Staff Report #3 – 2019 Attendance and Disability Management Programs

Staff Report #3

February 26, 2020

To All Commissioners

Re: 2019 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 the individual’s 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 and other legislative requirements

The table below illustrates the five distinct categories of lost time utilized by LTC. The colours associated with each category represent the level of control the employer has over each category, with green being a relatively high level of control and red being little to no control. The associated bullets with each category represent the various programs and strategies that are currently in place in effort to mitigate the lost time in each of the categories, the details of which are discussed later in this report.

Short Term Disability
(yellow)		 • Return to Work Program

• Employee Assistance Program & Peer Support Program

• Mental Health Resiliency Training
Work Related Disability
(green)		 • Health & Safety Annual Work Program

• Hazard Recognition & Injury Investigation Process

• Return to Work Program
Long Term Disability
(red)		 • Long Term Medical Placement
LOA Statutory & Contractual
(red)
Other Lost Time
(yellow)		 • Attendance Management Program

• Culpable Absenteeism Program

• Management Outreach to Employees

In 2018, LTC experienced an overall increase in lost time. Through assessment, it was found that the increase was attributable to the implementation of Bill 148, Fair Workplaces, Better Jobs Act enacted January 1, 2018. This Bill 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 restricted the employer’s ability to request medical confirmation for lost time in certain circumstances. Effective January 1, 2019, the Ontario government enacted Bill 47, reversing key components of Bill 148, including the “paid lost time” provision.

While the increase in lost time in 2018 was thought to be the result of the ESA amendments, 2019 lost time did not see the anticipated decrease when Bill 47 reversed the changes. LTC continued to see an increase in overall lost time, resembling more historical averages as compared to the lost time observed in recent years (the average lost time in 2010 was 19 days per employee). The increase is attributable to an overall increase in disability claims, in terms of the number of claims and duration of same, specifically in relation to an increase to short term disability claims.

Summary of All Lost Time – Average Days Per Employee 2016 to 2019

Year Short Term Disability Work Related Disability Long Term Disability LOA Statutory & Other Other Lost Time Total
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
2019 9.5 0.2 1.6 3.3 4.7 19.3

Of note, excluding Leave of Absences (LOAs) (statutory leaves and contract provisions, whereby the employer has little to no control over) the average lost time in 2019 was 16 days.

As previously noted, effective management of absenteeism and disability requires 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, the Collective Agreement includes provisions pertaining to the return to work program which is 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 healthcare practitioner. This information is compared to the physical and non-physical demands of the employee’s 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 their 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 response to the duty to accommodate disabled employees 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. Three-component parts define the RTW program:

  • Modified Work – 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 temporarily will not exceed 12 weeks, except by approval of the General Manager, in consultation with Human Resources.

There is an 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 $360,000 in 2016 to upwards of $470,000 in 2019. Of note, in the past few years, there have been several longer-term temporary accommodations required, increasing the overall cost of LTC’s RTW program, and again this trend is anticipated to continue. 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 favourable 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 for alternate work, in mid-2016 and continuing, assessments have been undertaken to broaden opportunities for reasonable, suitable and sustainable alternate work options, 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:

  • project work in the Fleet and Facilities Department
  • smart card audits
  • on-board audits
  • 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 the information provided, 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 (2015 – 8.1), which is consistent with an increase in the number of claims filed in the same period.

Short Term Disability & Employment Insurance (1) Lost Time – 2016 to 2019

Year Operations Fleet & Facilities Admin & Mgmt. Total
Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee
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
2019 5,409 10.9 550 5.2 290 5.3 6,249 9.5
(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 2018 and 2019 STD claims identified the highest volume and highest cost claim types for STD:

Cause and % of Total STD Claims and Cost – 2018 and 2019

Cause General Description % of Total Claims % of Total Claims Est. Benefit Paid in 2019
2018 2019
Disease – skin, bones, skeletal muscles, accidental fractures 35% 31% $341,000
Mental Disorders 12% 18% $246,000
Miscellaneous 5% 17% $138,000
Respiratory/Infectious Disease 19% 12% $47,000

Based on the assessment in 2019, the largest number of claims, consistent with 2018 can be attributed to “disease – skin, bones, skeletal muscle and accidental fractures” with 31% of all claims filed. Through discussions with the insurance carrier, it was determined that in 2019 there was an overall increase in musculoskeletal disorders that were found to be chronic in nature. As illustrated above “mental disorders” claims in 2019 have increased in number over prior years, and further, were found to have the highest associated costs and be the lengthiest claims overall. The insurance carrier has advised that in 2020, it is likely that a higher proportion of the STD claims will be transferred to Long Term Disability claims given the medical conditions and chronic nature associated with the claims. Human Resources continues to work closely with the insurance carrier on active claims management and return to work strategies to ensure, those who are able, are returning to work a safe and effective manner.

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 – 2016 to 2019

Year Operations Fleet & Facilities Admin & Mgmt. Total
Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee
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
2019 840 1.7 192 2.0 – – 1,032 1.6
(1) 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 prior three years (2016 to 2018), with a notable decrease in 2019. However, as noted under the Short Term Disability section above, it is anticipated that there will be an increase in LTD claims in 2020, more consistent with the three prior years. Analysis of LTD claims in 2019 continue to indicate that the highest volume/type/length of claims were in the categories of “Accidents/Injury” at 30% and “Mental Disorders” at 30%, both were found to have the highest associated costs and were the lengthiest claims overall.

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 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. 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 – 2016 to 2019

Year Operations Fleet & Facilities Admin & Mgmt.
Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee
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
2019 135 0.3 25 0.5 – – 160 0.2

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 have historically been performance-based, referred to as the NEER Program. Historically premium rates were set annually by the 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. Since 2003, London Transit has successfully received annual rebates as the result of favourable performance, which have in turn funded the RTW program. Annual rebates have been applied directly to LTC’s Health Care Management Reserve, which is utilized to fund RTW program initiatives and/or any surcharge experienced. The following table provides a summary of WSIB cost net of NEER performance rebates for the years 2016 through to 2019, noting that the 2019 WSIB assessment is an estimate and not finalized until September 2020.

WSIB Premium and Rebate Costs (000’s omitted) – 2016 to 2019

Year Gross WSIB Premiums Premium (Rebate) / Surcharge NEER Net WSIB Cost RTW Program Direct Cost
2016  $ 1,711,610 $ (72,000)  $ 1,639,610  $ 360,000
2017 1,806,427 (308,500) 1,497,927 410,000
2018  1,929,833  (611,500) 1,318,333 460,000
2019 1,351,821 (500,000) 851,821 469,000
Total $ 6,799,691 $ (1,492,000) $ 5,307,691 $ 1,699,000

Effective January 1, 2020, the WSIB NEER Program has been replaced with a “Rate Framework Program.” The NEER program technically ended December 31, 2019, and as such London Transit will still be eligible for a NEER rebate and remain liable for NEER surcharges on the 2016 to 2019 claims in 2020. The final NEER statement will be issued in November 2020 with NEER surcharges payable by December 31, 2020, and NEER rebates issued in January 2021. Following is a summary/highlight of the “Rate Framework Program”:

  • Under the new system, rather than having employers pay premiums based on their business activity, then calculating premium rebates or surcharge based on experience rating on a retrospective basis, the WSIB will be adjusting each employer’s premium rate in the fall of each year based on past experience rating and providing a projection as to whether the employer is trending upward or downward with their premium rate. Depending on their experience rating over a rolling six-year period, an employer’s premium rate will move up or down based on risk bands established as part of the program.
  • London Transit’s premium rate for 2020 is $1.70 (per $100). Each fall, the new premium rate will be released. At this time London Transit’s projected rate remains unchanged.

Given this change in program, administration will be undertaking an assessment of the potential impacts of the new program in relation to the RTW Program, disability claims management and the impact of the expanded active claim period from four years to six years. The historical NEER refunds/surcharge program is being eliminated, and London Transit’s injury performance will directly impact annual premiums

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. The overall decrease is attributable to Bill 47 and the removal of the paid sick days.

Leaves of Absence – per Statute and/or Employment Contract/Agreement – 2016 to 2019

Year Operations Fleet & Facilities Admin & Mgmt. Total
Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee
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
2019 1,883 3.8 275 2.6 13 0.2 2,171 3.3

Other Lost Time

Non-attendance captioned as other lost time (no disability benefits are payable) has increased slightly over the four year period. 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 also have a negative impact on the organization’s ability to provide service.

The majority 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 in this report. 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 – 2016 to 2019

Year Operations Fleet& Facilities Admin & Mgmt Total
Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee Total Days Avg. Per Employee
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
2019 2,544 5.1 282 2.7 226 4.1 3,051 4.7

Mental Health Wellness

As set out in the 2019 Business Plan, a key principle under the Strategic Outcome of “An Engaged, Diverse and Respectful Workplace” is creating a safe and supportive work environment through the encouragement of employee health and wellness with an increased focus on employee mental health. In support of the psychological health and safety of all employees, London Transit implemented a Mental Health Strategy with a vision that calls for employees that are resilient in the face of personal and workplace challenges. Together with London Transit’s Wellness Committee, ATU Local 741 Executive, and a mental health consultant, London Transit developed a custom training program for all employees on the topic of mental health in general, with a strong focus on resiliency, including tips and strategies to manage mental health. The training module was tailored to address current issues specific to public transit which aids in the transfer of knowledge from the classroom to on-the-job situations. The Mental Health Resiliency Training is in alignment with London Transit’s strategic goals, focusing on a culture free from stigma, recognizing mental health as essential to the quality of life, and ensuring that organizational supports are available. The Mental Health Resiliency Training was rolled out in mid-2019, and by the end of 2021 all employees will have received it. Feedback from the program has been positive to date. In addition, the program received the “Corporate Leadership Award” for “Safety and Security” from the Canadian Urban Transit Association in 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 $2.2 million and $2.7 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 approximately 62% of the $84.0 million total operating budget for conventional and specialized services.

Given the nature of the service provided, an average of 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 47); 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 Canadian workforce in general as well as the transit industry at large, LTC continues to experience increases in lost time, recognizing that disability management is multi-faceted and challenging. 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. Administration also continues to work with transit industry partners to share best practices with respect to managing and responding to increases in lost time.

Julie Hall, Manager of Human Resources

Joanne Galloway, Director of Human Resources

Concurred by:

Kelly S. Paleczny, General Manager