Workmen’s Compensation

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Workmen’s Compensation written by X.

What the Public Needs

From The Canadian Forum, November 1920, p.40

In practically every industrialized community the principle is recognized that industry should accept the responsibility for the casualties among its work people. The labour point of view, of course, is that workmen are in the position of soldiers and that workmen injured in their employment, are as much entitled to care and remuneration as soldiers wounded in action. The country pays and maintains the soldier when he is wounded just as when he is fit for service, and when he is discharged, the country gives him a pension. So in industry, the employer should pay and maintain the workman while he is disabled just as when he is fit, and if his injuries render him useless for further work, the employer should give him a pension for life. Another way of putting it is that if a manufacturer pays for the repairing of a machine that has broken down in his service, there is at least as much reason why he should pay for the rehabilitating of a workman who has broken down — either through specific injury or in general health — while in his service.

With this view the enlightened modern employer goes a long way in agreement. The 18th and even 19th century view — so clearly reflected in the English Common Law — that even in the case of a particularly dangerous employment, the workman took the job with his eyes open and therefore could claim nothing in case of injury, — that view is a thing of the past. It is recognized that industry does owe some duty to its injured servants, and both in England and America, employers have come forward and collaborated in the framing of compensation acts. The whole question nowadays is one of what the limits of the duty are, how the compensation is to be determined, and when determined, how paid, — whether entirely by the employer or in part by the workman.

In order to answer this question, it is necessary to examine the actual working of the various compensation acts now in operation. At the outset, we stumble on the fact that the overwhelming number of cases to be dealt with are short period disability cases. Thus in 1919 in Ontario, 47% of the cases terminated in 2 weeks, 68% in 3 weeks, and 90% in 6 weeks. These figures are typical of the experience with every workmen's compensation act. Such being the situation, it is obvious that in fixing the scale of compensation, one, if not the chief, consideration ought to be, to encourage the quickest possible return to work and to discourage any tendency to draw out the period of disability. This is particularly important, of course, in the case of persons of a low [p.41] earning-capacity, who it is to be noted, are also, in most cases, of a less industrious and responsible type.

This point of view, of course, would be utterly repugnant to the protagonist of Labour. While he would not deny that a high scale of compensation might conceivably induce a slight amount of malingering, he would not admit that the danger was one of the governing considerations. Such a thing, he would argue, is simply a question of administration. Appoint capable and honest commissioners and doctors to administer the law, and the danger of malingering will be negligible. The obvious criticism is that no matter how capable and honest your administrators, the law must be such as to lend itself to efficient administration. Ill-conceived and unwisely-framed laws defy the efforts of the most efficient and honest administrators. This in passing.

Rejecting, then, the malingering argument for conservatism and caution, the Labour theorist lays it down that the proper and just measure of compensation is 100% of earnings during the period of disability. The injury has been sustained in the service of industry and industry should see that, financially at least, the workman does not suffer.

That such a scale is too radically high is not, of course, proved by the fact that no community in the world has seen fit to adopt it. But the fact that 66 2/3 per cent. of earnings is the highest scale that has anywhere been adopted does at least put upon the advocates of the 100% scale the onus of establishing their case. And in such a question it is clear that one of the considerations must be the fact that the industries of one country are in competition with those of other countries and cannot with impunity be unduly handicapped in that competition. Thus the question of scale of compensation takes its place with, for instance, the eight-hour day as a proper subject-matter for international consideration and settlement.

In the meantime, it is submitted that the sound principle to be applied is adequate maintenance during disability. Such a principle solves at once the malingering difficulty. The ideal scale of compensation, on this view, would be one high enough to provide adequate maintenance and medical attendance during disability but not so high as to be in danger of inducing malingering. No douljt this view will be attacked as being unfair to the man whose injury is in no way due to his own fault. Such a man, it will be urged, ought not to suffer any financial loss. It must be remembered, however, that it is not with such cases alone that we are called upon to deal. Under the great majority of present-day compensation acts, the workman is entitled to compensation regardless of whether or not he has been negligent. If every accident were a real "accident", if, that is to say, there were no fault on the part of the workman, the principle put forward might well be reconsidered. But in a very large number of cases, there is negligence and often serious negligence, on the part of the injured man. If, therefore, the principle of maintenance during disability involves some hardship on the man who has been guilty of no negligence, the payment of full wages to men whose own negligence was the cause of their injury would involve even greater hardship the other way, that is on those who are taxed to pay the compensation. The compromise of basing compensation on the cost of maintenance during disability, though admittedly not perfect, is, it is submitted, an equitable solution.

Such a principle applies only, of course, to cases of total disability, permanent or temporary. For cases of partial disability, temporary or permanent, the procedure will necessarily be different. Here it is a matter of estimating the percentage by which a man's earning capacity has been impaired. Many systems have been tried. The English method is to give a nominal award and then wait to see what wages the injured man earns on his return to work. The drawbacks of such a method are obvious. The man's employment may be of such a nature that his earning capacity, for the moment at least, is not impaired at all; a dishonest man may feign greater incapacity than he actually suffers from, and so on ad infinitum, as has been found in Eligland. In California, on the other hand, a schedule has been compiled "comprising 12,711,240 possible combinations or ratings which have been carefully computed and made readily understandable by a person mentally competent to find in a railroad time-table when a train leaves"! (sic). It requires no great boldness to prophesy that such a scheme will fall "of its own weight". The sensible compromise between these two extremes seems to be that adopted in Ontario, of allowing so much for a specific injury (loss of eye, loss of leg, etc.) taking into account the work of the man but regardless of the actual decrease in earning capacity.

This brings us to the question of the administration of compensation legislation. Should claims be settled in the ordinary courts or should there be, as in Ontario, a special board charged with the task of administering the law, quite independent of the courts of law? A comparison of English with Ontario experience leaves no doubt that the "board" system is infinitely preferable. The English system inevitably involves the very things that it ought to be the main object of a compensation law to avoid — viz., uncertainty, delay and expense. Thus in England, as a result of the expensive litigation, etc., involved, the efficiency of the Act is said to have been reduced 50%; in the United States, where the insurance companies are allowed to deal with the workmen, investigation has disclosed the most [p.42] serious abuses, in the way of short settlements, etc. With these conditions contrast the record in Ontario for 1919. Only 1.71 per cent, of the assessment paid by employers went to pay the expenses of administration. In other words, over 98% of the money contributed for compensation purposes found its way to the pockets of the injured workmen, and that too, without any of the uncertainty and delay incident to litigation. Nor is the advantage by any means all on one side. The employer is benefited by the relief from the old-time long-drawn-out litigation. A considerable weight of worry and annoyance is lifted and his relations with his men are appreciably improved. The case for administration by special board may fairly be said to have been demonstrated.

One word more. A comparison of the present-day Ontario Act with the Common Law — which alone governed the master-servant relationship prior to 1880 — may be interesting as showing at a glance the progress that has been made. An action at Common Law was available only when it could be shown that the personal injury complained of arose from the employer's personal negligence or because he knowingly employed an incompetent servant. Even then, however, the plaintiff might have to meet the defence of "volenti non fit injuria", not to speak of the counter-charge of "contributory negligence". Furthermore, even if the plaintiff successfully surmounted the defences of volenti not fit injuria and contributory negligence, there remained the even more serious obstacle of the doctrine of "common employment", which excluded liability when the injury was caused to the workman by reason of the negligence of a fellow-workman in the employment of the same master for the purposes of the same business, regardless of whether the injured man was bound to obey the orders of the fellow-servant whose negligence caused the injury. So far the Common Law.

The Ontario Act — and the other Canadian Acts are substantially similar — provides that the workman or his dependents are to be entitled to compensation irrespective of negligence or any other circumstance, except only that the accident must not be attributable solely to his own serious or wilful misconduct, and even then compensation is payable if the accident results in serious disablement or death. It is doubtful if there is any field of law in which such striking progress has been made.

X.