Arcelor Mittal Steel v. The Illinois Workers' Compensation Commission, 2011 Ill. App. LEXIS 1154; 2011 IL App (1st) 102180 WC (1st Dist. 2011)

By: Suyon T. Flowers - Associate - Nyhan, Bambrick, Kinzie & Lowry

Updated: January 15, 2012 

 

 The Petitioner, a mechanical maintenance technician, filed an Application for Adjustment of Claim pursuant to the Worker’s Compensation Act after he sustained injuries to his right arm on November 29, 2007.

 

At trial, the Arbitrator awarded the Petitioner permanency, temporary total disability (TTD) benefits and permanent partial disability (PPD) benefits. In his computation of the TTD and PPD benefits for which Petitioner was entitled to, the Arbitrator included scheduled overtime earnings and production bonuses in the calculation of Petitioner’s average weekly wage.


On appeal, the Commission affirmed and adopted the Arbitrator’s decision with the exception of striking three sentences from the arbitrator’s discussion of penalties and correcting the permanency award to reflect 27.5% instead of 27.55%. The Circuit court confirmed the Commission’s decision. Arcelor Mittal Steel then appealed to the Appellate court. At issue was whether the Commission erred when it included overtime wages and production bonuses in its calculation of the Petitioner’s average weekly wage.


As to whether the Commission erred when it included overtime wages in its calculation of Petitioner’s average weekly wage to determine weekly benefits for TTD and PPD, the court held that the Commission did not err when it included Petitioner’s overtime wages in its calculation of Petitioner’s average weekly wage.


In its reasoning, the court noted that the determination of a Petitioner’s weekly wage is a question of fact and the Commission’s inclusion of overtime wages in its calculation of Petitioner’s average weekly wage will not be disturbed unless it is contrary to the manifest weight of the evidence. In reaching its conclusion, the court first analyzed Section 10 of the Worker’s Compensation Act which excludes “overtime and bonus” in the calculation of the average weekly wage. The court further noted that the Commission had found that for the 39-week period prior to the Petitioner’s injury, he had worked 173 hours of scheduled “overtime calculated at straight time” which was required as a condition of his employment; that his twelve hour shift was mandatory; that he did not use his seniority and he did not request to work the scheduled overtime. The court also found that the Petitioner had worked additional overtime hours that were not either scheduled or mandatory that the Commission did not include in its calculation of Petitioner’s average weekly wage. Thus, based on this reasoning, the court found that the Commission’s decision to include overtime wages in its calculation of Petitioner’s average weekly wage was not against the manifest weight of the evidence and affirmed the Circuit court’s confirmation of the Commission’s decision.


As to whether the Commission erred when it included production bonuses in its calculation of Petitioner’s average weekly wage to determine weekly benefits for TTD and PPD, the court held that the Commission did not err when it included the Petitioner’s production bonuses in its calculation of Petitioner’s average weekly wage.

 

Here, the court first distinguished between incentive-based pay, which an employee received in consideration for specific work performed as a matter of contractual right and a bonus, which was received for no consideration or in consideration of overall performance at the employer’s discretion. Then the court noted that the Petitioner received production bonuses in consideration for work performed pursuant to his collective bargaining agreement and not as a gratuity provided by his employer. The employer calculated production bonuses based upon “measures of volume, quality of steel produced and the number of days worked without a lost time accident.” The court also noted that the Petitioner’s production bonuses were an important part of his compensation package and the employer had no discretion regarding whether or not to pay production bonuses if earned by its employees. Thus, the court determined that since the Petitioner’s production bonus was not a “bonus” as defined under Section 10 of the Worker’s Compensation Act, then the Commission’s decision to include production bonuses in its calculation of Petitioner’s average weekly wage was not against the manifest weight of the evidence and affirmed the Circuit court’s confirmation of the Commission’s decision.

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