Staff Report #6
February 27, 2019
To All Commissioners
Re: 2018 Attendance and Disability Management Programs
Recommendation
That the report be NOTED and FILED.
Background
Absenteeism and disability management represent an onerous and costly challenge for all organizations. Success in meeting the challenge is dependent upon understanding and managing the many complexities and competing elements associated with absenteeism and disability management, including:
- workplace demographics, i.e. ageing workforce, availability and extent of benefits (concerning physical and psychological health disabilities), heightened work/family issues and increased focus and attention on individual’s own mental health;
- legislative requirements associated with the duty to accommodate;
- the organizational culture around disability and absence;
- trends and factors impacting the type and nature of illness leading to absenteeism, and
- changes to the Employment Standards Act, by way of Bill 148, Fair Workplaces, Better Jobs Act.
Overall, lost time in 2018 was directly impacted by the implementation of Bill 148, Fair Workplaces, Better Jobs Act enacted January 1, 2018, which amended the Employment Standards Act to modify significant portions of the Act. With respect to lost time, Bill 148 modified the personal emergency leave provision mandating that employers pay the first two days of personal emergency days and restricting the employer’s ability to request medical confirmation for lost time in certain circumstances.
In fall 2018, the Ontario government announced its intent to repeal amendments made by Bill 148. Bill 47 was implemented which removed the two paid personal emergency days as of January 1, 2019, and removed restrictions with respect to employers requesting medical documentation to confirm absences in certain circumstances. With the amendments of Bill 148 in place for only one year, the impact on lost time attendance in 2018 stands out amongst trends observed prior to this time; it is therefore expected that prior lost time attendance trends will return in 2019.
As can be seen in the following table, the total average lost time for LTC employees in 2018 increased and resembles more historic averages as compared to the lost time observed in recent years (e.g. the average lost time in 2014 was 18.1 per employee). The increase is attributable to overall disability claims, both compensable and non-compensable, in terms of the number of claims and duration of same, and as noted above the implementation of Bill 148, Fair Workplaces, Better Jobs Act, which in and of itself represents almost two average days per employee.
Summary of All Lost Time – Average Days Per Employee 2015 to 2018
| Year | Short Term Disability | Work Related Disability | Long Term Disability | LOA Statutory & Other | Other Lost Time | Total |
| 2015 | 6.0 | 0.3 | 1.9 | 2.3 | 5.2 | 15.7 |
| 2016 | 5.9 | 0.2 | 2.1 | 2.8 | 4.3 | 15.3 |
| 2017 | 7.1 | 0.6 | 2.4 | 3.3 | 4.4 | 17.8 |
| 2018 | 7.9 | 0.6 | 2.7 | 4.1 | 3.9 | 19.2 |
Of note, excluding Leave of Absences (LOAs) (statutory leaves and contract provisions, whereby the employer has little to no control over, including the two paid personal emergency days), the average lost time in 2018 was 15.1 days.
As previously noted, effective management of absenteeism and disability require dynamic approaches, strategies, and evolving initiatives combined with the consistent application in applying same. Such ongoing initiatives include:
- developing and communicating attendance management policies and programs consistent with practical and legal realities;
- analyzing incidents and causes of disability and absenteeism, and identifying and implementing initiatives to reduce same;
- effectively integrating the duty to accommodate within the organization’s culture, relevant policies and programs; and
- developing a culture that encourages all parties to work cooperatively and effectively responding to the collective issues of attendance.
The following report provides an overview of LTC’s attendance and disability (both compensable and non-compensable) management performance, including the impact of non-attendance and the various strategies and initiatives undertaken that have, and continue to mitigate the negative operational and fiscal impact associated with absenteeism.
Disability Management
Disability management encompasses both compensable sickness and injury (i.e. job-related, and therefore subject to the Workplace Safety and Insurance Act) and non-compensable (i.e. non job-related, and subject to the terms and conditions of LTC’s wage replacement insurance program as provided under the current insurer, Desjardins Financial Services – DFS).
Disability management is an increasingly important and complex area to manage given the significant financial exposure associated with actual claims and the myriad of legislation (i.e. Workplace Safety and Insurance Act, Occupational Health and Safety Act, Ontario Human Rights Code, and the Employment Accessibility portion of the Integrated Accessibility Standards Regulation under the AODA). Also, there are provisions in the Collective Agreement pertaining to the return to work program which are critical to the issue of disability management.
LTC’s Return to Work Program
A progressive Return to Work (RTW) program for both compensable and non-compensable disabilities is a key element of LTC’s Disability Management Program. Employees who are off work are required to provide functional ability information from their attending health practitioner. This information is compared to the physical and non-physical demands of the pre-disability position. If the employee cannot be accommodated to return to his or her pre-disability position, temporary alternative work is explored. A range of value-added temporary alternative work, from interior bus cleaning, customer service work, light duty work in Fleet and Facilities and/or administrative areas is considered. Costs and progress are monitored with the ultimate objective of returning the employee to full and normal duties. The RTW program is critical in that it provides an alternative to having employees remain on income replacement benefits pending a return to full and normal duties. The program supports having employees performing productive work (versus not working) even if it is outside the normal classification. The RTW program offers benefits to both the employee (e.g. reduces or eliminates lost earnings, helps reduce social isolation, helps maintain a sense of confidence and value) and the employer (e.g. retention of experienced employees, better productivity, effective management/containment of non-attendance cost).
The RTW program is implemented in accordance with the duty to accommodate the disabled employee arising from the Ontario Human Rights Code. The program continues to evolve, as case law in this area continues to expand in terms of what is considered a reasonable and suitable accommodation for a disability, and as such managing these programs while still complying with legislative requirements can be a challenging exercise. The RTW program is defined by three component parts, namely:
- Modified Work: Is any job or bundle of tasks within an employee’s pre-disability position which he/she may perform without the risk of re-injury to themselves or others. This work may consist of regular tasks that have been changed, redesigned or physically modified. If necessary and if it can be reasonably accommodated, there may be a reduction in time or volume of work performed.
- Work Hardening: Involves tasks within an employee’s pre-disability position designed to condition the body and gradually improve strengths and tolerance, to the point where he/she can once again be considered able to perform the essential duties in his/her pre-disability position.
- Alternate Work: Involves temporary short-term alternate work which will be considered for employees who cannot perform the essential duties of their pre-disability position, or cannot be accommodated by way of modified work and/or work hardening. Alternate work that may be available on a temporary basis will not exceed a period of 12 weeks, except by approval of the General Manager, in consultation with Human Resources.
Over the last several years, there has been increased reliance on LTC’s RTW program, for both compensable and non-compensable disabilities, and it is anticipated that this trend will continue. The annual costs of the overall program have increased from $195,000 in 2014 to $450,000 in 2018. Of note, in 2017 and flowing into 2018, there were several longer-term temporary accommodations required, increasing the overall cost of LTC’s RTW program. Notwithstanding this significant increase, the RTW Program continues to be fully funded from the Commission’s Health Care Management Reserve. Contributions to the reserve come primarily from WSIB premium rebates associated with related favorable claims and cost experience much of which results from an effective RTW program.
Although the annual costs have increased, there continues to be significant value in the alternate work programs and job tasks associated with same. Due to the growing demands in alternate work, in mid-2016 and continuing, assessments have been undertaken to broaden opportunities for reasonable, suitable and sustainable alternate work, so as to better address the demand for same and assist departments with key workload issues. As such, the alternate work program has been expanded and may include available short-term work projects such as those listed below:
- increased staffing abilities in General Service to assist in staff shortages
- on-board audits for service plan changes
- outreach/customer service, educating/promoting service plan changes
- enhanced interior bus washing
- fare media sales in customer service at 450 Highbury
- auditing of shelters, stop amenities, etc.
Non-compensable claims are managed in two ways. First, the administration is involved in individual claims management from the onset of the absence. All employees who are absent must provide the insurer with the appropriate medical information to be entitled to benefits and the employer with functional abilities and prognosis information. Based on such information, claims are monitored, and suitable RTW options are explored and offered, as appropriate. Ongoing contact is maintained according to defined schedules with employees who are absent under the Short-Term Disability (STD) and Long-Term Disability (LTD) programs. Secondly, overall claims experience is examined holistically on an annual basis as part of the insurance renewal process. The review includes consideration of the claims’ adjudication and management process provided by the insurer.
Short-Term Disability (STD)
The following table provides a summary analysis of the change in lost time associated with Short Term Disability (STD) over the past four years. Total average lost time for LTC employees has returned to more historical averages (pre-2015), which is consistent with an increase in the number of claims filed in the same period.
Short Term Disability & Employment Insurance(1) Lost Time
| Year | Operations | Fleet & Facility | Admin & Mgmt. | Total | ||||||
| Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | |||
| 2015 | 3,310 | 7.6 | 121 | 1.3 | 113 | 1.8 | 3,544 | 6.0 | ||
| 2016 | 3,057 | 6.7 | 479 | 4.8 | 82 | 1.4 | 3,618 | 5.9 | ||
| 2017 | 3,962 | 8.6 | 305 | 3.1 | 171 | 2.8 | 4,438 | 7.1 | ||
| 2018 | 4,390 | 9.0 | 645 | 6.4 | 92 | 1.7 | 5,127 | 7.9 | ||
| (1) under the wage replacement program, employees have a period between eligibility for STD benefits and LTD benefits which they are eligible for Employment insurance sick benefits | ||||||||||
Further analyses of 2017 and 2018 STD claims identified the highest volume and highest cost claim types for STD:
Cause and % of Total STD Claims and Cost
| Cause General Description | % of Total Claims | % of Total Claims | Est. Benefit Paid in 2018 |
| 2017 | 2018 | ||
| Accident/Injury | 38% | 35% | $375,000 |
| Respiratory/Infectious Disease | 34% | 23% | $45,000 |
| Mental Disorders | 12% | 12% | $132,000 |
As illustrated above, “Accident/Injury” claims accounted for the highest volume of claims over the past two years followed by “Respiratory/Infectious Disease” and “Mental Disorders.” “Mental Disorders” claims were found to have the highest associated costs and were the most lengthy claims overall.
Although the number of claims filed in 2018 increased, the average claim duration has remained fairly consistent with prior years. Approximately 40% of claims were less than two weeks in duration and approximately 13% of total claims were greater than 17 weeks. The increases in STD claims over the past several years can be tied to changes in workforce demographics resulting in more accident/injury-related disabilities. These types of claims tend to be significant in duration and therefore more costly.
Long-Term Disability (LTD)
The following table provides a summary analysis of the change in lost time associated with Long Term Disability (LTD) claims over the past four years. The LTD experience tends to be more volatile than other measures, given that any one case can have a very long duration and therefore directly impact LTC’s experience in terms of insurability.
Long Term Disability (1) Lost Time
| Year | Operations | Fleet & Facility | Admin & Mgmt. | Total | ||||
| Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | |
| 2015 | 1,145 | 2.6 | – | – | – | – | 1,145 | 1.9 |
| 2016 | 1,283 | 2.8 | – | – | – | – | 1,283 | 2.1 |
| 2017 | 1,485 | 3.2 | – | – | – | – | 1,485 | 2.4 |
| 2018 | 1,745 | 3.6 | 6 | – | – | – | 1,751 | 2.7 |
- Cases where change of definition has been approved and no likelihood of RTW are not included in above
On average, the number of approved LTD claims has been relatively consistent over the last four years. However, the duration of LTD claims has been increasing, as reflected in the average lost time per employee in 2018. Further analysis of LTD claims in 2018 indicate that the highest volume/type/length of claims was in the category of “Accidents/Injury” at 36% followed by “Mental Disorders” at 29%; this was the reverse in 2017.
London Transit explores all options of suitable accommodation when employees are deemed totally disabled from their pre-disability position; however, where LTD is approved, it is less likely there will be an opportunity for a temporary RTW accommodation often leading to extended LTD claims. The limited opportunity relates primarily to the nature of the disability, which precludes work in any capacity or the treatment of the disability may take several years and with an unknown prognosis.
Compensable Injuries and Illness – Workplace Safety Insurance Board
London Transit’s Health and Safety Program has a clear mandate/objective to prevent work-related injuries, illnesses and related absences. The objective is further supported by a key principle under the Strategic Outcome of “An Engaged, Diverse and Respectful Workplace” as set out in the 2015-2018 Business Plan, i.e. “creating a safe work environment and encouraging employee health and wellness”.
Notwithstanding the program and various initiatives in place, compensable injuries and illnesses do occur. It is important that such claims are promptly and properly investigated, processed and monitored. This begins with a feedback loop to the Joint Health and Safety Committees in terms of investigating and understanding the event giving rise to the injury or illness, taking preventative steps in the future, and where warranted, enlisting the assistance of London Transit’s ergonomist consultant. It also includes active management of the claim by LTC administration including liaising with the Workplace Safety Insurance Board (WSIB) and appealing approved claims that the administration feels are not compensable under the Act. London Transit utilizes the services of an outside consultant for more complex claims management and representation when claims appeals are heard.
The following table provides a summary analysis of the change in lost time associated with compensable injuries and illnesses over the past four years.
Workplace / Job-Related Injuries / Illness Lost Time
| Year | Operations | Fleet & Facility | Admin & Mgmt. | |||||
| Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | |
| 2015 | 165 | 0.4 | 10 | 0.1 | – | – | 175 | 0.3 |
| 2016 | 135 | 0.3 | 4 | 0.1 | – | – | 139 | 0.2 |
| 2017 | 344 | 0.7 | 11 | 0.2 | – | – | 355 | 0.6 |
| 2018 | 290 | 0.6 | 82 | 1.5 | – | – | 372 | 0.6 |
The overall average lost time per employee is directly attributable to an effective Joint Health and Safety Program, a progressive RTW program and a significant investment in claims management, assessment, and prevention. For the last several years, there have been several longer-term compensable disability cases, resulting in those employees participating in the RTW program, performing alternate work on a long-term basis (considered beyond 12 weeks).
WSIB Premium and Rebate Costs
The LTC is a Schedule II employer and as such, the annual WSIB premiums are performance-based. Premium rates are set annually by industry sector and at the end of the year (based on the WSIB’s September to September calendar) employers are retrospectively either surcharged for poor performance or rebated for favourable performance (referred to as the Board’s NEER program). Historically, from 2003, London Transit has successfully received annual rebates as the result of favourable performance, which is to fund the RTW program. In 2018, LTC was in a surcharge position as a result of recent activity in several 2016 claims, however, it is anticipated that the surcharge will be reversed in 2019. All rebates are applied directly to LTC’s Health Care Management Reserve, which is utilized to fund RTW program initiatives and/or any surcharge experienced, as was done in 2018. Should the annual costs of the RTW program and/or any surcharge exceed the aggregated WSIB rebates, a new funding model will need to be established.
The following table provides a summary of WSIB cost net of NEER performance rebates for the years 2015 through to 2018, noting that the 2018 WSIB assessment is an estimate and not finalized until September 2019.
WSIB Premium and Rebate Costs (000’s omitted)
| Year | Gross WSIB Premiums | Premium (Rebate) / Surcharge NEER | Net WSIB Cost | RTW Program Direct Cost |
| 2015 | $ 1,636,471 | $ (345,500) | $ 1,290,971 | $ 247,000 |
| 2016 | $ 1,711,610 | $ 116,685 | $ 1,828,295 | $ 360,000 |
| 2017 | $ 1,806,427 | $ (128,034) | $ 1,678,393 | $ 450,000 |
| 2018 | $ 1,991,580 | $ (400,000) | $ 1,591,580 | $ 450,000 |
Leave of Absences (LOA) per Statute and/or Employment Contract/Agreements
Absences due to leaves can be paid (e.g. bereavement) or unpaid (e.g. pregnancy and parental) and the employer has little or no control over this lost time (as such absences are considered statutory/legislative in nature, in addition to Bill 148 noted above or provided by contract).
In 2018, paid emergency days (per Bill 148) averaged just under two days per employee. It is therefore anticipated that absences due to leaves in 2019 will return to pre-2018 levels.
Leaves of Absence – per Statute and/or Employment Contract/Agreement
| Year | Operations | Fleet & Facility | Admin & Mgmt. | Total | ||||
| Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | |
| 2015 | 1,073 | 2.4 | 269 | 2.9 | 35 | 0.6 | 1,377 | 2.3 |
| 2016 | 1,396 | 3.1 | 210 | 2.1 | 89 | 1.5 | 1,695 | 2.8 |
| 2017 | 1,559 | 3.4 | 238 | 2.4 | 271 | 4.4 | 2,068 | 3.3 |
| 2018 | 2,069 | 4.2 | 419 | 4.2 | 189 | 3.4 | 2,677 | 4.1 |
Other Lost Time
Non-attendance captioned as other lost time (no disability benefits are payable) has increased slightly. Non-attendance in this category covers such cases as one-day illness and/or sporadic illnesses, the elimination period prior to a short-term disability claim, non-job related injury, book-off personal, absence without leave, late to work and non-compensable days in which approval for an STD/LTD claim is either pending/denied/withdrawn/no further action. Absences in this category may not be paid; however, like other absences, they do have a negative impact on the organization’s ability to provide service.
Most of these types of absences are managed through London Transit’s Attendance Management Program (AMP) as “monitored absences,” separate and apart from the disability management process noted earlier. The AMP establishes attendance standards and employees who fail to meet the standards in any given year progress within the program. Standards apply to both the number of days or part days missed in this category of absence, as well as the number of occurrences (the latter being defined as the number of instances of absence, with a continuous absence treated as one occurrence). Throughout the process, the emphasis of the AMP is on assisting employees to deal with underlying causes of non-attendance and encouraging more regular attendance. The program has proven effective in identifying those employees who require assistance in dealing with factors affecting attendance and has resulted in many success stories where individual attendance has improved. In cases where the non-attendance is attributable to an identified underlying medical condition such that it meets the definition of disability, the employee’s attendance is managed by the Human Resources department due to confidentiality. In addition, “culpable” or blameworthy absences are dealt with through a progressive discipline approach and not the Attendance Management Program.
Other Lost Time – No STD, LTD or WSIB Benefit Payable
| Year | Operations | Fleet& Facility | Admin & Mgmt | Total | ||||
| Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | Total Days | Avg. Per Employee | |
| 2015 | 2,545 | 5.8 | 146 | 1.6 | 404 | 6.4 | 3,095 | 5.2 |
| 2016 | 2,343 | 5.1 | 170 | 1.7 | 137 | 2.3 | 2,650 | 4.3 |
| 2017 | 2,400 | 5.2 | 163 | 1.6 | 152 | 2.5 | 2,715 | 4.4 |
| 2018 | 2,012 | 4.1 | 319 | 3.2 | 161 | 2.9 | 2,492 | 3.9 |
Psychological Wellness
As noted in previous reports, London Transit recognizes that psychological wellness continues to have a significant and direct impact on overall attendance, in terms of sporadic lost time days, non-compensable STD claims, duration of same, presenteeism (attending work, but the mind is elsewhere) and WSIB claims. As noted in Staff Report #1, January 30, 2019, the parties completed key initiatives in the 2018 Mental Health Strategy and are in the process of developing a comprehensive Workplan for 2019.
The Cost of Non-Attendance
The cost of absenteeism is generally defined from three perspectives:
- productivity cost, i.e. impact on available productive hours, workload allocation issues and related opportunity costs addressing the allocation issues;
- administrative cost relating to staff time managing absences and the impacts of same; and
- financial costs relating to increased complement requirements, overtime costs and impact on employee benefit costs.
The annual cost associated with non-attendance, considering the above, ranges between $2.1 million and $2.6 million. The estimated cost accounts for approximately 5% of the $51.7 million in annual personnel expenditure, which includes all earnings and employee benefit costs. Personnel costs account for 62% of the $84.0 million total operating budget for conventional and specialized services.
As an average, approximately 80% of all non-attendance is managed via increased complement, with the balance being replaced at overtime or not replaced at all. The need to replace the lost time defines the nature of public transit, i.e. providing scheduled service to customers noting the majority of employees are Operators whose responsibility is to deliver on-road service. The decision to replace non-attendance with the hiring of additional staff or replace at overtime is predicated upon an assessment of key inputs, namely:
- the nature and extent of service requirements, which are variable by time of day, day of week and time of year;
- the number, timing and duration of periods of absences;
- the impact on efforts and capacity to fill work assignments;
- efficiency considered work rules/requirements – the cost of hiring/employing replacement staff vs. applying overtime;
- the impact of legislative changes, (i.e. Bill 148), and
- the impact on the quality of work life.
A complement assessment is undertaken on an annual basis in an effort to determine the appropriate Operator complement to ensure service requirements can be met while at the same time mitigating the extent of the need for personnel to be available to fill shifts for same day absences.
Conclusion
Consistent with the rest on the Canadian workforce, LTC continues to experience increases in lost time and faces the challenges of growth in multifaceted disability management. LTC has clearly defined processes for managing lost time, and while trends in lost time experience are disruptive, they represent an opportunity to implement innovative and dynamic responses in effort to mitigate the lost time going forward. Where warranted, LTC is supported by industry experts in related fields and it is anticipated that this support will be required on a go-forward basis, as elements of the program are the subject to ongoing review and adjustment as necessary.
Julie Hall, Manager of Human Resources
Joanne Galloway, Director of Human Resources
Concurred by:
Kelly S. Paleczny, General Manager