1234567 (Re) 2016 OWSIB mini 4

Workplace Safety and Insurance Board

Appeals Resolution Officer Decision

Account Number: 1234567
Firm Number: 123456AB
Date: November 25, 2016

Objecting Party: ABC Ltd., Employer
Represented By: John Doe Professional Corp.
Respondent: None

Hearing: Hearing in Writing
Heard By: C. da Cunha, Appeals Resolution Officer

ISSUE

The employer objects to a field auditor’s (FA) decisions of February 29, 2016, August 12, 2016 and August 31, 2016, which denied an extension to the time limits to appeal another FA’s decision of April 28, 2008 and her decision of October 3, 2012.

BACKGROUND

On February 6, 2008, a FA sent the employer notification that, on March 3, 2008, an audit would take place on its premises to verify its payroll records, calculations of insurable earnings, worker statuses, business activities, industry classification, claims allocation and first aid regulation compliance for 2006 and 2007. At this time, the employer’s business activities were classified within:

• Rate group (RG) 190-07, Landscaping and Related Services, classification unit (CU) 9959-002, Lawn Maintenance Services;
• RG 751-07, Siding and Outside Finishing, CU 4224-003, Concrete Sealing; and,
• RG 764-01, Homebuilding, CU 4011-099, Homebuilding Operations Amendment/07.

Upon completion, the FA informed the employer on April 28, 2008 that the audit resulted in premium adjustments for 2006 and 2007 equating to a credit of $5,234.24 to its account. Furthermore, the FA advised the employer that its current classification remained correct. The FA provided the employer until October 28, 2008 to appeal this decision. The employer did not do so.

On August 9, 2011, the employer asked the Workplace Safety and Insurance Board (WSIB) to remove RG 764-01, Homebuilding, CU 4011-099, Homebuilding Operations Amendment/07, from its account since it was no longer involved in that business activity. The account specialist closed that CU on October 13, 2011, retroactively to March 31, 2011.

The employer contacted the WSIB again on May 22, 2012, stating that it had added a new division, named XYZ of Ontario, to its operations. On the same day, the FA sent the employer notification that, on June 5, 2012, an audit would take place on its premises to verify its payroll records, calculations of insurable earnings, status of unreported contractors, business activities, industry classification, claims allocation and first aid regulation compliance for 2010 and 2011. At this time, the employer’s business activities were classified within:

• RG 190-07, Landscaping and Related Services, CU 9959-002, Lawn Maintenance Services; and,
• RG 751-07, Siding and Outside Finishing, CU 4224-003, Concrete Sealing.

The FA actually conducted the on-site audit on June 22, 2012, June 25, 2012, July 20, 2012 and July 21, 2012.

On October 3, 2012, the FA communicated to the employer that the audit resulted in premium adjustments for 2010, 2011 and 2012 equating to a credit of $35,134.38 to its account. The FA also advised the employer that it had breached Section 155 of the Workplace Safety and Insurance Act (WSIA), 1997. Furthermore, the FA notified the employer that she had added RG 732-05, Heavy Civil Construction, CU 4221-000, Piledriving Work, to its account effective January 1, 2012 and that they had agreed to allocate its insurable earnings as follows:

• RG 190 – 2%
• RG 751 – 23%
• RG 732 – 75%

The FA provided the employer until April 3, 2013 to appeal this decision. The employer did not do so.

The employer representative contacted the WSIB on December 22, 2015, requesting that RG 707-01, Mechanical and Sheet Metal Work, CU 4241-002, Drain Contractors, and/or RG 707-02, Mechanical and Sheet Metal Work, CU 4241-099, Plumbing, Heating, and Air Conditioning, Installation Amendment/08, be added to the account retroactively to January 1, 2008.

The FA’s Decisions

On February 29, 2016, the FA denied the employer’s request, finding that there were no exceptional circumstances present to allow an extension to the time limits to appeal the classification decisions of April 28, 2008 and October 3, 2012.

The employer’s representative objected to the decision. The FA reconsidered and upheld the original decision on August 12, 2016, concluding that there were no exceptional circumstances present as per the criteria found within the Appeals Services Division (ASD) Practice & Procedures (P&P) Document of July 1, 2016.

After further discussion with the employer representative and the ASD, the FA again reconsidered the original decision on August 31, 2016, this time utilizing the guidelines found within the Appeals System P&P document of September 1, 2010. Upon doing so, the FA upheld the original decision once again, for the same reasons.

The Employer’s Position

The employer’s representative has made multiple submissions, including the most recent one on September 16, 2016, in support of the employer’s request to be granted an extension to appeal the April 28, 2008 and October 3, 2012 decisions. The employer representative argues that the time limit extensions should be allowed because:

• The FAs’ letters of April 28, 2008 and October 3, 2012 failed to rise to the threshold of providing “actual notice of the time limit” and “whether the party was able to understand the time limit requirements”. The FAs structured their communication in such a way that, with respect to the classification issue, they conveyed to the employer’s staff, who are reasonable, intelligent and hard-working individuals, the understanding that it was not a matter up for dispute or appeal. Furthermore, the FAs did not discuss other possible classifications in their letter nor did they invite the employer to discuss other possible classifications for its business activities that it believed were not captured by the RGs within which it was classified;
• The WSIB deliberately ignored, overlooked or simply failed to properly classify the employer’s drain contracting and/or sump pump installation business activities in the 2008 audit and then compounded this oversight in 2012. This matter is inextricably linked to the time limit issue and falls in the “closely related” criterion found within the P&P of September 1, 2010;
• The employer relied upon the WSIB’s expertise in classifying its business activities, to its own detriment;
• Due to this classification error, the employer was overcharged by approximately $500,000.00 from 2008 to 2015. This is a very significant issue in dispute. The WSIB should not hide behind the technicality of a six-month appeal time limit to avoid correcting its own egregious error; and,
• The above-noted reasons constitute “exceptional circumstances” as intended under operational policy 11-01-03, Merits and Justice. Therefore, the employer’s appeal should be granted.

AUTHORITY

Section 120 of the WSIA, 1997

Appeals System P&P Document (September 1, 2010)

Operational Policy:

11-01-03: Merits and Justice

ANALYSIS

Having reviewed and considered the evidence currently available to me within the case record, I find that the employer is not entitled to an extension of the time limits to appeal the April 28, 2008 and October 3, 2012 decisions.

With respect to the employer representative’s contention that the April 28, 2008 and October 3, 2012 decisions are incorrect, I must point out that this is not an issue before me, not within my jurisdiction to resolve and not germane in determining whether or not an extension to the time limits to appeal the decisions is warranted. The question of whether or not the decisions are correct would only be relevant if the employer were appealing those decisions; it is not. It is appealing the decision to deny its request for an extension to the time limits to appeal those decisions. That is the only issue before me and I make no finding of fact in this decision regarding the correctness of the 2008 and 2012 decisions themselves.

Under section 120(1) of the WSIA, a written notice of appeal must be filed with the WSIB within 30 days after a decision is made concerning return to work or a work transition plan. In any other case, the appeal must be filed within six months.

Section 120(1) also provides the WSIB with the discretion to extend the 30-day and six-month time limits.

In the absence of specific policy, the ASD adopted the following guidelines when considering the extension of the statutory time limits for objections to decisions, which remained in place from September 1, 2010 to June 30, 2016, inclusive, with respect to employer account appeals:

Broad discretion to extend will be applied where appeals are brought within one year of the date of the decision. Criteria to be considered for longer delays include:

• Serious health problems (experienced by the party or the party’s immediate family) or the party leaving the province/country due to the ill health or death of a family member;
• Whether there was actual notice of the time limit. This acknowledges that as of January 1, 1998, decisions specifically refer to the time limits but prior to January 1, 1998, decisions do not;
• Whether there are other issues in the appeal which were appealed within the time limits and which are closely related to the issues not appealed within the time limits;
• The significance of the issue in dispute;
• Whether the party was able to understand the time limit requirements.

All decisions to extend time limits will be based on the merits and justice of the case.

The employer did not provide the WSIB with its intent to appeal the April 28, 2008 and October 3, 2012 decisions until December 22, 2015; more than 7 ½ years and 3 years after the decisions, respectively. Therefore, broad discretion cannot be applied here.

The first criterion is also not met in this case nor is the employer making the case that it is.

In his submissions, the employer representative marries the second and fifth criteria, as outlined previously. Essentially, the employer representative’s position has two premises:

1. There was no actual notice of a time limit in relation to the classification issue because of the apparent finality of the wording used by the FAs in their letters; and,
2. The employer could not be expected to reasonably understand the time limit requirement because of point #1 plus: a) The lack of discussion on the FAs’ part involving other possible classifications; and, b) The absence of an invitation to the employer to provide its input concerning other possible classifications for its business activities that it believed were not captured by the RGs within which it was classified.

Firstly, I respectfully disagree with the employer representative’s interpretation of the intention of the second criterion. Out of the five criteria, the second one is, in my opinion, the least flexible of all in its intended application. The P&P precisely indicates that this criterion is specifically used to acknowledge that, prior to January 1, 1998, WSIB decisions did not include a time limit notice to appeal the decision. This is clearly not the case here since the decisions came well after 1998 and both letters informed the employer that, if it disagreed with any decisions resulting from the audit, it had six months from the date of the respective letter to notify the FA, in writing, of its intent to appeal. Therefore, the WSIB provided the employer with notice of the time limit, as intended by the P&P.

Secondly, in their respective decisions, the FAs invited the employer to contact them if it had any questions regarding the audit results and even advised it of the existence of the Office of the Employer Adviser, its purpose and contact information. The inclusion of this information in the letters serves to diminish and/or eliminate any potential misunderstanding on the part of the recipient that the issues addressed in the letter are not up for discussion or appeal.

Thirdly, weeks prior to the actual audits taking place, the FAs informed the employer that its business activities and industry classification would be targets of the audit. Furthermore, the FAs discussed its business activities with the employer, in person, during the audits.

In the April 28, 2008 letter, the FA confirmed the employer’s current classification and advised it that the audit results showed it to be correct. In the October 3, 2012 letter, the FA also confirmed the employer’s current classification and added a new RG to its account. In other words, not only was the employer aware that classification was an issue under review prior to and during the audits, but it was also made fully aware that the respective FAs had determined that its classification remained unchanged after the 2008 audit and that a new RG had been added after the 2012 audit.

In light of these circumstances, any reasonable, well-informed and intelligent person would understand that its classification had been reviewed and considered and a decision had been made on each occasion, and that s/he had six months from the date of that decision to appeal, if s/he did not agree with that decision.

Finally, with respect to the comments regarding the lack of a written discussion concerning other possible classifications, or an invitation to the same, by the FAs, I note the following:

• The FAs met with the employer and discussed its business activities thoroughly, as evidenced by their reports on file. Therefore, the employer knew that the FAs were well aware of all of its business activities when considering the matter;
• It is not always necessary, nor advisable, for a decision-maker to communicate in writing every single piece of information considered when reaching a decision. In this specific case, the employer knew that its classification was under review, was provided with an opportunity to provide in-person input, received decisions regarding the issue and was notified that it had a specific time-limit within which it had to appeal those decisions, if it disagreed with them. The employer did not request or argue for specific RG’s before or during the audit processes. Therefore, under the circumstances, it was not necessary for the decision-makers to outline, in writing, every single RG s/he considered before reaching the decision. In fact, it would have been excessive if they had done so; and,
• These comments, without any context, would lead one to plausibly conclude that the employer was so unsophisticated that it could not reasonably understand the time limit requirement communicated in each letter. However, such a position is contradicted by the information on file, which shows that the employer was fully aware of and took the steps necessary to protect its classification interests when required. This is evidenced by its August 9, 2011 notification to the WSIB that it was no longer engaged in a business activity falling within RG 764, and asking that it be removed from its account, and its May 22, 2012 correspondence advising the WSIB of the addition of its new division, which resulted in the addition of RG 732 to its account.

Noting the above, I find that the second and fifth criteria have also not been met.

In relation to the third and fourth criteria, the employer’s arguments regarding these are wholly predicated on the assumption that the April 28, 2008 and October 3, 2012 decisions are incorrect. However, as I explained at the start of my analysis, I do not have the jurisdiction to adjudicate the correctness of these decisions.

In any event, the employer has not appealed any issues within the necessary time limits that are closely related to the issues addressed by the FAs in their decisions. It would be absurd, and against the intentions of the WSIB, for a decision-maker to accept that the employer objecting on time to a decision to deny a time limit extension would make the issue under that appeal (i.e. the denial of the time limit extension) closely related to the issue(s) not appealed within the time limits (i.e. the 2008 and 2012 classifications). If that were the case, there would be no need for the appeal on the time limit issue to proceed. Therefore, the third criterion has not been met.

Furthermore, the WSIB has a responsibility to handle its accident fund in a steady and responsible way. If decisions were open to being retroactively changed for unlimited periods of time, it would undermine the WSIB’s ability to do so. That kind of uncertainty would make it hard to manage and control the balance of the accident fund and, in turn, to calculate how much employers, in the present and in the future, need to contribute to it. Therefore, the 30-day and six-month time limits to appeal a decision are in place to allow the involved party(ies) time to review the decision and to determine if s/he will proceed with an appeal while also allowing the WSIB to conduct the appeals process in a timely fashion, if the party(ies) choose(s) to appeal. The appeals time limits are a crucial part of permitting the WSIB to appropriately manage and control the fund and are not simply a technicality.

The intention is that at a certain point, the WSIB and/or the worker and/or the employer have to move on, and the WSIA dictates that that point is after 30 days or six months from the date of the decision, if no objection is raised, subject to the criteria listed in the P&P.

Taking this into account, the threshold for the fourth criterion cannot simply and solely turn on whether or not the issue is significant for the appellant as, for every appellant, the issue it wishes to dispute is “significant”, which is why it is seeking an extension to appeal that issue. If this were the case, all time limit extension appeals would be allowed and there would be no point in having an appeal time limit applied to WSIB decisions in the first place. Therefore, in adjudicating “the significance of the issue in dispute” one must turn to the fact that all decisions to extend time limits will be based on the merits and justice of the case.

A decision-maker must always be cognizant of whether or not the case before them is rare and the adjudicative outcome is absurd or unfair and against the intentions of the WSIB. In making such a determination, the decision-maker must determine whether the appellant’s circumstances are exceptional. Having considered the facts of this specific case, I find that they are not.

In the present circumstances we have two WSIB decision-makers, approximately 4 ½ years apart, looking at the information provided by the employer and coming to the same conclusions with respect to its classification, with the second decision-maker confirming the first decision-maker’s classification decision and adding a new RG to the account. Given that judgments involve a certain amount of subjectivity, it is not exceptional or unusual for people to come to different conclusions or disagree regarding the same information. However, that is not even the case here; both FAs independently agreed on the classification of the employer’s business activities. Furthermore, the evidence on file shows that they were both aware of and robustly addressed, within the case record, the employer’s drain contracting and sump pump installation business activities and provided their rationale for classifying them in the manner in which they did. Therefore, I respectfully disagree with the employer representative’s position that they deliberately ignored or overlooked this aspect of the employer’s business activities, resulting in an egregious error upon which the employer relied, to its own detriment. The evidence simply does not show, or even suggest, that they did so.

In this specific case, while the amount claimed by the employer is significant, the issue in dispute itself (i.e. its classification) is not because it is not rare nor are the circumstances giving rise to it exceptional.

However, it must also be stressed that there is no basis on record upon which one can reasonably conclude that the employer overpaid its premiums from 2008 onward. The record shows that neither RG 707-01, Mechanical and Sheet Metal Work, CU 4241-002, Drain Contractors, nor RG 707-02, Mechanical and Sheet Metal Work, CU 4241-099, Plumbing, Heating, and Air Conditioning, Installation Amendment/08, have been added to its account at any point in time since 2008. Therefore, a claimed overpayment of $500,000.00 since 2008 is purely speculative at this point.

Furthermore, even if, at some future date, it is shown in some way that the classification decisions of 2008 and 2012 were incorrect, this would not be an exceptional circumstance. I appreciate that the employer feels wronged because of its belief that it has been overcharged premiums since January 1, 2008. However, that will always be the case where an employer feels that it has been classified in a CU with a higher premium rate than the one within which it feels it should have been classified.

As previously stated, at a certain point, the WSIB and/or the worker and/or the employer have to move on, and legislation dictates that that point is after 30 days or six months from the date of the decision, if no objection is raised, subject to the criteria listed above. In some cases (i.e. the employer has been under-charged premiums) this works to an employer’s benefit, and the WSIB’s disadvantage, and in others (i.e. the employer has been over-charged premiums) it works to a firm’s detriment, and the WSIB’s benefit; it’s a two-way street.

An appellant’s assumption that it may have been potentially charged premiums higher than it should have been, regardless of the amount, is not in itself a significant or an exceptional circumstance justifying exemption from the time limit requirements to appeal a decision. Therefore, I find that the fourth criterion has also not been met.

CONCLUSION

There is no entitlement to an extension of the time limits to object to the decisions of April 28, 2008 and October 3, 2012.

The employer’s objection is, therefore, denied.

DATED November 25, 2016.

C. da Cunha
Appeals Resolution Officer
Appeals Services Division