Ontario’s Ministry of Labour has announced that it is about to amend legislation which will lower the ceiling which determines whether any of the surplus in the insurance fund held by the WSIB (Workplace Safety and Insurance Board which used to be known as the Workers’ Compensation Board) should be allocated to employers.
A qurestion: What is in a name?
The new name for the more familiar Workers Compensation Board does not refer either to workers or compensation.
Several other questions arise:
Why does the WSIB ever have a surplus and to whom does that money belong?
The WSIB collects premiums from employers and aggregates them. These funds are then invested to ensure that a certain amount of capital is always available to pay compensation to injured and sick workers entitled to benefits under the workers’ compensation scheme. The WSIB is required to maintain more capital than may be needed at anyone time. This means that the premiums paid in are higher than they need to be to meet on-going outgoings. The principle is that, should payments into the insurance fund be stopped at a particular moment in time, there should be enough money in the fund to pay all the benefits to which existing claimants are entitled. Failure to have that amount of money in reserve, to have a surplus, is said to create an economic crisis for the WSIB. It will have liabilities on its books which it cannot meet (only if payments stop). It will have an unfunded liability problem. So, the insurance fund is kept topped-up.
But what if that surplus balloons? There will be money sitting there that is not doing anything very much. As it turns out, a lot of money, a lot of surplus. Just now the Ontario WSIB surplus is a staggering $6.4 billion. No self-respecting capitalist can tolerate the idea of lazy money. Currently the law does not allow them to make a claim on that surplus.
This raises another question:
Why is there a law denying capitalists desires in a devoutly capitalist jurisdiction?
Because it is workers’ money, not the capitalists’ money. Workers run the risk of injury or disease by going to work. They will need replacement income and money for treatments should those risks materialize. If there was no insurance scheme on which they could call, they would have to buy some insurance. They would need to bargain to earn enough to pay the premiums. That is, they would have to ask for more money than they would if there was an insurance scheme, such as the WSIB, on which they can for income replacement and treatment. It is the employers who make out the cheques but they have the wherewithal to do this because they do not have to pay employees who would have bargained for more if they had to buy their insurance directly.
It looks as if employers are paying the contributions but in fact the contributions come out of workers’ potential wages . This is true for other worker benefit schemes such as pensions. Economists agree with this analysis even though, in any one workplace, employers firmly believe that contributions to a workers compensation or pension plan is an enormous drag on their profits. Even the Supreme Court of Canada agrees that these kind of contributions on behalf of workers comes out of workers’ foregone wages; see its decision in 1968 in Gray v. Kerslake.
This raises another series of related questions: why should these huge amounts of money in worker compensation and pension funds, workers’ monies, be invested by non-workers? Why should they be allowed to be invested in anti-working class, anti-environmental undertakings, such as private prisons, military equipment, fossil fuels, long term for-profit care homes, mining and deforestation on indigenous lands, etc.?
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To return: the Ford government has a plan to take money out of the surplus WSIB funds and give it to employers. It intends to enact a law to distribute funds when the WSIB fund reaches 125 % of what the actuaries tell it is necessary to have. At that point it must re-allocate the money. The law will say that the fund managers can consider re-allocating the surplus when it reaches 115%. The intention is that those ‘excess’ funds will be returned to employers. The supporting rationale is that the employers will have more money to invest in new jobs, technology and health and safety for workers.
Of course, they might just pass it on to their shareholders and executives—as they did with subsidies during the pandemic.
And it is workers’ monies. It is theft.
Sidebars
On 6 October, 2021, Ontario’s Ministry of Labour was cutting WSIB premiums for 2022 by $168 million. This will mean that, since 2018, premiums will have been cut by $2.4 billion. The latest cut reduces the average employer contributions to the workers’ compensation fund by 5%. Employers are said to be happy, much as the Ford government wants them to be. A cut in premiums, however, does not signify that workers are better off. It could mean that the WSIB is so much more efficiently run than it has ever been that it can keep workers’ benefits where they have been and still return money to employers. It could mean that there are less injuries and diseases arising from workplace incidents and less benefits have to be paid out. It could mean that the WSIB has become meaner and makes it harder for injured and sick workers to recover benefits or a mixture of all of these possibilities.
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How did we get workers compensation? As the Industrial Revolution took hold, workers’ conditions were abysmal. The rates of injuries and deaths were catastrophic. The social welfare system was primitive, to say the least. Workers and their families needed income replacement. They went to the courts to sue their employers. The courts were unreceptive. They were committed to the idea that contracts of employment were entered-into by legally equal people, employers and employees. As they were voluntary arrangements, each party had taken risks which they were willing to bear. Workers were assumed to have voluntarily assumed the risks of being injured or killed at work. If they argued that a fellow worker’s carelessness had led to injury or death, the courts held that it was still no one’s responsibility except that of the injured workers who had voluntarily agreed to work with such careless workers. Workers needed something better and they were supported by more liberal thinkers and churches who could not stomach the carnage. As these voices began to be heard, the judiciary began to bend a little and it slowly released its strict adherence to the voluntary assumption of rik principle which had crippled workers. For most workers, it still remained too costly to sue but, some employers did not like the uncertainty the right to sue gave workers and they joined the cries for reform which came form workers and their more liberal allies. In 1913, a commission that had been set-up to deal with the problem, the Meredith Commission recommended the workers’ compensation. scheme that remains in place today. The idea was that, if workers gave up their right to sue for replacement income, that replacement income would be provided by an insurance scheme which would determine what kinds of injuries would be compensated. There were always to be struggled about which employers would eb covered, how compensation was to be calculated, what role the adjudicators should play in remedying wrongful practices that had led to claims, etc. Workers won some improvements. But, as seen, employers fight back. The story reminds us that those bearing the real risks of production are workers and that they have to struggle mightily to get compensation for their injuries and eaths incurred as the employing class pursues profits.
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In the 19th century it was common for employers to pay their workers in goods in lieu of the agreed-upon monetary wages. The practice was known as ’payment in truck’. It led to abusive trickery. Overvaluation of the goods was the norm, in effect stealing money from the workers. One technique used by employers was to issue vouchers , stating that the vouchers would be redeemed at a local pub. Every pay-day, workers would spend some of their wages as they collected them. In one coal-mining area of Wales, the workers’ spouses used to meet their husbands at the pub to make sure the wages would not be squandered. Workers , trying to avert this, often hid their spouses’ only pair of shoes to stop them from coming to the pub; pay-days came to be known as “Shoeless Thursdays”. The employers’ attitude has not changed all that much. The Ontario Employment Standards Act has a provision that workers’ wages must be paid in cash to avoid these kinds of abuses. There are exceptions: in some cases, employers may charge wages with the cost of providing room and board up to a limited amount, union dues may be deducted from wages, as may contributions to CPP or registered retirement plans. The story illustrates that stealing from workers has a long history. The Ford government attack on the WSIB fund continues a shameful tradition.