When it comes to wage indemnity benefits, employees can’t double-dip even if they’ve been successful in a human rights case, the Supreme Court of British Columbia has ruled.

Between April 2008 and April 2009, Leslie Palm couldn’t work due to depression and received $36,078.57 from the International Longshore and Warehouse Union-Employer Association Health and Benefit Plan in wage indemnity benefits. In March 2009, she filed five complaints with the Canadian Human Rights Commission, arguing she experienced workplace discrimination that affected her well-being. In 2011, she settled with her employers, the British Columbia Maritime Employers Association and Western Stevedoring Co. Ltd., and received $35,000 as compensation for pain and suffering.

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The benefits plan’s trustees asked for reimbursement of the $35,000, since the text states that wage indemnity benefits don’t apply to “disabilities which were the result of the act or omission of a third party.”

That is, the plan kicks in if no other party is on the hook. “If [an employee] fell off the roof putting up the Christmas lights, they get the benefits from the plan because they don’t have anybody to sue,” says Bruce Laughton, the lawyer who represented the plan. “It’s their own fault for falling off the roof.”

However, the plan’s text also notes that if a case does involve a third party, it may advance benefits to the employee. The most common third-party situations are motor vehicle accidents and workers’ compensation claims, says Laughton.

“What happens is that individuals are off work because of those injuries and they don’t know yet whether they’re going to recover from the insurance company or from workers’ compensation,” he says. “And so because of that uncertainty and the lack of income . . . the benefits plans will advance benefits on the understanding that once the claims against the third party has been settled, the members will reimburse the plan for the benefits.”

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Palm’s case was more complex because she didn’t file the human rights complaints until almost a year after she began receiving benefits from the plan. But in the case of an employee injured in a car accident, it’s clear there’s a third party involved and the employee would sign a reimbursement agreement at the outset, Laughton notes.

“The basic concept is that the members of the plan should not be able to recover from two sources,” he says.

Palm argued the $35,000 was an award for pain and suffering, not to replace lost wages, and she therefore shouldn’t have to reimburse the plan.

In his ruling, Justice Ronald Skolrood pointed to the plan text, which outlines that “benefits will be reduced by ‘any monies recovered through a legally enforceable cause of action against another person or corporation.’ This provision does not stipulate that the monies recovered from a third party must correlate to the type of benefits paid, which in this case again were for lost wages, in order for the benefit offset to apply.

“I am satisfied that any money recovered from a third party must relate to the same incident or event that caused or contributed to the disability for which benefits were paid. That is the case here in that the weekly indemnity benefits were paid in respect to wages lost while the defendant was away from work due to depression resulting from workplace issues. Those same issues were the subject of her complaints to the Canadian Human Rights Tribunal and of her resulting settlement.”

Skolrood ordered Palm to return $35,000 to the benefits plan, plus interest and costs.

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Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com

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