Highlights of Noteworthy Decisions

Decision 569 18
20/07/2018
M. Keil
  • Deductions (severance pay)
  • Loss of earnings {LOE} (termination of employment)

The worker suffered a compensable injury in April 2010, for which the Board granted the worker a 9% NEL award. In April 2014, the employer advised that worker that his employment was being terminated effective immediately, due to restructuring. The employer offered a severance package of 46 weeks of pay. The worker had to sign a release from all other claims, including claims under various Acts.

The Board found that the worker's employability was affected by his compensable injury and that he was entitled to WT services. However, the Board denied LOE benefits from April 2014 to March 2015, on the basis that the employer provided salary continuation during this period, and that the employer had not paid severance pay or termination pay. The worker appealed a decision of the Appeals Resolution Officer denying LOE benefits from April 2014 to March 2015.
The Vice-Chair agreed with a number of prior Tribunal decisions that pay in lieu of notice, severance or termination does not constitute earnings and cannot be used to deny LOE benefits for an overlapping period. The Vice-Chair acknowledged that Decision No. 2210/13 draws a distinction between the minimum termination pay provided under the Employment Standards Act and additional termination pay negotiated as part of an agreement. The Vice-Chair stated that, to the extent the Decision No. 2210/13 is based on similar facts to this case, she disagreed with the characterization of termination pay as earnings in that decision.
The severance package in this case represented compensation for a number of items, as well as constituting a release from any action. The severance package was called salary continuance, terminology that may have been used because it was paid in installments. However, the Vice-Chair found that it was still not earnings within the WSIA, as there was no remuneration for services provided.
The worker was entitled to LOE benefits during the period in question. The appeal was allowed.