Court File and Parties
CITATION: Bell Technical Solutions Inc. v. Workplace Safety and Insurance Appeals Tribunal, 2022 ONSC 6946
DIVISIONAL COURT FILE NO.: DC-22-162-JR
DATE: 20221209
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, LeMay and Leiper JJ.
BETWEEN:
BELL TECHNICAL SOLUTIONS INC. Applicant
– and –
WORKPLACE SAFETY AND INSURANCE APPEALS TRIBUNAL Respondent
Counsel: Chris Sinal and Liam K. Ledgerwood, for the Applicant Chris Paliare and Mariam Moktar, for the Respondent
HEARD by videoconference at Toronto: December 6, 2022
Reasons for Decision
LeMay J.
[1] This is an application for judicial review of a decision of the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”) dated February 14th, 2022. That decision rejected the Applicant’s request to have its business classification changed from Schedule 1 to Schedule 2 of the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A (“the WSIA”). In the alternative the Applicant requested that the WSIAT reclassify its business within the Schedule 1 classification system from Rate Group 704 (electrical work) to Rate Group 983 (communications industries). The WSIAT denied both requests.
[2] The Applicant now seeks to have this Court quash the WSIAT’s decision and make a declaration classifying the Applicant as a Schedule 2 employer on the basis that the WSIAT’s decision declining to place the Applicant into Schedule 2 was illogical and circular, rendering it unreasonable. In the alternative, the Applicant seeks to have this Court place it into Rate Group 983 within Schedule 1.
[3] For the reasons that follow, I would dismiss the Application for judicial review. In order to explain my reasons for reaching this conclusion I will first set out some background facts.
Background Facts
[4] The Applicant, Bell Technical Solutions Inc. (“BTS”) is currently a subcontractor for, and a wholly owned subsidiary of Bell Canada Inc. However, BTS’s predecessor was a numbered company operating as Entourage Technology Solutions (“Entourage”). In early 1996, Entourage was incorporated and began providing services to, inter alia, Bell Canada. At the time of its incorporation, Entourage was not a wholly owned subsidiary of Bell Canada Inc.
[5] Throughout its operation, BTS (and Entourage before it) has been engaged in installing and repairing indoor residential wiring for Bell Canada’s systems. From about 1998, BTS (and Entourage) performed outside telephone installation work as well as, more recently, work for smaller commercial businesses. Finally, there was some testimony before the WSIAT that BTS had become more involved in installation of computer and cable television cabling and equipment inside residences and small businesses. Between 1996 and 2005, Entourage was partially owned by Bell Canada and partially held privately by other shareholders. In 2005, BTS became a wholly owned subsidiary of Bell Canada.
[6] When it began business, Entourage also registered with the Workplace Safety and Insurance Board (“WSIB”) as an employer. On the same day that the registration form was completed, February 22nd, 1996, counsel for Entourage wrote to the WSIB to seek to have Entourage classified in Rate Group 983 (a request that would only apply to a Schedule 1 employer).
[7] The WSIB responded on February 27th, 1996, stating, inter alia, that:
Employers operating a business or industry under Schedule 1 must notify the Workers’ Compensation Board of the business activity and the estimated annual assessable earnings within ten (10) calendar days after the first worker is hired and provide a written estimate of annual assessable earnings by the final day of the month following the month in which the first worker was hired.
[8] The WSIB’s letter confirmed that Entourage would remain classified in Rate Group 704 (a classification that also only applies to a Schedule 1 employer). On March 21st, 1996, this decision was appealed by Entourage’s counsel. The issue of whether Entourage belonged in Schedule 2 was not raised on this appeal. Ultimately, after meeting with a Senior Auditor on January 29th, 1997, Entourage confirmed that it would not be appealing the classification any further. Correspondence documenting that meeting confirms that Entourage indicated that it would be abandoning its appeal after it was explained to them that because Entourage did not “operate” a telephone and/or a telecommunication service rate group 983 was not the proper classification.
[9] In February of 1998, Entourage’s counsel again raised with the WSIB the proper classification of Entourage. After various meetings, the classification of Entourage into Rate Group 704 was confirmed by the WSIB in January and April of 1999. Entourage appealed this decision. As part of its appeal of the Rate Group classification, Entourage asked for the first time to be classified in Schedule 2. This request was made on January 4th, 2000. That request was ultimately withdrawn without prejudice.
[10] In 2005, Entourage advised the WSIB that it was changing its name to BTS and would continue to operate as a separate company from Bell Canada. In the meantime, over the course of its existence both the Ontario Ministry of Labour and the Canada Industrial Relations Board (“CIRB”) had determined that BTS was a federally regulated company. The Ministry of Labour’s determination that BTS was federally regulated was made in the summer of 1998. The basis for this determination was the Ministry’s finding that BTS’ operations were an integral and vital part of Bell’s operations. The determination by the CIRB was made in 2009.
[11] On November 6th, 2019, the current proceedings began with a further request from BTS’s representative to classify it under Rate Group 983 and/or move BTS to Schedule 2. This request was made on the basis that BTS was closely related to Bell Canada and that, therefore, its operations were “ancillary” to Bell Canada’s operations within the meaning of the WSIA. The WSIB’s decision was appealed through the WSIB’s internal appeal process. The WSIB made its final decision on February 25th, 2020.
[12] BTS appealed the WSIB decision to the WSIAT. A panel of the WSIAT considered the issues and released a decision on February 14th, 2022. In that decision the WSIAT determined:
a) That Rate Group 704 and not Rate Group 983 represented the best fit for BTS’s business activities.
b) BTS could not be moved from Schedule 1 to Schedule 2 because of the provisions of the WSIA and because it would be both impractical and unwarranted to transfer BTS to Schedule 2 at this point.
c) BTS’s classification should not be changed to Rate Group 983 as the business activities of BTS were not “ancillary” to those of Bell Canada within the meaning of the WSIA.
[13] The Applicant BTS now seeks judicial review of the decision. However, the Applicant is only seeking judicial review of the WSIAT’s findings on the first two points listed above. No challenge is taken to the WSIAT’s final conclusion. BTS argues that the decisions of the WSIAT on the first two points were unreasonable.
[14] The Respondent WSIAT opposes the judicial review application on the basis that the decisions of the WSIAT were reasonable and deference is owed to its findings. Further the Respondent argues that the equitable doctrine of laches should bar this application because of the Applicant’s delay in seeking a change in its classification since it was first classified in Schedule 1.
The Regulatory Scheme
[15] The WSIA is the legislation that provides coverage for workplace accidents for most employers in Ontario. It is a no fault system that provides employers with legal protection in the event an employee suffers an injury arising out of or in the course of their employment. It also provides workers with a variety of benefits and services.
[16] Under the WSIA, employers are divided into two schedules. Schedule 1 employers are required to pay premiums based on the Rate Group that they are classified into. Rate Groups provide a general description of business activities and the WSIB classifies employers into the group that is the “best fit” for the employer. Schedule 2 employers pay only the direct costs of claims and an administrative fee. The activities that fall into Schedule 1 and Schedule 2 are set out in the respective Schedules. The Schedules are contained in O. Reg 175/98, which was made pursuant to the WSIA.
[17] If an employer objects to its classification, it can appeal that decision through the WSIB’s internal appeals process. That process ends with a hearing before an Appeals Resolution Officer. In the event that the employer is still dissatisfied with the WSIB’s final decision, then the employer has the right to appeal that decision to the WSIAT. The WSIAT conducts a hearing de novo.
[18] As a final matter, the underlying legislation changed with the introduction of the WSIA in 1997, which became effective January 1, 1998. This new legislation replaced the Workers’ Compensation Act R.S.O 1990 c. W 11. Provisions and policies under each Act were considered by the WSIAT. However, given that the bulk of the provisions, and the adjudication of the issues, took place under the WSIA, I will refer to the statute as the WSIA throughout these reasons unless a distinction is necessary.
The Standard of Review
[19] There is no dispute that the standard of review in this case is reasonableness: See Canada (Minister of Citizenship and Immigration) v. Vavilov 2019 SCC 65, [2019] 4 S.C.R. 653. Neither of the questions before the Court concern “constitutional questions, general questions of law of central importance to the legal system as a whole or questions regarding the jurisdictional boundaries between administrative bodies”: See Radzevicius v. WSIAT 2020 ONSC 319.
[20] On a judicial review application, the reviewing court engages in a two-step analysis. First, the Court considers whether the decision under review has the hallmarks of a reasonable decision: justification, transparency and intelligibility. Once those hallmarks are considered, a reviewing Court goes on to consider whether the decision is justified in relation to the relevant factual and legal constraints that bear on the decision: See Vavilov, supra para. 99.
Analysis
The Movement of BTS from Schedule 1 to Schedule 2.
[21] BTS asserts that the WSIAT’s decision that it could not be moved from Schedule 1 to Schedule 2 was unreasonable. I disagree. There is an intelligible, transparent and justifiable chain of reasoning that leads the WSIAT to its conclusion.
[22] First, the WSIAT instructed itself on the statutory provisions on this issue. For ease of reference, the relevant provisions state:
74 (1) Upon application, the Board may declare an employer to be deemed to be a Schedule 1 employer or a Schedule 2 employer for the purposes of the insurance plan.
Exception
(2) A Schedule 1 employer is not eligible to be deemed to be a Schedule 2 employer under this section.
Same
(3) The declaration may be restricted to an industry or part of an industry or a department of work or service engaged in by the employer.
Same
(4) The Board may impose such conditions upon the declaration as it considers appropriate.
[23] Section 74(2) contains wording that states that a Schedule 1 employer cannot be deemed to be a Schedule 2 employer. In this case, the WSIAT stated that the wording of that section was mandatory and found that this was sufficient grounds to deny BTS a transfer from Schedule 2 to Schedule 1. The WSIAT’s decision on this point is not unreasonable.
[24] However, the WSIAT went on to consider BTS’s argument that it had, at all material times, met the criteria for inclusion in Schedule 2. The WSIAT concluded that the request to “place” BTS in Schedule 2 was not permitted by section 74 of the WSIA. Counsel for BTS argues that this is circular reasoning, rendering the WSIAT’s decision unreasonable.
[25] The problem with the claim of circular reasoning is that the WSIAT went on to consider whether it was possible to retroactively establish BTS as a Schedule 2 employer when it originally registered with the WSIB in 1996. By considering this second argument, the WSIAT directly addressed the key underlying issue that had been raised by BTS and did so by looking beyond the wording of section 74.
[26] The WSIAT also rejected this argument for two reasons. First, the WSIAT concluded on the facts before it that BTS had requested that it be classified as a Schedule 1 employer when it originally registered with the WSIB. The WSIAT reviewed the file history before it and reasonably concluded that BTS’s predecessor had applied to the WSIB to be registered as a Schedule 1 employer in 1996. It was not until several years later that BTS challenged its inclusion in Schedule 1 and even then it withdrew that challenge.
[27] Counsel for BTS argues that there was no option given to BTS but to apply for Schedule 1 and that the form that BTS completed does not specifically say that it is an application for Schedule 1. The problem with this argument is twofold. First, the letter accompanying the application specifically requests that BTS be included in Rate Group 983, which is a Schedule 1 Rate Group. Second, Bell Canada was a Schedule 2 employer (which BTS would have known). I note that there was limited evidence on these points before the WSIAT. However, the evidence that the WSIAT had of the application, the accompanying letter and the subsequent appeals all provided grounds to anchor the WSIAT’s conclusion that BTS had applied and been registered as a Schedule 1 employer in 1996. Having originally applied as a Schedule 1 employer, it was reasonable for the WSIAT to conclude that BTS could not be retroactively registered as a Schedule 2 employer back to the date of its original registration.
[28] Second, the WSIAT considered the question of whether it was mandatory to place a federally regulated employer in Schedule 2. The WSIAT concluded, in light of previous Tribunal jurisprudence, that it was not mandatory. In particular, the WSIAT focused on Decision No. 613/90I, 1991 5070. That decision concluded that the WSIB had a discretionary power to determine whether an employer fell within Schedule 1 or Schedule 2 of the WSIA.
[29] Counsel for BTS argued that Decision No. 613/90I stands for the proposition that a Schedule 1 employer may be moved to Schedule 2 and that, therefore, the WSIAT’s decision in this case is unreasonable. There are three significant problems with this submission. First, this decision was a “right to sue” application brought under different provisions of the legislation. Second, the decision was under the Workmen’s Compensation Act, which was an older statute. Finally, counsel was not able to identify a single decision in which the WSIAT had actually moved an employer who had originally been registered in Schedule 1 to Schedule 2.
[30] Counsel for BTS also pointed to the decision in Wright v. Bradley Air Services Inc., Decision No. 661/98. Counsel argues that this was another example of a case where the WSIAT had determined that it was possible for an employer to be transferred from Schedule 1 to Schedule 2. Again, however, this decision is a “right to sue” case and there was no actual transfer of an employer from Schedule 1 to Schedule 2. Indeed, in Wright, the employer was not requesting the transfer.
[31] Neither of these decisions assists BTS’s argument. In fact, the Wright decision specifically quotes sections of WSIB policy that preclude the transfer of a Schedule 1 employer into Schedule 2.
[32] The WSIAT also recognized the potential for businesses to fall partly within both Schedules. In the decision at bar, the WSIAT stated (at para 68):
We conclude that, as was the case in Decision No. 613/90I, circumstances may arise where there is potential for an employer to fall within either Schedule 1 and Schedule 2. We note that “Construction, installation or maintenance of telephone or telegraph lines and works as a business” is a description of a Schedule 1 industry, included in Class H of Schedule 1, and it is apparent that the fact that an employer’s business activity which is associated with the installation of wiring to be used in connection with telephones is not by itself determinative that the employer must fall within Schedule 2.
[33] The WSIAT went on to say that there were three reasons why, in this case, the WSIB’s original decision to place BTS in Schedule 1 was not unreasonable. The WSIAT considered the evidence surrounding BTS’s original registration in Schedule 1, the fact that Schedule 1 was a “good fit” and the fact that it was not practical to retroactively place BTS into Schedule 2. Each of these conclusions was reasonable. The first two have been extensively dealt with earlier in these reasons, so I will not address them further here.
[34] On the final issue, BTS makes the point that there was no evidence before the WSIAT to support the final conclusion that reclassification into Schedule 2 was impractical. I am not persuaded that evidence was necessary to support this conclusion. The WSIAT is an expert tribunal that is well-versed in the intricacies of the insurance scheme that it interprets. The differences between Schedule 1 and Schedule 2 are significant and it is not unreasonable for the WSIAT to have inferred that it was impractical to void all of the premiums paid since 1996 and then calculate the individual liability paid by the WSIB on behalf of BTS. It is an inference that flows naturally from the structure of the WSIA.
[35] Counsel for BTS argues that, if we grant the Application, the question of remedy should be remitted to the WSIB. However, that argument misses the point made by the WSIAT in paragraph 73 of their reasons that, for the argument that BTS is making to succeed, they must be placed into Schedule 2 ab initio.
[36] I also note that section 12 of O.Reg. 175/98 makes it clear that activities that are partly within Schedule 1 and partly outside of it are covered by Schedule 1. This is further support for the view that Schedule 1 is the default provision for registering businesses and that Schedule 2 is the exception.
[37] For all of these reasons, I conclude that the WSIAT’s decision to refuse to place BTS in Schedule 2 was reasonable.
Was The Classification of BTS in Rate Group 704 Unreasonable?
[38] This brings me to BTS’s argument that Rate Group 704 was not the best fit and that BTS should have been classified into Rate Group 983. Determining which Rate Group is the “best fit” for a business activity is a fact-finding exercise. In this case, the WSIAT considered the text of both of the Rate Groups, the testimony that they heard about BTS’s business activities and BTS’s relationship to Bell Canada, and the activities of competitors.
[39] Counsel for BTS points out that Rate Group 983 deals with telecommunications companies that are provincially regulated. While that observation may be correct, it is also important to note the differences between the text of Rate Group 983 and Rate Group 704. Rate Group 983, when read as a whole focuses on the operation of telecommunications services. Each sub-category specifically contains the word “services”. Rate Group 704 deals with installation, maintenance and repair of a variety of electronic equipment, including “telephone wiring (interior only)”. In my view, the WSIAT properly acknowledged (at paragraph 40 of their decision) that there were elements of both Rate Groups that could apply in this case. However, the question for the WSIAT was which rate group was the “best fit”.
[40] BTS argued that the WSIAT did not properly consider the classification of all of BTS’s competitors in Rate Group 983 and improperly failed to use its inquisitorial powers in order to obtain additional evidence. In support of this fact, counsel refers to a decision where the WSIAT did ask for more information about the employer’s competitors.
[41] While the WSIAT does have the authority to seek additional evidence, the fact that it did not do so in this case does not render its’ decision unreasonable. The WSIAT considered the evidence on competitors (at para. 13), and found that it was limited. The WSIAT went on to consider and apply its previous jurisprudence (including Decision No. 601/11I) and conclude that this evidence did not assist BTS in its case.
[42] The WSIAT weighed all of this evidence and concluded that Rate Group 704 was the “best fit”. The WSIAT acknowledged that there were elements of Rate Group 983 that described BTS’s business activities. However, the WSIAT explained why it viewed Rate Group 704 as the “best fit”. Finally, as I have outlined above, the WSIAT also explained why it did not give great weight to the evidence of “competitors” in its analysis. There is nothing unreasonable about the WSIAT’s decision on this issue either.
Delay
[43] Counsel for the WSIAT argued that BTS’s application should be dismissed for delay. I would not give effect to that argument. BTS’ application was an application to judicially review the WSIAT decision of February 14, 2022. That application was commenced and pursued in a timely manner.
Conclusion
[44] For the foregoing reasons, BTS’s application for judicial review is dismissed.
[45] Having regard to the agreement of the parties, the Applicant shall pay the Respondent costs in the sum of $15,000.00 inclusive of HST and disbursements within thirty (30) days of today’s date.
LeMay J.
I agree. _______________________________
Sachs J.
I agree _______________________________
Leiper J.
Released: December 9, 2022
CITATION: Bell Technical Solutions Inc. v. Workplace Safety and Insurance Appeals Tribunal, 2022 ONSC 6946
DIVISIONAL COURT FILE NO.: DC-22-162-JR
DATE: 20221209
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, LeMay and Leiper JJ.
BETWEEN:
BELL TECHNICAL SOLUTIONS INC. Applicant
– and –
WORKPLACE SAFETY AND INSURANCE APPEALS TRIBUNAL Respondent
REASONS FOR DECISION
Released: December 9, 2022