Yukon court orders new review of injured worker’s wage-benefit calculation

A Yukon worker’s successful challenge to the calculation of his wage-loss benefits was sent back for a new hearing after a judge found the appeal panel had not adequately explained its use of an exception to the usual earnings formula.

In Workers’ Safety and Compensation Board v Sundin, 2026 YKSC 10, the Supreme Court of Yukon quashed the panel’s decision on February 16, 2026 and returned the matter to a differently constituted panel. Justice K. Wenckebach did not set a replacement benefit rate or rule that the worker could never qualify for an exception.

The dispute concerned how to measure lost earnings when a worker was injured shortly after starting a substantially better-paying job.

Older earnings produced a much lower benefit

Karl Sundin started work as a natural resources officer for the Yukon government in July 2018, earning $78,819 a year. He was injured during a search-and-rescue operation about two months later. The compensation dispute concerned benefits for periods when the workplace injury prevented him from working.

His short-term benefits were calculated using his earnings immediately before the injury. Average weekly earnings of $1,515.76 produced a weekly benefit of $1,136.82.

The calculation changed when he became entitled to long-term benefits. The applicable policy ordinarily looked at earnings from all employment during the two calendar years before the injury and selected the year more favourable to the worker. Sundin had earned considerably less before taking the government job.

Using that earlier income initially produced weekly long-term benefits of $325.86. An internal review increased the amount to $427.42, which was upheld on reconsideration. These were the historical calculations under review, not new amounts awarded by the court.

Sundin appealed. The appeal panel found exceptional circumstances and first based his benefit on his income when injured. After the board of directors sent the matter back, the panel reaffirmed its conclusion and used the earnings of a worker in the same position, with the same seniority and employer. The result was again $1,136.82 a week.

The Workers’ Safety and Compensation Board sought judicial review of that second panel decision.

An exception still needed a reasoned explanation

The judge reviewed the decision for reasonableness, asking whether the panel’s reasoning was coherent and justified by the governing law and facts.

Although newer compensation legislation had come into force, the amount of Sundin’s compensation remained governed by the former legislation. The board’s policies were binding on the appeal panel.

The earnings policy allowed a different approach where its ordinary method could not be applied or would produce an unfair or unintended result. But it also contained a more specific provision addressing exceptional circumstances for categories such as young workers, students, apprentices and people with no more than two years of documented work history. That provision permitted comparison with other workers’ earnings.

Sundin did not fit those listed categories. The judge did not treat that as the end of the question: the panel still needed to consider both parts of the policy and explain how they related. Instead, it overlooked the more specific provision and incorrectly said the policy supplied no guidance on exceptional circumstances.

The panel also listed facts it considered important without explaining how they established an exception. Sundin’s lawyer argued that the central point was obvious: a benefit based on much lower historical earnings failed to reflect the wages he was actually losing.

The judge accepted that the reasons suggested concern about that difference. But a formula based on previous years’ earnings already contemplated that some workers would receive benefits calculated from wages lower than those they earned when injured. The panel therefore had to explain what distinguished Sundin’s circumstances from other cases with that same feature. Its reasons did not do so.

The court set aside the decision and ordered a fresh determination by a different panel. The ruling required a fuller application of the policy; it did not itself resolve Sundin’s ultimate benefit entitlement.