Despite Pension, Worker Could Claim Benefits in Post-retirement Job

Case File

Although a literal take on a statute in Pennsylvania would have deprived a worker of benefits after he returned to work part-time after retiring, context and the "absurdity doctrine," pointed in favor of his claim. Simply Research subscribers have access to the full case.

Case

Bradford County v. Pasko, No. 926 C.D. 2022 (Pa. Commw. Ct. 08/14/24).

What Happened?

After he retired, a county wastewater treatment plant operator returned to work for the county on a per diem basis. While doing so, he injured his back at work. At the time of the injury, his average weekly wage was $277.41 with a disability rate of $249.67. Due to the injury, the operator did not work for nearly a year. During this time, the operator continued to receive his pension benefits, which he had done since before he returned to work. Before the workers' compensation judge, the county asserted that it was eligible to take a credit for the pension benefits against the wage loss benefits.

The WCJ agreed with the county, explaining that the Workers' Compensation Act did not differentiate between pension benefits a claimant began receiving prior to a work injury and those that began flowing after an injury. Thus, the WCJ ruled in the county's favor, holding that the act showed a clear legislative intent that claimants receiving pension benefits prior to their work injury should still be subject to the pension offset.

The operator appealed to the Workers' Compensation Appeal Board, which reversed, finding it against the purpose of workers' compensation laws to leave a claimant "with a work-related injury but no disability benefits."

The county appealed to the Commonwealth Court.

Rule of Law

Section 204(a), 77 P.S. §71(a), of Pennsylvania's Workers' Compensation Act, provides that the benefits from a pension plan that are funded by the employer directly are to be credited against the amount of the award. In the same section, the law spells out that the same kind of offset applies for Social Security benefits but not for Social Security benefits that were received prior to a compensable injury.

What did the Court Say?

An employer may not claim a pension offset credit pursuant to Section 204(a), 77 P.S. §71(a), of Pennsylvania's Workers' Compensation against wage loss benefits.

Regarding Section 204(a), the court explained that the credits reflected a legislative intent to benefit employers by decreasing their liability for payment of wage loss benefits in certain scenarios. At the same time, however, the statute provided for the claimant to be made whole through the receipt of a combination of wage loss benefits and other benefits of an amount roughly approximating what a claimant would be able to have earned if he kept working.

According to the court, a literal reading of the pension offset would not eliminate double recovery for the operator's wage loss but would instead eliminate any recovery for his current wage loss.

The court reasoned that when the operator retired, the country would reasonably have expected that it would be required to continue paying the operator's pension. However, it also needed to hire some to perform additional wages, meaning that the county always should have reasonably expected to pay, after the operator retired, both the pension and additional wages on top of the pension for someone to perform the work.

"If Claimant had opted not to return part time and Employer had hired a different worker to perform that same work, and that worker became injured, Employer would always have had to pay Claimant’s pension, the new worker’s wage loss benefits, and presumably, an additional worker to perform that work in the interim," the court explained.

In this case, there were two earning losses connected to two distinct employment relationships, with the second, part-time employment relationship being the one from which the wage loss benefits flowed.

The court also noted that the "absurdity doctrine" would prevent adopting a literal interpretation of the statute. The doctrine allows courts to discard a literal interpretation of a statute only if:

(1) The ostensible absurdity must consist of a disposition no reasonable could intend.

(2) There is a non-absurd reading that could be achieved by modifying the enacted text in relatively simple ways.

The court found that the doctrine applied in this case because a literal approach would require the court to believe that the legislature intended to single out for disfavored treatment the class of workers who receive a pension and return, post-retirement, to the employer that funded the pensions. It would also require the court to believe that the legislature to recover wage loss benefits after a compensable injury resulting from their new part-time employment. Likewise, the court would have to believe the legislature intended to single out for special, favorable treatment the class of employers that pay pensions and rehire retirees to work part time.

Thus, the court upheld the board's ruling in the operator's favor.

Takeaway

The offset in Section 204(a) of Pennsylvania's Workers' Compensation Act is not available where the compensable injury occurs within the context of a retiree's subsequent part-time employment with a former employer.

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