Nov. 24, 2014
By Moira Welsh
A flawed workplace insurance program exposed in 2008 for giving rebates to dangerous employers is still handing out the cash rewards, a new report by the Ontario Federation of Labour has found.
The problem was earlier exposed by a 2008 Star investigation that found Ontario’s Workplace Safety and Insurance Board (WSIB) gave tens of millions of dollars in rebates to companies that had been found guilty of provincial safety violations leading to deaths, amputations and other gruesome injuries.
After the Star stories were published, then premier Dalton McGuinty called the rebates an “embarrassment” and the WSIB chair said the problem would be promptly fixed.
The report, scheduled to be released Monday by the Ontario Federation of Labour, shows corporations are still getting a huge chunk of money in safety rebates in the years immediately after worker deaths and serious injuries. Like the cases previously exposed by the Star, some of the companies were convicted under provincial occupational health and safety laws but the fines imposed were dwarfed by their hefty rebates.
“I’m shocked by the lack of action,” said OFL president Sid Ryan. “It’s basically giving the finger to injured workers.”
The WSIB told the Star it has concerns about the accuracy of the OFL’s research. A spokesperson said the WSIB has taken “strong action” since the Star articles in 2008, cancelling more than $10 million in potential rebates under the Fatal Claim Premium Adjustment policy.
A spokesperson for the WSIB said the agency has yet to see the report. The Star sent questions based on examples in the report and spokesperson Christine Arnott said “given the examples you have shared with us, we have concerns about the accuracy of the information being used, and how it is being interpreted.”
The following are examples of WSIB payouts to companies after deaths or serious injuries detailed in the new OFL report:
IKO’s spokesperson said, “WSIB notwithstanding, safety is an important issue for us and is a key consideration for our operations on an every-day basis.”
Lafarge and Triple M. didn’t comment.
In Ontario, most companies are required to buy insurance from the WSIB. Their premiums pay for the program, sharing the costs among all employers. The program uses rebates to reward companies that improve safety in their workplace and uses surcharges to pressure unsafe companies to improve.
The Star’s original investigation probed whether rebates were issued in the year following the accident and the year of the guilty finding; that analysis led to 75 cases that most dramatically illustrated the problem. These companies were fined a total of $14 million yet received payouts totalling $42 million from the WSIB.
The WSIB then announced a policy dealing with workplace deaths. The policy disqualified a company from rebate eligibility in the year of the fatal accident. The Star reported at the time that the rule did not, however, target rebates in the years after a death, during the three-year window in which a claim’s cost is tracked.
Now that the OFL has concluded the problem still exists, its president, Ryan, said the provincial fines are clearly “just a cost of doing business.”
According to the report, called “Rewarding Offenders,” the WSIB gave rebates to 78 employers convicted of provincial offences between 2011 and 2013 during the same year the accidents occurred. More than $14 million in rebates was awarded to employers during the year they were convicted of health and safety offences, the report said.
WSIB premiums are based largely on the expected cost of a company’s claims for the year. If lower than projected, the company gets a rebate. How much lower determines the amount of the rebate. If a firm’s insurance costs exceed expectations, it is hit with a surcharge.
In Ontario, death is cheap. A dead worker costs the system about the same as a worker with minor injuries, whether it’s from lost time or the purchase of a casket.
WSIB’s former chair, Steve Mahoney, once said: “The cost of a fatality can actually be lower than the cost of an injury, particularly if there are no dependants - just pay for the funeral, and it’s over.”
The OFL says the insurance board claims it’s in the midst of revamping the much-criticized “experience rating” system. But lawyer Joel Schwartz, who wrote the report for the OFL, said the changes are superficial because the board continues to base its premium rates on the costs related to employee accidents. Schwartz is a staff lawyer at the Industrial Accident Victims’ Group of Ontario.
Under this system, Schwartz said employers have an incentive to suppress or minimize claims, creating a false impression of safety. According to the report, employers that have broken health and safety laws would still be entitled to reduced premiums if they are able to minimize the cost of claims.
The OFL wants WSIB to make dramatic changes to the system by using the rebates to improve workplace safety and use the money previously spent on rebates to help victims’ families.
Ryan says the time for incremental changes is long past. He’s calling for a change of executive leadership at the WSIB, where former Ontario Progressive Conservative MPP Elizabeth Witmer is the Liberal-appointed chair.
“The power rests with the premier’s office and Kathleen Wynne needs to send a signal. No worker should lose a life or limb.”
The WSIB told the Star that it is “committed to workplace safety. We invest more in health and safety than any other jurisdiction in Canada, paying more than $250 million annually (more than $1.5 billion since 2009) out of employer premiums to support occupational health and safety activities.”