dilemma that I and other employers are faced with when reviewing and considering the underlying objectives of the proposed elements of Bill 165, lies within the reasoning of the board and government to achieve the goals that have been constantly espoused since the hearings have commenced: If only employers would prevent accidents and minimize the outcome of accidents, ie re-employ or reinstate, then costs would decrease and fiscal responsibility would be realized. The key means to achieving this objective is mandatory inclusions of specific health, safety, vocational rehabilitation programs and policies for employers only.
Furthermore, a corollary assumption of the hypothesis is that the absence of these additional tools, in of course a bipartite configuration, has caused there to be too many lost time accidents. Hence, this is why costs of the system are so high.
Our concern with such logic is that it can be reasonably established that if the initial hypothesis is false, then by deduction, any and all of the achieved objectives, ie the remedial actions, or the conclusions arising out of that and how to implement the remedial actions, will be flawed, and perhaps fatally. Thus, let's examine this hypothesis.
Information presented to the committee from such sources as the Council of Construction Associations in their submission of August 25, 1994, as well as the London and District Construction Association's new submission of August 29, 1994, has clearly established that province-wide as well as interindustry the frequency of time loss accidents, which takes into account the relativity of man-hours, has decreased over the last 10 years, from 1982 to 1992, while in construction, as we like to constantly emphasize, it's been a dramatic increase, 62% in fact for the period 1987 to 1993, which just happens to coincide with the implementation of the CAD-7 experience rating system.
Juxtaposed against the declining accident frequency was the fact that the average cost per claim had risen 517% during the same time period.
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Let's look at the premises of what the objectives are.
Timely and early return to work: It's been stated again and again that in order for employers to facilitate timely return to work, it's imperative that we have functional capacity information. We do not consider this to be medical information, nor do we consider this to be an invasion of privacy.
Thus, it is our recommendation that the currently worded amendment does not define the functional capacity and should do so, and classify it as non-medical information. Dr Michel Lacerte spoke to that as well yesterday. Furthermore, and this is the other corollary that must be with that, it must be given to the employer in a timely manner, preferably 24 hours.
The following information as it pertains to the notice of fitness ties in with the report of functional capacity information and return to work. It is through the board's current procedures and processes that employers are notified via an initial notice of fitness with regard to whether a worker can or cannot return to work.
The problem with this form is that there's no obligation on the board's part, once the initial notice is sent out to employers, to require that it sends it on a regular basis. That is to say, not all employers, and in particular with the construction industry, can always provide immediate and suitable modified duties, at perhaps what we call the most severe or restricted functional capacity levels, things that would be described as just merely capable of doing daily living activities.
However, employers can and will make the effort to provide suitable modified duties as a worker progresses in his recovery. But in order for employers to take advantage of being able to provide return to work, if not early return to work, we must be notified as the worker progresses so that when he does meet a functional capacity level that we can accommodate with suitable duties, we can then implement an early return-to-work program. Thus the recommendation would be to have the notice of fitness forwarded to employers on a regular basis, perhaps every 45 to 60 days.
The other key component with regard to a return-to-work program is ensuring that there's optimal medical management. It is imperative that there also be an obligation on the medical profession to provide a medical management program that is based upon effective and efficient evidence-based modalities and treatments, with which we know workers can and do recover.
I'm just going to keep going here.
As pertains to vocational rehabilitation issues, to two points within the amendments under section 53, we can say congratulations to the government. They have recognized the imperative of having the employer consulted and involved. We are happy they say that when a voc rehab program is going to be implemented, the employer should be consulted, because employers can bring a lot of information to bear. One of the anecdotal points I have brought out is that we can query the appropriateness of voc rehab objectives.
Of note, five years ago, one of my first experiences with the voc rehab plan was that a worker had continued to be off work for over a five-year period, despite having a voc rehab plan in place. The objective: return to work to a heavy mechanic duty. The problem with that was that the permanent impairment restrictions stated no heavy lifting and no repetitive bending, key functional demands of the new voc rehab goal. But it took the board and the worker five years to recognize that they had chosen the wrong goal.
Now when I have back claims involving voc rehab, one of the first things I do is look to see what is the chosen retraining or new position program, and point out: "Have you closely examined what are the functional capacities of this job once he's retrained? If not, let's take a second look before we invest the time and energy."
As it pertains with regard to voc rehab services and the qualification for availability over specific periods of time, again, I think it's important that employers be asked to contribute. Is it appropriate to extend services? Of note, we believe this provision -- and this is under subsections 53(12) and (13) on page 6 of your notes as I'm going along quickly -- is that a worker may continue to be unemployed because he has chosen, in concert with the board, to retrain for a profession in which there are limited employment opportunities in general, and these minimal opportunities are further reduced because the employment opportunities are not located within the worker's home town. Then the question becomes, is it appropriate to expend additional resources in the likelihood that the outcome is near zero? We must think these questions over closely.
I think a key criteria with regard to voc rehab and the whole concept of the audit procedure is the appropriateness of whether the government should be legislating a penalty system of evaluation of employers' programs and practices as it pertains to voc rehab, especially when there are subjective criteria which would not be evaluated by accredited professionals in a uniform manner. Again, as has been previously established, when it comes to accreditation at the voc rehab level, the province of Ontario has negligible programs, and there are subjective criteria for an expert.
Thus, another thing to be considered when one is subject to an audit is, what are the implications of when an employer must now comply with subjective criteria when it comes to implementation of programs and practices? That is to say, in order to minimize an unfavourable audit, what you're going to start seeing is that employers will be required to transfer resources away from what are already demonstrated to be good health and safety programs and practices because of the decrease in time loss accidents. Instead, we're going to be focussing on such things as vocational training, language training, literacy skills, general skills and upgrading, refresher courses, employment counselling, including job-search skills, identification of employment opportunities. Is that an appropriate way for employers to be reducing time loss accidents and preventing recurrence?
The other question that employers think about when we're looking at the whole concept of audits is, where is the reciprocal agreement for employers in this act? For example, with any time loss claim, will the board initiate a review without an employer's objection to determine why the worker has not returned to work?
When performing this rule, will the board automatically audit any information pertaining to the worker's actions to determine if he or she did or did not cooperate with vocational rehabilitation programs? If found to be in violation, will the board implement a penalty? Will it be retroactive? Will the board establish as part of the criteria of cooperation the selection of a treating health care practitioner whereby the provision of an optimal medical management program would be mandated? If the worker chose to go to a medical practitioner who did not practise along optimal medical guidelines, would that be considered to be a penalty?
Better yet, what about the penalties for the board as it pertains to the lack of cooperative nature with the board? Is there any incentive for the board to make a timely decision and cooperate with employers' requests? Why is all the onus on employers and not on the other stakeholders? That is the question we want to know.
The Vice-Chair: If I may interrupt, you have about five minutes left.
Ms Peters: No worries. I'll give you a full minute to ask questions.
With regard to penalties and audits, and it pertains to re-employment, we feel that section 54 already allows for a sufficient number of penalties to employers, who get penalized both with regard to experience rating as well as not meeting re-employment provisions. We don't need to be penalized on the subjective criteria of programs and policies.
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Additionally, and what is particularly important to construction, is that these penalty scenarios fail to recognize that for small employers the burden of proof and compliance with such audit-based programs lies with producing substantiating written procedures and practices. This requirement would be costly as well as administratively prohibitive. This is especially true in construction in which, for an employee population base of over 300,000, there are approximately 32,000 employers, of which, on average, it is estimated that over 80% have five or less persons.
Furthermore, the entire concept of health and safety practice audits repeats and duplicates the provisions already in Bill 208.
We add to that the final complication that both claims adjudicators and case workers will become workers' advocates, thereby clearly eliminating neutrality. You have a system that has further established barriers to re-employment and reinstatement and which is not, "Knock them down."
Thus, as the conclusion, it is clear from the discussions we have brought up today in the submission paper that it is our position that Bill 165 is based upon false assumptions, thus rendering any recommendations as highly suspect despite the fact that they are not the same recommendations as negotiated by the PLMAC accord.
Additionally, and as employers, we find it rather ironic that we're in a unique situation here. We are now protectors of the workers' compensation system in Ontario for both the current working population as well as the future working population. It is self-evident that without fiscal sustainability there will be no workers' compensation as we know it today. Furthermore, this fact has not been lost on the representatives of our construction labour force.
This is my final comment. Of note, and I would request that you review COCA's submission of August 25, there is a letter in there dated June 21, 1994, co-signed by Mr David Chalmers, chair of COCA, and Mr Joe Duffy, business manager of the Provincial Building and Construction Trades Council of Ontario, and I quote:
"...both parties acknowledge that the unique features of the workers' mobility in construction make it impractical to apply the proposed template to CAD-7. The bill's proposed amendments to subsection 103(1) of the act do not acknowledge this conclusion and impose uniformity in its application. This is not acceptable as we believe it may damage the industry's occupational health and safety performance rather than improve it."
Thus, and for the record, it is clear that this bill does not have the support of the construction industry, both labour and management.
The Vice-Chair: A brief comment from each caucus.
Mr David Winninger (London South): You've made a number of suggestions today that might fall under better case management. But yesterday we heard evidence from several people that the best early return-to-work programs, the most successful modified work programs, were those that were a product of the cooperation of labour and management, the company doctor and in some cases joint committees which were spearheading early return-to-work. I wonder if Ellis-Don has a joint committee dedicated to ensuring that workers who are able to, can return to work early.
Ms Peters: I'm proud to say that well in advance of the legislation, Ellis-Don has implemented and has continued to implement an early return-to-work program. Because we are a multi-union employer, the system works slightly differently than it might work in a workplace where you have what we call a static and captured audience.
Do we work from a joint system? In a sense of the word it is a management-directed program, but all the program materials and input in the program are merely coordinated by management. That is to say, all the correspondence is copied to the worker, to the doctor, to the board, and it is merely management that takes on the administrative burden of coordinating the return-to-work program. The worker's directly involved.
Mr Mahoney: I wonder how many of your subcontractors would have joint health and safety committees on those programs, the small people who do a lot of the work under the direction of Ellis-Don. I appreciate the fact that you have it as a large corporation, but the smaller companies in this province are just going to get killed with this stuff.
You raise a really interesting point on page 7 of your report where you say, "...is it the casual employer's responsibility for the fact that, upon testing, the" injured "worker does not have more than a grade 6, 8, 10 education" and that they turn out, even though they might have lived here for 20 years, to be functionally illiterate? So it's now your responsibility to get them a high school diploma or to get them a degree of some sort in English and/or math at a cost, we found out recently, of about $10,000 per course for these students, by the way, being paid for by the Workers' Compensation Board.
What you haven't said here is that workers' compensation, it seems to me, is turning into a broader social program rather than an insurance policy paid for by employers for the benefit of injured workers. Is it the responsibility of an organization like the WCB to re-educate these people or is that indeed the responsibility of the worker and society at large, ie, the government?
Ms Peters: I would temper my response --
Mr Mahoney: Don't bother. Go ahead. Let 'er rip.
Ms Peters: I raise the queries to point out the way the socioeconomic shift of the cost of the safety net has gone to the workers' compensation system.
Mr Mahoney: Right on.
Mrs Witmer: Thank you very much for an excellent presentation, Ms Peters. I think you've raised just some outstanding questions that the government needs to give very serious consideration to. For example, you ask, "What about reciprocal treatment for the employer?" I think throughout the document we see that the employer's going to be penalized, it becomes a much more confrontational system, and also you raise the question, "What are the qualifications of those board personnel who will sit in judgement of employers?" There are just so many unknowns within this legislation that it has to be extremely frightening for employers who are already dealing with a system that's mismanaged. Any further comments?
Ms Peters: I want to stress, and it had been previously brought up, that it's bad enough for a large employer to attempt to understand and to implement the current legislation and be proactive. The small employer, whose average job duration is six weeks, if he is audited he is out of work. Is the purpose of the act to put workers out of work? He'll fail the audit.
The Vice-Chair: Thank you. On behalf of the committee, I'd like to thank Ellis-Don Construction for its presentation here this morning.
Do we have anybody here from the Canadian Union of Public Employees, Local 255? And I don't believe we have anybody here from the Waterloo Regional Labour Council either.
Interjection: They're doing a heck of a job, Mr Chairman.
GLASS, MOLDERS, POTTERY, PLASTICS AND ALLIED WORKERS UNION
The Vice-Chair: I believe Mr Rice from the Glass, Molders, Pottery, Plastics and Allied Workers Union, Local 446, has agreed to go. We appreciate this. Good morning and welcome to the committee.
Mr Melvin Rice: Good morning, panel. My name is Melvin Rice, and to my right is Andrew Duffy.
History has clearly shown that because of past governments' interference through political appointments, the mandate of the Workers' Compensation Board has been severely hampered. It is now time that the system be turned over to the two stakeholders most affected: workers and employers. Bipartism has been proven to be the most effective and non-controversial method of governance. The best example of such a system is the Workplace Health and Safety Agency. Over 300 decisions have been made by consensus and only once was an issue forced to a vote.
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Statistics show that 78% of injured workers disabled for more than a year, post-Bill 162, are unemployed. This statistic is deplorable and unacceptable, yet it is the propaganda of employers and their endless rhetoric regarding unrealistic projections of the unfunded liability that continue to thwart attempts to remedy the high unemployment of injured workers.
I would like at this time to introduce Andrew (Andy) Duffy from Woodstock, an injured worked from Timberjack Inc, where I'm also an employee. Andy would like to relate to the committee some of his personal experiences regarding the 10 years subsequent to his accident.
Mr Andrew Duffy: Good morning, ladies and gentlemen. I'm Andy Duffy. I was injured at Timberjack. I suffered a back injury in 1985 and I've been off work ever since.
I have done everything that the WCB has asked of me. At first my doctor took me off work and then hospitalized me. After that I went to Downsview for three weeks. The first thing the doctor who was in charge of me said to me was, "What's your problem?" I told him. His reply to me was, "There's nothing wrong with you." So I said, "Have you looked at my X-rays?" He said, "No, if I want to look at X-rays, I'll have them done here." I said, "Why don't you have them done?"
So I had them done and three weeks later, at the end of my course, I was taken to his office and I said to him, "Did you ever look at my X-rays?" He said, "Oh, yes, you have problems with L2-3 and L3-4 in the lower back, but you're fit for modified work." He got in contact with a counsellor, I believe, and the counsellor got in touch with Timberjack. They took me back to work, just working out of the main office. I believe I lasted there about four weeks and my own doctor again put me off work and I had to see them in emergency.
A week later, it so happened I had to come here to London for an examination at the WCB. The first thing the doctor said to me there was, "Have you been working, Mr Duffy?" I said, "Yes." He said, "Who told you to get back to work?" I said, "One of your counterparts in Toronto." He said: "Well, I'm telling you that you don't work. Go home and I'll have a counsellor contact you."
That was fine. I stayed home. The counsellor got in contact with me and I was sent Goodwill Industries in London for rehab again. After the rehab I was called to the counsellor's office, who told me I was unemployable, 100% unfit for any type of work. I was called up in front of the pensions board, and although I'm 100% disabled I was given a 20% pension, which is inadequate on any terms. So $200 a month, to me, is going to help me a lot.
I don't know what else I can say, just that I have done everything the WCB has asked. Thank you.
The Acting Chair (Mr Paul Klopp): Thank you, Andy. You did great.
Mr Rice: In my opinion, Bill 165 does address some of the most urgent problems in the WCB system today. From my analysis, Bill 165 is very similar to the agreement that PLMAC negotiated. There certainly seems to have been a lot of give and take on both sides, as is the usual course of negotiations. However, in the drafting of the legislation, the intent of certain amendments has been diluted by the language chosen. I have attached an appendix with suggestions for your consideration.
To summarize the appendix, I am most concerned with the language in subsection 51(2), which refers to prescribed medical information. Access to a worker's medical information must be limited to only the employer who participates in the vocational rehabilitation plan and shows a genuine interest in returning the injured worker to the workforce. The current wording seems to discourage a cooperative environment which is imperative in any successful return-to-work program. Before providing information, a physician should be comfortable that it will be used to rehabilitate and accommodate the worker's impairment, preferably through a joint labour-management return-to-work program. Any medical information provided should be non-diagnostic in nature.
I also have concerns that subsection 8(7.1) eliminates the value of private disability insurance plans that are purchased by workers. This section needs only to identify duplicate worker compensation benefits.
The appendix goes on to identify a few more areas of concern: Will subsections 53(10) and (13) allow interference by an uncooperative employer? Will subsection 95(6) hamper the independence of the Industrial Disease Standards Panel? Can subsection 147(14) be amended to include the group of injured workers who turned 65 before Bill 162 and who will miss out on the $200 increase? Is the cap in section 148, the Friedland formula, necessary? Our position is, "Hats off -- no caps!" Why does the bill not eliminate section 93 so that both the workers and the employers can enjoy a truly independent appeals tribunal?
In summary, the $200 increase will be appreciated by the approximately 40,000 injured workers who remain unemployed and on the brink of poverty. Although welcome, it will not make up for all the feelings of despair and indignity that injured workers and their families must suffer due to the inadequacies of the WCB system. Fortunately, these workers will continue to receive 100% inflation protection of their benefits, yet approximately 130,000 other injured workers will watch the Friedland formula slowly erode their inflation protection.
I must state for the record that I do not agree with the implementation of the Friedland formula or any other method of decreasing worker benefits solely for the purpose of increasing the board's financial viability. Surely there are only two proven methods of attaining cost-efficiency and ultimately a healthy compensation system. They are accident prevention and maximum re-employment. I do however accept that the Friedland formula was a result of the negotiated process, but I hope that the royal commission will review this important issue.
I believe that once workplaces become safer and truly enforceable return-to-work programs are mandated by legislation, we will begin to witness a resurgence of the health of the workers' compensation system. It is imperative that the system be administered by a bipartite board representative of the two stakeholders: workers and employers.
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I strongly urge the government to pass Bill 165 into law with the proposed amendments. Together with the findings of the royal commission, this bill will work to rebuild the compensation system so that it will reflect the needs of our society in the future.
Thank you for this opportunity to present my views to the committee.
Mr Mahoney: Just one brief question: On the opening page of your presentation, sir, you say that from your analysis Bill 165 is very similar to the agreement by the Premier's Labour-Management Advisory Council, the one that was negotiated. Just help me with this. The agreement was put in place and part of the agreement was adopting Friedland, which would generate, I believe, $3.3 billion in revenue for the board. The agreement by the PLMAC, when they left the room, was that the $3.3 billion would come off the unfunded liability. When it appeared in the announcement by the Premier, ie, Bill 165, the Friedland formula was used to redistribute $2.5 billion -- I think my numbers are pretty close -- to other injured workers. So it didn't go to what the agreement was. Okay?
I'm not really asking you to comment on the propriety of doing it one way or the other, but the agreement, when they left the room, was a $3.3-billion reduction of the unfunded liability. How can you say that this bill reflects that agreement when in fact the government introduced deindexation of pensions, taking money away from injured workers and redistributing it, which was not the agreement at the PLMAC?
Mr Rice: Mr Mahoney, what I do is I work in a factory 40 hours a week and I don't have lot of time to get into the real thing.
Mr Mahoney: I appreciate that.
Mr Rice: I read what is put out by our leader, Gordon Wilson of the OFL, and the issues that they put out. I certainly believe in what they have to say, so I really can't comment on that. All I know is that we need this bill. It has to go through. The Friedland formula I don't agree with, but it was negotiated. I've been into negotiations with our company, I guess, five times and you never get all that you want. This bill, so far, is the best that I have seen that we need.
Mr Mahoney: That wasn't my question.
Mr Rice: I know, but I really can't answer your question.
Mr Mahoney: It wasn't the agreement; that's my only point. Right or wrong, it wasn't what was agreed to. If it had been agreed to, if they had all shaken hands in those PLMAC meetings and management had said, "Okay, fine, let's give the $200. Let's use the Friedland to generate the revenue, let's not bother looking internally within the board. Let's do that," then I would agree totally with your statement. I appreciate the fact that your information comes from the Ontario Federation of Labour, which is claiming that this was the agreement. I just point out to you, with due respect to you and to Mr Wilson, that this was not the agreement. Now, Mr Wilson will be here this afternoon; we can ask him to clarify that.
Mr Rice: Okay, I certainly would appreciate it if you would ask him.
Mr Mahoney: I will ask him.
Mrs Witmer: Thank you very much for your presentation, both of you. I want to just follow along the same path that my colleague has embarked upon, because I do believe that some of the information contained within your document is misleading. For example, you indicate that the new system of bipartism has been proven to be the most effective and non-controversial method of governance and then you quote as a good example the Workplace Health and Safety Agency. For your information, I can tell you that agency is not working. I think you could talk to any employer in this province and they could tell you exactly why bipartism does not work.
I think it's important to note that you've indicated here that there are great similarities in the agreement that was reached by the PLMAC and Bill 165. Again, I need to point out to you that the employer community that negotiated the accord has totally rejected Bill 165 because it doesn't in any way, shape or form reflect the accord. What we see in Bill 165 is the labour position. In fact, it's a very political agenda.
I think it's important that everybody take a look at all the information available. Unfortunately, this bill isn't going to resolve the problems that have been talked about as far as the injured workers are concerned. It's not going to make for a more efficient system or more timely delivery of services. That's totally missing from this bill.
Mr Rice: My only response to that is that I work at the bottom line, with the injured workers like Andy here, and I see this all the time. I talk to management. All they ever seem to have is nickel and dimes. They worry about the money. They don't worry about the workers they injured. This is just one example. We have, I guess, four more, if you care to be interested in talking to them, from our own factory in the same position.
Mrs Witmer: As MPPs, we actually deal with injured workers all the time. We face the same frustrations as you do. We try to facilitate their return to work and dealing with the system. I think it's unfair to tar and feather all employers, because we've certainly heard from employers. We all know employers who do an excellent job of doing what they can.
Mr Rice: I've never had the opportunity to deal with those yet. When I do I'll certainly let you know.
Ms Sharon Murdock (Sudbury): Mr Rice and Mr Duffy, I want to thank you very much for coming in. Mr Duffy, I want to particularly thank you because I think you've made the point of what that $200 is going to mean to the groups that are exempted under the Friedland formula.
It's interesting. I've been listening to the comments and the questions that Bill 165 is the labour side and that the PLMAC agreement was never listened to. If this was the labour side of the bill, there would be no Friedland formula in here at all. If this was the labour side of the bill, there would be unbelievable changes to the return-towork program and the involvement of the labour movement every step of the way at the Workers' Compensation Board. To make a statement that this doesn't reflect what the agreement was and that this is all a labour bill -- you're right in your comments, in saying that it is a compromise and that neither side gets everything it wants.
In terms of the bipartism of the board, I know that you did mention it briefly, but I just wanted to see what kind of representation you thought of in terms of the breakdown. I don't know if you know the details of the breakdown of the board and how you see it working.
Mr Rice: I'm not that far up on it, but I'd like to see equal representation between management and labour and get the thing going and get our injured workers back into the job they came out of.
The Vice-Chair: On behalf of this committee, I'd like to thank the Glass, Molders, Pottery and Plastic Allied Workers Union, Local 446, for its presentation this morning.
I'd like to call forward our next presenter, from the Canadian Union of Public Employees, Local 255.
Mr Ferguson: While they make their way up, I think we all recognize there are some strongly held opinions on all sides concerning this bill, but I would hope that in the future we don't accuse anybody of trying to mislead the committee. I mean, Ms Witmer said the last delegation tried to mislead the committee.
Mrs Witmer: Did I use the word "mislead," Mr Ferguson?
Mr Ferguson: Yes, you did.
The Vice-Chair: I did not hear that word, but I think it's agreed. I think that with the cooperation of all the committee members, we will get through this.
Mr Mahoney: The only one who wants to mislead anybody around here is you, Will. We know that.
Mrs Witmer: I would agree.
The Vice-Chair: Order.
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CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 255
Mr John Adams: My name is John Adams. I am the secretary-treasurer of Local 255 of CUPE. I have been very interested in Bill 165 since I first found out about it in June of this year. If it becomes law, it will most certainly help ease the hardships of many disabled persons in Ontario. There are a few amendments that should be attended to before it is passed. I won't personally discuss the changes -- I prefer to leave them to more knowledgeable speakers -- but I think after my address you'll find out the things that should be amended.
You see my compensation board claim number before you and a very brief rundown of my experiences in the last almost 30 years. On July 21, 1966, at approximately 9:45 am, I was working aloft on a telephone pole when the pole snapped off and crashed on rocky ground. I had a sharp pointed stone penetrate my right elbow causing a fracture of the radius and I suffered some painful broken ribs. I was given first aid by my follow worker and then transported, in a great deal of pain, by the way, about 18 miles by a Bell Telephone truck, as was instructed by the supervisor.
At the hospital, they just placed a cast on my arm and nothing on the ribs because they said there was nothing they could do about them really.
From the hospital, I was taken directly to my employer, where I was severely reprimanded for several hours for getting injured and, even though I was in shock, was forced to sign forms to say that it was my own fault. I must say that at this time I was only following my supervisor's orders. Up until 15 minutes prior to the accident, both my fellow worker and myself had followed the book in every safety aspect.
I was not allowed to leave for home before 5 pm at night and I had to use a bus. I was told to report for work at 8 am the following morning so as not to cause a lost-time accident. My employment for the next seven or eight weeks consisted of answering radio calls and sorting files in an office.
In September, I returned to my position as lineman and had to attend the company doctor twice a week for so-called rehabilitation. This was very painful. The doctor's idea of treatment was to put his body weight on my arm, which is in this position permanently, and try to straighten it forcefully. I almost passed out several times. He ridiculed me and called me a wimp. This affected me physically and mentally, and eventually I just discontinued seeing him.
On February 21, 1967, after being stressed right out because of work conditions, I phoned in sick and had a visit from my supervisor who informed me I'd been dismissed from the firm. During the course of the next few hours, I received about four phone calls offering me situations because of other, more sympathetic supervisors at the company. I opted for the position of learner power lineman for the simple reason that I was a power lineman before I came to Ontario.
I progressed very favourably with the new firm despite the fact I was having increasing difficulty with my right arm, which by now was permanently locked in a bent position. After having a chat with my doctor, it was decided I needed surgery on my right elbow. This was performed around June 1967.
After some 10 weeks off work, I received a bill from the surgeon for the operation that he had performed. It appeared that my former company had not reported my accident. Luckily, I met the nurse from the hospital who remembered placing the cast on my arm a year earlier. Because of my hospital file, I eventually was granted 7% disablement in May 1968.
From 1968 through to 1986, by using modified work practices because I had no rotation of my wrist, I was able to do my job effectively. I've always loved my job -- in fact, I have taught this trade at Ontario Hydro school -- and lost very little time apart from the usual sicknesses and illnesses. But in 1987 my coordination on my right arm really got bad and the result was that I suffered several broken fingers on my left hand. It was found that the ulnar nerve in my right arm and wrist was operating at only 1% of its potential.
The surgeon at Western University Hospital here in town chose to do an ulnar nerve transposition. He had fully intended to do some other modifications at the same time but, on getting inside and seeing the decayed condition of my elbow, decided to perform only what was necessary and leave it at that. My nerve gradually repaired itself to the present state and eventually I had to have more surgery at Meaford General Hospital, where I had a plastic and steel implant and quite a lot of cleanup was done.
On applying for reassessment by the WCB, I ran into a great deal of opposition -- and that's putting it very mildly -- and was told constantly that there was absolutely nothing wrong with me. How this information was obtained by the WCB is a mystery to me because I had not been assessed or examined by anyone since 1968. I have letters in my file that refer to a "permanent disability assessment of 1978," which is another mystery because I never went to such a meeting.
I was also informed that I suffered no wage loss because I earned far more in 1989 than I did before my accident in 1966. I earned $2 an hour in 1966. It's obvious I earned far more. Because of my condition, I was dropped from being a power lineman and I lost pretty close to $8,000 a year, which is a lot of money. It meant a lot to my pension. I dropped to approximately $26,000 in 1987; I did not reach $30,000 again until 1991.
I had to make some inquiries and, with the assistance of the office of the adviser to the injured worker in Toronto, I was eventually called to the 16th floor of the WCB building on October 21, 1991 -- it was a horrendous experience, I can tell you -- where I was told by the examining doctor that I was in incredible condition. His name is a mystery to me because he never even introduced himself to me. I asked him what was going to happen; he said, "Nothing much."
In the last week of November 1991 I was notified that my claim had been reviewed by a medical staff and that my permanent impairment had been increased to 16%, which is quite a bit from what it originally was in 1966. It brought my WCB pension allowance to $202.28 per month.
Since August 1991 I've been disabled with a chronic back and leg ailment which adds to my problem because I have to use a walking cane with my gimpy arm; therefore I'm not able to walk very well. I had some pretty heavy-duty spinal work done at Hamilton General Hospital. It repaired the nerve damage, but I still have a lot of pain.
One of the things that I am concerned about has already been discussed by the previous speaker, and it was receiving compensation from two different places. On the back page of my article you'll see that I live like a millionaire. At the end of the month I have $14.62, which I have had a hole put in today because I had 30 copies, 180 pages, photocopied at 10 cents a copy. I'm in debt to myself.
If it is considered that I am getting awarded by the WCB and Canada pension disablement and I have my $200 reduced out of my pension, I'm going to be finding really hard times.
In conclusion, please consider the thousands of injured workers, many of whom could be in a far worse financial situation than myself. It is because of these people you should find it in your hearts to make this bill law in Ontario. I thank you for your patience.
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Mrs Witmer: Thank you very much for your presentation, Mr Adams. In the course of last week and this week we've certainly heard from many individuals such as yourself who have faced the system and been frustrated by the system. However, my personal assessment of Bill 165, and I know it's an assessment that is shared by many people, is that this particular piece of legislation unfortunately is not going to address some of the very, very serious concerns you have raised today. However, I think we're all committed to doing what we can in the future and hopefully all three parties will work together to make sure that the situation does improve itself for anybody injured on the job.
Mr Adams: I hope so. Thank you.
Mr Randy R. Hope (Chatham-Kent): It's nice that people are sympathetic, but the two opposition totally disagree with the $200 allowance that will be given per month, and I think it's important for the record to show that.
Mr Adams, one of the things people might be saying is, this accident happened a long time ago.
Mr Adams: Yes.
Mr Hope: With the practices that are in place today, with the experience rating and that, people are not forced back to work, they're not forced on to sickness and accident programs, they're not forced into jobs that you indicated. With your experience in the labour movement and the people you talk to, especially injured workers, do you see a recurrence of the situation that happened to you in other workers' situations that are happening today?
Mr Adams: I have a friend who works for a steel company in Hamilton who's had an operation for cancer on his throat, he has damaged lungs, a lower back problem, problems with both legs, who has been smoothly pushed back to work in a very bad environment. He was basically threatened, "If you don't go back to work, you will have no WCB," and this is a crime. This man is not in very good condition. Now, if this isn't intimidation, I don't know what is.
Mr Hope: Mr Adams, in your presentation you also indicate mysteries about documentation and information dealing with your medical.
Mr Adams: Yes.
Mr Hope: Do you believe that if medical information was given to current employers -- and it's only your belief I'm asking; you know, I only have to ask if you would believe it, because you're a victim of circumstances that happened before in workers' compensation -- do you believe that employers would utilize that information, medical information, to discredit current claims or future claims dealing with any benefit program the employer may offer or to make sure re-employment is not an issue in their workplace for you?
Mr Adams: It depends on the employer. I was lucky to have my last employer, who had absolutely nothing to do with my injury. They actually gave me a job as a serviceman and meter reader, and they were definitely not committed to do so. I believe there are a lot of very good employers around who would do such a thing, but there are some employers, as my former employer pointed out, that are pretty devious. I tell you, I'm not impressed with that company.
Mr Hope: You clearly indicated that you live like a millionaire.
Mr Adams: Yes.
Mr Hope: I guess we would question that, but one of the things I would like to ask you is the representation issue. You made reference to the board doctors, you made reference to what happened to you with WCB. Do you believe it is in the best interests of injured workers to have representation on the board of directors to make sure the issues and views of injured workers are heard?
Mr Adams: I would volunteer my body for that job if it is needed, even though it would cause me great pain in travelling. I firmly believe someone should be there to see that there is fair treatment, because I was left on hold for 10 minutes on the phone one day. I was addressed -- I realize we're in a bilingual country. One person in Toronto -- I will not mention names, but I have it on file -- would insist on speaking to me in French. So one day I answered in my first tongue, which happens to be Celtic, and she hung up on me, because she didn't have to put up with this nonsense. If I did that to her, I'd still be waiting to get some money. Really, I was pretty badly treated, and I hope that we do have good representation.
Mr Mahoney: Being on hold for 10 minutes is probably better than getting voice mail, but I won't go into that.
Mr Adams: Not when you have to pay for it, sir.
Mr Mahoney: I don't have any questions for Mr Adams. I do want to clarify, however, what Mr Hope has just put on the record, and that is that we are opposed to the $200-a-month supplement. Let me be very clear -- and if you want to read my report, you'll see it there -- that we support the principle of providing that supplement to the injured workers who need it, but we clearly said that money has to be found from within restructuring of the Workers' Compensation Board and savings in the Workers' Compensation Board and not from Friedland. So let's just be very clear, because Mr Hope and others have a tendency to want to put things in Hansard and then later on say, "See, it happens to be true." It's not true.
Interjections.
Mr Mahoney: Well, read the document. It's absolutely quite clear.
Mr Ferguson: I didn't see it. Show us.
Mr Mahoney: I'll point it out to you later. But it's there.
That was also part of the accord, by the way. There's no disagreement on the $200. The disagreement is in where the money comes from, how it's delivered, who gets it and the use of the de-indexing to fund it when that was clearly agreed to in the accord to go towards the unfunded liability.
The Vice-Chair: On behalf of this committee, I'd like to thank the Canadian Union of Public Employees, Local 255, for its presentation this morning.
WATERLOO REGIONAL LABOUR COUNCIL
Mr Larry Batista: Thank you very much. My name is Larry Batista. I'm the president of the Waterloo Regional Labour Council, and on behalf of the Waterloo Regional Labour Council, I thank you for this opportunity to respond to Bill 165, the Ontario government's proposed amendments to the Workers' Compensation Act and the Occupational Health and Safety Act.
The Waterloo Regional Labour Council represents approximately 20,000 members of over 100 affiliated local unions in the region of Waterloo. You will no doubt have heard or will be hearing from some of these locals individually. Further, we also participate in many regional bodies that help our members, including the Waterloo-Wellington Injured Workers Educational Network.
Because of our participation in the community at large, we have had a chance to see the many differing views about what ails the workers' compensation system and the more controversial views on what to do to fix it. The little academic background that I have would love to state that we have unbiased and objective conclusions in this review of Bill 165, but the worker in me knows that is definitely not true. I am pleased to state that the Waterloo Regional Labour Council will always see the world from a rather subjective point of view, and that is the worker's perspective.
Let me state right off the bat that Bill 165 is a package of compromises that attempts to address some of the more rational employer concerns and some of the more rational worker concerns. It is not the end-all and be-all in WCB legislation. Nevertheless, it does take us much farther along the path to a just and equitable system than most legislation that is being passed in Canada today, so I applaud the Ontario government for introducing this legislation. Unlike the Liberal and Conservative critics, whose unbending and unending attitude gives Neanderthals a bad rap, this government has finally begun to deal with the problems at the WCB in an open and fair and reasoned manner.
Mr Mahoney: Just like this presentation.
Mr Batista: I said it was biased.
Mrs Witmer: And you might as well condemn everybody.
Mr Batista: However, Bill 165 does have some serious flaws that need to be addressed before it receives royal assent.
First, section 8, which amends subsection 51(2) of the act, mandates a doctor to provide return-to-work information, albeit with worker consent, to an employer without first having some kind of determination about whether the employer intends to participate cooperatively with the worker, the doctor and, where applicable, his representatives in the return to work.
Workers are often unaware of employer animosity in return-to-work situations until it's too late. Therefore, any information provided must be used to help the patient's recovery and accommodation through a WCB-approved program. It is absolutely essential that a cooperative environment exist between all parties for successful return-to-work programs to be effective, and this must be made clear in all the legislation.
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Further, the Friedland inflation protection formula as proposed in Bill 165 is inflation protection for the board and not for the workers. As you may well know, the 4% cap or maximum increase per year will cause injured workers to lose out badly in the long term, especially if there is a significant rise in the rate of inflation. Inflation protection at 75% of the consumer price index is tolerable to a point, but to put a 4% cap on the yearly benefit is definitely not acceptable. It is not acceptable to us, to the injured workers' groups, to the OFL or to the business community. There is no reason for the 4% cap to be there, so remove it.
Also, the $200 monthly increase to the lifetime pensions of disabled workers who are unemployed and who were injured prior to 1990 misses a small but completely vulnerable segment of workers. These are injured unemployed workers who are over 70 years of age and missed the increase simply because of their age. This injustice must be remedied.
There is also some fear that this benefit may be clawed back if you end up on social assistance. Language that would affect this kind of legislation is retrogressive, forces those workers in unfortunate circumstances into truly desperate ones and must be removed.
These and a few other flaws that this presentation cannot go into because of time constraints are all fixable, and from what I've seen, this government seems to be willing to listen. I hope it continues to do so. This government listened by doing a few simple things in the proposed Bill 165.
By strengthening and streamlining the return-to-work and rehabilitation provisions, along with increased penalties for non-cooperation, this bill will help put injured workers back in the mainstream of society and will have a significant impact on the business lobby bugaboo known as the "unfunded liability."
Also, by further enhancing experience rating programs which will measure health and safety practices and return-to-work practices in the workplace, this legislation will finally start to punish the transgressors and reward those with good records. It has always been the fundamental belief in the labour movement that true reform to the WCB can only come from really preventing workplace accidents and preventing exposure to hazardous substances. Reduced injuries equals reduced costs equals reduced unfunded liability.
A bipartite board of directors will also do wonders for the system by ensuring that both stakeholders have an equal say in the administration and policy direction of the board.
Finally, the establishment of a royal commission to study the system will deal with the larger issues which have never really been properly addressed. Issues like coverage, universal disability insurance and the board's relationship to other social programs will finally be dealt with in a serious fashion.
Work is the central part of our lives. It's the place where we spend most of our waking hours and most of our energy. More importantly, the status and rewards society attaches to the jobs that we have or do is rightly or wrongly how we judge ourselves, how we measure our self-worth and the primary way in which others see us. When that ends through a workplace injury that is no fault of our own, our sense of self undergoes a drastic re-evaluation. Actually, it is more properly a drastic devaluation.
Speaking from personal experience, a serious workplace injury literally and figuratively forces us to become injured workers: workers who are valued less by their employer. If you are not fired before the injury is reported, you may be given some meaningless task that has no consideration of your capabilities. We are valued less by our coworkers, who criticize and further devalue the work that we do, and valued less by society, because we are a burden and cannot contribute in a meaningful way. Add to that the sense that you are an abuser of the system if your injury is not a visible one, like a herniated disc, and you have some sense of where an injured worker gets to quickly on the self-esteem chart. We become suspicious of everyone, even those that are trying to help us.
It is time that some legislation allay this paranoia. It is time for legislators in Ontario to put back in some small way the self-esteem that workers have been deprived of as a result of workplace injuries. Bill 165, with the amendments as described in the attached appendix, which was kindly supplied by the OFL, will go a long way in restoring workers confidence in themselves and in this government.
I thank you for this opportunity to air my council's view on Bill 165 and I look forward to answering any questions you may have.
Mr Fletcher: Thanks, Larry, for the presentation. I'm going to ask the same question I asked earlier about the role of the worker's physician when it comes to getting back to work. One presentation said they should have a committee that can determine whether work is suitable for an injured worker returning to work. I'm just wondering, should the worker's physician also have a role in that, determining whether or not work is suitable for a person returning to work?
Mr Batista: I think it's absolutely essential for the physician to be involved. If the physician is not involved, especially if it's a non-union environment, you may very well have the parties co-opt the worker without his really wanting to be there. So it's essential that someone who knows about the ergonomics of the situation and the actual physical parameters of the job that the worker is undergoing be there to help the worker understand just exactly what they're going through.
The Vice-Chair: Further questions? Mr Mahoney.
Mr Mahoney: To avoid being accused of being a Neanderthal, I'll turn it over to Mr Offer. He has a question.
Mr Steven Offer (Mississauga North): Well, thank you very much. Question: What does "definitely not acceptable" mean?
Mr Batista: That means definitely not acceptable.
Mr Offer: So if the government goes ahead with this bill with the Friedland formula, with the cap, this bill is definitely not acceptable to you and you will oppose it.
Mr Batista: That's absolutely correct.
Interjection: And the OFL.
Mr Offer: And the OFL?
Mr Batista: Actually, there have been circumstances in which we have opposed the OFL position, and that may certainly be the case.
Mr Offer: Okay.
The Vice-Chair: Mr Mahoney.
Mr Mahoney: Mr Chair, you know I couldn't stay out of this. Your statement, "It is not acceptable to us, to injured workers' groups, to the OFL or to the business community."
Mr Batista: That's right.
Mr Mahoney: There seems to be some pretty broad agreement there. Are you aware that the OFL, represented by Gord Wilson, was on the Premier's Labour-Management Advisory Committee, along with the business groups, and that they agreed to Friedland?
Mr Batista: I'm well aware of that. I'm also aware that they've had to make some compromises, and I'm also aware that injured workers' groups are in opposition to that particular formula.
Mr Mahoney: Absolutely. That's clear, that they're in opposition to it. My point, though, that I'm having some trouble with is that, as Mr Offer has pointed out, you've said that the 4% cap is "definitely not acceptable," which means if it remains in the bill you would urge your friends on the government side to vote against the bill or to withdraw the bill. That's what I determine you to have just said, and you're saying that it's not acceptable to you, to injured workers -- I agree -- it's not acceptable to the OFL. How can it not be acceptable to the OFL if Gord Wilson himself was part of the agreement at the PLMAC which imposed Friedland? Never mind what they did with the money. It imposed Friedland, including the cap.
Mr Batista: Are you suggesting that Gord Wilson was by himself the only person who had a say in the formulation of this bill?
Mr Mahoney: I didn't say that at all.
Mr Batista: Well, then, what I'm telling you --
Mr Mahoney: I didn't say that at all. You have said in your brief the OFL is opposed to the 4% cap as part of Friedland.
Mr Batista: That's right, and Gord Wilson and the OFL are opposed to that 4% cap. Even though the bill went on to legislation, they still clearly state their opposition to the 4% cap.
Mr Offer: The Waterloo Regional Labour Council is against the bill.
Mr Mahoney: As Mr Offer points out, your labour council is against Bill 165, and we appreciate you coming forward and saying that.
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Mrs Witmer: Larry, I'm glad that you do recognize there is compromise within the bill. You indicate that some of the employers' concerns are rational and some of the workers' concerns are rational and this bill is attempting to address that. Personally, I guess, that's refreshing. I've always believed in compromise as opposed to bashing my opponents, and I'm glad that you recognize it. Thank you.
Mr Batista: You're welcome.
Mr Mahoney: Sounds like a Neanderthal to me.
The Vice-Chair: I thank the Waterloo Regional Labour Council for their presentation this morning.
RICK CORIN
JASON MANDLOWITZ
The Vice-Chair: I call our next presenters, M.C. Warren and Associates Inc. Could we could keep the banter down just a touch.
Mr Mahoney: Banter?
The Vice-Chair: The banter.
Good morning and welcome to the committee. You'll be allowed up to 20 minutes for your presentation.
Mr Rick Corin: We wish to thank you, Mr Chairman and members of the standing committee, for the opportunity to speak on Bill 165. My name is Rick Corin. I represent Freightliner of Canada in St Thomas. With me are Ms Thelma Riddell of CAMI Automotive in Ingersoll, Mr Steve Deegan of Cara Operations in London, Ms Kelly Byrnes-Cheong of Sarnia General Hospital and Mr Ira Downer of Dow Chemical Canada Inc, also in Sarnia. I will make some general comments on Bill 165 and Mr Jason Mandlowitz of M. C. Warren and Associates Inc will then address several specific issues in Bill 165.
Employers support most of the fundamental principles of workers' compensation articulated by Sir William Meredith. We are concerned, however, that the original intent of workers' compensation has been lost in recent years. The current workers' compensation system has broadly defined "accident," created an unnecessarily adversarial environment and expanded costs tremendously. We are concerned that through Bill 165 the WCB will continue to impose a significant financial burden on current and especially on future employers in Ontario and not significantly improve opportunities for injured workers to return to work, obtain modified or suitable work or receive quality rehabilitation services. We are concerned by many of the other changes to the act which are proposed by Bill 165.
We are concerned by the government proposing to allow itself to exact policy direction for one year after proclamation of Bill 165. This violates the Meredith principle of an arm's-length, independent adjudicative and administrative function, and must be deleted.
First and foremost, we strongly oppose any tampering with experience rating. Despite the introduction of an amendment to section 28 of Bill 165, we believe that tampering with the merit system will result in negative consequences. Employers will certainly interpret changes to experience rating to be nothing more than an insidious attempt to gouge additional revenues.
The intent of experience rating is to reduce both the frequency and cost of workplace injuries. Since its introduction in the early 1980s, experience rating has proven to be extremely successful. The result has been that both frequency and duration of lost time have gone down significantly. This trend should be encouraged and allowed to continue by retaining the current experience rating plans. Retaining experience rating unchanged is therefore not a difficult public policy decision.
Reducing the unfunded liability is a much more difficult exercise, one which needed to be addressed but is missing from Bill 165. Most other Canadian jurisdictions are taking bold actions now towards the unfunded liability. Ontario cannot be the outsider at this time. De-indexation of the act would be the type of initiative which would aggressively attack the unfunded liability situation. As a result, we support the application of the Friedland formula to all injured workers.
The workers' compensation system must balance, as Meredith attempted to do, the needs of workers and employers. This requires ensuring fair and adequate compensation for injured workers, dispensed as quickly as possible, and a financially viable system for which employers would be held financially responsible. This can only be accomplished with the inclusion of the PLMAC's financial responsibility framework in the purpose clause to Bill 165.
We submit that Bill 165 has two fundamental failings. It fails to make any significant contribution to the existing act. It is poorly written, poorly defined and unacceptably vague in its intent. Further, it fails to provide a sound bridge between the universally recognized shortcoming of the existing system and a new direction which has stakeholder support.
Bill 165 will succeed in compromising the work of the royal commission and imposing significant new administration burdens on the WCB.
I will now turn the presentation over to Mr Mandlowitz.
Mr Jason Mandlowitz: In the time remaining, I intend to address the purpose clause, disclosure of medical information pertaining to return to work, and governance.
We first want to acknowledge the over 60 companies who have contributed to and supported this submission and point out that a number of them are with us in the room today, not just at the table but behind me as well.
As Mr Corin has already indicated, we support many of the perspectives already put to this committee by the employer community. We support in the strongest possible terms maintaining the current experience rating programs now in place in Ontario. They have proven to be successful vehicles for employers to control costs through effective return to work. The efficacy of these programs has been confirmed by a variety of WCB studies, internal and external.
We support the application of the Friedland formula universally. We support deleting from Bill 165 any reference to government policy directions to an arm's-length, independent agency. We are concerned with the continued growth of the unfunded liability, which will directly increase annual assessment rates for current and future employers.
In 1994, based on the average assessment rate for schedule 1 employers, the unfunded liability was about 27.8% of the target assessment rate. The 1994 target rate was set by the board at $3.20. Without the unfunded liability levy at all, it would have been $2.31. Since 1990, assessment rates have experienced a net reduction in new claims costs and a spiralling increase in charges for the unfunded liability. The implications are obvious, both to current employers and to those seeking to establish new enterprises in the province. If these costs are unduly burdensome to future employers, then the WCB is technically in violation of section 116(1) of the act.
The government has indicated that the combination of Bill 165, addressing short-term issues, and the royal commission, addressing longer-term issues, represents an important step forward for future reform of the workers' compensation system in Ontario. Bill 165 should not be regarded as a quick fix. It is neither quick nor a fix. Bill 165 fails to articulate either a comprehensive set of principles or a clear vision for reform of workers' compensation.
It is difficult to understand the thinking of the government on a number of issues, including the need for a one-year policy direction authority. If the government had published a background document to Bill 165 which explained its intent, stakeholders would have been greatly assisted in their efforts to present to this committee.
Bill 165 will actually complicate the process of reforming workers' compensation. The royal commission will be reviewing a moving target, changing as a result of the work of the WCB transition team and implementation of Bill 165, should it be enacted. The implementation of Bill 165 should be a matter of great concern to this committee.
If the government and this committee enact Bill 165, you will be dumping on to the WCB, an agency already having difficulty administering the current act, a new and ill-timed challenge. The impact of having to implement Bill 165 now will add new costs to the system, require internal human resource reallocations and reduce service providers for injured workers and employers.
You must understand that your work is only the tip of the iceberg. While you deal at the level of broad legal and adjudicative concepts, these must be given life and meaning by the WCB administration. The WCB must first understand what the Legislature intended in these changes and then consult and communicate with stakeholders, draft new internal policies, obtain approval from the board of directors, train adjudicators, amend all operational policy manuals and so on. Implementation of your recommendations to the Legislature will require a substantial length of time. Implementation of the proposed experience rating plan alone could easily commence no earlier than 1997.
You will not be fixing the system overnight. Changes to the workers' compensation system take time. Only recently has the WCB begun to effectively address the case backlog for determining non-economic loss awards provided in Bill 162 some four years ago. It took the board virtually nine years to complete a new form 7 and form 6. How long would it take the board to consult and complete a new release of medical information form for return to work?
In 1989, the WCB indicated it would initiate a new revenue strategy, including employer reclassification, and some of that has already been done. But the entire strategy was initially cited as being completed in 1993. That schedule has already been amended to 1995. Even that date is now in question. We ask you to consider very carefully whether in fact the WCB can at this time undertake the type and extent of implementation which would be required of it by Bill 165.
For these reasons, we believe that Bill 165 is ill-timed and should be stayed until the royal commission has completed its work and provided a report to the government of the day. We are quite prepared to work with the current act until the work of the royal commission has been completed.
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With respect to Bill 165 itself, we wish to briefly address several issues.
We submit that the purpose clause in Bill 165 is inadequate and must reflect the true purpose and object of workers' compensation legislation while remaining true to the principles established by Meredith. No one doubts that the act is a benefits document, but great attention is also devoted to funding issues. Accordingly, we believe the financial responsibility framework agreed to by PLMAC should be added to the purpose clause. This would not be unprecedented. Page 12 of our submission provides the full text of the purpose clause enacted in 1993 by the Legislature in the Yukon. It addresses issues of fair and adequate compensation, rehabilitation, the solvency of the compensation fund, fair employer assessments and even other issues.
Appearing before the committee on August 22, the deputy minister indicated that a purpose clause had to answer the question, "Why do we have this legislation?" We submit that the answer to this question rests from the historical perspective with Meredith and from a modern perspective with fiscal responsibility. Obviously, legislators in the Yukon were persuaded by this argument and we believe it will become the wave of the future for all WCBs across the country.
Medical information: We are concerned that the proposed subsection 51(2) of Bill 165 will impede immediate and successful return to work. Bill 165 limits the disclosure of medical information to physicians only, yet the current section 51 in the act allows for medical reports to be submitted to the WCB by a broader set of health care providers. We recommend that the committee review this matter carefully.
To expedite timely return to work, we recommend that subsection 51(2) be amended so that medical information for return to work would be non-diagnostic, focus exclusively on worker capabilities, be reported on a standard form following stakeholder consultation, and be required as a matter of law without the need for worker consent. The success of return-to-work programs rests with the workplace parties who can act in good faith. This approach is working successfully today in many Ontario workplaces.
Governance: Bill 165 requires some clarification on the issue of the board of directors. A reading of the proposed subsection 56(1) allows for the WCB chair to also be a director on the board of directors. We believe Bill 165 intends the chair to be a separate member of the board of directors. This can be corrected by adding the word "and" after the proposed paragraph 56(1)4 of Bill 165. Further, Bill 165 provides no indication of what the role of the chair would be. We recommend that Bill 165 add a section detailing the duties of the chair, which would reflect PLMAC discussions.
To ensure that the WCB administration is represented at the board of directors for the purpose of providing insight on implementation and policy issues and to chronicle board of director decisions to ensure accurate and timely responses by the WCB administration, we recommend that the president be added as a non-voting member of the board of directors. Statutory language from Manitoba, Alberta and British Columbia which already does this is provided for your consideration in our submission.
Finally, we recommend that Bill 165 establish that board of directors' meetings require a quorum of seven voting members, with at least one from each of the stakeholder communities.
Duties of the board of directors: Bill 165 and the act use the term "board" on a number of occasions. Section D.5 of our submission indicates why this is a problem and recommends the committee specify during clause-by-clause review that "board" should refer to WCB administration, while "board of directors" should be substituted to refer to and mean the corporate entity.
Ontario is one of three jurisdictions which fail to define "board" in the definitions section of the act. Manitoba defines "board" and "board of directors," and we submit that this committee should support the Manitoba model for Ontario. This may not appear to be a significant issue when compared to pension enhancements and the Friedland formula, but Bill 165 is unclear in many instances, leading to confusion as to whether the use of the term is intended to refer to the administration or the board of directors. To ensure proper accountability, this issue must be completely clarified. For example, is it the administration or the board of directors who will be charged with the responsibility for ensuring that medical and scientific advances are incorporated in policies and benefits? Which body is intended to have the authority to receive medical reports? Which body is intended to have final say respecting interpretation of the act? Bill 165 refers to all of these by using the term "board."
We are also aware that this has been an issue of some concern to staff at the Ministry of Labour and recommend it be addressed during clause-by-clause review.
Thank you for the opportunity to present our views to you today on Bill 165.
The Vice-Chair: Thank you. Just over a minute each. Mr Mahoney.
Mr Mahoney: Do you want to ask that?
The Vice-Chair: Mr Offer.
Mr Mahoney: It's okay. With only a minute, we had a couple of things. We wanted to discuss the quorum requirements that you're suggesting, because the change in the act goes from requiring a majority to requiring seven. The way it's laid out, you could in essence have seven labour representatives making a decision without a management rep there, the way that you can interpret this. I don't know that your amendment goes far enough to ensure that this could be protected, because you could have six and one under your amendment, counting WCAT etc, etc. So that's one concern.
I'm very interested in your medical analogy, however, and we heard this from a lot of labour groups. I think you've come up with wording that makes sense, that it would be non-diagnostic, focused exclusively on the worker capabilities reported on a standard form following all-stakeholder consultation. That would in essence "demedicalize," the term that was used yesterday, this whole process, and should satisfy the concerns of anyone around rights to privacy and that type of thing. So I commend you on that.
I don't know if you have any comments in relationship to either of those two issues: the quorum or any additional remarks on the medical aspects.
Mr Mandlowitz: The principle we're trying to establish in the quorum obviously is that a majority is required. As we added it up, there were 13 members and seven as a majority. What I think we've said in our submission is that if you have three different stakeholder groups -- employers, labour, and the public, whoever they may be -- you'd have a total of seven, with no less than one from each of those.
Mr Mahoney: Yes, which could be four threes.
Mrs Witmer: Thank you very much for an excellent presentation. I think you've hit the nail right on the nose when you say on page 2 that this bill fails to articulate either a comprehensive set of principles or a clear vision for reform of workers' compensation, and I know that's the concern that many people do have.
You also express your concerns about the fact that maybe we're putting the cart before the horse: We're dealing with Bill 165 first, which is a quick fix, and then we're going to focus on the royal commission. Do you want to expand on that further?
Mr Mandlowitz: It's very confusing, I think, to have two processes which may be very parallel in practice in operation. When one reads Bill 165 initially and one does not have regard from a practical perspective of the implementation implications and one is naïve and knows nothing about the process, then the criticism may be unaccepted. But the reality is we all know that it takes years and years to implement any individual change to the act. Bill 162 is an example of that.
It's our view that we can't have change at the same time as a royal commission is reviewing the system in its essence. We can't be tampering with some of the essence of funding through de-indexation at the same time the royal commission is trying to put that in a broader context, looking not one or two years down the road but a number of years down the road.
Ms Murdock: Thank you very much. After listening to presentations for a week and two days I thought -- you know, after a while there's some repetition, shall we say. I didn't really think that I would hear something new, so I'm really glad that I have in this one, and it's on your governance section, on paragraph 56(1)4. From that, in your first paragraph, am I understanding you to mean that you consider this person could be one of the people who are already from either management or labour side?
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Mr Mandlowitz: I'm suggesting that's a possible way one would read subsection 56(1) in Bill 165. It lists five members of the board but it doesn't indicate clearly that it's inclusionary. What we're suggesting is, by putting "and" in after "two vice-chairs," it would be very clear because you're adding, in addition, a chair.
Ms Murdock: "The board shall be governed by a board of directors composed of the following members."
Mr Mandlowitz: Yes.
Ms Murdock: 1, 2, 3, 4 --
Mr Mandlowitz: And 5.
Ms Murdock: -- and 5, each of them being separate.
Mr Mandlowitz: That's right. I think it's everyone's intent that they will all be separate. I'm suggesting that's not the way I read this with a particular hat on. I think we all have the same goal. I'm suggesting the "and" would clarify it.
The Vice-Chair: I'd like to thank M.C. Warren and Associates Inc for its presentation this morning.
CHATHAM AND DISTRICT LABOUR COUNCIL
Mr Aaron De Meester: My name is Aaron De Meester, president of the Chatham and District Labour Council. I want to thank the committee for allowing me this opportunity to speak today.
This is going to be a brief submission because I do not think it necessary to reiterate from my colleagues of other labour organizations and unions. They no doubt will do a thorough and commendable job of informing you of labour's concerns with Bill 165. However, I will present to you my concerns in order of descending importance.
Starting with subsection 148(1): I strenuously object to using the Friedland formula to index pensions, for obvious reasons. It defeats significantly the principle of protection and economic fairness for 134,000 injured workers. At 4% inflation, the formula will only protect half of their pension. If inflation exceeds 8%, the indexing will protect less than half that figure. Take an example of a young worker injured at the age of 20, collecting a pension for 45 years, until future earnings loss payments cease at age 65. At even 4% inflation, that worker will realize an erosion of 60% in the final years of entitlement.
Section 43: I am indignant that there is no proposal to restrict the practice of deeming. These phantom jobs are invented, then are used to reduce through deduction future earnings loss pension calculation. A great injustice is perpetuated by this miserly and unfair practice. This section should be amended to exclude the practice of deeming.
Section 51: I am opposed to this proposal, which would give to the employer knowledge of intimate details of workers' health. Workers should have the right to privacy. While the phrase "with the consent of the worker" would appear to protect workers, it in fact provides little comfort. Workers, especially in a non-union workplace, are often intimidated by management. If a worker withholds consent, will he or she be accused of not cooperating? This proposal comes from the employers who seek to frustrate workers' claims and interfere with, not help, vocational rehabilitation. I strongly advise that the proposed amendment to section 51 be deleted.
Section 53, dealing with rehabilitation: This section has been amended to provide board assistance to employers with vocational rehabilitation. Employers have obligations under section 54 to assist injured workers. The board's role is to insist that they fulfil their obligations. Injured workers need rights to vocational rehabilitation, not employers. I oppose the addition of the word "employer" to subsections (1), (3) and (9). These proposals should be deleted.
Also, in subsection (12) the wording has been changed from "shall" assist the worker to search for employment for a period of up to six months to "may" assist. I recommend that the present wording be retained. It is next to impossible for injured workers to find employment. The North American free trade agreement and permanent plant closures have contributed to job loss for many Ontarians, especially in higher-hazard industries where many injured workers are no longer able to work. What is an injured worker to do if his plant closes? Under the present act, the board has an obligation to assist for six months. The proposal would make future assistance optional.
Dealing with subsection 132(2) on the question of unfunded liability: If the board's fund has sufficient moneys in it to pay for all future pension obligations, it is said to be fully funded. If it has more than enough money to pay these obligations it is said to have a surplus. If it has less money than it needs to pay these obligations it is said to have an unfunded liability.
What does this mean? Is the unfunded liability a problem? I submit it is not. If the Ontario economy were to completely collapse tomorrow and the board were to receive absolutely no income in future years, the unfunded liability would be a problem. All pension moneys would have to be paid out and there would not be enough money to pay for them. But this is not of course the case. Ontario businesses will remain open and will continue to pay assessments.
Is the magnitude of the unfunded liability a problem? An unfunded liability of some $11 billion seems like a lot of money, and of course it is, but the board has capitalized reserves of $6 billion. This is a lot of money in the bank. I'm just going to change my numbers now, and I'd like to use the figure of $100,000 rather than $110,000 and $37,000 instead of $60,000. There's a typing error here, I believe. To make a comparison, if you had a mortgage on your house and you had $37,000 in the bank and a steady income, you would not be overly concerned about your future ability to make your mortgage payment, would you?
I believe the employers are using the unfunded liability in the same way they use the federal deficit: as a way to frighten people into thinking that social programs must be forfeited. The cause of the federal deficit is the same as the cause of the unfunded liability. In the past, corporations have not paid their fair share of taxation, so the federal deficit has increased. The same is true for the unfunded liability. Corporations have not paid sufficient assessments in the past to cover future obligations.
Are the employers who are complaining loud and long about the current unfunded liability proposing to pay more money into the board's fund to ensure full funding? No, they are not. Rather, they seek to cut pensions and other entitlements through the Friedland formula, which erodes indexing.
On the subject of occupational diseases, the reality is that employers at present are not paying for much of the cost of the workers' compensation system because they only pay a tiny fraction of the actual numbers of occupational disease. Because of long periods between being exposed to harm in the workplace and the time people actually get sick from occupational disease, lack of knowledge of the hazards of chemicals and the fact that many diseases have a variety of causes, both workplace and non-workplace, few WCB claims are successful for occupational disease.
Enormous effort on the part of workers and their representatives only increases those numbers by a small amount. Since claims are not established, employers do not pay for them. I believe the only way employers will be compelled to pay the cost of occupational disease will be if its costs are assessed to industry on a statistical basis. For example, if the universal disability plan agency decided that, say, 5% of all cancers were work-related, then 5% of the costs of all victims of cancers would be assessed on industry.
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I'd like to conclude by offering for your contemplation an actual case involving an auto worker in Chatham. As I told you earlier, that's where I'm from. In 1991, Jim Hackett, aged 44, was working in a section of the factory which produces crash sensors to control air bags. One day he fainted and was taken outdoors in an effort to regain consciousness. The plant nurse and the plant manager were alerted and attended the incident, at which time the manager admonished the nurse to report that the incident was not work-related. Jim went off work and his condition of dizziness and weakness continued. Jim eventually was sent to a pulmonary specialist at St Joseph's Hospital in London, Dr Tom Woods. Dr Woods's diagnosis revealed that Jim was suffering the effects of isocyanate poisoning.
Jim submitted a claim to the WCB after learning of his condition. The employer denied that there was any isocyanate in the workplace, and after a WCB investigation, the board also denied the claim. Jim, knowing full well that isocyanates were used extensively in the production process, challenged the company's statement. He met with the company nurse who then admitted verbally that yes, isocyanates were used and suggested he undergo a controlled test exposing him to isocyanates in a lab in London. He was told by the specialist that if he underwent this test it could kill him. He then talked to the company nurse again about the test and she admitted jokingly that was a possibility.
Jim appealed the board's decision because of the evidence of uncontrolled isocyanates was so overwhelming. Today Jim's case is still being denied. That's my submission, ladies and gentlemen.
The Acting Chair: Ms Witmer, you're first.
Mrs Witmer: No questions.
The Acting Chair: Thank you. Mr Hope, please.
Mr Hope: Good to see you, Aaron. Thanks for coming before the committee from Chatham. I believe it's important that you brought up the issue of isocyanates. I know we also have an issue of sick building syndrome that's out there with the federal workers who are a part of it.
Aaron, one of the problems in our community is the issue we were talking about, experience rating, and the issue of workers being put on S and A programs or being put on modified or light-duty programs in the workplaces, which help the so-called safety records in our workplaces, and how they pit worker against worker. Have you ever seen these issues in your own workplace or even throughout the labour council, where safety records are being pushed on to employees which pit employee against employee to make sure that somebody doesn't take a sick day off or go on workers' compensation?
Mr De Meester: Yes, Randy, that's very prevalent in Chatham. My personal experience is at Siemens Automotive, where I work. They have an ongoing program there where if there are a million man-hours of time accumulated without an accident, without a lost-time accident, they will award some cash or award some trips or something of this nature. Of course, what this serves to do is to somewhat intimidate workers from taking any time off or putting a claim in to WCB for some injury or some chemical hazard that has resulted in disease. If that does happen, they are definitely encouraged, rather than go on WCB, to go on S and A or "We'll give you a job out in the warehouse" or something like that, whereas in fact they should be on WCB because it's definitely work related.
Mr Hope: Some of your conversations in the community -- and I know in our community we're much closer to supervisors and foremen in our work areas. Through the experience rating program, are supervisors, to the best of your ability and best of your knowledge, being governed on their pay increments, on their work-related accidents in their areas? For instance, if there's an accident, there are demerit points taken away from them as a supervisor, which then doesn't allow them for pay increases that are there in their areas or in their workplaces.
Mr De Meester: I'm not aware of that type of incentive at Siemens, but I certainly have heard about it at other places of work.
Mr Mahoney: I take it from this -- although I can't find the words to say it, so I'll have to ask you. I take it from what you've said here that the Chatham District Labour Council and you personally are opposed to Bill 165 in its current form.
Mr De Meester: To answer your question, I think Bill 165 represents the best piece of legislation we've seen yet on workers' compensation. However, we do believe there are areas that can be improved. We certainly are not rejecting it in its entirety. What I am seeking to do here today is to specifically point out where I think there is room for improvement. It is overall certainly in the right direction.
Mr Mahoney: I just am having some trouble. Your pages aren't numbered, so I'm not sure what page it is, but where you make the reference, "Are the employers who are complaining loud and long about the current unfunded liability," etc etc, "willing to pay more money?" It's the identical wording in the document on Local 446, which we heard earlier this morning, wherein they support eight of the sections of the bill; they're opposed to 17 out of 25 substantive sections, yet they still support the bill.
What I'm having some difficulty -- when I compare your document with theirs, when I read you saying, "I strenuously object to using the Friedland formula" -- "I am indignant that there is no" proposal regarding "deeming" -- "I am opposed to the proposal" on the medical information -- you're very clear here that you are opposed to these sections of the bill. The bill does not go far enough in your estimation, it goes too far in other ways. It's not the employers, to correct your statement, who seek to cut pension and other entitlements through the Friedland formula, which erodes indexing, it's this bill; it's this government that's doing that.
I just don't know how you can say you support the bill. I can see that you would agree with some parts of it; I have no difficulty with that. But how can you support the bill when it fundamentally goes against everything you've said in your document?
Mr De Meester: I disagree with your statement when you say it fundamentally goes against it. That's not the case at all. I appreciate you telling me that I've been very clear and I used the words "strenuously" and "I am indignant." Yes, I am, at the way --
Mr Mahoney: But not indignant enough to oppose the bill.
Mr De Meester: No, no.
Mr Mahoney: Just mildly indignant.
Mr De Meester: Let me finish, please. I thought I made myself clear. I oppose parts of the bill and hope that those parts would be improved, but I will say again that this bill represents the best piece of legislation I've seen so far, from any government, in an attempt to strike a compromise between business and labour. These are our concerns.
The Acting Chair: Thank you, Mr De Meester.
Mr Mahoney: So you're not really indignant.
The Acting Chair: Thank you very much for coming down today, the Chatham and District Labour Council, and presenting the views of your council. The committee thanks you for your time and I'm sure you'll be following our deliberations as they go on.
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ACCURIDE CANADA INC
Mr George Dendias: My name is George Dendias. I'm the human resources manager for Accuride Canada Inc. I'll give you a brief description of the organization. We're the only manufacturer of steel truck wheels in Canada. We are located in a plant which measures approximately 500,000 square feet in the southeast end of London, and we're considered to be the world's largest manufacturer of steel truck wheels. We employ approximately 900 folks and we've been part of the London community since the late 1800s in one form or another.
Let me say at the outset that we accept the notion that reforming workers' compensation is neither going to be easy nor lack its moments of controversy. I think being part of some of these presentations here, from an audience perspective, I've heard some of that. Therefore, if you accept the obvious that whatever the reforms, you'll be faced with a difficult task and attract a large number of critics, I suspect that what you should wish to do is concentrate on doing the right thing, I guess I should say, as opposed to the popular thing.
We congratulate the government on its intentions to fix the workers' compensation problem, that is, offer Ontario a well-managed and self-financed system which quickly compensates and rehabilitates employees for work-related injuries. However noble the intentions of the government, these amendments and the acrimonious process which brings us here today add more confusion, not less; encourage more partisanship, not less; and create a significantly larger deficit and put into question the reliability of the system for employees and employers.
The current system with the amendments this government wishes to enact are so cumbersome that I challenge you to find an average employee or employer who even understands how workers' compensation works. So-called experts and consultants are springing up everywhere to help the layperson cope with rules, regulations and practices of the board. The service infrastructure is an indication to us that the board is fat on procedures and short on results. Its hallways, in our view, are clogged with bureaucratic cholesterol.
The government's amendments should seriously consider making this process simpler and removing as much of the additional costs which the current complex structure absorbs. We urge the committee to recommend making the system simple so that it becomes easier to administer and more cost-effective. I'm going to be talking about some numbers here which may differ from some others. I think it's important to say that if the numbers are off a little bit from what others have spoken to, it's to the philosophical issue that I want to, I guess, make some significant comments.
The current Workers' Compensation Board deficit is approximately $11 billion. The government's own projections on the deficit of the Workers' Compensation Board is that it will reach approximately $13 billion with some of these amendments in place in the year 2014.
The government is also proud of the fact that its reforms will save $18 billion. I'm delighted that this branch of government is not given charge of the mathematics curriculum for my kids in school. I'd like you to ask the minister on my behalf how it is that you can start with $11 billion, save $18 billion, and end up with $13 billion. Perhaps the math they teach in the school of politics is different than what we're encouraging our kids to learn in school.
The point is that these amendments will add another $2 billion to an already burdensome deficit. Who will pay when the system no longer can? It is unfair for any government to burden a future generation of employees and employers with this kind of unforgiving dilemma. A bankrupt system will treat both its clients, the employees who receive the benefits, and its shareholders, the employees who make the contributions, callously.
Let me make a brief comment on the bipartite composition of the board's directors. Clearly, this type of structure reinforces the unfounded notion that workers and employers of Ontario want to be governed by a group of advocates. Just as a citizen would prefer to be governed by a government without connections to special interest groups, so must the board's directors be chosen for their impartiality.
Let me now rhetorically turn to these amendments and find the portion which speaks to the responsibility for ensuring that business does not go out of business financing the WCB. We say "rhetorically" because this portion does not exist in any profound or directive fashion.
The main source of revenue for the Workers' Compensation Board is employer funding. What if enough employers can't pay? These amendments must more directly and ardently speak to the board's responsibility of ensuring that its backers, the employer community, can continue to fund the system while still remaining competitive. It will be too late if the board acts to keep the system viable after business becomes non-competitive. The board should be mandated to protect the employers' competitive ability to fund the system.
Our presentation to this point has asked you to consider the intent and practice associated with the amendments and current procedures of the board. However, in our view, everything else pales in comparison when you review the government's changes to the issues of re-employment and experience rating.
What the heck is the matter with an experience-based format where, as an employer, you pay according to how much you've improved your safety record and reduced your workers' compensation costs? The amendments will allow the board to intervene and create an uncertainty in a process which is simple, direct and successful. As a prudent employer in London, we strive for certainty of costs. Short of having certainty of costs, we want to be able to influence costs so they can become more certain. The amendments will create an air of uncertainty which may not have any bearing on our ability to be a safe employer. Why is this necessary or even desirable?
Have you ever started watching a sporting event in the middle and you didn't know who was ahead? The first question you ask yourself is, "What is the score?" People want to know where they stand. The amendments on the current experience-based system will make the score inconsequential.
When is an employer free to terminate the employment of someone who has been injured and returned to work? The answer: when he quits. Decisions on re-employment end employment continuance smack of subjective ineffectiveness. If the rules on this issue are going to be draconian, at least make them clear and specific. We suggest that the rules be changed to ensure that employees are not disadvantaged because of work-related illness or injury. However, if an employee's continued employment is not related to his injury or illness, an employer should be free to terminate the employment according to the same labour laws which prevail for all other employees. The current practices associated with this issue and the increased powers that the amendments will give the Workers' Compensation Board will encourage employers to jump from the frying-pan directly into the fire.
When I began this presentation, I stated that the government's intentions on changing the current workers' compensation system is laudable. The government should be encouraged to continue its efforts to find a balanced solution to our current workers' compensation crisis. We suggest it's still possible, in this day of political opportunism and 15-second sound bites, for us to develop practical solutions with the good intentions this government has initiated. Once again, on behalf of Accuride Canada Inc, we thank you for the opportunity to speak with you today. I hope our presentation suggests that your work is not complete and that you'll give some consideration to our recommendations.
Mr Ferguson: Thank you very much, sir, for your presentation this morning. We certainly appreciate your comments where you the laud the government for trying to implement some progressive changes for the board.
I do want to correct -- and I'm sure this is not intentional on your part -- on the second page where you got into the mathematical calculation. Today, the debt is around $11 billion, and it's projected that by the year 2014, if nothing is done at this point in time, the debt will increase to $31 billion. Hence, you get the $18-billion figure. You used the incorrect figures here -- it's not $13 billion; in fact it should be $31 billion -- where you so freely criticize the Minister of Labour. However, I would take it at face value that it wasn't intentional and that it was an error on your part.
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Can I ask you, is your firm in favour of reducing the level of benefits immediately for injured workers? Some companies have appeared before this committee and have suggested that injured workers shouldn't be getting 90% of net pay for benefits, they should be getting somewhere around 85% or 80%. I'd like to know what your firm's position is on that matter.
Mr Dendias: I think it requires more thought than I'm able to give it at this moment, but I think our position should be that employers and employees should be encouraged to return the injured or ill employee back to work. I don't know if 90% does that for the employee. I suspect that it requires a lot more study and perhaps discussions with other folks, but I think the system should encourage people to return back to work as quickly as possible.
Mr Offer: Thank you for your presentation. I want to talk to you about the last page of your presentation where you speak to the changes of the rating system. You asked the question, I think you said, "What the heck is the matter with an experience-based format wherein as an employer you pay according to how much you have improved your safety record and reduced your WC costs?" I think that is a very important question and I think that we're going to explore that a little bit in greater detail as we go on with the bill. What do the changes as proposed by the government mean to a company such as yours?
Mr Dendias: I suppose if you followed my discussion through to the point of knowing what the score is, I think most of us can deal with events if we appreciate that if we do something, something else will occur. When that becomes very ambiguous, when it becomes cloudy, I think that inability to focus on results as a result of current practices causes us to veer, I suppose, from doing the right things.
In circumstances where you could be a very good employer from the perspective of ensuring that you run a very safe operation and then still be penalized as a result of some other event that you can't control, I think that will cause turmoil. It certainly does on a specific day-by-day basis. I suspect that on this type of basis it will even cause greater turmoil.
Mr Offer: And on the experience and merit rating as suggested by the government, there's a clause (d) which says "such other matters as the board considers appropriate." I guess that's about as muddy and fuzzy and murky an area as you'd ever want to get into.
Mr Dendias: Again, business is interested in knowing where it stands. Anything that causes us not to know how what we do today is going to affect the bottom line, how the employees are going to be brought to work, causes us to act in ways that perhaps we wouldn't want to act. Let us know if we do A that B will occur, and we'll do A very well. If we don't know that B is going to occur, if we don't know what it is that is likely to be the outcome of our efforts, it's unlikely that those efforts are going to be focused on the right thing.
Mr Offer: So let us ask the government, what does (d) mean? What does it mean? A lot of employers ask, "What does clause (d) mean?"
The Vice-Chair: Any further questions, Mr Offer?
Mr Offer: What does clause (d) mean?
Interjection: Who are you asking?
Mr Offer: The government. I want to know what it means.
Mr Dendias: I don't know. I guess that's why you're asking the question, because no one knows.
The Vice-Chair: Mrs Witmer.
Mrs Witmer: Thank you very much for your presentation.
Interjections.
The Vice-Chair: Order, please, in fairness to our presenter. Mrs Witmer.
Mrs Witmer: I personally have been very pleased with the calibre of the presentations today and yesterday. We've certainly heard some different points of view and yet reinforcement of points of view that we heard last week in Toronto.
I think that you have made an interesting comment on the first page of your presentation, one that we haven't really discussed within the committee, but that is, we have a system at the present time which is extremely complex. It's not well managed, and unfortunately the average employer or employee doesn't understand how the system works. They have been forced into a situation where they're working with consultants in order to understand the system, in order to deal with the system, and as I've said many times, many of the employees, the injured workers, also use the MPP offices.
I guess the number one concern that we need to address is, how do you implement, put in place, in the province of Ontario a well-managed workers' compensation system that will quickly deal with the injured worker and rehabilitate that individual? What does this bill do to create further obstacles to a quick return to work and dealing with the issue?
Mr Dendias: I'm not sure that we have the time to go into specifics, but I'll tell you --
Mrs Witmer: Just some of the keys. What are some of the keys?
Mr Dendias: Part of what I just said a moment ago: Making the system so confusing that an employer or employee does not know what the outcome of their activities is going to result in causes them to go running, wallets I guess turned inside out, to lawyers, MPPs -- I'm not suggesting you get money -- consultants and others and basically putting the workers' compensation into their more capable hands.
I can tell you, and I take this from personal experience as an employer and employee and also from speaking to many employees on our shop floors, there aren't many people who understand what happens to their claim once they have an injury. They do not know what to do. They do not know who does what it is that they do with it and they turn to experts, either in a unionized facility to an expert who sits on a committee, or we've had employees turn to lawyers. We've gone directly from an employee-employer relationship to a lawyer-to-lawyer relationship, and whatever the outcome is, it's acrimonious because it has been handled by lawyers.
We're adding crud on crud, and at the end of the day you just have this pile of stuff that causes an employee not to be treated fairly, nor does it cause an employer to be treated fairly, because they're removed from the process, it's so complex.
Mrs Witmer: We've had people come in here who are injured workers and I think they're very optimistic that this will be the answer to all their problems. Do you see that there will be any improvements to the system as far as quick compensation and rehabilitation?
Mr Dendias: No, absolutely not.
The Vice-Chair: Thank you. On behalf of this committee, I'd like to thank Accuride Canada Inc for its presentation this morning.
Mr Mahoney: Mr Chairman, could I make a request? This will have to go I think to ministry staff because I doubt if the figures would be available, but as soon as possible I would like to know if the calculations can be worked out as to what level of benefit would result over a 10-year period, applying the Friedland formula, based on the best guesstimates of course of what inflation would be for 10 years.
It was done apparently in the PLMAC process to determine the unfunded liability level, so whatever levels are used by that group could be used here. So my request is that we find out, if an injured worker is on 90% of net income in year one and Friedland applies each year, would that reduce that 90% to -- what? -- 87%, 86%, 85%, whatever, over the 10-year period? In each year, what percentage of that 90% remains? So how much is actually being taken away from the injured worker?
Mrs Witmer: For 10 years?
Mr Mahoney: A 10-year period.
The Vice-Chair: That was noted.
Mr Mahoney: Ten years would be fine.
Mr Offer: I'd also like to get some information based on section 28 of the bill, which adds section 103.1, and get a specific and definite answer as to what clause (d) means.
The Vice-Chair: Noted. Seeing nothing further, this committee stands recessed till 1:30 this afternoon.
The committee recessed from 1200 to 1332.
GARY THOMPSON
JOHN LECHICKY
RICK THRASHER
The Vice-Chair: I call this committee to order. Good afternoon and welcome. You'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd leave a little time for questions and comments. Could you please identify yourself for the record and then proceed.
Mr Gary Thompson: Gary Thompson, manager of staff development, Sun Parlour Home for Senior Citizens.
Mr John Lechicky: John Lechicky, compensation officer for the city of Windsor.
Mr Rick Thrasher: Rick Thrasher, workers' compensation and group insurance for Chrysler Canada.
Mr Thompson: Good afternoon, ladies and gentlemen. The brief presented today, which is before you, the three of us are going to present, but it is a much larger group of employers. Some 78 companies are attached to this brief, who had input through brainstorming and endorse the contents of this proposal that is before you.
This latest package of workers' compensation reforms comes against a backdrop of some rather contradictory statistics. Accidents, both lost-time and non-lost-time, are dropping, from the historical highs of nearly half a million in the late l980s to a 1994 projection of some 350,000. While it is argued that there is more to be done, the results are nevertheless substantial and significant. At the same time, the duration of claims is also dropping. The number of lost-time claimants who have returned to work within the first 30 days of an accident is 71.5%, well above the average figure in the last four years. Return-to-work percentages at other selected intervals have also substantially improved. These programs also reflect the cooperative efforts of both management and labour.
Against these positive statistics is the discouraging bottom line of the Workers' Compensation Board. Last year the board lost $504 million. The unfunded liability continues to increase, despite, I think, the collective and truly the best interests of many employers in the province of Ontario. It remains the considered opinion of those people who have attached their name to this brief that the unfunded liability has put the workers' compensation system at risk.
It is in this context that in the next few minutes we'd like to present some comments on Bill 165. We will not comment on every aspect of the bill, but we will focus in on some rather key elements, which, if enacted, would have the greatest and most detrimental effect to the employers who have attached their name to this brief.
I'd like to turn over the microphone to Mr John Lechicky.
Mr Lechicky: Today I would like to talk to you about the purpose clause that has been enacted by the legislation. I will not review the background of the clause. It is well stated. Everybody here is aware of the PLMAC process in which business and labour undertook to develop this statement of principles to this legislation.
It is, however, our submission that the legislation as drafted does not reflect the joint submission of both business and labour to the government, nor does it reflect the commitment of the government itself. In a letter to the chairman of the Employers' Council on Workers' Compensation dated April 21, Premier Bob Rae said, "A `purpose clause' will be added to the Worker's Compensation Act which will ensure that the WCB provides its services in a context of financial responsibility. This clause will also address the principles of fair compensation and benefits for workers, as well as an enhanced rehabilitation and return to work."
Unfortunately, the bill as it is before you does not reflect this commitment. The issue of financial responsibility, which was at the very centre of the business agenda for reform, has been excluded from the present purpose clause. As a result, references to the purposes of the act contained in other sections of the bill will not allow any fundamental consideration of financial accountability and responsibility as the board and the Workers' Compensation Appeals Tribunal examine proposals for changes in benefits, services, programs and policies.
We are well aware of the impact of this exclusion of financial accountability from the purpose clause. We only have to look at chronic pain. It will be particularly significant when the appeals tribunal considers appeals which break new entitlement ground in the granting of benefits. In doing so, the tribunal is bound to reference only those principles enunciated in the purpose clause of the act, in much the same way as the Labour Relations Board would examine the purposes of the Ontario Labour Relations Act when examining the fundamental purpose of that legislation.
It is our submission that the committee should amend the legislation to reflect the agreement of both management and labour and the commitment made to the business community by the Premier in his letter in April. We suggest that a reasonable wording for the purpose clause is found directly in the PLMAC agreement.
There has been some suggestion that financial accountability and responsibility cannot possibly constitute a purpose of the act. We reject that idea. The Ontario Legislature determines the purpose of any legislation, and if the Legislature determines that financial accountability is a purpose, then that's what it is. In addition, Mr Justice Meredith, who headed the royal commission which brought about the original Workers' Compensation Act, warned that the act was needed because the financial impact of the previous tort system was threatening to drive employers out of Ontario. If it was a purpose of the act 81 years ago, it remains a purpose today.
I'd like to now have Mr Rick Thrasher speak.
Mr Thrasher: The other issue we'd like to address today is that of experience rating. We mentioned at the outset that those parties involved in the preparation of this brief deal with WCB issues for their companies in Essex and Kent counties on a daily basis. They are the ones who see the advantage of the experience rating program first hand, and that is why this group is so disappointed with the proposal to alter the experience rating systems and formulas.
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The present system, reflected in the NEER and the CAD-7 programs, has been successful in its goals. Through experience rating, companies have a direct opportunity to impact their bottom line in WCB costs, and they have done just that. Health and safety initiatives, creative rehabilitative jobs and permanently modified positions are just some of the initiatives employers have taken to deal with the challenge.
The current system is objective, measurable and predictable, and those who do the work and spend the money get the reward of rebates -- simple and straightforward. Those who do not actively pursue such practices find an expensive surcharge tacked on to their assessment. The results have been substantial and give real promise of further improvements. Clearly, many businesses have reacted with enthusiasm and commitment to this challenge.
We would like to highlight just a few examples today from Essex and Kent counties. Number one would be the Sun Parlour Home for Senior Citizens in Leamington, which recently committed $100,000 to purchase 18 state-of-the art mechanical lifts. Without a statement that such lifts would help reduce accident costs, improve the health and safety of its residents and its employees and offer a positive impact on the home's NEER determination, that $100,000 in scarce capital dollars may not have been available.
At the Sydenham District Hospital in Wallaceburg, modified work and back care programs have led to a two-thirds reduction in the claims and an 80% reduction in lost-time days. These improvements were driven by management, who saw the results in the rebates and the objective, bottom-line NEER program.
At my own company, Chrysler Canada, we previously had a program that required employees who required temporary modified work to go home and claim workers' compensation until they could return to their pre-injury job. Experience rating provided the incentive for the company to launch an aggressive modified work program, developed with the complete cooperation of the CAW. The result was that over a two-year period our lost-time frequency was cut by 40% and our lost-time days were down by almost 50%.
Finally, at Thamesview Lodge, the introduction of the NEER has brought about an aggressive modified work program. This program has saved both the employer and the WCB thousands of dollars, and the employer has used the objective dollars and cents argument to convince managers that employees must be brought back to work.
This bill proposes to change that. It would, to use the words of the minister, "augment" the existing programs with a subjective system which would examine the health and safety practices of companies, their vocational rehabilitation practices and their return-to-work practices.
We should also note that the proposed subsection (2) in the government amendments speaks about both frequency and costs, and we have to assume that that is because both criteria are used in the determination of rebates and surcharges in CAD-7. But if it is the intention of the government to change the cost-based formula used for the NEER calculations, we cannot support that change.
We contend that the additional factors outlined in the proposed new subsection (3) can only be adversarial in nature due to their subjectivity. There is no indication who will determine the success of the health and safety practices of the company. We do not know if there will be new WCB employees examining practices at a cost of millions of additional dollars. We don't know if this exercise will be undertaken internally in a climate of labour relations which will vary from workplace to workplace. And we don't know the basis for consideration of the vocational rehabilitation and return-to-work practices and programs of well over 100,000 individual employers. Clearly, any such consideration will be a monumental bureaucratic task for a board which unfortunately hasn't even been able to provide us with a NEER statement for June yet because the board's actuaries have not completed the program of expected cost factors and reserve tables.
We submit that this program would result in many more appeals if passed. Employers who now find themselves with a surcharge at year-end rarely appeal. There are few ways to challenge the results of an objective system. However, under the proposed system appeals would be abundant. No employer will quietly accept a surcharge or indeed a reduced rebate resulting from the subjective determination of the health and safety, vocational rehabilitation and re-employment efforts in the workplace.
We recommend that the committee retain the current NEER and CAD-7 systems, which are widely accepted in the employer community and whose bottom line has been a great success, not just in cost savings but in real proactive prevention programs, return-to-work practices and rehabilitative programs.
Mr Thompson: In some of the presentations to this committee last night, it was outlined that the views presented represent not only Kent county but also Essex county and Windsor proper. In that, I'd like to add just a few comments and briefly touch on some of the aspects of the bill that were not presented on the issues of reinstatement and vocational rehabilitation.
It is our view that sections 10 and 27 of this legislation, which set up new, rather punitive penalties for employers, should be removed or scrapped. Both will increase the adversarial nature of a system which is already suffering from too many confrontations and too many appeals. I would just like to simply remind the committee that in the first four months of 1990, there were 1,600 applications for hearings. In the same period this year, there were more than 4,700.
On the issue of providing return-to-work information, there can be no reason to allow any worker to frustrate a return-to-work transitional work program. At the same time, this bill is placing more demands on employers to do just that. The provision providing the worker's consent should be removed from this legislation.
Finally, on the $200 supplement, it is our submission this should end at age 65. The trigger for the supplement is section 147(4), which is replaced at age 65 by old age security, and the additional $200, if it is required beyond that date, can be provided by the guaranteed income supplement.
With those comments, we would be pleased to answer any of your questions.
Mr Mahoney: The issue around mediation -- maybe you could help me with this -- the legislation proposes that the board will be put into a position to mediate disputes if there's a determination that an employer is not acting responsibly or there are some problems with regard to rehab, that type of thing, and yet, as you point out, section 10 allows the board, presumably adjudicators or case workers, on their own initiative to determine that an employer has violated the re-employment provisions of the act. Section 27 would allow case workers to determine that employers had failed to cooperate in the provision of voc rehab services to workers. What's left to mediate if a decision comes down from either a case worker or an adjudicator that you as an employer have violated these provisions?
Mr Lechicky: Absolutely nothing. The next step is the appeal system. There's no mediation once an adverse decision comes down. The next step for a worker or an employer is to appeal, so there is no mediation.
Mrs Witmer: Thank you for your presentation. You indicated in the section under vocational rehabilitation and reinstatement that your most serious objection here was the two new punitive aspects that were involved in sections 10 and 27. You suggest here, surely if there's an individual employer who's not abiding by the spirit of the law, the board would have the ability to deal with that individual. How would you suggest that employer be dealt with, rather than tarring and feathering all employers?
Mr Lechicky: As it is now, the worker can make an appeal to the compensation board indicating that the employer has not acted fairly. It can be presented by the worker or by the union.
Mrs Witmer: Exactly.
Mr Lechicky: There is a mechanism in place right now.
Mr Thompson: That injured worker has access to reinstatement, the reinstatement hearings branch. Just in the present legislation there are avenues available for an individual who feels their employer is in violation of whatever section in that legislation. Our feeling is that there are options available to them now and that those options are adequate.
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Ms Murdock: My question actually is in relation to your page 3, where you say, "Last year, the surplus of rebates over surcharges was over $100 million." In actual fact, it was over $150 million and the year before that it was $25 million, so it shows, in terms of return-to-work and modified programs, how that system is working. However, the idea when it was initially instituted in 1984 was that the money that would be taken in on surcharges would balance out and offset any payouts. We're now into a position where the offset is $150 million, and from the year before last to last year $25 million to $150 million. If that's any indication of where it's going to go, where is that money going to come from in terms of paying that out to employers, if the surcharges don't equate?
Mr Thrasher: Can I address that? From my own industry's point of view, the target rate for our industry is significantly lower than what we're currently paying. Therefore, we're getting substantial refunds. The move towards our target rate has been directed by the board to be capped at a certain percentage. You can only move so far each year.
Interjection.
Mr Thrasher: Right. But sooner or later we're going to catch up to that rate. This is a temporary thing and we don't want to see changes in the formulas because of a temporary cap on the way in which we move our assessment base. Sooner or later we're going to get to our target rate and at that point assessment should equal surcharges.
The Vice-Chair: On behalf of the committee, I'd like to thank the Sun Parlour Home for Senior Citizens for their presentation this afternoon.
Mr Mahoney: Mr Chairman, could we ask either the deputant or the government to provide this committee with a copy of the letter that's referred to on page 2 from Premier Rae to the chairman of the Employers' Council on Workers' Compensation, wherein the Premier makes a commitment to putting financial responsibility in the purpose clause?
Ms Murdock: I think they submitted it to us last week.
The Vice-Chair: The ECWC package?
Ms Murdock: It was a letter sent to ECWC. They supplied it.
Mr Mahoney: That's great. I'd like it to be tabled separately as an item, with copies for all members of the committee.
ONTARIO FEDERATION OF LABOUR
The Vice-Chair: I call our next presenters, from the Ontario Federation of Labour. Good afternoon and welcome. Just a reminder that you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you'd leave a little time for questions and comments from each of the caucuses.
Mr Gordon Wilson: I want to know if I can pick who gets to ask the questions.
The Vice-Chair: I get to do that.
Mr Wilson: Mr Mahoney would certainly be at the top of my list.
Mr Mahoney: You bet. Leave me lots of time, Gordy.
Mr Wilson: Thank you. My name is Gordon Wilson. I'm the president of the Ontario Federation of Labour. I'm joined by Mr Jim Paré, our director of organization.
I'll be as brief as I can. You have been given copies of our brief, which has our arguments in more detail.
Our organization represents about 650,000 workers in the province of Ontario. I think it's important for the committee to understand that the federation represents more injured workers than any other organization in this country. Bill 165 potentially affects every worker in Ontario and has therefore prompted the appropriate amount of discussion and controversy in our movement and in our society within the province. I know your committee has been touched by the many divergent views during these proceedings.
The labour movement, I want to say right out front, would not have drafted a bill like this one given the opportunity to sit down in a room and simply draft a bill that we thought would address the concerns of our membership and injured workers. But Bill 165 as we currently see it is a reflection of some very difficult bargaining with some of the province's most prominent employers and within the environment of a difficult economic environment.
The bill must be looked at as a total package and not cherry-picked, as some interests are attempting to do in this current debate. This is a package that addresses the concerns of both the poverty of injured workers and those concerns expressed by employers about finances now and in the future, as well as the very important issues of workplace health and safety and return to work.
For workers with disabilities due to workplace injuries, the most serious problem is that of poverty. Prior to the 1989 introduction of Bill 162 there was no obligation on employers in this province to return workers with disabilities to the workplace. As a result of that, over 40,000 workers on small WCB disability pensions whom the board has judged unlikely to benefit from rehabilitation continue to remain unemployed. Thousands of these workers require social assistance and benefits in order simply to live, which speaks to the level of poverty that they endure.
Bill 162 was supposed to be a revenue-neutral bill. It introduced an obligation on employers to re-employ workers who were injured, which should have saved the compensation system millions of dollars. Unfortunately, many employers have ignored their obligation in that 78% of workers who have been out of the workplace for one year still remain unemployed. These workers continue to collect benefits, and statistics reveal to us that the longer a worker with a disability is away from the workplace the less likely she or he is to return to work.
Unemployed workers with disabilities face major income reductions in the WCB's deeming process, and alternative employment prospects are really quite virtually dim. People with disabilities suffer an unemployment rate of over 40% throughout Canada.
Another key problem area in the system is how accident prevention is viewed and responded to. The current system of financial incentives and penalties, known as the experience rating system, encourages employers to challenge entitlement decisions, appeal claims and hide claims. Unscrupulous employers -- that's not all of them of course, but any unscrupulous employer operating in this province can influence an injured worker not to file a claim -- are in turn rewarded by the system in that it doesn't show up as an accident statistic. Experience rating does not penalize employers for claims due to occupational disease nor does it measure good industrial hygiene practices. Ontario's experience rating program does little to reward good health and safety practices at the workplace because it measures exclusively the wrong things.
The subject of the board's finances cannot be ignored either. Today the WCB's financial condition is somewhat healthier than it was 10 years ago. It now has assets which will cover nearly 37% of its liabilities. This funding ratio has improved from 32% in 1984 and will continue to improve if effective health and safety, re-employment and rehabilitation programs and practices are implemented by this bill and the board.
Certain employer lobbyists point out that Bill 165 will result in the unfunded liability rising from $11.6 billion in 1994 to $13 billion in the year 2014. In their calculation, they neglect to mention that their $13 billion is expressed in inflated 2014 dollars and that the funding ratio is actually projected to climb from 37% to 55% in the same time period, if the bill becomes law.
As an aside, I find it curious that these same employers who are so concerned with the unfunded liability do not as well advance a position which says that they assume, as they would with the unfunded liability argument, that virtually every workplace in this province is going to close tomorrow and therefore those obligations must be met -- they don't apply that rule as well to pension programs so that every pension plan in this province would be fully funded.
Does Bill 165 address some of the more pressing problems in the system? As a member of the PLMAC, I can confirm that the legislative amendments address the main concerns which business and labour brought to the bargaining table last March. Contrary to much of the commentary we've seen in the media and at these committee hearings, Bill 165, I can say to you, closely mirrors the content and spirit of the business-labour agreement negotiated by the PLMAC.
For the committee's edification, I just would like to point out that when we reported back to the government, at the government's request, after we had agreed to the package deal, both business and ourselves, we had left two crucial decisions to the government -- the question of whether or not to advance $200 to those pre-act workers and also the question of coverage -- where neither one of us, the employers nor ourselves, could come to an agreement. We left those decisions to government, which it made.
Attached to our brief is a comparison of the PLMAC agreement and Bill 165, which I think, when you go through it, you will see closely mirrors the legislation now before you.
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I would like to say as well that although it is obvious that the legislation's drafters worked very hard to mirror the PLMAC agreement, they have made, in our view, some serious mistakes in the drafting of the legislative language which have the effect of defeating certain intents of the amendments. In the interests of saving time for questions, we've attached an appendix to our brief which contains suggested amendments to a number of clauses in an effort to assist those who will be drafting the bill at third reading.
Our most serious concern with the legislative language is subsection 51(2), which provides for prescribed medical information. Why should an employer who has rejected the concept of cooperative return-to-work programs and has not implemented a WCB-approved program have access to a worker's medical information? Unfortunately, we believe the present wording of the amendment discourages the cooperative environment which is necessary for successful early return-to-work programs. The worker is obligated to provide the information to an employer who has no obligation to participate in a proper program. We believe this to be the antithesis of being cooperative in the process.
Before a doctor should be mandated to provide information, the doctor should feel comfortable that the information provided will be used to help in the patient's recovery and that the patient's impairment will be accommodated through a workplace program developed and approved by the WCB. The information provided by a doctor must be non-diagnostic in nature.
Bill 165 provides a $200 monthly increase, as I mentioned earlier, to the lifetime pensions of disabled workers who are unemployed and who were injured prior to 1990. However, it misses a small group of disabled workers who were over 65 years of age when Bill 162 was passed. All workers who are in receipt of a permanent partial disability award and who were 65 years of age before Bill 162 was passed should receive the additional $200 monthly increase. These workers live in very difficult circumstances and are now over 70 years of age. Bill 165, as currently drafted, denies them this pension increase only because of their age. The compensation they received at the time for their disability was meagre by today's standards and a pension increase for this group is a matter of justice and equity in our opinion.
Although Bill 165 provides the $200 pension increase for 40,000 disabled workers and 100% CPI inflation for 45,000 of the most vulnerable workers in the system, 134,000 workers who receive WCB disability pensions who have not returned to work will see the inflation protection of the WCB pensions eroded through the Friedland inflation protection formula. In addition, workers injured after 1990 and who have access to the strengthened return-to-work and vocational rehabilitation provisions will also be subject to the new formula. This federation does not willingly endorse the Friedland formula or anything else that would reduce benefits. I draw your attention again to that result being one of bargaining. Experts from around the world agree that cutting benefits will not make a compensation system healthy. There are only two proven methods that have substantial impact upon the system: prevention and re-employment. None the less, we recognize that this formula was a result of a negotiated process by business and labour in developing the proposed amendments to this legislation and we trust the issues of benefit levels and indexing will be reviewed by the royal commission.
The original Friedland formula does not have a cap on the maximum increase the formula could provide; it recognizes a maximum 10% annual CPI increase with any excess adjustment carried forward to a year with less than 10% inflation. Friedland was designed for pension plans and is not a natural fit for WCB benefits. In a pension plan, the erosion of benefits would not be too severe, given the average life expectancy after retirement. However, for a younger worker, the benefit erosion could become serious in times of high inflation and have lifetime implications.
Therefore, the 4% cap imposed by Bill 165 becomes a punitive measure, in a sense, for injured workers if inflation rises rapidly. The WCB's income will tend to match inflation because it is tied to wages. The WCB does not need this cap to protect the accident fund in times of high inflation. Benefit costs will fall significantly behind inflation by 25% of the CPI, less 1%, as the board income keeps pace with inflation. Although the cap was a part of the negotiated PLMAC agreement, further investigation of the long-term effects of this cap on injured workers and on the system indicates the cap cannot be justified. The federation recommends that the government remove it from Bill 165.
The most effective way to eliminate deeming and ensure that there will not be large groups of workers with disabilities who are unemployed and living in poverty in the future is to make every effort to re-employ them in their pre-accident workplace. The strengthened and streamlined return-to-work provisions and rehabilitation provisions in the bill, along with increased penalties for non-cooperation, will assist in safe and timely re-employment of injured workers.
The re-employment proposed in the bill is not something new; it has been embraced by a number of major employers in the province, including companies like Ford, General Motors, Stelco and Inco. We're not breaking new ground here; we're simply saying it works there and it should work everywhere else. These provisions would have a significant impact on the WCB's unfunded liability.
Workplaces will become safer through the augmentation of experience rating programs which will measure health and safety practices and return-to-work practices in the workplace. These provisions should also have a significant impact on the unfunded liability through prevention of accidents and reduced exposure to hazardous substances.
The board's administration and policy direction will improve with a bipartite board of directors which gives the two key stakeholders in the system an equal say. This is a system much different from one proposed by a member of this committee which is really an employer-controlled Workers' Compensation Board proposal.
Decisions will reflect workplace needs and reality. The success of bipartism at the Workplace Health and Safety Agency is a testimony to this form of governance. In a short, three-year period the agency board of directors has come to consensus agreement on over 300 decisions, far more than the Legislature itself, and has found it necessary to take a vote only once, far less than the Legislature itself.
The B.C. Federation of Labour, in a speech given recently by Jim Dorsey of the British Columbia Workers' Compensation Board, at the Association of Workers' Compensation Boards conference in Toronto, indicates that their bipartite Workers' Compensation Board is also a success story. Two governments and five labour members have played a role in supporting the bipartite governance structure in British Columbia.
Although Bill 165 addresses some serious problems in the system which will need immediate attention, it does not deal with the larger issues of coverage, entitlement, occupational disease, universal disability insurance, benefit levels, indexing, finances and the board's relationship to other programs. These are issues which have been skirted around and subverted for years because the resources have never been made available to review them properly. We are pleased that the announcement of the royal commission to study the system has been made. Its report should form the basis of a system which could look quite different than the one we know today.
Too many workers with disabilities live in poverty. Dr Annalee Yassi estimated in her study for the Weiler inquiry into Ontario's WCB that as many as 6,000 workers die every year in our province from occupational disease. Our economy is changing and the sectors which traditionally fund the system are shrinking. The non-covered service sector is growing, leaving some 700,000 Ontario workers denied compensation coverage.
We would urge that the Legislature pass Bill 165 into law with amendments which clear up the intent of some of the clauses. Then we must begin the important work of a royal commission to build the system so that it will reflect the needs of our society in the future.
I want to conclude by thanking all of you on the committee for the time to appear before you and to make these few comments. We are prepared to respond to any questions in the time we have left. Thank you.
Mrs Witmer: The PLMAC business caucus has denounced this bill and indicated that it does not support the accord that was approved. I ask you, why was the accord disregarded by the government and why was financial accountability excluded from the purpose clause?
Mr Wilson: Let me begin by saying I could ask you, I guess, the same question, seeking the same answer, because it's a bit of a puzzle to me too, why we've had the reaction from some employers that we have had. I can tell you that the government charged us, both parties, with the task of trying to come to an agreement. We came to an agreement, we came back and we tabled it with the government. There was ample opportunity before the Premier to make those points. No one was more surprised than I was the next day to find out that there were some reservations about the deal they had just agreed to with us. I can tell you, at 4 o'clock in the afternoon of the second day of our bargaining I was ready to break it off because I didn't think there was enough there for us. I was urged by the members of the business community to stay there. There were some more moves that we made both ways and at the end of the day they were as pleased as we were with the compromise that we had arrived at, and it was a compromise. I am totally at a loss trying to explain the reaction within the business community in denouncing the agreement that they had agreed to.
Mrs Witmer: Well, the bill is quite different from the agreement. I have one more question.
Mr Wilson: I beg to differ with you, Mrs Witmer. That's why we tabled the comparisons that you will find in the back of our submission.
Mrs Witmer: One question: Are you prepared to include injured workers as part of the bipartite board, as part of the labour grouping, and if not, why not?
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Mr Wilson: I think we've been far more busy in our outreach to injured workers than any other organization in this province, and so we clearly would consider a good degree of involvement in this whole process by injured workers, yes.
Ms Murdock: Thank you, Gord and Jim, for coming today. Actually, I'm going to get something clear on the record, I hope, given that both of you sat on the PLMAC. On April 15, the business community put out a press release saying that it was frustrated and disappointed from not going along with the joint business-labour representatives from the joint presentation that was made to the Premier on March 10, and they were angry and upset over the Premier's comments of April 14 in the House when he announced that we were going to be making changes and bring forward Bill 165.
Now, Mr Mahoney has said that the whole thing fell apart upon hearing that Lynn Williams could possibly be the chair of the royal commission and that it had nothing to do with anything that transpired from March 10 to April 14. I would like you to give me the dates, if you can, or the time frame as to how that worked.
Mr Wilson: Well, we negotiated on the first Friday and Saturday in March, which I think was the 2nd or the 3rd, and within a week appeared before the Premier and tabled our agreement. It was not until some time after that that the name of Mr Williams emerged.
Ms Murdock: So then you walked away when you heard about Mr Williams?
Mr Wilson: All I can tell you is that what I began to read in the public press was that "the business community are now opposed to the agreement they arrived at." In fairness to the business community, like us, it's not monolithic, although I would argue that perhaps our structures serve us better in terms of coming to consensus. I can just tell you that the employers, who were major employers that were in this process, had sat down at the table across from us and come to an agreement with us. There were others I suspect second-guessing, and it's too bad they weren't at the table.
Mr Mahoney: Thanks, Mr Wilson, for your presentation.
Mr Wilson: Call me Gord, Steve.
Mr Mahoney: Gord, I'd like to just go through a couple of points here. You say this mirrors -- "closely mirrors," I guess, not to misquote you -- the agreement.
I've looked at the agreement. I see the purpose clause; preceding the purpose clause, the statement dealing with "financially responsible framework for decision-making." The purpose clause in the agreement outlines point 2.
I take it, although it doesn't appear clearly here, that what you're saying in the outline of the PLMAC agreement is that it'll go in subsection 58(1) instead of in the purpose clause. But that contradicts the letter that we just recently heard about from the Premier wherein he made a commitment to the chairman of the Employers' Council on Workers' Compensation that a financial responsibility clause would be put in the purpose clause. That was April 21, I believe. So I could see how the business community would feel that somehow the government was agreeing to financial responsibility being in the purpose clause, and I can understand its shock and dismay when it didn't appear.
You say it closely mirrors, and yet under "Return to Work," clause 5(c), it states in the PLMAC agreement, "The existing experience rating program, NEER, will be augmented by an additional incentive component to encourage greater re-employment." I guess my question on that one to you is, is there a difference between "augment" and "replaced by", because that's simply been eliminated? That would not seem to mirror the PLMAC agreement.
There was agreement on the $200 supplement to be dealt with by the government, but nowhere, Gord, in this document, do I see concurrence by anyone that the money would be found from implementation of Friedland, and that was the biggest drawback and the straw, I guess, that broke the camel's back from the business community's point of view.
The Vice-Chair: And your question, Mr Mahoney?
Mr Mahoney: My question is, we've had people come forward indicating that the OFL is totally opposed, words like "definitely not acceptable" at these hearings. We've been puzzled how organized labour, the OFL or any other individual union, can come forward so adamantly opposed. We had one group, a CAW group, opposed to 17 sections of the bill. If you look at the bill, that leaves eight sections, Gord, that they support out of the entire bill.
We're a little confused how organized labour can come forward here, say it's opposed to all of this, it mirrors the the PLMAC agreement, when it certainly does not mirror it in black and white --
The Vice-Chair: Your question?
Mr Mahoney: -- and we'd like you to tell how the Ontario Federation of Labour can take a position that's clearly juxtaposed to the original position that you took in support for the PLMAC agreement.
Mr Wilson: I'm going to ask Jim to respond to a couple of the technical points you --
Mr Mahoney: Oh, Gordie.
Mr Wilson: Wait a minute; I want to get into you too. First of all, to explain, I would say that probably the item that took the most discussion in our bargaining with the employers was the question of adding the measurements of return to work and the health and safety workplace as the measurements to join the number of accidents and the frequency of accidents. And we agreed, all of us at the table, that the manner in which we would effectively reduce compensation costs was to add those two components to the existing two in measuring what an employer's assessment rate should be, for a whole bunch of good reasons, including a number of employers who were working very hard in their workplace and weren't getting any credit for it under the current system.
With regard to the organization that you say has come from labour that speaks to 17 changes they would like to make, well, I can understand their frustration. We thought we had a bargained arrangement, as we were asked to do, and then found that the people we'd bargained with started to denounce it. You can hardly expect that the labour movement's going to react anything other than in opposition to that.
Mr Mahoney: So scrap the bill.
Mr Wilson: People are now saying, "Well, maybe there isn't any deal there; maybe we now have some license to move to try and correct the things we thought were shortchanged."
My personal preference is, I think when you negotiate an arrangement like we do in collective bargaining every day with employers in this province, a deal is a deal is a deal. Now, people are going to express themselves, because we're not monolithic.
I'll ask Jim just to respond to a couple of technical points that you raised around financial responsibility. By the way, let me just say this: We ought not to lose sight that this system was not built for the purpose of financial responsibility. This system was built for the purpose of providing benefits to working people in lieu of tort, and you ought not to lose sight of that.
Mr Mahoney: I was quoting the Premier. I'm sorry.
Mr Wilson: Well, you should do it more often. He says a lot of good things.
Mr Mahoney: He speaks well of you.
Mr Jim Paré: Just a couple of issues. I think it's pretty clear to anybody who reads it that financial responsibility is not a purpose. I think the government took the right tack in making it clear how the financial responsibility was going to be tied to the system, and it tied the board of directors to that system. So I think it's much more clear, and financial responsibility just can't be a purpose.
On the issue of experience rating, the amendment was passed last week in Toronto. It was clear that we followed the analogy that George Peapples put forward of the four-legged stool for experience rating. I think the bill follows that. I think there was a mistake in the drafting of the bill. That was cleared up last week with the amendment, and I think it's clear now that experience rating in fact is augmented; it has not been replaced.
Mr Mahoney: So, Jim, you don't agree with Gord that a deal is a deal is a deal, I guess.
Mr Paré: When the deal is broken, I guess it's a little bit difficult to stick with a deal is a deal is a deal.
Interjections.
The Vice-Chair: Order, please. In fairness to the other presenters who weren't allowed to go over, on behalf of this committee I'd like to thank the Ontario Federation of Labour for its presentation. Thank you very much.
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CANADIAN AUTO WORKERS, LOCAL 1520
The Vice-Chair: It's my understanding that the Canadian Auto Workers, Local 636, has cancelled, so we'll bring forward the Canadian Auto Workers, Local 1520, for our next presenters.
Mr Rick Witherspoon: Let me open first of all by welcoming the members of the committee to London. On behalf of the membership of CAW, Local 1520, we'd like to thank you for the opportunity to present our views.
There will be three people involved in our presentation today. I'd first of all like to introduce Peter de Ryk, to my immediate right, a member of CAW, Local 1520, who currently holds the position of benefits representative. Pete represents our members in the administration of various forms of benefit entitlement and is directly involved with the workers' compensation system.
Also joining me today is Bill Such, also a member of Local 1520. Unfortunately, Bill was injured at work and Bill would like to take this opportunity to share with you some of the concerns that he has with respect to the workers' compensation system, specifically in the area of vocational rehab.
My name is Rick Witherspoon. I'm the president of CAW, Local 1520.
Our local represents approximately 3,000 workers at the Ford plant in Talbotville. Our members work in an auto assembly plant. The work is strenuous and highly repetitive due to the nature of work and the fact that we build approximately 60 units an hour, 10 hours a day. Injuries do occur.
As workers representing workers, it's our goal to ensure that any and all injured workers receive adequate compensation should they be injured. Any amendments to the Workers' Compensation Act must ensure that any worker not only receives adequate compensation but that claims and appeals be handled in a just and timely fashion. Today it's not our intention to try to critique all the proposed amendments; rather, to address a few specific areas of concern.
Let me open by saying that we are pleased to see the inclusion of the purpose clause, which provides fair compensation to workers injured in the course of their employment and, of equal importance, the inclusion of the term "occupational disease." Our first area of concern deals with the duties of the board of directors, under subsection 58(1). The specific concern relates to the term "financially responsible and accountable manner." Does this imply that the provisions of the new purpose clause will fall prey to a financially responsible board? Such a provision will frustrate an already unworkable system. Recently, we are finding that injured workers are not only faced with challenging their employers, but are in fact taking on the board itself. Cost containment should not be a priority when providing fair compensation, and we would therefore recommend in the strongest terms that subsection 51(8) be deleted.
Section 147 provides for an additional $200 per month to workers receiving pensions. We welcome such an increase. Having said that, we are of the opinion that this section will affect a relatively small group. On the other hand, the change to the indexing formula proposed in section 148 will impact injured workers for the rest of their lives. The act currently provides for full indexing. To provide an increase to some injured workers at the expense of others is totally unacceptable.
Another area of concern pertains to vocational rehabilitation. Section 53 provides for the inclusion of the word "employers." Voc rehab is provided for an injured worker, not for the employer. Surely if there is to be an inclusion in this area, it should be in the injured worker's best interests. We'd recommend that the word "employer" be deleted.
The final area of concern that we want to address today deals with the proposal for an experience and merit rating program. On the surface, any program which provides health and safety practices, provides for the assistance of returning an injured worker to his job, deserves some merit. Unfortunately, as workers' reps, we're somewhat sceptical in that we feel this kind of approach is reactionary rather than proactive. In a system already fraught with employer abuse, it's our opinion that such an approach will see injured workers returning to work too soon, improper reporting of claims and additional appeals in an already overloaded appeal system. This type of rating scheme is not in the best interests of injured workers, and we would recommend that it be deleted.
At this time, I'd like to turn the microphone over to Brother de Ryk to provide some specifics on the points that we've highlighted. As previously mentioned, Pete represents the members of Local 1520 in the area of benefits, a position that he's held for the past 20 years. During that time, Pete has witnessed numerous changes to the workers' compensation system and holds some very strong opinions as they relate to the bill and how it will impact on injured workers.
Mr Peter de Ryk: Thanks, Brother Witherspoon. First of all, I'd just like to expand on some of the four points that have been raised in the beginning of our brief. As I read through some of these things, I've also proposed some possible changes to the act itself.
The first change that we are extremely opposed to is the addition of subsection 58(1). That's the duties of the board of directors: "The board of directors shall act in a financially responsible and accountable manner in exercising its powers and performing its duties." We feel that this section blatantly contradicts the new purpose clause under the act in section 0.1; that is:
"(a) to provide fair compensation to workers who sustain personal injury arising out of and in the course of their employment or who suffer from occupational disease and to their survivors and dependants;
"(b) to provide health care benefits to those workers;
"(c) to provide for rehabilitation services and programs to facilitate the workers' return to work; and
"(d) to provide for rehabilitation programs for their survivors."
It's obvious that none of these clauses under section 0.1 would be possible if they were controlled or guided by cost containment. Are we now going to only allow payment of benefits for occupational disease, work-related injuries, rehabilitation, retraining or assistance to survivors if the board can afford it? Of course this cannot be allowed to happen, so therefore it is our strong recommendation that these two sections are completely contradictory to each other.
Further to that, subsection 148(1): We are totally opposed to the change in the indexing formula from the present full indexing based on the consumer price index of Canada. It is apparent that an attempt is being made by our lawmakers to convince us that the reasons for the change to three quarters of the Canadian price index minus 1%, to a maximum limitation of 4%, was designed to compensate those who were and are undercompensated. This is to be done at the expense of those who are overcompensated, according to the business community, the undercompensated being injured workers who are receiving a subsection 147(4) supplement, which is the older workers' supplement. The overcompensated are those who receive a partial permanent disability pension but are presently working.
The problem, of course, is that the number of injured workers who qualify for the additional $200 increase is very limited, and the board is presently trying to eliminate as many of the 147(4) supplements as possible when their two-year evaluation comes due. The impact on a permanent partial disability pension due to this reduction could have an effect on a younger worker for life, particularly if the disability prevents him or her from working somewhere in the future. Indexing never keeps pace with the cost of living, and this reduces all WCB benefits for life.
I would like at this point in time to give you an example of the abuses that are going to take place with respect to changing the indexing, at the cost of perhaps thousands of workers in the future, and that the only positive sense to that is the additional increase of the $200 to people who are entitled to 147(4) benefits.
At this very present time, I have received and of course have appealed an issue where 147(4) benefits were eliminated for one of our injured workers. This injured worker was of -- and it seems to be rather coincidental that it took place just prior to the enactment or the possibility of enacting this act. However, this injured worker, who has received 147(4) benefits for the past two years as a result of a major injury -- both shoulders, right arm as well as a major back injury to this person -- is presently in receipt of a Canada disability pension. He's also presently in receipt of a Ford disability pension, of which we all know the criteria. That is total disability.
However, his 147(4) benefits, at the conclusion of the two-year evaluation -- he was deemed to be able to return to work, period, and therefore his 147(4) benefits were removed. This person, of course, is in no different position today than he was two years ago when, through a lengthy vocational rehab assessment and trial period as well, his injuries prevented him from benefiting from vocational rehabilitation and as a result was awarded 147(4) benefits, and those benefits should continue today.
It's obvious also by having close contact with the office of the worker adviser in the London office that this is becoming a very great problem in that they have up to 100 of these particular types of cases. So it's obvious that this change is going to really reflect a reduction in the actual cost of payments out of the WCB system while trying to make it look as though they're actually helping a small group of people somewhere in the future.
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To continue on with the brief, subsection 53(3), which deals with vocational rehabilitation services: We have several major concerns with these proposals and we totally disagree with the wording of 53(3). This subsection should be changed to read, "The board shall provide the worker with appropriate vocational rehabilitation services." After all, it is the injured worker who requires rehabilitation and certainly not the employer.
The board must be mandated to provide vocational rehabilitation in an active manner. The employer should not have any influence on the type of rehabilitation, otherwise the decisions with respect to the type of assistance or rehabilitation provided will be based on cost rather than what is required to successfully rehabilitate an injured worker.
Wording it as above would require the board to devise policies to rehabilitate an injured worker actively and in a positive manner. However, due to the present and proposed language, which allows the employer to participate in the vocational rehabilitation plan, a great deal of abuse has taken place not only by the employers and their representatives but also by rehabilitation staff of the board itself.
We have brought with us today one of the many injured workers who have been abused by the system. Mr William Such has sustained a major injury to his lower back, resulting in the need for lumbar decompression, which unfortunately was not very successful. As you can see, Mr Such is not a very old person. After reaching some stability in his medical recovery, he was assigned a vocational rehab case worker and a goal was designed for Mr Such where he was told to use the available information from Canada Manpower, unemployment help centres, newspapers and any leads he could obtain to seek possible suitable employment.
The salary expectation at this point was set at $6.35 to $7.50 per hour. His medical condition ruled out physical work. This, coupled with his educational background, limited his possibility of obtaining a higher-paying sedentary type of occupation. However, it was always Mr Such's desire to return to work at Ford Motor Co, which of course paid a higher wage. Mr Such at this point was incorrectly locked into a future economic loss of 1% which, incidentally, was $22.88 per month. This had no bearing on his income at that particular time as long as he cooperated with the vocational rehabilitation system, in that he received the full supplement.
Mr Such did everything requested of him and followed the plan as set out. He went out and sought work that was recommended to him. One of the jobs in question recommended to him was with an appliance company in St Thomas, Ontario. The potential employer was unable to hire him because the job required Mr Such to deliver appliances and he would have to do a lot of heavy lifting, which he was not capable of doing. On his own initiative Mr Such then contacted a former employer at Fanshawe Park. He was told that when the park reopened they would try and find him some light work that he might be able to do. Mr Such did not wait for this to happen and instead he contacted a local food distributing company. He was successful in acquiring a position with them which was to commence in January 1994.
When he contact the Workers' Compensation Board vocational rehab section to inform them of his success, he found that he had been assigned a new case worker. The new case worker decided that he should not take this job and that he be retrained for a higher-paying job because of the future adjustment to his future economic loss award.
Again Mr Such complied and enrolled at Fanshawe College for a level four upgrading basic skill development course. This course was for eight hours a day and five days a week. Both his family physician and surgeon clearly stated that he would not be able to cope with the constant sitting and limited him to one to two hours at the most. He tried anyway, under the threat that he would be cut off for not cooperating with voc rehab.
Mr Such tried to attend classes in the beginning. However, he was unable to sit for the required time in class. He even tried to use a podium to alleviate the condition, but with no success. As he was unable to attend full-time, he was deemed to be non-cooperative and was cut off from his vocational rehab supplement. This, of course, resulted in an income of 1% future economic loss. As everyone in this room would know, $22.88 per month certainly is not a sustainable income for any young person with a family.
So, as you can see, the goal in this case was not to assist the injured worker in vocational rehabilitation but to save money by basing the FEL at 1%, to return to his former employer, which was out of the question, and to design a rehabilitation program that he was unable to meet. This case is only one of the many abuses workers are faced with under the voc rehab because of the involvement of the employer and the attempt to use financial restraint.
Another blatant example is the use of methods by the board that border on entrapment. This is where questions are asked of injured workers, for example: "We have medical information that suggests you are no longer totally disabled. Do you think you can return to work?" This is just after the worker's finished a daily physiotherapy session and has been told by a doctor that improvement is not very good and with nothing to suggest that the worker could go back to work. If the injured worker is naïve and doesn't smell a rat, the response will be that he's not capable of returning to work. The result of this is non-cooperation with voc rehab and his or her benefits are terminated.
These are not isolated cases. These are probably more the norm than not, but happen constantly due to the intervention by employers, fuelled by cost containment and practised by the board. Changing the proposal as suggested would go a long way in curbing the unjust abuse.
At this point in time I would like to call on Bill Such, who actually is the injured worker who was involved in this particular case, if anyone has any questions on his behalf as to what actually transpired, or perhaps he can even expand on the type of treatment that he did receive through the vocational rehab system. Perhaps he can also relate to us as to the type of income he presently has to survive.
The Vice-Chair: Excuse me, if I may. You have about three minutes left in your time.
Mr Winninger: It seems to me, from what I've heard from presenters, whether they're on the labour side or the management side, frequently financial responsibility and a good benefit package for the injured worker are somehow mutually exclusive, and I noted with interest your remarks on section 58.
The evidence that I think I've heard over the past couple of days would support the conclusion that one way to bring down the cost of the unfunded liability is to have a safe and speedy return of the worker to the workplace. We've heard from several parties, successful workplaces, where the labour and management work together to ensure the workers are reintegrated into the workforce, but we've also heard from other groups that have indicated the challenges, if not the frustrations, they've experienced in bringing labour and management together to get workers back into the workforce.
I would ask any of you what your experience with Local 1520 has been with regard to the kind of cooperation or joint efforts that are made to get workers back.
Mr de Ryk: Perhaps I can answer that. As far as we are concerned, within an internal system with the employer that we actually work for and/or represent the workers of, we have a very excellent internal cooperation system with respect to returning injured workers to work.
However, the act itself and the regulations that we have to deal with either contravene that in some cases or are open for open manipulation, as I've just suggested in the case of Mr Such here. It's not isolated. However, we can control the actual speedy return to work. We cannot control the manipulation that comes afterwards with respect to the appeal process either by the employer and/or the system.
Further in my brief -- I'd like to continue if I could -- I do touch on some of these particular items as to what the experience rating section of it does to our particular situation. If I may, I'd like to continue on with that.
The Vice-Chair: We don't have time for that, but the committee members will be reading that. Mr Offer.
Mr Offer: I note that your local represents 3,000 workers and your very eloquent arguments about aspects of the legislation, where you say the type of rating scheme that's being proposed is not in the best interests of the injured worker. You ask for it to be deleted. On the basis of the Friedland formula, you indicate you are totally opposed. You go on to say its implementation would be a great injustice to injured workers in the future. On the basis that you're here representing 3,000 workers and that the government does not change these areas of the legislation, are you in favour of the bill?
Mr de Ryk: Am I in favour of the bill?
Mr Offer: Based on what you've said in this presentation.
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Mr de Ryk: We are not in favour of the bill the way it's currently written. What we are in favour of, of course, is amendments to that bill as we've outlined in our proposal. If you read the last page of my particular brief, it reflects that as well. No bill, of course, is totally and completely acceptable by any group. I'm sure the labour group can't accept every word in the bill, nor can the business group accept every word in the bill, and I'm sure that no parties that are represented here on this particular committee can accept every proposal of this bill. However, if you want us to say we are for or against this particular bill, we're not going to do that. What we will tell you is that this bill could be adjusted in order to become acceptable to all groups.
Mrs Cunningham: Thank you for your presentation. I did read to the end of it. I should be saying something to Bill. Everybody here feels very frustrated and disappointed that you've been treated the way you have by the system. I'm aware of more cases like yours than anybody would want to admit, and some of you know what's been in our office. You've summed it up nicely, I know, Rick, but Peter, you've summed it up nicely at the very end.
I think your last sentence indicates the frustration with the hundreds of thousands and sometimes millions of dollars we spend on paper and these hearings where so little is gained and so little is heard. When you say, "We would also suggest that this committee investigate the possibility of introducing a universal income system that is fair and equitable for all disabled people in the province of Ontario," I think you're showing your total frustration with a workers' compensation system that just simply doesn't work. I share your frustration and I thank you for your brief.
Mr de Ryk: Thank you.
The Vice-Chair: On behalf of this committee, I'd like to thank the Canadian Auto Workers Local 1520 for its presentation this afternoon. Thank you very much.
INJURED WORKERS IN NEED (LONDON) INC
The Vice-Chair: I'd like to call forward our next presenters from the Sarnia Injured Workers in Need Inc. Good afternoon and welcome to the committee. Just a reminder that you'll be allowed up to 20 minutes for your presentation. The committee would appreciate it if you were a little briefer than that and allowed time for questions and comments from each of the caucuses. Please identify yourself for the record and then proceed.
Mr Anthony Barbato: My name is Anthony Barbato and I am an executive director of Injured Workers in Need Inc, Sarnia agency. I thank you and the committee for allowing me to be here today. I was looking forward to an occasion like this to express the concerns that all injured workers in Lambton county and perhaps throughout Ontario have had for a long time.
Bill 165 makes changes and amendments to the Workers' Compensation Act. Many social crimes have been committed in the past against workers. We all know that. We only have to remember the days when children in England and other parts of the world were forced to work long hours in coal mines and other industries for a wage that was not even enough to survive. That problem is solved now, thanks to the birth and the spreading of all trade unions. Workers have always produced wealth and will always produce wealth, but that wealth has gone and will always go to those who have the power to take it.
The Workers' Compensation Board has also committed crimes against injured workers in the past. The most blatant example is the fact that for 70 long years all workers who had become disabled because of their job history had been denied compensation -- 70 long years. It has been only since 1985, after the Supreme Court ruled on it, that the Workers' Compensation Board began to recognize disabled workers with a job-related disability history: "In determining any claim under this act, the decision shall be made in accordance with the real merits and justice of each case." This is contained in subsection 4(4) of the act and it is also mentioned at the end of each section of the Workers' Compensation Board operational policy book.
The Workers' Compensation Board and its operators are the administrators and guardians of the act, which is a lot. What puzzles me here is, how can justice be achieved if the very people who administer the law are given immunity from being reprimanded in any way for violating that same law?
Section 76(3) and (4) are the only parts of the act which give injured workers a chance to make Workers' Compensation Board operators accountable to the crown for breach of duty or violation of the act causing damage to them. This bill is repealing subsections 76(3) and (4), which allows injured workers to sue the crown for a tort received by the Workers' Compensation Board operators and replaces it with a clause of absolute immunity for the board and its operators. With the elimination of subsections 76(3) and (4), there is no more liability of the Workers' Compensation Board in the act but only an accountability of the board to the Ministry of Labour through a memorandum of understanding once a year. It has not been explained to anyone what this memorandum is going to impose.
Article 15 of the Canadian Constitution clearly says that, "Every individual is equal before and under the law and has the same right to equal protection and equal benefit of the law without discrimination...." I do believe that this article is being violated by this bill.
Article 24 of the Canadian Constitution: "Anyone whose rights and freedoms, as guaranteed by this Charter, have been infringed or denied, may apply to a court of competent jurisdiction to obtain such remedies as the court considers appropriate and just in the circumstances." This article also, I believe, is violated by the Workers' Compensation Act. If a judge, and in this case the Workers' Compensation Board, is charged for violating some laws, he cannot appoint himself judge and jury at his own trial and that's what is happening with the Workers' Compensation Board.
Sure, all the changes in this bill are great and admirable, but unfortunately those same changes are ineffective, as most of the act is now, because there is nothing in it now that makes the Workers' Compensation Board operators responsible and liable for damage procured to injured workers. In my view, this whole exercise becomes just another political game.
I strongly believe that subsections 76(3) and (4) should be left unchanged. If the Honourable Minister of Labour cannot share this view, he should at least insert something specific in the bill which would guarantee injured workers and employers a remedy for the devastating consequences of Workers' Compensation Board operators' negligence, incompetence and violation of the act.
I am very well aware of article 33 of our Constitution too, the "notwithstanding" formula or clause so debated at the time, but I also know that the clause has a five-year limitation. In my judgement, it should have never been applied, even with its limitations, by any province with regard to article 15, because that constitutes human rights violation. What would China say if it knew that we here in Ontario violate human rights. What would the international commission for human rights say if it knew that Ontario is violating human rights? Would they impose sanctions on this province? We don't know.
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Flexibility, simplicity, efficiency: These are three magic words which would work wonders if they were applied to the claims adjudication process. There is nothing in this bill about flexibility to shorten the long, complex and painful process of adjudication, which is costing the system a tremendous amount of money, time and stress.
A simple clause for negotiating quick settlements among injured workers, employers and WCB would be very appropriate. Claims, which are now dragged on for four or five years, could be solved in months. This would save billions of dollars to the system, and I'm not just referring to the compensation system here but the whole system. This may seem an exaggeration, but if you bear with me for just a couple of minutes, you will see that it is not.
In a study made by the Ontario Medical Association released to the public just a few weeks ago, it has been found that children in low-income families with stress and hardship tend to develop violent behaviour, which in many cases becomes uncontrollable and violent. During the dragging on of claims, many injured workers end up on welfare. Their families are destroyed with stress. Their children some day may become criminals. The consequences of all this will cost the system a lot more than if the system would allow these families to make a decent living.
It is true that the Workers' Compensation Board should not take the responsibility of the welfare department, but it is also true that the welfare department should not pay injured workers who should be on compensation. All the dragging and shoving of people back and forth is creating huge costs which in the ultimate analysis have to be paid by all of us, and that includes you and me. We have five social programs, perhaps more, which are shoving people on to each other. It would be a lot cheaper to merge them and come up with one plan, a guaranteed income plan -- and, by the way, this is done in many, many countries -- which would prevent stress and hardship which are causing most of our social problems.
In this presentation I'd like to mention also one other concern, section 63 of the act. The authority to issue regulations given to the board by the act should belong to Parliament. Regulations issued by the board will eventually become law to be abided by all people in Ontario. I really believe that in no circumstances should members of Parliament delegate their legislative authority to other bodies in our system.
To conclude: I'll just make this conclusion and be ahead of the time because I expect some questions. All our work should be devoted towards progress of our civilization. We all should contribute to create harmony and cooperation among ourselves. Instead, we are only creating hardship, despair and hatred, and this is completely the opposite of what each and every one of us should do. We are going the wrong way. Thank you. I would be very glad to answer all kinds of questions, no matter how many there are.
Mr Offer: Thank you very much for your presentation. I guess I have one question. Clearly, you've read the legislation; you can see that through your presentation. You've read the bill very carefully and you have a long history in these matters. From your experience, based on your readings, do you support the bill as presented by the government in its current form?
Mr Barbato: I beg your pardon? Did you say "use force"?
Mr Offer: Do you support, are you in favour?
Mr Barbato: Many changes are changes that are long needed, but the real roots of the problem are not dealt with in this bill. The roots of the problem with compensation are the devices they use in cooperation with employers -- now this is not to accuse anyone, but you know, all of you know, I know and everybody knows that when there are two conflicting interests and they hit each other, there is a thunder, there is a lightning, there is a storm. We know that.
There are two different forces. One is negative, one is positive, whatever you want to call this, and every time they hit each other there is going to be a storm. We know that. When you drag and you use those devices, like vocational rehab, who is going to determine the suitability of employment when these people are offered the modified duty, because it is very vague. Is it the family doctor? If the family doctor says that job is not suitable, then the compensation may say: "No, we can override that. For us it's suitable, so we cut you off."
This is one of the things, and the claim is dragging. Hardship on these families is increased, productivity goes down, stress goes up. The cost is huge to the society. The cost is huge to everyone. This is the root of the problem. We have to simplify the system. The system is too complicated and it's too subject to devices which are of two conflicting interests and therefore creating hassles for everyone, not just for me as claim representative, but also for these people, injured workers, for the employers.
I feel sorry for them. I believe they can no longer sustain the premiums to support the system, to be frank with you. They cannot, so the system now -- and when I say "the system," it's not just compensation, it's the whole system -- has to find a way to get together with Mr Chretien, he's a very understandable man; with all the association of municipalities, they're understandable people; the premier of our province and other provinces -- sit together and say, "We've got to solve this problem." We have too many programs, too many regulations, too many conditions to be met, too much paperwork. All this paperwork, the conditions and stress it causes, is the problem.
We wouldn't have any unfunded liability in this way, we wouldn't have all these problems in this way, if we create a guaranteed income plan that is unique throughout Canada like in other countries in Europe, then we automatically cancel the problem. We don't have to talk in particular of this guy who the doctor said -- and it's a story like this book. Here is another one, it's another double book. You know, this is ridiculous. The simplifying of the system is the key to solve all the problems and if we don't do that we are going to stack all our problems to the point where we are going to be buried underneath them. And not me, not you, will be able to get out of it.
Mrs Cunningham: Thank you very much. It's nice to hear people with some common sense.
Mr Barbato: Thank you.
Mrs Cunningham: It's sad to see people who are injured and who have suffered from a system that we have been living with probably in this province for the last 30 years and has increasingly become worse -- at least as long as I've been at Queen's Park representing London, for which I can only speak, in the last six years. To me, the day-to-day work of this whole system certainly doesn't work on behalf of the people who come into my office.
But I should tell you, there may be a couple of things you'd like to look at. We had a Dr Lacerte present to us last evening from the University of Western Ontario and Parkwood Hospital, telling us that we don't have properly trained professionals in the area of vocational rehabilitation in Ontario. We have no courses, and the University of Western Ontario, through its medical school, has informed us, or myself, that this will take place a year from now. One of the problems is, we don't have the specialists we need to do the work to help you.
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Mr Barbato: That's right.
Mrs Cunningham: The second point that I think you made so well -- I personally, as a politician, am fed up with words and paper and public hearings. I've been doing it for six years and I've seen no gain, so I'm fed up. What it takes is day to day making sure that a system works and is accountable, and I thank you very much for your words "flexibility, simplicity, efficiency." They're not that expensive. They save us money and maybe our children would have more jobs if we work that way.
Mr Barbato: Exactly.
Mrs Cunningham: I'd like to thank you very much for your presentation today.
Mr Ferguson: Just very briefly, I just have a comment. We want to thank you for your straight-from-the-heart presentation. I think we understand what you're advocating at this point, given simply the myriad of programs out there. You're suggesting that what we really ought to be examining is some sort of a guaranteed annual income for people, and I think most of us would agree with that and probably the time has come to look very seriously at that question.
Just so you don't leave totally disenchanted, the purpose of this bill is pretty clear: to put the WCB on some sort of solid, financial footing. Following this will be the royal commission and we're hopeful -- I am hopeful and many presenters who have appeared before this committee have expressed hope that the royal commission will in fact come up with some recommendations in order to overhaul the complete system in the future. We agree that's what's needed for 1994. Thank you for appearing today.
Mr Barbato: You're welcome.
The Acting Chair: Thank you. On behalf of the committee, we appreciate you taking the time to come down, and I'm sure when that royal commission comes around, you'll have many comments to bring forth. Thank you on behalf of the committee for your hard work.
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793
Mr Terry O'Neil: My name is Terry O'Neil. I'm the business manager of the London District Building and Construction Trades Council. My colleague who's accompanying me today is Ms Marnie Niemi, who is a compensation representative with the International Union of Operating Engineers, Local 793.
To begin, if no one else from the construction community has welcomed you to London for these hearings, please allow me to do so on behalf of those who have built this city, are continuing to build this city and will for many years to come.
I'm speaking on behalf of the International Union of Operating Engineers, Local 793. It's an affiliate of our building trades council. It is a union that was chartered in 1919. Local 793's territorial jurisdiction now encompasses the entire province of Ontario where it represents in excess of 10,000 members. The majority of the union's membership is engaged in the operation, repair and maintenance of cranes, shovels, bulldozers and similar heavy construction equipment. Local 793 also represents employees across the entire employment spectrum including the employees of municipalities, scrapyards, industrial cleaning contractors and waste disposal companies.
In order for this committee to fully appreciate the impact of the proposed changes on our members and other construction workers in this province, it is necessary to sketch briefly the unique characteristics of our industry and how it differs from the industrial sector. In 1962, the Royal Commission on Labour-Management Relations in the Construction Industry here in Ontario identified three ways in which construction differed fundamentally from manufacturing: First, the construction industry was subject to seasonal and cyclical fluctuations in the economy; second, the workforce was characterized by mobility, flexibility and specialized ability to perform construction industry tasks; and third, the products generated by the construction industry were not easily transformed from place to place, so that typically workers moved from job site to job site. In the manufacturing industry, the location of the work does not change, it's the product that moves.
These characteristics are as true today as they were in 1962, 32 years ago.
With this framework in mind, I would like to begin my presentation by applauding the provincial government in recognizing that the workers' compensation system is one in need of a major overhaul, if not radical surgery. Bill 165, I feel, captures the main areas of consensus reached by the Premier's Labour-Management Advisory Committee. More importantly, it makes a good attempt at balancing the Workers' Compensation Board's twin challenges, those of maintaining costs and making the system fairer for injured workers.
In terms of achieving real fairness in the system, I particularly favour the purpose clause, section 0.1, as it will be of benefit to our members in their dealings at all levels of the board. This clause finally addresses what many of our injured members have been denied for years; that is, reasonable compensation and equal access to rehabilitation services. Having this purpose enshrined in the legislation itself will give injured construction workers some leverage in their claims and the confidence that fair treatment lies at the heart of the board's mandate.
The bipartite board, sections 56, 59, 60 and 66, is an amendment which also pleases Local 793 in that it attempts to placate both labour and management by giving each an equal voice in determining the Workers' Compensation Board's policies. The bipartite structure is commonly used in our industry with great success. Health and safety committees, grievance arbitration boards and many government tribunals, such as the Ontario Labour Relations Board, have all adopted this format and it's working quite successfully. In fact, the trustees of Local 793's pensions and benefit plans and training trust fund are jointly represented by the union and our contractors, our partners, the people with whom we work on a daily basis. With the bipartite board, both labour and management will be on an equal footing to make the system more effective and more responsive.
Since we live in a dollars-and-cents world, I would like to discuss what, for us and our members, is perhaps the most important amendment. Subsection 147(14) allows an additional $200 a month to injured workers on pensions who are in receipt of the equivalent of old age security. We feel this is an issue of primary concern for the members of Local 793.
To understand why this particular change is so important, the committee must appreciate the incredible injustice that the system put upon our permanently disabled members who were injured prior to 1990. Through no fault of their own, these members have been financially devastated simply because they worked in construction. Why? This goes back to the unique characteristics of our industry, as I noted earlier. When those characteristics are combined with the fact that our members are paid relatively high wages to perform specialized and strenuous work but yet have few transferable skills, the end result had the effect of automatically denying them access to rehabilitation services because they, according to the Workers' Compensation Board, could not approximate their pre-injury earnings if the Workers' Compensation Board was to offer training.
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In other words, when the Workers' Compensation Board deemed that our injured workers could only earn $9 an hour as parts assemblers and that this didn't come close to their previous wages, they were consistently cut off the system with no other help in sight. Instead, they were simply given a subsection 147(4) supplement, currently standing at $387.74 a month, and a small pension, nothing more. Clearly, the system failed them terribly. These members can no longer work at their trade because of their permanent injuries. Many have families to support and, like all of us, they have bills to pay. Yet the Workers' Compensation Board shut the door on them. I ask you, where is the fairness in this? The $200-a-month pension increase is in Bill 165, I believe, to right this past wrong. In no way can we say that this is clearly adequate, and in no way will this rectify what the system has put them through, but at least it will provide some financial relief and give some hope for their standard of living.
The next point I would like to address is the Friedland formula. This is another aspect of Bill 165 that will dramatically affect the income of our members. Subsection 148(1) deals with the de-indexing of pensions to 75% of the consumer price index minus 1%, with a cap of 4%. This is problematic in several ways.
First, most of us will collect our pensions from work at the age of 65. When we retire, we have approximately 20 more years to live. What about the worker who is 40, 30 or 20 when he or she is awarded a pension? To de-index permanently disabled workers to a lifetime of increasing poverty is anything but fair compensation. Further, members of this committee, it is an insult to the integrity of those who have done so much to build our nation.
Second, to put a limit of 4% indexing is frightfully unjust. This low percentage will continue to penalize further in times of high inflation. As the cost of living rises, injured construction workers will be trapped in a downward spiral year after year. This aspect of the amendment is most certainly not in keeping with the purpose of this act as outlined in section 0.1. However, we are well aware that the Workers' Compensation Board is struggling financially and changes must be made to get the board back on its feet. Cutting benefits by implementing the Friedland formula is not the answer. Pure and simple, this approach would be reforming the system on the backs of those who need help the most, our injured workers. In our view, the answer lies in strengthening those sections in the act that address prevention and re-employment.
Preventing accidents must be the number one priority. You have heard a great deal about the bureaucracy, the way people are tied to it and how they have become insensitive to it, and the way in which the injured workers consequently suffer. I am departing here from the written text, if you don't mind. Let me give you a current example where prevention is of utmost importance to our industry. Right now, we have forced an issue on the 401 which has caused the night construction to come to an end until the proper precautions are taken to protect the lives of our workers. We have people working out there every night and every day within six inches of traffic moving at 120 kilometres an hour that cannot be slowed down and will not be reduced to one lane because the Ministry of Transportation tells us: "I'm sorry. We really don't want to inconvenience any of our tourists." Well, too bad. We'll shut it down, because if not, if we lose any of those workers or they are permanently injured, we're going to take those bodies and those people in and put them right on the desk of the Ministry of Transportation and let them solve the problem. But let me go back to where I was.
Only when total accident frequencies begin to decline and those who are injured get re-employed by their employer more quickly will you achieve a true balance between fair compensation and fiscal responsibility. In short, we agree with certain aspects of the legislation, and I've outlined those for you. However, there are amendments of a more technical nature which cause us concern. These are the experience rating, the concept of jurisdictional compensation, the absence of union representation in the vocational rehabilitation process and the fact that the re-employment obligations of employers have not been strengthened for the construction industry. How can we attempt to lower the unemployment rate of injured workers, which currently stands at 40%?
Further, in our view, several other problems need to be addressed in the proposed legislation. The deeming provision as it applies to future economic loss serves only to further reduce the incomes of workers who have not returned to a phantom job and continues to be a punitive measure which hurts more injured construction workers than it benefits.
With regard to experience rating, there need to be strong provisions which penalize employers who fail to fulfil their obligations to re-employ injured workers fully. In fact, employers who encourage their employees to collect private disability insurance and not file WCB claims are doing so at an alarming rate. Many employers are exploiting loopholes in the legislation to avoid higher assessments, and they rely on the board's slow administrative process and inaction in levelling penalties. The current funding ratio of 37% would be better served if these employers paid their fair share. Section 103.1 of the proposed changes is a move in the right direction in terms of closing existing loopholes. Strict enforcement of the experience and merit rating programs, however, will be crucial if the programs are to be truly effective.
I trust these matters will be the focus of the royal commission and I look forward to discussing them in the future so that labour, management and government can work together in developing a fairer compensation system, one which more accurately reflects the needs of the construction community and of our society as a whole.
Thank you for this opportunity to present our views and the views of the leadership of Local 793. We now look forward to any questions you may have, and Marnie is more than prepared to handle the technical details.
Mrs Cunningham: Good to see you here. I noted that you were keeping an eye on the employer when it comes to building roads in Ontario. I'm glad you did that. I'm sure the members will take your concerns back to the government.
Mr O'Neil: Please understand that point; don't be under a misconception. We are certainly keeping an eye on the employer, but the employer is working to guidelines laid down by the Ministry of Transportation, and those guidelines are in fact violated by the tendering terms. The employers for whom we work in partnership are being forced through no fault of their own to work in an unsafe manner.
Mrs Cunningham: My comment, of course, still stands.
Mr O'Neil: Exactly.
Mrs Cunningham: I want to ask a question in that regard, because you started by talking about the purpose clause and how you were happy that it spells out reasonable compensation and equal access to rehabilitation services. I just wanted to let both of you know that I think probably 80% of the criticism that we've heard so far with regard to the workers' compensation system doesn't have nearly as much to do with promises in legislation and raised expectations as with the day-to-day workings of the system itself, all parties, which I'm glad you addressed.
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I'm wondering, within your own group, how you now with this purpose clause will be monitoring these activities, not just of the employers but of the system. I'll just throw in two pieces. We heard last evening from a professional that we don't have trained vocational rehabilitation workers. That's just one piece. You may have heard me say that earlier. We also heard from an expert this morning, M. C. Warren and Associates, with regard to the amount of time it takes to make any changes to the system. Even forms take six and seven years. Whole generations of people could be unemployed that long if that purpose clause doesn't work. I am wondering if you've thought about that and what you intend to do about it.
Ms Marnie Niemi: Thank you, Dianne. I would like to address that concern. That has indeed been something that we have discussed at great length within Local 793, how we're going to address the monitoring of the board in its day-to-day operations. Currently the way Local 793 operates, unfortunately a lot of our members have enormous difficulties with the board in terms of language difficulties, literacy difficulties, and by the time a claim comes to my office, quite often it's so far gone, it's years old. We are attempting to implement within Local 793 broader educational programs to be aware of policies within the board, and, for our membership, exactly what their rights are under the policies that exist.
Addressing your concern of the timeliness of change within the board, currently the only recourse that unions have had to influence change within the board has been to take to WCAT various issues repeatedly and hope that the board will take precedent set at the WCAT to heart. We're hoping that with equal access and fairness enshrined within the purpose clause, we can continually, as representatives representing injured workers, refer to that purpose clause in the initial levels, dealing with claims and getting them solved initially without waiting for years and years and years of a backlog and continued detriment to the injured workers.
Mr Ferguson: Thank you, Terry, Marnie, for appearing today. I have one question and I am wondering if you could answer it for me. As you well know, the government has received a number of submissions on this issue. We've received a number of recommendations. In fact, even the opposition parties have recommended that the government take certain action.
For example, they are suggesting we are not going far enough. The Liberals have recommended that we apply the Friedland formula to everyone, all past and present claims, including those who receive a 100% pension. The Conservatives, on the other hand, have suggested that we ought to be reducing the benefit level from 90% of net earnings down to 80% and that we ought to be looking at putting in a 72-hour waiting period from the time of the accident until the time one would be eligible to receive benefits. I am wondering if you could tell me whether or not, and whether you have any personal examples of the hardship and despair that would cause to your individual members.
Ms Niemi: I guess I can answer that. I recognize that within our climate of fiscal responsibility and deficit reduction, particularly with regard to government apparatus, there is a definite trend in attempting to reduce benefit levels and cutting costs at all stakes. We don't feel at Local 793 that reducing benefit levels is indeed the answer. It's certainly not within the scope of legislation which is intended to be remedial, which is meant and intended to redress injuries done. It's not the intent of the legislation to further penalize and further injure workers.
I recognize that the idea behind Friedland has been duly negotiated by the Premier's Labour-Management Advisory Committee, and while Local 793 does not approve of this, we recognize that it was duly negotiated through a collective bargaining process, in that sort of a manner.
We don't feel, obviously, that it is the answer. If we anticipate better prevention and quicker return-to-work programs, we anticipate that these would be a much more effective solution than the overall reduction of benefits.
Mr Ferguson: I want to thank you for your balanced and rational submission to the committee.
Mr Offer: I too would like to thank you for the balanced and rational submission, notwithstanding the fact that some questions are less than balanced --
Mr Klopp: Well, don't ask any.
Mr Offer: -- such as Hansard will show the previous one.
I'd like to ask you about the ratings assessment. We have heard many presentations that the current ratings situation based on results is one that is in the best interests of workers and is in the best interests of reducing accidents in the workplace. We've heard that from a number of people. In fact, what we have heard is that if there's anything that's working well under the current act, it's the ratings situation, the thing that the government is seeking to change. I'd like to get your thoughts as to whether a ratings system based on results is not one which is in keeping with the best interests of workers in this province.
Ms Niemi: We agree that the experience and merit rating programs currently in use by the board are, in principle, effective in that they address issues of prevention. However, within our local, in terms of cases I've personally handled, there's such rife abuse of the experience rating. As we indicated in our brief to you, the instances where employers have encouraged their workers not to file compensation and to merely, "That's okay. Take a break. Sit in the kitchen. You don't have to work. Just read the newspaper and we'll pay your wages" -- that happens a lot more than we would like to admit.
Unfortunately, as a result of that, the statistics are not totally accurate or honest or representative of accidents actually happening within the industry. As a result of that, we feel that the legislation, the way it's worded in these amendments, is very effective in that it looks beyond numbers, numbers which can be very easily manipulated, as we're seeing. As a result, we feel that the inclusion of health and safety programs, employer cooperation in expedient return-to-work programs and employer cooperation in vocational rehabilitation services is a very balanced way of approaching a very problematic area at this time.
The Vice-Chair: Thank you very much, Mr Offer. I thank the International Union of Operating Engineers, Local 793, for their presentation this afternoon.
Seeing no further business, this committee stands adjourned until 8:30 am in Sault Ste Marie.
The committee adjourned at 1528.