For over a decade, injured worker groups have met several times with the Workplace Safety and Insurance Board (WSIB) to raise concerns about Ontario’s experience rating system. Introduced in the 80s as an incentive for employers to provide a healthy and safe workplace, the program has in many cases had the opposite effect according to its critics.

What finally prompted an official response was a series of articles in the Toronto Star newspaper early this year. The Star investigation revealed that many of the companies receiving financial rebates through the WSIB’s program are the same companies where a worker was killed on the job in the same year.

WSIB chair Steve Mahoney, who says he wasn’t aware such a thing was happening, put an immediate moratorium on rebates to those companies and launched a formal review of the Experience Rating System in the spring of 2008.  [Watch: Steve Mahoney discusses Experience Rating System]

The WSIB, which makes a million decisions a year, was somehow missing out on key information about companies investigated by the government’s enforcement branch. The Ministry of Labour wasn’t getting the message across to the WSIB about companies that had been fined for endangering workers.
Mahoney acknowledges the problem. “If the ministry fines a company $3,000 and then they get a cheque from us for $5,000, that’s no good, and I understand that,” he says. “That’s not part of the review. That’s part of the immediate action I took when this problem became apparent to me.”

He says he has improved lines of communication, and that WSIB and MOL agree that they need a good two-way dialogue, particularly in the areas of the judicial departments.

But these measures cover just the tip of the iceberg, says Marion Endicott, an injured worker advocate. “It doesn’t deal with the huge rest of the problem.”

The numbers game
A committee worked all summer, meeting weekly to discuss progress on the review. Members of the WSIB are on the committee, and actuarial company Morneau Sobeco is leading the review. The WSIB has issued a draft of its report and plans to solicit input and feedback from both employers and labour.

Mahoney says the study has looked at other compensation boards in Canada, and that most have some form of incentive program. But experience rating isn’t just about incentives.

Ontario’s employer incentive program has two components: a reward component in the form of a rebate cheque or reduced premiums as an incentive for companies with good safety record, and a penalty component in the form of a hefty surcharge employers must pay the WSIB if their safety record is bad.

Endicott says the surcharge goes against the whole premise of Canada’s workers compensation law, which dates back to 1915. By gaining compensation, employees lost their right to sue. “This surcharge,” she says, “is kind of getting close to suing. Employers are required to pay huge amounts of money.”

And that, she explains, often leads to dishonest reporting, or depriving injured workers of time off. Employers get a warning, and if they “do things right,” the surcharge might turn into a rebate. “Doing things right doesn’t mean any improvements in health and safety,” she says. “It means getting workers off benefits.”

She says that the current system pressures employers to mistreat employees, by controlling claims in three ways: encourage workers not to report injuries; get workers back to work as fast as possible to avoid a “lost-time injury” in the stats; or aggressively fight claims.