The purpose of awarding temporary total disability payments under the Indiana Worker’s Compensation Act is to compensate an employee for a loss of earning power because of an accidental injury arising out of, and in the course of, his or her employment. Ballard v. Book Heating & Cooling, Inc., 696 N.E.2d 55, 57 (Ind.Ct.App. 1998).  While a claimant is undergoing treatment for a work injury, it is relevant whether the injured worker has the ability to return to work of the same kind or character. Id. (citing Covarubias v. Decatur Casting, 358 N.E.2d 174, 176 (1976)). If the injured worker does not have the ability to return to work of the same kind or character during the treatment period, he is temporarily totally disabled and may be entitled to benefits. Id.

In Indiana, once payment of temporary total disability benefits commences, payment of TTD may not be terminated unless (1)the employee has returned to any employment; (2) the employee has died; (3) the employee has refused to undergo a medical examination under Section 6 or has refused to accept suitable employment under Section 11; (4) employee has received 500 weeks of TTD benefits or has been paid the maximum compensation allowed under Section 22; or (5) the employee is unable or unavailable to work for reasons unrelated to the compensable injury. IC 22-3-3-7(c).

The termination of an employee does not automatically terminate the rights of the employee under the Worker’s Compensation Act.  In most cases, the employee will still be entitled to medical treatment until he or she reaches maximum medical improvement and compensation for any permanency (PPI). However, eligibility for TTD benefits may be affected.

Similarly, when an employee voluntarily resigns from a job after an injury, the employee’s eligibility for medical treatment and permanency benefits are not extinguished, but the employee’s entitlement to TTD benefits may be affected. In Borgman v. Sugar Creek Animal Hospital, 782, N.E.2d 993 (Ind.Ct.App. 2002), the claimant voluntarily terminated her employment for reasons unrelated to her work injury. Therefore, the employer did not have a duty to offer her work within her restrictions or remit any TTD benefits. The Court found that the claimant was unavailable for work for reasons unrelated to her work injury and TTD benefits were properly terminated.

Currently, there is no case law directly on point in Indiana as to whether TTD must be paid when an employee is fired for cause prior to a full duty release to work. The Indiana Courts, in construing statutes, have said that words are to be given their plain, ordinary, and usual meaning unless contrary purpose is clearly shown by statute itself. Cox v. Worker’s Compensation Board of Indiana, 675 N.E.2d 1053, 1057 (1996). Therefore, it is reasonable to interpret IC 22-3-3-7(c)(5), which states that TTD benefits may be terminated when the employee is unable or unavailable to work for reasons unrelated to the compensable injury, to mean that if the employee is terminated for a reason unrelated to the worker’s compensation injury, then it is reasonable to terminate TTD benefits and/or not reinstate TTD benefits when an employee is working light duty and is subsequently fired for cause.

From a defense standpoint, it is not advisable that an employer/insurance company continue to pay TTD benefits, or commence TTD payments when an employee had been working light duty at the time of the termination, when an employee is terminated for cause. At this point, as there is no case law mandating that TTD benefits continue or commence upon termination for cause, and the statute clearly states that TTD benefits can be terminated once the employee is unavailable to work as a result of circumstances unrelated to the work injury, it is unlikely that a bad faith claim for failure to pay TTD benefits, if made by the plaintiff, would be successful. However, employers should use caution when terminating an employee with an active worker’s compensation claim, and make sure to well-document the reason(s) for the termination, to avoid a claim that the termination was in retaliation for the worker’s compensation injury/claim.

It is likely, that in the future, a plaintiff will try to make a case that he or she is entitled to TTD benefits despite being fired for cause. In making these arguments, it is anticipated that the argument will be made that the terms contained in Worker’s Compensation Act are to be liberally construed to effectuate its humane purposes, and that it would be inhumane to cut-off TTD benefits for an employee who is unable to work. See Cox, 675 N.E.2d at 1057. It is also likely that a plaintiff may ask the Court to go one step further than it did in Platinum Construction Group, LLC v. Collings, 988 N.E. 2d 1153 (Ind.Ct.App. 2013), when it found that receipt of unemployment benefits does not automatically preclude entitlement to TTD benefits, and find that a claimant fired for cause be entitled to TTD benefits.

In Platinum Construction Group, LLC v. Collings, 988 N.E. 2d 1153 (Ind.Ct.App. 2013), the claimant was a construction worker who was injured at work and could not return to his job duties when he was laid off when the company went out of business. After he was laid off, the claimant filed for and received unemployment benefits. The question before the court was whether the claimant’s receipt of unemployment benefits precluded him from being eligible for TTD benefits. Platinum specifically argued that claimant was ineligible for additional TTD benefits because he applied for and received unemployment benefits. The employer argued that the two claims are incongruous because in asserting an entitlement to TTD benefits, a claimant is asserting an inability to work, whereas an unemployment benefits claim is asserting that he is able-bodied, available, and making an effort to find work. The employer also asserted that the claimant is not entitled to a windfall of duplicative benefits. The Court found that the claimant was unable to perform work of the same kind and character due to the injuries that he suffered while working for Platinum and therefore met the statutory requirements to receive TTD benefits. The Court also concluded that the claimant was also entitled to receive unemployment benefits; after claimant was released to full duty work, he attempted to perform construction work but was unsuccessful. At the same time, he was willing, able, and available to work in a capacity that was less physically taxing, as required by the unemployment compensation statute. To ensure that the claimant did not receive a windfall, the Board credited the employer for the sums the claimant received in unemployment benefits.

It would be quite a leap for the Indiana Courts to infer from the holding in Platinum Construction that TTD benefits would be payable to an employee fired for cause.  And unless and until the Indiana Courts do take this step, employers and insurance companies should terminate TTD benefits upon an employee’s termination for cause and TTD benefits should not be commenced for an employee who was working light duty at the time of his or her termination for cause.

As always, please feel free to contact us to discuss this issue or related matters.