Winning a misconduct dismissal is only half the battle for employers facing WCB exposure
An Alberta employer fired a worker for egregious conduct and ultimately won on that point. But in a decision signed February 20, 2026, Hearing Chair A. Edmunds of the Appeals Commission for Alberta Workers' Compensation ruled that the employer remained on the hook for months of workers' compensation claim costs regardless. "The employer is not entitled to cost relief prior to November 3, 2023," the panel concluded, upholding an earlier ruling that carries sharp lessons for HR professionals across the country.
The worker sustained a low back strain on February 16, 2023, while on the job. The Workers' Compensation Board accepted the claim and provided physiotherapy, two rehabilitation programs, a medical status examination, a functional capacity evaluation, and multiple specialist assessments.
The worker had been performing modified duties when the employer terminated him on May 24, 2023, citing egregious conduct. Despite the termination, the WCB initially disagreed that the conduct was egregious and continued paying wage loss benefits.
It took until October 3, 2024, more than 16 months after the dismissal, before the Appeals Commission confirmed the conduct was egregious, triggering a retroactive deletion of all wage loss payments effective May 25, 2023.
The secret hernia that couldn't shift the workers’ compensation costs
The employer's concurrent condition argument centred on a hernia the worker had carried since infancy. On November 3, 2023, he underwent a non-compensable hernia repair, after which the employer received cost relief for all claim costs beyond that date.
The employer argued the hernia had been contributing to prolonged disability long before the surgery, and that cost relief should have been applied as early as four to eight weeks after the original accident. The independent medical examiner, when asked directly whether any identifiable factors were causing a delay in recovery, responded that there were none.
A WCB medical consultant acknowledged the hernia may warrant work restrictions but concluded it did not impact the worker's recovery from the back injury. The panel found those two findings were not internally inconsistent: a condition can limit a worker's duties while remaining independent of the healing process of another injury.
Misconduct alone won't move the cost-relief needle
The employer's representative argued that a pattern of worker conduct throughout the claim constituted errors in judgment that prolonged recovery and warranted cost relief. The conduct cited included failing to disclose the hernia to the WCB and treatment providers until surgery had been scheduled, fasting for four weeks while unable to take medication, a treatment hiatus between May and July 2023, not being forthcoming with treatment providers about functional abilities, and reporting to modified duties while impaired by drugs and alcohol.
The panel wasunconvinced. "In absence of objective evidence establishing a causal connection between the identified conduct and the duration of disability, we do not find the criteria for cost relief based on the worker's error in judgement has been met," the decision states. A third argument — that costs should be relieved because wage loss benefits were paid during a medical investigation — also failed, as the investigation did not determine that the worker's condition was not compensable, which was the required threshold for cost relief to apply.
The panel's overall conclusion was unambiguous: "we find the objective medical evidence does not substantiate the application of any of the cost relief provisions relied upon."
