WEBB v. WORKERS COMPENSATION APPEALS BOARD (1979)

In this proceeding on writ of review we are called upon to determine whether petitioner Robert F. Webb is entitled to temporary disability indemnity payments under Labor Code section 139.5 during a period in which rehabilitation services were not being provided due to his failure to request them. We affirm the Board's decision that he is not.

On January 31, 1975, while employed by respondent Di Giorgio Corporation, Webb incurred an industrial injury. Di Giorgio furnished medical care and commenced temporary disability payments at the rate of $119 per week. Payments were suspended for a time but later were extended to December 15, 1975. Webb requested an informal permanent disability rating on January 20, 1976. The permanent disability rating bureau rated his permanent disability compensation rate at $70 per week in the total sum of $8,662.50, to commence August 28, 1975.

On June 9, 1976, Di Giorgio received a written demand for rehabilitation from Webb's counsel, and commenced on that date to make temporary disability payments once again of $119 per week; it also developed a vocational rehabilitation plan for Webb which was submitted to the rehabilitation bureau for approval. The rehabilitation bureau approved the plan and stated that respondent “will pay all temporary disability at the rate of $119 per week from the date of injury to the date Mr. Webb begins work at Roberts Motel less wage loss credit for wages earned and/or allowed liens.” Di Giorgio thereafter maintained an aggressive rehabilitation program for Webb, which culminated in his employment as a motel manager on October 8, 1976; it also paid full temporary disability benefits from June 9, 1976 to October 8, 1976, but not for the period December 15, 1975 through June 9, 1976.

Webb filed an application for adjudication of claim, seeking to obtain the disputed temporary disability payments. The workers' compensation judge found in favor of Webb and issued findings and award ordering payment of temporary disability during the six-month period. Di Giorgio petitioned for reconsideration, contending that the proper date for commencement of the payment of temporary disability benefits is the date the injured employee requests rehabilitation. The Workers' Compensation Appeals Board granted the petition for reconsideration and sustained the contention. We granted review.

Resolution of the issue herein hinges upon the interpretation to be given Labor Code section 139.5, subdivision (c); it provides: “When a qualified injured workmen chooses to enroll in a rehabilitation program, he shall continue to receive temporary disability indemnity payments, plus additional living expenses necessitated by the rehabilitation program, together with all reasonable and necessary vocational training, at the expense of the employer or the insurance carrier, as the case may be.” (Emphasis added.)

The subject was competently analyzed in Ponce de Leon v. Glaser Brothers (1977) 42 Cal.Comp.Cases 962, 968, from which we quote extensively:

“Three dates have been advanced as the starting point for the temporary disability benefits referred to in Section 139.5(c). (1) The Rehabilitation Bureau takes the position, for the reasons referred to above, that there should be no interruption in temporary disability benefits. In effect, as soon as normal temporary disability benefits cease, Labor Code Section 139.5 temporary disability benefits should be commenced for an employee entitled to vocational rehabilitation services. (2) The defendant urge(sic) that such benefits should not commence until the applicant actually enrolls in and commences his rehabilitation program. (3) A third alternative is to ascertain when an applicant first manifested and expressed interest in vocational rehabilitation and equate that with choosing to enroll, and therefore, the commencement (sic) date. This manifestation must be communicated to the defendants and/or their representatives.

“It seems to us that these alternatives may be putting the cart before the horse. The legislature spoke in terms of the applicant ‘continuing to receive’ temporary disability benefits. They were obviously contemplating the ideal situation where the worker is identified as being in need of vocational rehabilitation while still medically temporarily disabled and that immediate steps would be taken to initiate the process of vocational rehabilitation. They did not create a new type of temporary disability benefit. They spoke of those benefits continuing. It seems clear that they intended a workers' disability should not be permanent and stationary until he was both vocationally and medically rehabilitated.

“However, the ideal situation above referred to will not always occur. For any number of reasons vocational rehabilitation procedures may not start before the applicant has been medically rehabilitated and has become stationary from a purely medical standpoint.

“In those situations, and depending upon the specific facts, the above referred to alternatives for the commencement date of the temporary disability benefits referred to in Labor Code Section 139.5(c) may become important. For example, why was the ‘ideal situation’ not followed? If it was because the applicant was not interested in vocational rehabilitation at the time he became medically permanent and stationary, he will have to reopen this issue And temporary disability may be reinstated if otherwise eligible From the time he manifested this interest and communicated it to the defendants. On the other hand if it was because of delays or mis-diagnosis of the need for vocational rehabilitation benefits by the defendants then no interruption of temporary disability benefits may be in order.” (Emphasis added.)

The holding of the Board in this case is consistent with the Ponce de Leon principles, and with the intent of Labor Code section 139.5, subdivision (c). Until the employer has reason to believe that rehabilitation is both appropriate and desired by (or at least acceptable to) the injured employee, the rule of reason dictates that rehabilitation benefits need not be furnished. The wisdom of the Ponce de Leon rule is readily apparent, for without it an injured employee could wait for years without disclosing a “secret intent” to seek rehabilitation, then suddenly force a retroactive disgorgement of substantial monies necessarily unaccompanied by rehabilitation efforts.

The Board found in this case, on substantial evidence, that no request for rehabilitation was made prior to June 9, 1976 and De Giorgio had no cause to believe before that date, from medical reports or otherwise, that rehabilitation was either needed or desired. Accordingly the rule of Ponce de Leon, which we approve despite the contrary wishes of Webb, was correctly applied.

Webb argues that 8 California Administrative Code section 10004, which requires an employer to report an injured employee's disability status to the rehabilitation bureau immediately after 120 days of total temporary disability, was violated. First, the record does not disclose such a violation, it being totally devoid of any reference to the subject at all. Second, that report was due at the end of May 1975, some seven months before the question before us could possibly have arisen; and its presence or absence could not have affected either Webb's or Di Giorgio's actions. Webb argues further that section 10004 requires such a report when the employer learns that the employee is unlikely to be able to return to his usual and customary occupation. In this regard Webb ignores again that the Board found, impliedly at least, and on more than substantial evidence, that there was no such knowledge on the part of Di Giorgio as to trigger the requirement for such a report.

The decision of the Board is affirmed.

I dissent.

We are called upon to determine whether petitioner Robert F. Webb is entitled to temporary disability indemnity payments under Labor Code section 139.5, during a period in which rehabilitation services were not being provided due to his failure to affirmatively request such services. The majority holds that the duty to make temporary disability indemnity payments does not accrue until the injured employee makes an affirmative request for rehabilitation. Strong policy in favor of the expeditious identification, notification, and referral of industrially injured employees to rehabilitation services convinces me that, under the facts of this case, petitioner is entitled to full temporary disability indemnity payments.

I

When petitioner filed an application for adjudication of claim, he sought to have respondent ordered to make temporary disability payments for the entire period from the date of his injury until the completion of his rehabilitation program, including the period December 15, 1975 (when the workers' compensation judge ruled his condition was permanent and stationary) through June 9, 1976 (when petitioner requested rehabilitation). The workers' compensation judge found in favor of petitioner and issued findings and an award ordering temporary disability to be paid during the disputed period. In his memorandum of decision the workers' compensation judge noted that a contrary decision would place the burden on the employee to request services rather than on the employer to provide them, would be a departure from the Workers' Compensation “delivery system” of benefits, and would not comply with the intent of the rehabilitation program.

Respondent petitioned for reconsideration of the decision of the worker's compensation judge, contending that the proper date for commencement of the payment of temporary disability benefits would be the date that the injured employee requests rehabilitation. The Board held, as the majority notes, but with a dissent in the three-member panel, that the commencement date of the temporary disability benefits under Labor Code section 139.5, subdivision (c), was the date that petitioner communicated to respondent that he elected to undertake the rehabilitation program. The dissenting member of the board urged that an employer has an affirmative duty to determine whether or not an injured employee requires vocational rehabilitation; where the employer has notice of the employee's need for rehabilitation and takes no action, the temporary disability payments should be paid from the date of injury until the program is complete.

II

The specific issue, as the majority agrees, is whether petitioner was entitled to receive temporary benefits after his condition was permanent and stationary but prior to the time he notified his employer of his desire to undergo rehabilitation. A proper analysis begins with several statutory provisions.

Labor Code section 139.5 establishes the rehabilitation responsibilities as follows:

“(a) The Administrative Director shall establish within the Division of Industrial Accidents a rehabilitation unit, which shall include appropriate professional staff, and which shall have all of the following duties:

“(1) To foster, review, and approve rehabilitation plans developed by a qualified rehabilitation representative of the employer, insurance carrier, state agency, or employee.

“(2) To adopt rules and regulations which would expedite and facilitate the identification, notification, and referral of industrially injured employees to rehabilitation services.

“(3) To coordinate and enforce the implementation of rehabilitation plans.

“. . .

“(c) When a qualified injured workman chooses to enroll in a rehabilitation program, he shall continue to receive temporary disability indemnity payments, plus additional living expenses necessitated by the rehabilitation program, together with all reasonable and necessary vocational training, at the expense of the employer or the insurance carrier, as the case may be.”

In turn, Labor Code section 4651.2 provides that no petition alleging the decrease or termination of disability shall be granted while the injured worker is pursuing a rehabilitation plan under Section 139.5.

Labor Code sections 139.5 and 4651.2 contemplate a situation in which the injured employee's need for rehabilitative services is identified prior to the time that his injury becomes permanent and stationary, and provides that if the employee chooses to accept rehabilitative services he will continue to receive greater benefits by the continuation of his temporary disability benefits while receiving vocational training. In the present case petitioner's injury became permanent and stationary on December 15, 1975, and he began to receive the lower permanent disability benefits after that time. He subsequently underwent rehabilitation.

Prior to January 1, 1975, Labor Code section 139.5 authorized, but did not require, the establishment of a rehabilitation unit. It made participation in rehabilitation voluntary on both the employee and the employer, provided that the employee's permanent disability rating would be made as of the date of completion of the rehabilitation program rather than on the date of the injury, and placed a limit on the employer's financial responsibility. (See former Lab.Code, s 139.5; Witkin, Summary of Cal. Law (8th ed., 1978 sup. to vol. 2) s 186A subd. (b), p. 62. See generally Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 110 Cal.Rptr. 144, 514 P.2d 1224; Dalen v. Workmen's Comp. Appeals Bd. (1972) 26 Cal.App.3d 497, 103 Cal.Rptr. 128.) The amendment of Labor Code section 139.5 represents California's response to the growing awareness that rehabilitation is an inherent part of the Workers' Compensation system's function. (See 2 Larson, Workmen's Compensation Law (1976 ed.) s 61.20, p. 10-479.)

Under prior law there were several drawbacks to the rehabilitation system. First, the employee might be unable to take measures himself toward rehabilitation, since most employees are undergoing great financial hardship during the rehabilitation period. (Moyer v. Workmen's Comp. Appeals Bd., Supra, 10 Cal.3d at p. 235, 110 Cal.Rptr. 144, 514 P.2d 1224.) Second, although the employee might receive the higher benefits as temporary disability payments and certain rehabilitation expenses, the employee would also invariably receive a lower permanent disability rating since the permanent disability rating would be computed with reference to age and occupation after rehabilitation instead of the date of the injury. (Id. at pp. 234-235, 110 Cal.Rptr. 144, 514 P.2d 1224.) Finally, even if the employee elected to undergo rehabilitation the employer was free to refuse, and might do so since the higher costs of rehabilitation were born by the employer. (Ibid.) In amending Labor Code section 139.5 the Legislature eliminated the provisions allowing the employer to refuse to participate, eliminated the limitation on the employer's financial responsibility, and eliminated the provisions requiring that an employee who has completed rehabilitation be evaluated for permanent disability as of the time he finishes rehabilitation. It is thus clear that the Legislature intended to make rehabilitation programs more readily available to the large number of injured workers who might thereby benefit.

Pursuant to the authority granted in Labor Code sections 133, 139.5 and 5307.3, the rehabilitation unit of the Division of Industrial Accidents has established certain rules and regulations. (Cal.Admin.Code, tit. 8, ss 10001-10010.) Under these regulations a qualified employee is one in whom the effect of an injury, whether or not combined with prior injuries or disabilities, permanently precludes or is likely to preclude from engaging in either usual and customary occupation or the occupation in which the employee was engaged at the time of the injury. The statute deals with an injured employee who can reasonably be expected to gain from a rehabilitation plan. (Cal.Admin.Code, tit. 8, s 10003, subd. (2)(c).) An employer is required to report an employee's disability status to the rehabilitation bureau in writing (a) immediately upon knowledge that the employee is unlikely to be able to return to either his usual and customary occupation, or his occupation at the time of the injury, on a permanent basis; (b) immediately following 120 days of temporary total disability for injuries not previously reported under (a); or (c) upon completion of a rehabilitation plan. (Cal.Admin.Code, tit. 8, s 10004.) The regulations require that the rehabilitation plan be developed as soon as the need is identified or as directed by the bureau. (Cal.Admin.Code, tit. 8, s 10005.) Finally, implementation of the plan is to begin as soon as the employee is capable of participating in the program and medical opinion indicates that the employee's recovery will not be impeded by participation; in no event shall implementation take place later than the termination of temporary total disability payments. (Cal.Admin.Code, tit. 8, s 10006, subd. (g).)

Subsequent to the effective date of the amendment to Labor Code section 139.5 and the effective date of the regulations promulgated thereunder, the Workers' Compensation Appeals Board was called upon to consider the proper commencement date of the temporary disability payments provided for by section 139.5. (Ponce de Leon v. Glaser Brothers (1977) 42 Cal.Comp.Cases 962.) The Board noted that in the ideal situation the worker is identified as being in need of services while he is still temporarily disabled, and immediate steps would be taken to provide rehabilitation at that time. (Id. at p. 968.) For any number of reasons the ideal situation might not occur, and when it does not the Board recognized the three possible starting points, mentioned by the majority, for temporary disability payments under Labor Code section 139.5 subdivision (c). These are: (1) there should be no interruption of temporary disability benefits; (2) the benefits should not commence before the employee actually enrolls in a rehabilitation program; and (3) the benefits should begin when the employee communicates his interest in rehabilitation to the employer. (Ibid.) However, in Ponce de Leon, the Board did not choose between the hypothetical alternatives, but held instead that the resolution of the question would depend on the facts of the given case. It remanded for such a resolution. (Id. at pp. 968-969.) The Board stated: “For example, why was the ‘ideal situation’ not followed? If it was because the applicant was not interested in vocational rehabilitation at the time he became medically permanent and stationary, he will have to reopen this issue and temporary disability may be reinstated if otherwise eligible from the time he manifested this interest and communicated it to the defendants. On the other hand if it was because of delays or mis-diagnosis of the need for vocational rehabilitation benefits by the defendants then no interruption of temporary disability benefits may be in order.” (Ibid.) There is nothing in the record to indicate that petitioner was not interested. As noted by the Board in Ponce de Leon, the early identification of workers in need of rehabilitation services and the early commencement of those services is essential for effective rehabilitation. (Id. at pp. 967-968.)

In amending Labor Code section 139.5 to its present form, the Legislature provided that the rehabilitation unit had the duty of adopting “regulations which would expedite and facilitate the identification, notification, and referral of industrially injured employees to rehabilitation services.” (Lab.Code, s 139.5, subd. (a)(2).) There is in Labor Code section 139.5 the grant of authority to require employers to make a referral to the rehabilitation unit of any employee who might be in need of rehabilitative services. The regulations adopted pursuant to Labor Code section 139.5 require the employer to file a written report immediately upon the knowledge that an injury may prevent the employee from returning to work, or immediately following 120 days of temporary total disability. (Cal.Admin.Code, tit. 8, s 10004, subds. (a) and (b).)

Contrary to the majority's holding, I believe that Labor Code section 139.5 and the regulations administering that section place an affirmative duty upon the employer. That duty is to identify and report an employee who may be in need of rehabilitative services and in any event, to make the report to the rehabilitation unit when the employee has received 120 days of temporary total disability. To hold that the employer has no affirmative duty would hinder the rehabilitation unit in its duty to identify, notify and refer employees to rehabilitation services, and would defeat the essential requirement of a rehabilitation program that it commence as soon as possible after the injury.

Upon an analysis of the facts of this case it becomes apparent that respondent did not meet its duty in petitioner's case. Petitioner received temporary total disability benefits for well over 120 days yet no report appears in the record showing that such a report was made to the rehabilitation unit. Respondent should not be permitted to successfully contend that it had no notice.

There are other reasons that respondent's contention under the facts of this case cannot be accepted. A disability is regarded as permanent when further change, for better or for worse, is not reasonably to be anticipated under usual medical standards. (See 2 Hanna, Cal. Law of Employee Injuries and Workmen's Compensation (2d ed. 1979) s 14.01(3)(c), p. 14-11; 2 Witkin, Summary of Cal. Law (8th ed. 1973) s 174, p. 996.) On August 24, 1975, respondent determined that petitioner's injury was permanent and stationary, and discontinued temporary disability benefits. The Board subsequently upheld the worker's compensation judge's findings that the medical evidence supported the determination that the injury was permanent and stationary until nearly four months later, on December 15, 1975. Despite the fact that his injury was determined to be permanent and stationary petitioner did not return to work. The combination of the stabilization of petitioner's injury, his failure to return to work, and the medical reports which indicated that he probably would not return to work gave respondent sufficient notice that petitioner Might be a person who would require rehabilitation services. This is not a case in which respondent contends that the employee was malingering, or that his injury did not prevent him from returning to work. Respondent's failure to take any action in response did not fulfill its duty towards rehabilitation. Under such circumstances I believe it proper for petitioner to be eligible to have his temporary disability benefits continued from the date of his injury until completion of the rehabilitation program. I believe this is basic common sense in light of the statutory scheme.

PARAS, Acting Presiding Justice.

EVANS, J., concurs.