In the recent Decision in Rose Corporation v. W.C.A.B. (Espada), No. 661 C.D. 2019, filed 08-17-2020), the Commonwealth Court considered the Employer’s argument that Act 111 of 2018 [adopting new IRE provisions to replace the former IRE provision struck down by the Supreme Court in Protz v. W.C.A.B. (Derry Area School District), 161 A. 3d 817] could be applied retroactively to essentially validate IREs performed under the pre-Protz IRE provisions of the Workers’ Compensation Act. In a near unanimous Decision¹ authored by Judge Cohn Jubelirer, the Court has held that Act 111’s provisions cannot be applied retroactively to “resurrect” an IRE performed under those pre-Protz provisions. In reaching its conclusions, the Court examined when a statute can be deemed to have retroactive effect. The Court noted that statutory construction rules require that, for a statue to be deemed to have retroactive effect, it must be clear in the language of the statute that the General Assembly so intended such an application. The Court stated that, without such clear language, a statute can only be given prospective effect. The Court noted that an exception to this rule exists where a statute is merely procedural and does not alter substantive rights. Here the Court held that the exception does not apply since Act 111 effects a change on a claimant’s substantive right to benefits. Regarding the issue of legislative intent, the Court held that Act 111 merely states that it be given “immediate” effect. The Court discerned no clear language in Act 111 that the Statute be given retroactive effect. In so holding, the Court rejected the notion that the look back provisions of Act 111 (that the employer be given credit for total and partial disability benefits paid prior Act 111’s enactment) provide the necessary clear language of legislative intent to make the entirety of Act 111 retroactive. Therefore, Act 111 was deemed to have only prospective effect thereby rejecting any argument that IREs performed under the pre-Protz IRE provisions are valid to effect a change in a claimant’s disability status.
While this Decision is not generally favorable to employers, it is important to note that two positives can be taken from this Decision. First, in analyzing the look-back sections of Act 111 discussed above the Court stated that an employer is given full unfettered credit for total disability paid prior to the enactment of Act 111. Therefore, an employer need not wait to request an IRE until 104 weeks of additional total have been paid after enactment of Act 111. Second, the same is true for partial disability paid, including partial paid while a pre-Protz IRE was in effect. Hence, an employer can clearly receive credit for any partial disability paid under a pre-Protz IRE when calculating claimant’s 500 week entitlement.² Accordingly, employers should embark immediately upon obtaining new IREs under Act 111 so as to limit the claimant’s ongoing entitlement to indemnity benefits.
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¹The Opinion was joined by five Judges (P. Kevin Brobson, Michael H. Wojcik, Christine Fizzano Cannon, Ellen Ceisler and J. Andrew Crompton) with President Judge Mary Hannah Leavitt filing a concurring opinion.
²In another Decision filed simultaneously by the Court [Yolanda White v. W.C.A.B. (City of Philadelphia), No. 1463 C.D. 2019), the Court held that, in order to receive that credit, employers must first file for a new IRE under Act 111. It is important to note that the claimant in that case received an impairment rating under the pre-Protz provisions of 36% (which would not qualify as partial under Act 111). Since the Court held that consideration of whether the employer in that case would get credit for partial paid prior to reinstatement was pre-mature (as employer had not requested an IRE under Act 111), the issue of whether a rating under old IRE provisions of 35 to 49% entitles the employer to partial disability credit may arguably remain undecided.
Editor’s Note: To date, further review by the Supreme Court has not been sought in either the Rose Corporation or White cases. The parties in both cases still have ample time to file a Petition for Review with the Supreme Court, so “stay tuned!”