THE WORKPLACE SAFETY AND INSURANCE BOARD
APPEALS RESOLUTION OFFICER DECISION
DECISION NUMBER: 20090039
OBJECTION BY: Employer
WORKER: Not Participating
REPRESENTATIVES: N/A
HEARING DATE: N/A
ATTENDEES: N/A
ISSUE
The employer asks the Workplace Safety and Insurance Board (“WSIB”) to waive all charges on the account for 2006 and 2007.
HOW THE ISSUES AROSE
This account was opened in August of 2008, under a joint program between the WSIB and the Canada Revenue Agency ("CRA”). Under that program, apparent inconsistencies between how firms report to the two agencies are identified, and employers who were not reporting to the WSIB but should have been are held responsible to pay premiums.
The process of registering this business began with the sending of a letter dated April 8, 2008, which advised that the firm appeared to require WSIB coverage, and that most businesses in Ontario employing workers are legally required to register within 10 days of first hiring. The letter went on to say that if the firm contacted the WSIB to register, it would not be charged penalties, but it would “still be responsible for premiums from the year 2006 to date plus interest.” On August 7, 2008, a WSIB employee spoke with Mr. FY (one of the partners in the business), who said there was one employee, and that the business activity is a kiosk that sells T-shirts. Coverage for that type of business is compulsorily covered under classification unit 6149-000 (“Clothing Stores”).
As the April 8, 2008 letter stated would happen, the account was opened as of 2006, and no penalties were charged for the previous failure to register, report and make payments. However, as the April 8, 2008 letter also mentioned, the business was charged premiums as of 2006, plus interest on the previously unreported premiums.
The employer objected to charges relating to 2006 and 2007. A WSIB Account Specialist confirmed the charges in dispute and referred the objection to the Appeals Branch.
RESOLUTION METHOD AND PROCESS
In a telephone conversation, the employer advised me that he had no further information, and asked me to proceed to a decision unless I had any questions. I did not need anything more, so I have issued this decision without further processes.
AUTHORITY REFERENCES
Operational Policy Manual, document 11-01-03 (“Merits and Justice”).
Operational Policy Manual, document 14-02-02 (“Registration”).
Operational Policy Manual, document 14-02-06 (“Employer Premium Adjustments”).
ASSESSMENT OF EVIDENCE AND SUBMISSIONS
Document 14-02-02 of the WSIB's Operational Policy Manual ("OPM") says that employers in Schedule 1 industries must register with the WSIB within 10 days of first becoming an employer. The business activity engaged in by the objecting employer is compulsorily covered under Schedule 1. The reference to "compulsory" means that employing help in that industry creates a legal obligation to participate in the workplace safety and insurance system. The question in this objection is how far back the WSIB should go in enforcing the obligations of this employer in its particular circumstances.
Document 14-02-02 says that, in registering an employer, "the WSIB determines the effective date of each account." Under document 14-02-06, which deals with retroactive charges, an employer is required to be registered as of the date the first worker is hired. The impact of these documents, taken together, is that where help has been employed in a compulsorily covered Schedule 1 industry but the WSIB does not become aware of it until later, once the WSIB knows about the employment it is authorized to open an account retroactive to the date help was first employed.
However, in actual practice the WSIB has decided that, where employers were discovered through the joint program with the CRA, they would not be required to register and pay as of the date help was first employed. Instead, employers identified from a CRA list only have to pay premiums and interest back to the beginning of two years into the past. That is what happened in the case of the objecting employer.
All WSIB policies (and practices) have to be considered in light of the merits and justice of the case. Document 11-01-03 describes the standard as follows:
There may be rare cases where the application of a relevant policy would lead to an absurd or unfair result that the WSIB never intended. Therefore, a decision-maker may depart from a policy if it can be shown that the case has exceptional circumstances that justify doing so.
The employer submits that the WSIB should not charge the business for 2006 and 2007 because the employer was unaware that they had to register with the WSIB. In his objection form, he stated that the business had been operating (although originally under another name) since 1992, and that during those years they were not aware of the WSIB and its services. The employer said that, if they had known, they would have complied, just as they did for CPP, EI, PST and GST, and that they would do so in the future now that they know. The employer also argued that it is unfair to charge into the past given that their “employees files are closed.” He also said that the business cannot afford to pay the retroactive amounts.
Having considered the employer’s submissions, I find that it would not be appropriate to exempt the employer from charges going back to 2006.
The fact that this firm’s business activity is compulsorily covered means exactly that – any employer who carries out a compulsorily covered business activity is required, by law, to participate in the workplace safety and insurance system and is subject to the obligations (to report and pay) and legal protections (against being sued by its workers for workplace injuries and illnesses) which that system provides for. The WSIB has both the right and responsibility to enforce the legislation that relates to its own operations. In doing so, the WSIB has, under its joint program with the CRA, provided an exception to the normal policy, which requires registration as of the date of first hiring, and has decided to limit the registration requirement to two prior years. The employer benefited from that special exemption by not being charged even further back, even though that he was involved in compulsorily covered businesses going back to 1992.
In any case, even if the employer did not know about the requirement to register before receiving the April 8, 2008 letter, I am not convinced that the firm has no responsibility for charges going back to 2006 and that it should be relieved of them. It is up to employers in the province to find out what their obligations are, whether they have to do with the WSIB, employer health tax, licensing, employment standards, CRA-related responsibilities, etc. After all, it is an employer itself, not the WSIB or any other government agency, who knows the employer has gone into business, what type of operation they are carrying out, and whether they are employing workers. Even so, the WSIB carries out advertising in the media. Also, just as people are expected to know they have to pay taxes, it is common knowledge that workers’ compensation coverage needs to be at least looked into when going into business.
Therefore, in my view, it is only reasonable to expect employers to find out whether they have WSIB-related responsibilities. If it did not occur to this employer to look into their WSIB obligations, it is fair to ask who should be responsible for that. In my view, it is not the WSIB, whose existence is in fact well known in the business community, as reinforced by the fact that hundreds, if not thousands, of employers, including both large firms and small business owners, come forward and contact the WSIB every year to ask about coverage. Responsibility does not lie with other employers who, while the objector was not registered, were themselves paying into the accident fund. It would be unfair to them if an employer who did not find out what he was supposed to do was to be relieved of paying premiums when they themselves were paying all along. Therefore, I find that it is reasonable to expect the objector to pay into the accident fund even for a period before they say they were aware of the WSIB.
It is also important to be aware that, as a compulsorily covered employer, the objector and its workers were protected by the Workplace Safety and Insurance Act from day one – the workers were entitled to claim benefits if they had been injured or become ill as a result of their work, and the employer would have been protected, under the Workplace Safety and Insurance Act, from being sued for workplace injuries or illnesses. In other words, being a compulsorily covered employer, like all compulsorily covered employers this business always had coverage and its protections from day one; it is now being asked to pay for just two prior years. I do not think it is unfair for the WSIB to do that – it is not retroactively asking for money for nothing, rather it is asking to be paid for a small part of the coverage that has automatically been in effect for the firm and its workers from the date of first hiring.
As a result, even if the objector did not know about WSIB coverage, I find that it would not be unfair, absurd or contrary to the WSIB’s intentions to charge it premiums for the last two years during which they claim they did not know about coverage.
It might be argued that, if the firm did not know about the WSIB, it should not have to pay premiums, because it would not have known to use the WSIB’s services, including reporting claims and having the WSIB pay benefits. However, the fact that no claims were reported or that there might not have even been any work-related injuries or illnesses cannot have any relevance, in terms of fairness or anything else, in deciding whether to cancel retroactive premiums. After all, many firms never have a claim, and many contribute more in premiums than their own workers draw in benefits, but the WSIB does not refund the “unused” premiums back to the employers who paid them. It would not be feasible to do so, it would be against the Workplace Safety and Insurance Act, and it would violate the principles of the workplace safety and insurance system, which is a collective liability system in which all employers contribute to a common accident fund and all accident costs are drawn from that fund. It would also be contrary to the way all insurance systems work, both private ones that people can opt into and public ones that people are required to join – insurance systems simply do not pay back premiums if a party has not made a claim, and it would be unreasonable to expect them to do so. If a firm that fulfilled its obligation to register and pay cannot receive unused premiums back, it would be unreasonable to say that a firm that did not register and pay as it was supposed to have done should be excused from having to do so.
Therefore, I find that the charging of premiums back to January 1, 2006 was not absurd or unfair. In fact, it would be absurd and unfair – and would create an incentive to try to avoid the WSIB – if an employer who did not meet its obligations were to be given more leeway than one who did. That would also be contrary to the WSIB’s intentions, which are not only to apply retroactivity and interest back to two prior years as stated in the April 8, 2008 letter, but also to not treat people who have not registered more leniently than those who have done what they are supposed to do.
Finally, as I have stated earlier, the employer argues that his business cannot afford to pay the retroactive charges. However, if the WSIB were to waive those charges it would give his business an unearned financial advantage over his competitors who have been paying. The only bad consequence for this employer is that it now has to pay all at once for premiums which it should have been paying in 2006 and 2007. If that is difficult for this employer financially, that is something for it to discuss with the WSIB's collection department. Questions of financial hardship are looked after by that area, which has the authority, resources and specialized knowledge to monitor and make judgments about a debtor's ability to pay. Appeals Resolution Officers do not have the ability or tools to judge whether an employer is able to absorb charges that have been issued, or to monitor the evolving condition of a debtor's assets and liabilities. Also, since the collection department acts as a creditor, its decisions are not appealable through the normal objection process, and Appeals Resolution Officers have no authority to direct the collection department as to how and whether to collect overdue balances. Therefore, I cannot cancel premiums based on the fact that having to pay for prior years all at once might be financially difficult or impossible. I can only consider cancelling them on the basis of the facts of the case, and for the reasons I have noted in this decision I find that it would not be appropriate for me to do so. The proper remedy, if an employer has trouble making payment, is to contact the WSIB’s collection department and try to negotiate a payment arrangement, not for me to cancel the premiums. I understand, though, that the WSIB’s collection department has determined that this firm has financial resources, and has obtained a garnishment. If the employer feels that presents a hardship, it must address that with the collection specialist.
Going back to the language of the “merits and justice” policy that can allow a decision‑maker to exempt someone from the normal application of WSIB policy, financial hardship is not an “exceptional circumstance” that may justify excusing a particular employer from the usual registration and payment requirements. Other employers who were discovered by the WSIB based on the CRA’s information in 2008 are required to be registered as of January 1, 2006 and to pay premiums and interest. Alleged financial difficulty may be something for an employer to ask the WSIB’s collection department to take into consideration when pursuing payment, but is not a valid reason for exempting it from the same premium obligations that apply to other employers.
CONCLUSION
The registration of this employer as of January 1, 2006 and the charging of premiums and interest were within WSIB policy, and were consistent with the more lenient terms of the joint initiative between the WSIB and CRA. There are no exceptional circumstances in this case to justify waiving charges for 2006 and 2007.
The objection is, therefore, denied.
DATED July 23, 2009, at Toronto, Ontario.
B. Patlik Appeals Resolution Officer Appeals Branch