The opinion of the court was delivered by: Judge McCULLOUGH
Submitted: February 11, 2011
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE JOHNNY J. BUTLER, Judge
Joseph Bucceri (Claimant) petitions for review of the September 3, 2010, order of the Workers' Compensation Appeal Board (Board) which reversed the March 31, 2009, decision of a Workers' Compensation Judge (WCJ) granting Claimant's petition to review compensation benefits under the provisions of the Pennsylvania Workers' Compensation Act (Act).*fn1 We now affirm in part and reverse and remand in part.
On June 4, 2002, Claimant sustained a work-related injury to his left knee while in the course and scope of his employment with Freightcar America Corporation (Employer). Disability benefits were calculated under section 309 of the Act, 77 P.S. §582,*fn2 and set at a rate of $287.42 per week based upon an average weekly wage (AWW) of $319.36 per week. (Finding of Fact No. 1.)
On November 16, 2007, Claimant filed a review petition alleging that his compensation benefits had been incorrectly calculated under a supplemental agreement dated August 9, 2007, based upon an incorrect AWW. That same day, Claimant filed a penalty petition in which he alleged that Employer had failed to pay the correct amount of benefits. Employer filed answers to both petitions denying all of the material allegations raised therein. The petitions were consolidated and the case was assigned to a WCJ for hearings. (Findings of Fact Nos. 2, 3.)
During the proceedings, the parties informed the WCJ that the primary issue was whether supplemental unemployment benefits (SUB) and unemployment compensation (UC) benefits received by Claimant during a period of layoff prior to his work-related injury should be included in the calculation of his AWW. (Finding of Fact No. 4.)
Claimant testified that he worked for Employer for approximately 29 years, that he was laid off in March of 2007, and that he was receiving disability benefits since that time. Claimant had been laid off numerous times while employed by Employer, during which he received SUB payments and UC benefits. The SUB payments were paid by Employer as a benefit negotiated through a collective bargaining agreement (CBA).*fn3 The SUB payments were treated as income upon which he paid taxes. Claimant presented documentary evidence regarding the wages that he earned, and UC benefits that he received, for periods prior to his work-related injury. (Findings of Fact Nos. 5, 6.)
Employer's human resources manager, Charles Howard, testified for Employer in opposition to Claimant's petition. Howard testified that, as a part of the CBA in effect between November 1, 1997, through October 31, 2001, Claimant received SUB payments during the periods that he was laid off. Howard stated that the amount of SUB payments paid to employees was based upon seniority, and that the payments were taxable for federal income tax purposes, but not taxable for Social Security purposes. Employer also presented documentary evidence regarding the SUB payments made to Claimant prior to the work-related injury and the CBA under which the SUB payments were made. (Findings of Fact Nos. 7, 8.)
The WCJ accepted as credible the testimony of Claimant and Howard regarding Claimant's receipt of SUB payments and UC benefits during the period that he was laid off prior to his work-related injury. The WCJ also accepted as credible Howard's testimony regarding the manner in which SUB payments were accrued by Claimant under the CBA. The WCJ also found that Claimant's SUB payments and UC benefits were subject to federal income tax. (Finding of Fact No. 9.)
The WCJ noted that in Occidental Chemical Company v. Workers' Compensation Appeal Board (Knight), 756 A.2d 152 (Pa. Cmwlth. 2000), this Court determined that SUB payments under a CBA were in the nature of wages earned and were not intended to be in lieu of compensation and held that an employer was not entitled to a credit for such payments. The WCJ also noted that in Shire v. Workers' Compensation Appeal Board (General Motors), 828 A.2d 441 (Pa. Cmwlth.), appeal denied, 577 Pa. 675, 842 A.2d 408 (2003), this Court determined that sickness and accident benefits received through an employer-sponsored program are to be included in the calculation of a claimant's AWW under section 309 of the Act. (Finding of Fact No. 9.)
Based on the foregoing, the WCJ found that excluding the SUB payments and the UC benefits from the calculation of Claimant's AWW would result in an artificially low AWW. As a result, the WCJ included the SUB payments and the UC benefits and recalculated Claimant's AWW to be $562.21 per week.
However, the WCJ also concluded that Claimant had failed to sustain his burden of proving that Employer violated the Act by failing to pay the correct amount of benefits. (Findings of Fact Nos. 9, 10.) Accordingly, the WCJ issued an order granting Claimant's review petition and denying his penalty petition.
Employer appealed to the Board, which reversed the WCJ's decision. The Board noted that in Reifsnyder v. Workers' Compensation Appeal Board (Dana Corporation), 584 Pa. 341, 883 A.2d 537 (2005), the Supreme Court specifically determined that UC benefits were to be excluded from the calculation of AWW under section 309 of the Act. The Board also noted that because SUB payments are intended to be paid when an employee is no longer ...