Can Employer Cease Paying Partial Disability Benefits If Employee Returns to Work In a Modified Position ?
In Varkey v. Workers' Comp. Appeal Board (Cardone Industries), 827 A.2d 1267 (Pa. Cmwlth. 2003), employer petitioned to terminate benefits and the claimant filed two penalty petitions.
The parties resolved the litigation with a stipulation which required the claimant to return to work in a modified position and, if he worked in the position for two weeks, employer agreed to pay claimant $ 43,000.00 in past-due compensation as well as partial disability benefits beginning on the date that claimant returned to work in the modified position.
Shortly after the claimant returned to the modified position, employer ceased paying the partial disability benefits and waited approximately six weeks before paying claimant the $ 43,000.00 in past-due compensation.
The stipulation was adopted by an order of the Workers' Compensation Judge (WCJ) and claimant was forced to file another penalty petition when employer failed to continue paying the partial disability benefits.
A supplemental agreement was subsequently executed, acknowledging that the claimant had returned to work at a loss of earnings and was owed partial disability benefits.
The supplemental agreement further required claimant's wages to be reviewed quarterly to determine whether an underpayment or overpayment had occurred.
During subsequent litigation, employer's counsel stipulated that partial disability benefits had not been paid as previously agreed to and claimant's earnings had not been reviewed in a timely manner.
Consequently, the WCJ found that employer had violated the Act by failing to make timely partial disability payments and by failing to review claimant's income as required by the parties' supplemental agreement.
As a result, the WCJ concluded that employer's contest of the penalty petition was unreasonable and ordered the payment of counsel fees.
The Board reversed the award of counsel fees on appeal.
The Court reversed in turn.
In concluding that employer's contest of claimant's penalty petition was unreasonable, this court found support in cases where an unreasonable contest was found because the employer failed to pay compensation clearly owing and overdue or violated a stipulation reached by the parties and approved by the WCJ or ceased payment of medical expenses without first taking the necessary procedural steps.