REVIEW TO IMPROVE WCB RESPONSIVENESS, STREAMLINE ORGANIZATION

VICTORIA – The government acted today to fix problems at the Workers’ Compensation Board and make it more responsive to workers’ and employers’ needs. Two expert reviews will report back in mid-January, announced Graham Bruce, minister of skills development and labour.

“We are committed to making the changes needed to improve the board, cut its red tape and make it more user-friendly to both workers and employers,” Bruce said. “These reviews will also clarify the board’s mandate and deal with urgent items needed to make sure the system is sustainable and in line with other jurisdictions. Our aim is affordable, high-quality service and public confidence in the system.”

Bruce also announced two new appointments to replace the current WCB panel of administrators. Alan Barnard, former provincial comptroller general; and Bruce Rollick, a Vancouver actuary specializing in health and welfare plans, group benefits and collective agreements; were appointed effective today. The panel chair, Maureen Nicholls, remains in that position.

Today’s actions start the process of fulfilling another of the government’s New Era commitments.

Allan Hunt, an international expert on compensation programs and disability prevention from Michigan’s Upjohn Institute, will review WCB service delivery. He will recommend ways to streamline processes at the WCB and improve timeliness, fairness and quality. A Web site at www.labour.gov.bc.ca\wcbservicereview will allow system users to provide input to the review.

WCB policy and legislation will be reviewed by Alan Winter, a Vancouver lawyer with Fasken Martineau DuMoulin LLP. Winter specializes in labour law, occupational health and safety, and workers’ compensation. Winter will recommend improvements to the governing body. He will also report on how the present multi-layered appeal system should be changed to manage the volume and backlog of appeals and to speed decision-making. As well, he will make recommendations on the scope and funding of the system, pension and benefit levels, vocational rehabilitation and survivor benefits. Information from the recent royal commission will allow this review to be focused and timely.

Both reports will be submitted to the minister as part of the government’s core services review.

The WCB provides coverage for two million workers and 167,000 employers. It has an $8-billion investment portfolio and paid $950 million in claims last year.

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Alan Barnard joined the British Columbia government’s Office of the Comptroller General in 1981. He was appointed deputy comptroller general in 1990 and comptroller general in 1993. Barnard received his certified management accountant designation in 1975 and was president of the CMA Society of B.C. in 1990.

In 1997, he was honoured with a fellowship from the Society of Management Accountants of Canada for his contributions in public-sector financial management. Also in 1997, Barnard received the Financial Management Institute Award.

Barnard retired in 1998. He was made a life member of the Certified Management Accountant in 1999.

Before joining the provincial government Barnard worked in the private sector, and in credit unions and co-operatives. He also held positions as general manager and industry comptroller and was a lecturer at the University of Lethbridge.

Bruce Rollick

Bruce Rollick attended University B.C. on a Cominco scholarship and graduated with a bachelor of science degree in honours mathematics. He attained fellowship in the Society of Actuaries and in the Canadian Institute of Actuaries in 1971. Rollick is president of Strategic Income Security Services Ltd., an actuarial consulting firm.

Before 1996 he was with the Wyatt Co., where he served as vice president and director for 14 years and was responsible for the operation of the Vancouver office, where he was employed for 30 years.

Rollick specializes in trusteed, negotiated pension and health and welfare plans. He has particular expertise in the areas of pensions, group benefits and collective bargaining.

WORKERS’ COMPENSATION BOARD SERVICE DELIVERY REVIEW

Allan Hunt

Allan Hunt is a native of Wisconsin, educated at the University of Wisconsin, Lehigh University and the University of California at Berkeley, where he earned his PhD in economics in 1974. He has been employed at the W. E. Upjohn Institute for Employment Research in Kalamazoo, Michigan, since 1978 and was appointed to his current position as assistant executive director in 1989.

Hunt’s research career has involved him in the areas of disability compensation programs, prevention of work-related disability, employment and training policy, and the employment effects of technological change. Among the sponsors of his research have been the Social Security Administration, the National Academy of Sciences, the National Commission for Employment Policy, the Workers’ Compensation Board of British Columbia, Victorian WorkCover Authority of Australia, the International Labour Office, the Workers Compensation Research Institute, the U.S. Occupational Safety and Health Administration, and three different bureaus of the Michigan Department of Labor.

Hunt has over 25 years of experience in research on workers’ compensation policy issues and is the author or co-author of eight books and numerous commissioned reports and articles.

WORKERS’ COMPENSATION BOARD POLICY AND LEGISLATION REVIEW

Alan Winter

Alan Winter articled at the law firm now known as Fasken Martineau DuMoulin LLP and was admitted to the British Columbia bar in 1981. Since then, he has practised in the firm’s labour, employment and human rights department.

Winter has extensive experience in all areas of employment and labour law. Over the last several years, he has focused on two areas: conducting labour negotiations on behalf of employers in both the private and public sectors; and representing employers on workers’ compensation matters involving assessments, occupational health and safety standards, and compensation claims.

Winter was involved in the Royal Commission on Workers’ Compensation in B.C., representing individual employers and business organizations like the Employers’ Coordinating Group on WCB, which represented members of the Business Council of British Columbia, the Coalition of B.C. Businesses and the Employers’ Forum on WCB.

He has published articles and conducted seminars on labour and workers’ compensation matters.

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Core Services Review of Workers' Compensation Board
Terms of Reference
September 2001

The government has recently begun a review of all of its core services and systems of administrative justice. A comprehensive review of the Workers' Compensation Board (WCB) is seen as an essential component of this process, as well as to meet the government's New Era commitment to make the Workers' Compensation Board more responsive to the needs of injured workers and employers alike. This document sets out the terms of reference for the core services review of the WCB.

Background

The WCB is an independent provincial agency created by theWorkers Compensation Act. The WCB is responsible for adjudicating and administering benefits to workers, their dependants, and survivors for occupational injury and disease. The WCB is also responsible for the province’s occupational health and safety program. The workers’ compensation system is a mandatory, no-fault, monopoly system based on a “historic compromise” whereby workers give up the right to sue in return for security of benefits, and employers gain protection from legal suit in return for funding the system.

The WCB is a complex organization; this complexity results from the fact that it has responsibility to:

The WCB's organizational structure reflects the complexity of these responsibilities. It is divided into three functional areas: policy making, administration, and appeals.

A Panel of Administrators consisting of a Chair and four Panel members governs the WCB. The Panel sets the policies and strategic direction for the WCB.

I. Objectives of the Review

The objective of the review is to ensure the Board has a clear mandate, which is relevant to society, and to determine ways in which the WCB can improve service delivery for both workers and employers. The review will be guided by the "historic compromise" that underpins the establishment of the workers' compensation system, as well as by the core services review framework and questions. Broad objectives include:

• Making recommendations with respect to the legislative and policy framework WCB requires to carry out its mandate effectively;
• Making recommendations to eliminate overlapping jurisdictions and multiple proceedings;
• Making recommendations to streamline administrative procedures.
• Objectives that are specific to the WCB include:
• Making recommendations to ensure the long term viability of the workers’ compensation system; and
• Making recommendations that will improve the service delivery of WCB programs and services.

In addition, the review will take into consideration the findings of the Royal Commission as set out in the Royal Commission's Interim and Final Reports.

II. Review Components

The review of the workers' compensation system will be divided into two parts. The first part will focus on service delivery. The second part will comprise five components: board governance, appellate structure, major law and policy issues, occupational health and safety and deregulation, and role definition.

Part 1: Service Delivery

A review of the current service delivery challenges within the workers’ compensation system will be undertaken. A key component of this review will be a comprehensive assessment of the WCB’s interactions with workers, employers, and the public, a review of the WCB’s current service standards, and development of recommendations that are in keeping with best practices.

Specific questions to be addressed will include:

Quality

1. Is the WCB providing fair and timely services to workers and employers in terms of decision-making about workers’ compensation and rehabilitation, occupational health and safety in the workplace, and employer classification and premium rates?
2. Does the WCB communicate with its clients and stakeholders in a timely, responsive, and accurate manner? Is the response provided by the WCB appropriate given the nature of the question, problem or concern?
3. Is plain language used in all decisions, documents and communications? Are sufficient opportunities for face-to-face meetings and interaction provided?
4. Do workers, employers and the public have sufficient information and awareness about the WCB to access its services efficiently and appropriately?
5. Are processes for resolving complaints and disputes timely, fair, and effective? Are workers and employers adequately advised of their review and appeal rights?
6. Does the WCB provide adequate training to staff in terms of client interaction and client service?

Efficiency

1. Are current organizational and service delivery models the most efficient available, and in keeping with best practices? Will current service initiatives improve service delivery and meet the future needs of stakeholders? If not, what changes should be made to increase the level of efficiency while maintaining high levels of quality service?
2. Does the current system provide an appropriate focus on delivery of core services? Can organizational complexity be reduced to deliver these core services in a more efficient manner?

Accountability

1. Are current service performance measures and reporting mechanisms appropriate and effective?
2. Are appropriate mechanisms in place to ensure service standards and key performance indicators are tracked and met? Are appropriate benchmarks established and tracked?
3. If not, what changes should be made to ensure the ongoing accountability of the WCB for fair, responsive, and timely delivery of service to workers, employers and the public?

Part 2: Governance, Appellate Structure, Major Law, Policy and Regulation Review

1. Board Governance

A review of issues relating to the WCB's governance model will be undertaken, including consideration of the nature and size of the governance structure that would best provide the required stewardship of the system. A key component of this review will be a comprehensive assessment of board governance models in other jurisdictions and recommendations on best practices.

Specific questions to be addressed will include:

1. Does the current governance structure provide the required stewardship to the workers' compensation system? If not, how can effective governance be assured?
2. What are the components of effective governance in the context of the workers' compensation system in terms of:

• Composition of the board;
• Criteria for selecting board members;
• Selection process for board members;
• Terms of appointments;
• Role of the chair;
• Time commitment for board members, including the Chair;
• Mechanisms for ensuring board cohesiveness;
• Role of stakeholders in relation to the board;
• Role of stakeholders in the policy and regulation development process; and
• Direct reports to the Panel of Administrators.

3. Is the WCB providing fair and timely services to workers and employers in terms of decision-making about workers’ compensation and rehabilitation, occupational health and safety in the workplace, and employer classification and premium rates?

2. Appellate Structure and Related Topics

This component of the review is to address issues relating to the adjudicative process both inside the Board and with external appeal bodies.

Specific issues to be addressed will include:

1. Should the workers' compensation appeal system be changed? If so, what system should be put in place to ensure the fair, expeditious, efficient and effective resolution of appeals?
2. What are the components of an effective appeal structure in terms of:

• The number of levels of appeal;
• The jurisdiction of appeal body(ies);
• The reporting relationship of appeal body(ies);
• The relationship of appeal body(ies) to the Panel of Administrators;
• The appropriate degree of independence;
• Whether board policy should be binding on appeal body(ies);
• The role of medical advisors in the appeal process, and specifically the role of the medical review panel process;
• Mechanisms to reduce appeal volumes and to prevent/address the development of backlogs in the system;
• The role and structure of internal review processes;
• The role of alternative dispute resolution in the system;
• Mechanisms to enhance consistency and predictability of decision-making within the system;
• Standards for performance measurement and accountability for appeal bodies;
• The organizational structure of any new appeal body(ies); and
• The role of any representational members.

3. Should there be a power of reconsideration and, if so, should there be constraints placed on this power (i.e. similar to that provided under theLabour Relations Code)?
4. With respect to compensation claims, if there is new evidence that is of a substantial and material nature, should it be considered by the first level of Board adjudication before it may be considered by an appeal body?
5. If a new appeal process is recommended, how should transitional issues be addressed? What is a reasonable timeframe within which to operationalize a new appellate structure and process?
6. Should estates of deceased workers have standing on appeal?

3. Major Law and Policy Review

This component of the review will involve a thorough examination of the critical issues that are fundamental to the sustainability of the workers' compensation system. This examination will have two elements: reviewing the scope of the workers' compensation system in terms of the range of the application and the types of injury/disease covered and reviewing specific policy issues that have been identified as requiring immediate attention, including pensions, benefit levels, vocational rehabilitation, finality in the system, funding the system, fatal/survivor benefits and relief of costs.

There are two specific objectives for the major law and policy review: first, to establish the extent to which the system should continue to provide the current level and range of coverage, and second, to bring specific policy components in line with other Canadian jurisdictions.

Scope and Coverage

Should theActcontinue to provide "universal coverage" or should the scope of the coverage revert to the "exclusionary coverage" provided prior to the enactment of Bill 63 in 1994, or some other variation?

Policy Issues

Pensions

1. How should workers who are left with a permanent residual disability as a result of an occupational injury or disease be compensated?
2. Should the current pension system be retained, or should the approach currently used in other provinces be adopted? Specifically, should theActprovide for two separate types of pension awards: a lump sum for the non-monetary effects of a permanent impairment, and a pension to age 65 if there is an actual loss of earnings? If such a system is adopted, what type of benefits should be paid after age 65?
3. How should employability be assessed for the purposes of a loss of earnings pension? To what extent should non-compensable factors be considered when assessing employability?

Vocational Rehabilitation

1. Should the objective of vocational rehabilitation be employment or employability?
2. To what extent should the WCB provide vocational rehabilitation to injured workers? What, if any should be the limits to the WCB's discretion in this regard?
3. Should there be a statutorily mandated duty upon employers to accommodate injured workers? If so, should the nature of the duty vary depending upon the size of the employer and/or industry?
4. Should there be a statutory duty placed on workers to take all reasonable steps to mitigate any losses and return to work?

Benefits

1. What changes, if any, should be made to the method of calculating a worker's average earnings for the purposes of Section 33 of theAct?
2. When, if at all, should benefits from other government agencies, employment-related benefits, and private insurance plans be stacked and when, if at all, should these benefits be integrated with workers' compensation benefits?
3. Should the compensation rate be changed to a rate based on percentage of net earnings? Should the rate of compensation remain the same throughout the entire period of short term disability?
4. Should the way in which benefit payments are indexed be changed?
5. With due regard to the experience of other Canadian jurisdictions, should there be a waiting period for eligibility for workers' compensation during which the employer is obliged to maintain the worker on payroll? If so, should the employer be reimbursed by the system when the claim is accepted?

Lack of Finality

Should there be time limits on the ability to obtain reconsideration of past decisions with respect to compensation, occupational health and safety, employer assessment or classification matters? If so, what should these limitations be?

Occupational Diseases

1. Should the WCB continue to cover occupational diseases for compensation purposes, and if so how should they be addressed?
2. Should there be a mechanism for assessing and providing proportional entitlement for occupational injury and disease?
3. Should the current economic test remain for occupational diseases
4. How should applications for occupational diseases with long latency periods be dealt with under theAct?
5. How should the conditions of chronic stress and chronic pain be dealt with under theAct?

Funding the System

1. Should there be provision for redistribution of claims costs above a certain threshold?
2. Are the current relief of cost provisions contained in theActand in Board policy meeting their intended objectives? Are these objectives still valid? Should the relief of cost provisions be continued or should alternative mechanisms be implemented? If so, what mechanisms and why?
3. Should the WCB have additional powers to combat fraud within the system? If so, what should these powers be?

Fatalities / Survivor Benefits

Do the current provisions of theActensure appropriate entitlement and adequate benefits for survivors following the death of a worker? What, if any, changes should be made to theActin this regard?

4. Occupational Health and Safety and Regulatory Review

This component involves an analysis of the Board's current regulatory framework in order to identify areas of redundancy, repetition and overlap. It will also comprise a review of prescriptive versus performance based regulations with respect to occupational health and safety programmes, as well as a review of the role of new technology in providing simplified regulatory options to both large and small businesses.

Issues to be addressed in this section include:

1. Identify any overlap or duplication of regulations that can be immediately repealed without negative consequences for occupational health and safety.
2. Do the occupational health and safety requirements administered by the WCB provide an appropriate balance of performance and prescriptive powers?
3. Provide a plan for the effective review and reduction of health and safety regulations that is consistent with ensuring an appropriate balance between performance and prescriptive regulations without jeopardizing the health and safety of workers.
4. How should the specific needs of large and small employers be addressed in the development and application of occupational health and safety regulations?
5. To what extent can these needs be addressed through technological solutions and/or amendments to the Occupational Health and Safety Regulation?
6. Identify and address issues relating to occupational health and safety arising out of the Royal Commission Reports and the subsequent enactment of Bill 14.

5. Role Clarification/Definition

This component of the review clarifies and defines roles within the workers’ compensation system. Specific questions to be addressed include:

1. Should the authority to amend Schedule B of theAct(the presumptive schedule of occupational diseases) and to establish regulations of general application with respect to occupational diseases continue to reside with the WCB?
2. What role should the Office of the Workers and Employers Advisors play in the workers' compensation system generally, and the review and appeal process in particular?
3. What role, if any, should the government play in the establishment, review and updating of occupational health and safety regulations? What is the appropriate role for WCB?

III. Time Frame, Consultation and Reporting

Parts 1 and 2 of the review will be conducted through parallel, but closely related processes. Two independent consultants have been retained by the Ministry of Skills Development and Labour to undertake the review. Each consultant has primary responsibility for either Part 1 or Part 2 of the review. They will work in tandem, but each consultant is required to prepare a separate report for the Minister.

Part 1 of the review will engage stakeholders in a time-limited consultation process to ensure their concerns about service delivery are heard and understood. This consultation will include Government Members of the Legislative Assembly and may use such means as group meetings and a web-site. Part 2 of the review will encompass a more focused consultation process as significant stakeholder input into these issues has already been provided through the Royal Commission public hearing process. The consultant responsible for Part 2 will also be required to liaise with the Administrative Justice Review and the De-Regulation Initiative to ensure consistency in the recommendations where the issues being considered by these two processes overlap.

The timeframes for Parts 1 and 2 of the core review are set out below.