Executive Summary: Key Legal and Evidentiary Issues

• Karl Sundin suffered a permanent workplace injury about two months into his new position as a Natural Resources Officer for the Government of Yukon, creating a significant disparity between his earnings at the time of injury and his income in the two years prior.

• Policy EL-01 required long-term benefits to be calculated using the worker's earnings from the two calendar years preceding the injury, resulting in a daily benefit of only $61.06 versus his actual daily earnings of approximately $303.15.

• The Appeal Panel invoked the "Exceptional Circumstances" provision of Policy EL-01 to recalculate Mr. Sundin's long-term benefits at $1,136.82 per week, matching his short-term benefit rate.

• WSCB challenged the Appeal Panel's decision as unreasonable, arguing its interpretation of "exceptional circumstances" contained logical inconsistencies and it failed to explain why Mr. Sundin had exceptional circumstances.

• Justice Wenckebach found the Appeal Panel neglected to consider the full scope of the policy's guidance on exceptional circumstances, including provisions specific to young workers, students, learners, apprentices, and workers with two years or less of documented work history.

• Applying the reasonableness standard from Canada (Minister of Citizenship and Immigration) v Vavilov, the Court concluded the Appeal Panel's chain of analysis was missing links and its reasons could not be justified in relation to the law.

The facts of the case

Karl Sundin began working as a Natural Resources Officer for the Government of Yukon ("YG") in July 2018, earning $78,819. He continues to work for YG to this day. Prior to this role, Mr. Sundin had different jobs, with variable income, and earned much less — $27,886 in 2014, $16,806 in 2015, $8,260 in 2016, and $16,991.25 in 2017. About two months into his new job, Mr. Sundin injured himself while taking part in a search and rescue operation. He was permanently injured on the job and is now sometimes unable to work because of the injury. At those times, Mr. Sundin is compensated for his loss of earnings through the Workers' Safety and Compensation regime.

Short-term benefits and the transition to long-term benefits

When Mr. Sundin was first injured, his WSCB case worker applied Policy EL-01 and determined his average weekly income based on his two pay periods immediately before his injury. His average weekly earnings were $1,515.76, and he was entitled to 75% of that amount: $1,136.82 per week for his income loss. When Mr. Sundin's injury did not improve significantly, he became entitled to long-term benefits. His case worker based his long-term benefits on his higher income of the two years immediately preceding his injury, which was $16,991.25, earned in 2017. His long-term benefit entitlement was therefore $325.86 weekly. Because of his low income, Mr. Sundin was permitted to retain more than 75% of his income. On review, his long-term benefits increased to $427.42, and this decision was upheld on reconsideration. Mr. Sundin then appealed to the Appeal Tribunal, contesting the amount in long-term benefits he was entitled to receive.

The applicable legislation and policy framework

At the time Mr. Sundin was injured, the Worker's Compensation Health and Safety Act, SY 2008 c12 (the "Former Act") was in force. The Former Act was replaced by the Workers' Safety and Compensation Act SY 2021 (the "Current Act") while Mr. Sundin's case was winding its way through WSCB's internal review process. The amount of compensation Mr. Sundin is entitled to, however, is determined according to the Former Act. Section 22(a) of the Former Act states that a worker is entitled to 75 per cent of their average weekly loss of earnings up to the maximum wage rate, while section 22(b) gives the Board the authority and discretion to determine how to calculate a worker's average weekly loss of earnings. The Former Act and the Current Act also give the Board the authority to create policies that are binding on the Board, the Appeal Tribunal, and others. In accordance with section 22(b), the Board created Policy EL-01, which sets out different processes for determining a worker's average weekly earnings for short-term and long-term benefits. For short-term benefits, the policy directs the decision-maker to use the worker's earnings over two full pay periods or one month immediately before the injury. For long-term benefits, the decision-maker is directed to consider the worker's earnings from all employment over the two calendar years immediately prior to the date the injury occurred, and to select earnings over the calendar year in the worker's favour. The policy also includes an "Exceptional Circumstances" section, which states that when the circumstances of a case are such that the policy cannot be applied or doing so would bring an unfair or unintended result, the decision-maker will decide the case based on Policy EN-02, "Merits and Justice of the Case." Policy EN-02 underlines the importance of applying the legislation and policies to similar situations, ensuring that participants will be treated fairly and the decision-making process will be consistent and reliable. A separate section of Policy EL-01, under "Long-Term Benefits," also addresses exceptional circumstances specifically for young workers, students, learners, apprentices, or workers with two years or less of documented work history, permitting the use of comparable earnings of other workers in the same or a similar occupation in Yukon.

The Appeal Panel's decisions

The Appeal Panel determined that the "Exceptional Circumstances" section of Policy EL-01 applied in the circumstances of Mr. Sundin's case. It concluded that Mr. Sundin's long-term benefit rate should not be determined on his income in the years before his injury, but on his income at the time of his injury. His income was $1,515.76 per week, and he was therefore entitled to $1,136.82 per week for time missed at work because of his injury. The Board of Directors stayed the Appeal Panel's decision. It concluded that the Appeal Panel misapplied the Former Act, the Current Act, and its policies. It also concluded the Appeal Panel's decision was insufficient. It remitted the matter to the Appeal Panel. The Appeal Panel reheard the appeal and reaffirmed its decision that Mr. Sundin had exceptional circumstances. It determined that Mr. Sundin's average weekly earnings should be equivalent to the income of a worker in the same position as Mr. Sundin, and with the same seniority and employer. The result was the same: Mr. Sundin was entitled to $1,136.82 per week in long-term benefits. The WSCB thus applied for judicial review.

The standard of review

The parties agreed that the standard of review is reasonableness. As set out in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, a reasonable decision is one which is transparent, intelligible, and justified, based on an internally coherent and rational chain of analysis that is justified in relation to the facts and law that constrain the decision-maker.

Errors identified in the Appeal Panel's reasoning

Justice Wenckebach concluded the Appeal Panel's interpretation of "exceptional circumstances" in Policy EL-01 was flawed. First, the Appeal Panel failed to consider the entirety of the policy's discussions about exceptional circumstances. It cited and relied on the "Exceptional Circumstances" section but did not mention the "Long-Term Benefits" section, which discusses exceptional circumstances affecting young workers, students, learners, apprentices, or workers with two years or less of documented work history. At the time of the injury, Mr. Sundin was not a young worker, student, learner, apprentice, or worker with two years or less of documented work history; however, the Court held that did not mean the section could be disregarded. It is only by considering the policy's descriptions of exceptional circumstances in the two different sections that the Appeal Panel would be able to understand if they interrelate or how they should be interpreted. Second, the Appeal Panel incorrectly stated that the policy puts no guidelines surrounding when or how "exceptional circumstances" are to be used. The Court found this statement was incorrect, as the policy does provide guidelines about the determination of exceptional circumstances in the long-term benefits section, setting out categories of workers that may qualify and providing an alternative mechanism for determining those workers' average weekly earnings. Third, while the Appeal Panel provided a list of eight facts that it stated justified its conclusion — including that Mr. Sundin was a probationary employee when he was injured, that he continued working after his injury and only sought medical treatment a month later, and that he continued working for his employer and only occasionally missed work in the first 90 days after his injury — the Appeal Panel failed to explain why those facts led it to conclude that Mr. Sundin had exceptional circumstances. Finally, the Court noted that using previous years' income to determine a wage rate allows for the possibility, and likely the probability, that a worker will receive long-term benefits based on a lower wage rate than they earned at the time of their injury. It was necessary for the Appeal Panel to explain why Mr. Sundin's situation was different than others who would be assessed at a lower wage rate for their benefits than they receive for their actual earnings. This explanation was missing from the decision.

The ruling and outcome

Justice Wenckebach granted the WSCB's application for judicial review, concluding that the Appeal Panel's Decision 257 was unreasonable. Decision 257 of the Appeal Panel was quashed and remitted back to a differently constituted panel of the Appeal Panel. No specific monetary award was determined by the Court, as the matter was sent back for rehearing. The WSCB was the successful party in this judicial review proceeding.