Age Limit for Loss of Earnings Benefits Doesn’t Violate Charter

The Workplace Safety and Insurance Act’s age cut-off for loss of earnings benefits does not violate the Canadian Charter of Rights and Freedoms, Ontario’s Divisional Court decided in Gouthro v. Workplace Safety and Insurance Appeals Tribunal et al.

Facts of the case

Daniel Gouthro started working with the City of Toronto as a parks attendant in 1988. On February 5, 2001, he fell and hit his head on a locker. He was 63 years old at the time. As a result, he suffered cervical and lumbar strains. Consequently, he was granted loss of earning benefits until he turned 65, the compulsory retirement age in the City of Toronto.

Gouthro had also suffered a compensable back injury in 1982 and was receiving a monthly lifetime pension as a result.

Section 43(1)(c) of the Workplace Safety and Insurance Act (WSIA) provides that workers who are 63 years of age or older on the date of the injury are eligible for up to two years of loss of earnings (LOE) benefits after the injury. This is an exception to section 43(1)(b) of the WSIA, which terminates LOE benefits at age 65 for those who are injured before age 63.

Specifically, the law says:

A worker who has a loss of earnings as a result of the injury is entitled to payments under this section beginning when the loss of earnings begins. The payments continue until the earliest of:

(a) The day on which the worker’s loss of earnings ceases;
(b) The day on which the worker reaches 65 years of age, if the worker was less than 63 years of age on the date of the injury;
(c) Two years after the date of the injury, if the worker was 63 years of age or older on the date of the injury;
(d) The day on which the worker is no longer impaired as a result of the injury.

In order to be entitled to this exception the worker must demonstrate that they intended to continue working past age 65, therefore suffering a loss of earnings.

That is exactly how the law was applied for Gouthro.

Although he was originally awarded benefits until he turned 65, the loss of earning benefits were extended to February 5, 2003 (for two full years after he was injured), because he was able to show that he would have continued working beyond age 65 if not for the compensable injury.

Gouthro decided to contest the limit set out in the Workplace Safety and Insurance Act regarding the receipt of WSIB loss of earnings benefits as unconstitutional because it discriminates on the basis of age. In his application for judicial review to the Workplace Safety and Insurance Appeals Tribunal, he sought:

• A declaration that s. 43(1)(c) of the WSIA is of no force or effect because it contravenes s.15(1) of the Canadian Charter of Rights and Freedoms; and
• An order directing the Workplace Safety and insurance Board to pay loss of earnings benefits to him from the date of his injury until age 71

Gouthro’s application makes a clear attack on the exception in s. 43(1)(c):

“Section 15(1) of the Charter is contravened by section 43(1)(c) of the WSIA because it discriminates against workers on the basis of age, with respect to provision of benefits.”

The tribunal had to determine whether the impugned section discriminated against Gouthro on the basis of his age.

Gouthro was not successful. Although the section clearly creates a distinction based on age, the tribunal found that the two-year exception was based on expert evidence that relied on Statistics Canada data from 2008 showing that almost 90 percent of workers had retired by age 65. This provision offers practical ways to give older workers some flexibility. As stated by the tribunal majority:

“s. 43(1)(c) provided flexibility in LOE benefits to older workers while avoiding the problem of predicting when a worker would have retired. The Tribunal majority found that this approach was necessary to make sure that available benefits were appropriately targeted.”

Gouthro, still not satisfied, appealed the WSIAT decision to Ontario’s Superior Court of Justice, Divisional Court.

Decision

There were two questions the court had to deal with to confirm or reject the tribunal’s decision. First, does s. 43(1)(c) create a distinction based on age, and second, if so, does this distinction create a disadvantage by perpetuating prejudice or stereotyping?

On December 17, 2014, the court upheld the WSIAT decision and found that, while it was a clear the Act created a distinction based on age, the WSIA’s cut-off of loss of earnings benefits “does not create a disadvantage based on a stereotypical attribute.”

The court also found that while constitutional questions are reviewed on a standard of correctness, the WSIAT was interpreting its own statute and based on this expertise in applying the Act, the decision of the WSIAT was entitled to greater deference upon review.

Age limit constitutional

The age limit on the receipt of WSIB LOE benefits is constitutional based on current statistics that show that workers in the past have tended to retire before age 65, and that the system cannot afford to extend benefits to workers beyond age 65 and pay LOE benefits for life. These types of benefits are not available in perpetuity like other WSIB benefits. The purpose of the benefit is to provide insurance for actual wage loss, as opposed to indemnifying workers for life or providing a retirement subsidy. Insurance schemes need to establish criteria if they are to manage effectively and be financially sound. Age as a criterion is reasonable.

The court agreed with the WSIAT panel’s findings, stating:

“If the Workplace Safety and Insurance Act provided that injured workers were to receive LOE benefits until they died, that would imply that people work until they die. Both intuitively and statistically this seems incorrect.”

Expert actuarial testimony showed that less than 10 percent of the workforce was over the age of 65 years. While many expressed an interest in working past the age of 65, the reality was that very few did. Also, about 90 percent of workers who were injured after the age of 61 returned to work within two years, so the provision did not disadvantage 90 percent of the members of that class. Although some are affected by this general working age limit of 65 years, we are talking about loss of earning benefits here, not other benefits (for example, Gouthro himself was receiving a disability pension that was “lifetime”).

This is not a situation of a denial of benefits that available to other injured workers. It is an insurance scheme, not a social benefits program for workers. It has to be distributed in a financially responsible and accountable manner, and the age limit provision is a practical way of achieving this goal.

The tribunal therefore made the correct decision by concluding that the provision does not create discrimination, and therefore there was no contravention of the Charter. Even if there were a violation, it would be saved by section 1 of the Charter because the three-part test could be met.

On this point, Justice Marrocco wrote:

“[39] Providing loss of earnings protection to injured workers is obviously pressing and substantial. The same can be said for providing these benefits in a financially responsible way. If LOE benefits are provided in a financially responsible way, then the scheme for providing those benefits is sustainable in the sense that LOE benefits can be available for the foreseeable future. The benefit is also sustainable because the scheme limits or eliminates excessive financial demands. This is especially pertinent in Ontario because, when this legislation was introduced, the then Minister of Labour noted that workers’ compensation was failing to restore workers to their pre-accident status.”

What can be taken from this case?

We are often asked questions on why the WSIA can still discriminate based on age when other pieces of employment legislation have been changed to counter such discrimination.

Several interested stakeholders were waiting for this challenge and are quite disappointed with the results.

Suffice it to say, the court has again confirmed that the workplace safety and insurance scheme is meant to replace earnings. It is not meant to be solely a social benefits program. There are other eligible sources of income available to persons age 65 or older (e.g., CPP). For now, due to the statistical reality of the Canadian workforce, and that workers’ compensation is an insurance program, section 43(1)(c) of the WSIA does not violate s. 15(1) of the Charter and this will likely be upheld on future challenges.

However, due to the aging population and more and more employees choosing to work past the age of 65, with the possibility—perhaps greater—of incurring work-related injuries, and statistics changing, this issue will surely be revisited.