Pursuant to G. L. c. 32, § 16(4), the Petitioner, Dennis Gendron, is appealing the December 8, 2006 decision of the Respondent, Worcester Regional Retirement System, denying his request for an earlier effective date of retirement. (Ex. 2) The appeal was timely filed. (Ex. 1) A hearing was held January 22, 2008, at the offices of the Division of Administrative Law Appeals (DALA), 98 North Washington Street, 4th Floor, Boston, MA 02114, pursuant to G. L. c. 7, § 4H.
The Respondent Board did not send a representative to the hearing. Various documents are in evidence. (Exs. 1 - 11) One tape was used. The Petitioner testified. Petitioner filed a pre-hearing memorandum and filed objections to Exhibit 11. ("B") The record was held open for receipt of further evidence until February 22, 2008 when the record closed.
FINDINGS OF FACT
1. Dennis Gendron, d.o.b. 7/30/60, worked for the Town of Grafton's Highway Department for about nineteen years. He was injured at work on November 12, 2004 while unloading a truck. He tripped on a log and injured his right knee. He did not return to work thereafter. (Ex. 8. Testimony.)
2. From the time of this injury, Mr. Gendron received total incapacity workers' compensation benefits under G. L. c. 152, § 34. (Ex. 9. Testimony.)
3. At the time of this injury, Mr. Gendron did not have any or very much unused sick time because he had been out from work for about six months for a hip replacement procedure. He had some accumulated vacation time at the time of this injury. (Ex. 5. Testimony)
4. Mr. Gendron's employment was subject to a collective bargaining agreement (CBA). Article 16 of the CBA that covered the time period of July 1, 2002 through June 30, 2005, titled "Vacation," contained the following provision:
Vacation leave is not cumulative from year to year,
except upon the written approval of the Town
Administrator in cases where an employee's
vacation is cancelled to meet an emergency or
offset a critical personnel shortage. The Town
Administrator may, in his sole discretion, also
authorize a carryover of not more than ten (10) days. (Ex. 10)
5. In addition to his workers' compensation, the Town of Grafton paid Mr. Gendron a supplemental sick leave payment. (Ex. 11 at J. Testimony.)
6. Article 18 of the CBA, titled, "Sick Leave," states the following:
An employee receiving Workers' Compensation may use accumulated sick leave to supplement the difference between the amount of Workers' Compensation and the employee's regular wages, until any such sick leave allowance is depleted. This Article shall be subject to the limitations set forth in M. G. L. Ch. 152, Section 69. (Ex. 10)
7. Mr. Gendron was still considered to be a member of the union while he was receiving workers' compensation, and the Town of Grafton deducted his union dues from either his supplemental sick leave payment or from his accumulated vacation pay. (Ex. 11 at J.) Article 3 of his CBA titled, "Payroll Deduction of Union Fees," at Section 1 states that the employer shall, deduct from the wages of each Employee who authorizes the Employer in writing to do so, such monthly dues … as the Employee shall designate …. Ex. 10)
8. While Mr. Gendron was receiving workers' compensation, he had regular retirement deductions taken from either his accumulated vacation pay or from the supplemental sick leave payments by the Town of Grafton. He was never terminated from his job, which "was held open and … not filled until August 14, 2006." (Ex. 11 at B & J.)
9. On or about December 19, 2005, Mr. Gendron filed for accidental disability retirement benefits based on his November 12, 2004 knee injury at work. He provided medical records for processing his claim on or about January 11, 2006. (Exs. 4, 6 & 7.)
10. Mr. Gendron was awarded accidental disability retirement benefits by the Worcester Regional Retirement System. By letter of September 26, 2006, the Public Employee Retirement Administration Commission (PERAC) informed the Worcester Regional Retirement System that PERAC approved the award and Mr. Gendron's retirement was effective July 31, 2006. This was the date the Worcester Regional Retirement System had set. (Ex. 11 at D. Testimony.)
11. By a separate letter of September 26, 2006, PERAC informed the Worcester Regional Retirement System of the workers' compensation offset to be made to the accidental disability retirement benefit Mr. Gendron would be receiving. The pension, when reduced to an approximate weekly basis, amounts to $568.39, which is offset by the weekly compensation payment of $521.05, resulting in a pension payable of $47.34 weekly. This offset is effective as of July 31, 2006, and shall continue until there is a change in Mr. Gendron's workers' compensation benefit. (Ex. 11 at E.)
12. Mr. Gendron received his first retirement check on or about October 16, 2006. The letter from the Worcester Regional Retirement System accompanying the check stated that the retirement was effective July 31, 2006. Mr. Gendron was also provided with information about the workers' compensation offset. (Ex. 3)
13. Once he learned his effective date of retirement was July 31, 2006, Mr. Gendron wrote to the Worcester Regional Retirement System. He felt a mistake had been made and that his effective date of retirement should have been in July 2005. He explained that the date of injury of November 12, 2004 was the last time he received regular compensation, he filed his completed application for accidental disability retirement in January 2006, and against that background G. L. c. 32, § 7(2) called for an effective date of retirement in July 2005 which was six months prior to the filing of the application. Mr. Gendron never acknowledged that he received any supplemental payments from the Town of Grafton to supplement his workers' compensation payments. (Exs. 3 & 5. Testimony.)
14. By letter of December 8, 2006, the Worcester Regional Retirement System denied Mr. Gendron's request to change his effective date of retirement because he was on the Town of Grafton payroll until July 31, 2006, which would preclude being retired effective July 2005. By July 31, 2006, Mr. Gendron was no longer receiving any supplemental sick leave payments and had no accumulated vacation days from which further deductions could be taken either for union dues or for retirement system deductions. (Exs. 2 & 11 at Chief Executive Officer's statement.)
15. Mr. Gendron filed a timely appeal of this decision on December 18, 2006. (Ex. 1)
16. By letter of March 23, 2007, the Worcester Regional Retirement System informed PERAC that Mr. Gendron's accidental disability retirement papers were being resubmitted since Mr. Gendron had received a retroactive pay increase by July 31, 2006 that had not been factored into the earlier submission. In response, PERAC recalculated the retirement allowance to include this pay increase. On March 27, 2007, PERAC issued a revised approval letter for the Worcester Regional Retirement System. PERAC did not change the effective date of the retirement, but due to these new figures, the workers' compensation offset was also changed by PERAC, and the Worcester Regional Retirement System received this updated information. (Exs. 11 at A, C, G, H & I.)
17. Mr. Gendron settled his workers' compensation case on October 27, 2006.
Mr. Gendron's claim has merit, and his effective date of retirement should be July 11, 2005. In Zelesky v. PERAC and Worcester County Retirement System, 30 Mass. App. Ct. 106 (1991), the Appeals Court made clear that workers' compensation is not regular compensation under the G. L. c. 32, § 1 definition, and that it cannot be used for purposes of calculating a retirement allowance. The Appeals Court explained that workers' compensation is not paid by the employing governmental unit, but by an insurer, and is not remuneration for work performed. Rather, it is a substitute payment for an employee unable to perform his duties due to an injury at work. Id. at 109. The Appeals Court also made clear that supplemental payments, like the sick leave pay Mr. Gendron received to bolster his income while he was also receiving workers' compensation payments, are not regular compensation. The Appeals Court explained that they are not ordinary, routine payments, but ad hoc payments made to address a particular situation. The Appeals Court relied on the Supreme Judicial Court's discussions in Boston Association of School Administrators & Supervisors v. Boston Retirement Board, 383 Mass. 336, 341 (1981). Id. at 108-109 to explain what is and is not regular compensation. Mr. Zelesky worked in the county house of correction. After being injured at work, he received workers' compensation. Even though he was not at work, he continued to receive the supplemental pay he was entitled to under the terms of G. L. c. 126, § 18A due to the kind of job he performed at the house of correction. The Appeals Court found that neither the workers' compensation payments nor the G. L. c. 126, § 18A supplemental payments was regular compensation that could be included in the calculation of his retirement allowance. Id. at 109-110.
The Supreme Judicial Court addressed this same issue of whether workers' compensation payments are regular compensation for retirement purposes in Hayes v. Newton Retirement Board, 425 Mass. 468 (1997). This case also addressed the impact of G. L. c. 32, § 14(1)(a), which permits creditable service for time when the member is out from work receiving workers' compensation payments for total incapacity under G. L. c. 152, § 34. Mr. Hayes sought to use in his retirement calculation, the amount of his salary he would have received at the time he retired even though he was receiving workers' compensation at the time. He had been out on workers' compensation benefits since his injury. Despite being out from work receiving workers' compensation, the City of Newton had carried Mr. Hayes on its payroll, and he accrued sick leave and other benefits through the time of his retirement. Id. at 469. The Supreme Judicial Court made clear that creditable service was the only benefit granted by Section 14(1)(a), and not also the benefit to use the salary level for his position at the time of retirement, because workers' compensation was not regular compensation. The salary level he had at the time he last received regular compensation, which was the date he was injured, would be the salary level used in calculating his retirement allowance. The Supreme Judicial Court explained:
[W]e do not find … Hayes received regular compensation during the time he was receiving workers' compensation merely because the city continued to carry him on its payroll and Hayes continued to accumulate sick leave benefits over the course of those years. Id. at 472.
As for the impact of Section 14(1)(a) on Mr. Hayes circumstances, the Supreme Judicial Court addressed it as follows:
Section 14 protects employees who are injured on the job by allowing them to continue accumulating creditable service while receiving workers' compensation and by instructing the employer to make the contributions to the employee's annuity fund which would have been deducted from the employee's salary had he not been injured. There is no corresponding language in s. 14, however, which addresses the pension portion of an employee's retirement benefits, and that is the issue before us …. Id. at 473-474.
Like Mr. Hayes, Mr. Gendron last received regular compensation at the time of his injury. By January 11, 2006, he had filed a completed application for accidental disability retirement benefits that included the pertinent medical documents. G. L. c. 32, § 7(2) sets forth the method for determining the effective date of retirement as follows:
Upon retirement under the provisions of this section a member shall receive an accidental disability retirement allowance to become effective on the date the injury was sustained or the hazard or account of which he is being retired was undergone, or on the date six months prior to the filing of the written application for such retirement with the board and his respective employer, or on the date for which he last received regular compensation for his employment in the public service, whichever date last occurs.
Under this formula, Mr. Gendron's effective date of retirement is "six months prior to the [January 11, 2006] filing of the written application for … retirement," or July 11, 2005.
The decision of the Worcester Regional Retirement System setting the effective date of retirement as July 31, 2006 is rescinded, and Mr. Gendron is to receive a new effective date of retirement of July 11, 2005.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Sarah H. Luick, Esq.
DATED: June 27, 2008