When companies get rewarded for mistakes - WSIB Rebates

[Guest guest]

When companies get rewarded for mistakes

 

 

 

JIM ROSS FOR THE TORONTO STAR

Brenda Bamford, whose brother Kim Warner died of heat stroke at a Weston

Bakeries facility, says she feels her grief anew after hearing the company

" could get such a payoff for my brother's death. "

 

 

 

 

WORKING WOUNDED

 

The Star is investigating workplace injuries, death and illnesses in Ontario.

Information in the series comes from interviews, court documents and various

data sources, including Workplace Safety and Insurance Board data obtained

after a lengthy freedom of information request. The Star’s Andrew Bailey

analyzed the data. Previous stories have highlighted loopholes that allow

unsafe

job sites to escape penalties, and the high rate of post-traumatic stress

disorder among Toronto Transit Commission drivers.

 

 

 

Flaw in worksite safety system allows big rebates even when a death occurs

 

Apr 05, 2008 04:30 AM

David Bruser

Moira Welsh

Staff Reporters

Bonnie Heffern worked near the hospital in downtown Sudbury, so she was

already in the emergency room when they brought in her husband.

There had been an accident at the nickel refinery where Gordie worked.

The 46-year-old shift foreman had shut off an oxygen line valve and reopened

it without equalizing the pressure on both sides of the valve. Gas was

moving fast through the pipes.

A provincial investigation would later find that Inco Ltd. had not properly

trained its workers to operate the valves at the refinery. But also, the

valve contained hydrocarbon grease, which is highly flammable near pure oxygen.

The valve exploded.

Gordie looked like a spent fire log. Bonnie stood close by and watched his

charred body stiffen, his blue and uncomprehending eyes wide and darting. He

slipped into unconsciousness. The next day, on July 28, 2001, Gordie died.

What happened after his death reveals a serious flaw in Ontario's workplace

safety system. Inco was prosecuted and fined by the province, while another

arm of government rewarded the company with a safety rebate many times the

value of the fine.

In the intervening years, Bonnie mourned, sat through a coroner's inquest

and made plans to remarry. With clarity and a steady voice, she recently

recited the details of the day Gordie got hurt on the job.

What she cannot understand is how Inco's mistake could cost her so much yet

the company so little.

In 2004, after a Ministry of Labour prosecution, Inco pleaded guilty in

court for its role in Gordie's death, and paid a $375,000 fine. But Bonnie

recently learned that after the accident, the Workplace Safety & Insurance

Board

awarded the company $5 million in rebates.

" They shouldn't be rebated. It should not happen, " Bonnie said when told

about the payouts. " Gordie was a big advocate for safety at Inco. Any dangerous

job that had to be done he would do. He was always the dirtiest man walking

out of the refinery. If there was something wrong and it could be made right,

he would be the one talking now. "

Most companies in Ontario are required by law to buy insurance from the

Workplace Safety & Insurance Board (WSIB). Their premiums finance the program,

spreading each company's costs among all employers. The WSIB should then be

using rebates to reward those that have made workplaces safer and surcharges to

goad unsafe workplaces into improving.

But the Star found that the insurance agency has given at least tens of

millions of dollars in rebates to companies that have been prosecuted by the

provincial government and found guilty of safety violations leading to deaths,

amputations and other gruesome injuries.

The Star looked at 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 illustrate the problem. These offending companies were

fined a total of $14 million yet received payouts totalling $42 million from

the

WSIB.

While the WSIB has known about the practice for years – labour groups have

repeatedly complained about it – it is now searching for solutions after the

Star started investigating.

WSIB chair Steve Mahoney said he wants to address the issue promptly and get

in step with his agency's graphic " Road to Zero " TV ad campaign that warns

of fatal risks in the workplace.

" When you see people are getting rebates when they have obviously fallen

down through fatalities or (safety) convictions, that doesn't jive, " Mahoney

said. " The good (companies) wind up paying rebates to people who are not

performing well. "

The Star found the WSIB issued payouts that were often double, sometimes

quadruple the penalties levied after the province took companies to court,

allowing businesses to recoup their financial losses.

" What's wrong with this picture? That means we're paying their fines, "

lamented Mahoney, who began his tenure as WSIB chair in 2006, long after the

incentive program was created. " It doesn't make any kind of sense. "

While Mahoney says he wants " more money for the good guys and no money for

the bad guys, " some critics question the very existence of the incentive

program. They want it scrapped. In 2002, the year after Gordie Heffern's death,

Inco – now called Vale Inco after a takeover – received a rebate of $2.5

million from the WSIB. Then, in 2004, the year of the guilty plea and fine, the

mining giant was awarded another $2.5 million.

At the time, a lawyer for the ministry told the sentencing judge that the

fine " must be substantial enough to serve as a deterrent value to the accused

company. "

But labour groups say the WSIB system gives companies little incentive to

enhance workers' safety.

" I was shocked at the extent to which the board of directors at the (WSIB)

had been allowing this to go on for years and years, " said Wayne Samuelson,

head of the Ontario Federation of Labour. " It's an insult to those families and

workers who have been injured or killed, to think that money was even paid. "

At Vale Inco, spokesperson Cory McPhee said the employer of 12,000 is

committed to safety and reviewed its oxygen piping system after Heffern's

death.

" I don't want to start trying to speak to, defend, or otherwise explain the

WSIB's programs. We pay our premiums and we participate in their programs, "

he said. " Our record has been improving but we have a ways to go. A single

fatality is one too many. "

The incentive program – known in WSIB circles as the " experience rating

system " – began in 1985 to make companies safer by using a penalty-rebate

( " carrot-stick " ) approach. The system looks at the " experience " of each

company.

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 this system, a death is treated the same as a minor injury: Both cost

money, whether the claim pays out for lost work time or a casket. For medium

and

large companies, the program does not add any extra penalty when there is a

death. " 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, " said WSIB chief Mahoney.

In addition, this widely used insurance system is no-fault – while workers

are guaranteed compensation for accepted claims, they cannot sue their

employers for work-related injuries.

As early as 2000, the WSIB was concerned at how cheap death had become in

the incentive program.

" For a significant number of cases, the seriousness of a traumatic fatality

is not always reflected in the actual costs, " the agency said in a review.

" The effects of these costs ... are insignificant when compared to the loss of

human life. " Here are some of our findings (rebates represent a total of

amounts issued the year after the accident and the year of the guilty plea):

Semple-Gooder Roofing. The Toronto-based firm pleaded guilty after one of

its trucks, which was operating without a proper signalling system, hit a

temporary worker and dragged him 10 metres. Cristobal Montoya de Vacas was

killed

July 28, 2001.

Fine: $150,000

Rebates: $318,000

• Semple-Gooder president Francis Baxter said his company has a full-time

safety consultant. He suggested, however, that the accident was partly the

employee's fault and said the company paid the fine because " it wasn't worth

fighting. "

" He was in the country three days under false ID. He was from Ecuador. He

wasn't even an employee of ours. We had subcontracted, " Baxter said. " The

unfortunate thing in this case is they sent someone who's working under false ID

and who knows what type of person. This guy had a few different names. "

• Priestly Demolition. When the company botched the demolition of the Uptown

Theatre on Balmuto St. in 2003, bricks and masonry crashed on the Yorkville

English Academy next door. One student at the academy died and 14 others were

hurt. Priestly pleaded guilty to failing to ensure the protection of a

worker by not properly inspecting the roof before demolition. Ultimately, it

was a

bystander, not a worker, who was killed, but the Ministry of Labour still

prosecuted and secured a guilty plea.

Fine: $200,000

Rebates: $273,000

One hundred mourners attended the open-casket visitation for 27-year-old

Augusto Cesar Mejia Solis, who was crushed to death and found lying in a fetal

position, shielding a sobbing 10-year-old boy from the rubble. It was supposed

to be Solis's last full day in Canada before returning home to his fiancée

in Costa Rica.

Priestly boasts on its website " that each year we receive substantial

rebates " from the WSIB. The company claims: " Our safety record is second to

none. "

At Priestly, office manager Robin Savage said the incentive program is

" probably " flawed. But she noted the victim in the theatre collapse was not a

Priestly worker. While the cost of the death may not have been reflected in her

firm's WSIB costs, it increased Priestly's general liability insurance costs,

she said.

" I don't think our company can be used as an example (in the Star story).

WSIB is worker insurance. Unfortunately, the gentleman that was killed was a

person of the public, " she said. Savage defended her company's claim of having

a safety record " second to none, " saying that the lightly regulated

demolition industry is dangerous.

• Parmalat. Worker James Dann, 31, was killed Nov. 15, 1999 by an

assembly-line machine at the company's Mitchell, Ont. location.

Fine: $100,000

Rebates: $329,000

Dann, a new hire, was working on a machine that loaded containers of cream

cheese from a conveyor belt into cartons. When the machine stopped working,

Dann moved in to fix it. The machine's mechanical arm trapped him. Dann

suffocated as his colleagues tried to stop the arm from crushing his neck. He

had

only been on staff for a few months when he died and left two children.

Parmalat, a multinational dairy company based in Italy, pleaded guilty in

2001 to failing to provide machine guarding. The company said it would not

discuss the matter.

• Woodbridge Foam Corporation. The company pleaded guilty for failing to

ensure a shredder had been properly maintained. So Lieu, 52, had worked at the

company for 20 years. He died March 4, 2003.

Fine: $175,000

Rebates: $186,000

At the time of the guilty plea, Woodbridge maintained many locations, some

of which received surcharges under the WSIB incentive program. But at the

facility where Lieu died, the company received a rebate. The company did not

respond to interview requests.

Kim Warner collapsed Aug. 6, 2001 while working the ovens at a Weston

Bakeries facility in Barrie that made breads and rolls. Fifteen minutes shy of

ending a 12-hour shift, Warner, 44, slumped to the floor. He was working in the

middle of a record-setting heat wave. Just before his death, Warner's insides

were cooking at a temperature of 42.5 degrees Celsius, according to

transcripts from the prosecution against Weston.

When his sister Brenda Bamford gave a victim impact statement in a Barrie

courthouse in 2004, she made it clear she wanted Weston Bakeries to be punished

for its role in Kim's death.

" I just want everyone here to understand that my brother ... He was a man.

He had a life and that was wiped out in a very short time, and his death

devastated my family, " she told the court before Weston was fined $215,000 for

not

implementing a heat stress management plan at the facility. The year after

Warner's death, Weston received a rebate of $133,000, and in the year of the

guilty plea, the WSIB paid Weston a rebate of $605,000, bringing the total for

those two years to $738,000.

Weston spokesperson Geoff Wilson said the incentive program generally

succeeds in pushing companies to address safety concerns, and that Weston's

rebates

reflect such efforts and investments.

Speaking specifically about Kim Warner, Wilson said, " There may have been a

lapse in terms of this individual and his adherence to the policies and the

training he and all our employees had. We've now enhanced our training and now

are policing it in a greater fashion to make sure in a high-heat environment

they are taking frequent breaks. The company took very quick actions to

remedy any lapses. It was a very unfortunate circumstance for our employee and

his family. The safety and health of our employee is paramount. "

Bamford has placed no pictures of Kim around her home. She has not been to

visit his headstone in Newmarket. She is too afraid of reliving the grief that

consumed her then, when she crocheted into the early morning hours.

But now, sitting in her Wiarton home, Bamford – when told Weston received

enough rebates to pay the safety violation fine three times over – said she

feels grief anew.

" I'm so upset they could get such a payoff for my brother's death, " she

said.

" My brother's dead. You can't replace that. "

The reporters can be reached at (416) 869-4282 or _dbruser_

(dbruser)