Can Employer Reduce Benefits If the Worker Refuses Available Positions ?
In City of Philadelphia v. Workers' Compensation Appeal Bd. (Szparagowski), 574 Pa. 372, 831 A.2d 577 (2003), two claimants, individually, were injured while working as firefighters for the City of Philadelphia.
As a result, both retired and began collecting vested pension benefits from the City's Plan X.
The City then offered each claimant a job as a fire communications dispatcher, which each was physically capable of completing despite his injury; however, both refused the positions.
The City, thereafter, filed petitions for modification of the claimants' benefits due to what was alleged to be bad faith refusals of available positions.
Both claimants asserted that the City failed to give them a feasible alternative, because accepting the dispatcher positions would disqualify them from receiving their pension payments.
The Supreme Court consolidated the two petitions to consider the common question of whether a temporary suspension of pension benefits constitutes a loss of a "qualitative benefit," thus, justifying a refusal to accept employment within the claimants' physical limitations.
In its opinion, the Court distinguished between a claimant being asked to "forfeit a qualitative benefit," as in St. Joe Container, and being asked to "merely temporarily forego pension payments to which they are only entitled upon retirement from the City." Id. at 381-382, 831 A.2d at 582.
In Szparagowski, had the Claimants accepted the jobs, they would have ceased to receive the pension payments only while re-employed, and the pension payments would have resumed in full when their municipal employment ceased. Id.
In its opinion, the Court reasoned that:
By being offered jobs as fire communications dispatchers, Claimants are simply being asked to choose between working for the City and collecting their pensions.
If they choose to resume work for the City, they will receive compensation for their work, but will forego present pension payments.
If, on the other hand, they desire to continue collecting their pension benefits, they must officially retire from the City's employ and forego further City paychecks.
This choice is no different than that which any non-injured City employee with a vested pension faces and thus, is the very choice Claimants would have had if they had never suffered a work-related injury. Id. at 384, 831 A.2d at 583.
Importantly, if a former firefighter who had been receiving a pension under Plan X, accepts and then retires from a civilian job, "he will not under any circumstances, receive lower monthly pension benefits than those he received prior to his re-employment in the civilian position." Id. at 382-383, 831 A.2d at 583.
Accordingly, our Supreme Court held that "offering Claimants City jobs within their physical limitations that permit Claimants to both retain their vested pensions and accumulate additional pension benefits is more than sufficient to satisfy the City's obligation to offer Claimants 'available' jobs that do not deprive them of 'qualitative benefits' associated with their pensions." Id. at 384, 831 A.2d at 584.