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 Volume. 8 Issue. 26 – July 17, 2024


This week the Tribunal considers the implications for past and future IRB quantum calculations under the interpretation of ‘gross employment income’ given that the Applicant received three years retroactive salary totaling $196,220.66 as a result of a successful grievance regarding former employment, with the decision with respect to same not being received until well after the date of the subject MVA.




196K Grievance Award Factored into IRB Calculation

Implications of Post MVA Grievance Award – At issue with respect to a February 2019 MVA was the quantum of the ongoing IRBs payable to the Applicant Botari as well as whether the respondent Dominion is entitled to repayment of IRBs due to an overpayment. In 23-010231 v Aviva, the Tribunal ultimately found both that Botari remained entitled to IRB at the previously established rate of $400/week, and that Dominion was not entitled to a repayment.

The dispute between the party’s centered on Botari’s successful wrongful termination grievance against the Ontario Ministry of Labour. Specifically, whether Botari’s reinstatement and resulting retroactive lump sum payment of his wages from 2017 to 2019 should be considered when calculating his IRB quantum. The total amount received was $196,220.66.



Employment

At the time of the accident, Botari was employed with Calian Ltd. working as a civilian driving instructor for the military and was a reserve member with the department of National Defence. Dominion determined that Botari was entitled to IRBs of $400.00 per week and paid IRBs in this amount until October 5, 2020. Prior to 2015, Botari had been employed with the Ontario Ministry of Labour as a regional Program Co-ordinator. He was placed on paid leave from 2015 to 2017 and was then terminated in 2017. He filed a grievance with the Grievance Settlement Board (“GSB”) for wrongful termination, but the grievance process was not completed prior to the February 8, 2019 accident.

Retroactive Lump Sum Received for Three Years

The GSB released its decision on November 22, 2019, allowing Botari’s grievance. He was reinstated to his employment with the Ministry of Labour, although he was ultimately unable to return to the job due to his injuries. He received a lump sum payment, allocated to the 2017, 2018 and 2019 tax years. As a result of the reinstatement Botari also now had access to collateral benefits and was subsequently found to be entitled to long-term disability (“LTD”) benefits, retroactive to August 20, 2019 and CPP Disability benefits, retroactive to December 2019.

Botari’s Accountant

The accountant for Botari confirmed that the quantum of his IRB payment remains at $400.00 per week despite any LTD or CPP Disability payments and that there was no overpayment of IRBs from August 20, 2019 onwards. There was an overpayment from February 15 to August 19, 2019 in the amount of $10,628 as a result of the retroactive payment the applicant received from the Ministry of Labour for sick pay. However, this was no longer recoverable as the period from February 15, 2019 to August 19, 2019 was in excess of 12 months from the date of the notice of repayment (s. 52(3) of the Schedule).

Dominion’s Accountant

Dominion’s accountant, however, opted not to include any amounts stemming from the Ministry of Labour’s retroactive lump sum payment. Rather, it only considered the Botari’s income from the Department of National Defence, Calian Ltd. and employment insurance. The resulting gross weekly income was determined to be $1,015.70 per week. When LTD and CPP Disability benefits were applied to Botari’s gross employment income, his weekly IRB entitlement became nil. As such, Botari was determined not to be entitled to IRB payments after February 8, 2019, and that Dominion had overpaid IRBs to Botari in the amount of $34,285.71.

Retroactive Salary Included in Gross Weekly Income

The Tribunal determined that retroactive salary stemming from his reinstatement pursuant to the November 22, 2019 GSB decision falls under the definition of “gross employment income” in the Schedule. Accordingly, gross employment income for the purposes of IRB calculation includes the retroactive wages from the Ministry of Labour. The Tribunal did not agree with Dominion that the lump sum payment stemming from the November 22, 2019 GSB decision is an award of damages rather than a salary. It was noted that the GSB decision was clear in stating that the lump sum payment was not an award of damages, but rather, retroactive salary.

The Tribunal took note of Botari’s argument that Dominion interpreted the Schedule in a manner that permitted it to retroactively deduct LTD benefits the applicant received from his reinstated employment with the Ministry of Labour from the IRB quantum. However, Dominion conversely refused to consider the salary stemming from this employment when calculating IRB quantum. The Tribunal agreed with Botari “that the definition of “other income replacement assistance” references an “income continuation benefit plan”. Section 3(7)(d)(ii) clarifies that such a plan includes payments made to persons “employed while the contract for the insurance is in effect”. As such, if the respondent was to deduct the applicant’s LTD benefits stemming from the Ministry of Labour, he must have been “employed” by the Ministry of Labour. It would be inconsistent to take the position that the applicant was “employed” for the purposes of LTD deductions, but not so “employed” for the purposes of calculating gross employment income. I further agree with the applicant that in order to be “employed” an employee must be paid for their work, thereby receiving a salary or a wage.”

Accordingly, when the retroactive wages from the Ministry of Labour are included in his pre-accident gross employment income, Botari remained entitled to $400.00 in weekly IRB payments. Dominion had ceased paying IRBs October 5, 2020, therefore he was entitled to payment of the withheld amount of IRBs from October 5, 2020 ongoing.

Dominion is Not Entitled to Repayment

Botari conceded that Dominion did overpay IRBs from February 15 to August 19, 2019 in the amount of $10,628. As a result of the reinstatement pursuant to the GSB decision, he received retroactive sick pay. However, Botari further submitted that the IRBs paid during this timeframe are no longer recoverable as the period exceeded the 12 month timeline stipulated in s. 52(3) of the Schedule. Based upon an October 5, 2020 notice of repayment, Dominion acknowledged that pursuant to s. 52(3) of the Schedule, it is limited to overpayment of IRBs from October 5, 2019 to October 5, 2020 rather than from February 15, 2019 to October 5, 2020.

The Tribunal, however, confirmed that any period of overpayment is limited to the period that Botari was in receipt of sick pay, which was from February 15 to August 19, 2019. However, Dominion has acknowledged that it is requesting repayment only for the period from October 5, 2019 to October 5, 2020, when Botari was no longer receiving sick pay. As such, Dominion has not established that it is entitled to any repayment of IRBs.



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