Employer (Re), 2018 CanLII 42565

Workplace Safety and Insurance Board

Appeals Resolution Officer Decision

Decision Number: 20180010 Account Number: XXXXXXX Firm Number: XXXXXX Objecting Party: Employer Represented By: Employer Adviser Respondent: None Hearing: Hearing in Writing Heard By: C. da Cunha, Appeals Resolution Officer Date: February 22, 2018

Issue

The employer objects to the account specialist’s (AS) decision of March 2, 2017, which classified it within rate group (RG) G-723-05, Industrial, Commercial, and Institutional Construction, classification unit (CU) 4411-000, Construction Project Management, effective January 1, 2017.

It seeks to be reclassified within RG I-958-16, Technical and Business Services, CU 7799-001, Miscellaneous Business Services.

Background

The employer initially contacted the Workplace Safety and Insurance Board (WSIB) on April 11, 2005 with respect to its obligations under the Workplace Safety and Insurance Act (WSIA). On June 7, 2005, the WSIB determined that its business activity fell within RG I-958-16, Technical and Business Services, CU 7799-001, Miscellaneous Business Services, a by-application classification. The employer chose not to register an account with the WSIB.

The WSIB reviewed the employer’s classification again on July 23, 2012, May 5, 2013, March 11, 2015, and January 4, 2016, confirming the same by-application classification each time.

On February 14, 2017, the employer telephoned the WSIB requesting a letter confirming that it fell within a by-application classification and was not mandatorily covered under the WSIA.

The AS’ Decision

After obtaining and reviewing statements and documentation from the employer, the AS determined that its business activity fell within the mandatory construction RG G-723-05, Industrial, Commercial, and Institutional Construction, CU 4411-000, Construction Project Management. The AS registered the account retroactively only to January 1, 2017 due to the previous errors made by the WSIB in relation to its classification. The AS communicated this decision to the employer on March 2, 2017.

The employer objected to the decision and provided further documentation, requesting that its classification revert to RG I-958-16, Technical and Business Services, CU 7799-001, Miscellaneous Business Services.

The AS reconsidered and upheld the original decision on April 20, 2017 and October 3, 2017.

The Employer’s Position

The employer representative argues that the employer should be reclassified within RG I-958-16, Technical and Business Services, CU 7799-001, Miscellaneous Business Services, because:

• It provides only interior design services;
• It does not supervise the construction of a design project;
• All construction services are provided by a general contractor hired by its client;
• It does not supervise the general contractor;
• It does not provide interior design services that manage some or all phases of a construction project by spending a significant part of its time on a construction site providing field supervision and technical services by hiring or supervising contractors or subcontractors directly or on behalf of the project owner (i.e. the client);
• As an integral part of its interior design services, the employer does undertake site visits to inspect the finished work to ensure it meets the requirements of its designs. However, this is an essential part of what a provider of interior design services does;
• On its website, the employer does refer to the complete renovation of an asbestos-filled 29-storey building in Ottawa. However, the employer undertook this project before it incorporated and does not intend to perform any more of this type of work. The employer will likely be removing this reference from its website in the near future to prevent any possible confusion about the services it provides;
• On its website there is a suggestion that the employer was involved in the construction of a log home. However, the employer only provided interior design services for this project and did not hire or supervise any contractor or trade involved in the project;
• The term “construction administration” on its website refers to periodic on site visits by the employer to ensure that its interior design plans are understood and correctly complied with by the contractor. The contractor and not the employer manages the construction of the project;
• The term “construction” on its website refers to the project being built and not meant to indicate that the employer acts as a construction project manager; and,
• The contracts provided by the employer to the WSIB show that it provides interior design services and not construction project management.

Authority

Operational Policy: 14-01-01: The Classification Scheme

Employer Classification Manual (ECM) Documents: G-723-05: Industrial, Commercial, and Institutional Construction I-958-16: Technical and Business Services

Analysis

Having reviewed and considered the evidence contained within the case record, I find that the employer is not entitled to be reclassified within RG I-958-16, Technical and Business Services, CU 7799-001, Miscellaneous Business Services.

An employer is classified based on the business activity or activities in which it is engaged, subject to some administrative rules (e.g. classification can be affected by whether or not a firm with more than one business activity can segregate its payrolls).

Business activities are set out in the WSIB’s ECM, which consists of classification documents describing the scope of each business activity. Operational policy 14-01-01 explains that individual employer operations are classified according to the WSIB’s classification scheme and that the employer’s business activity is the sole criterion for classification. The WSIB does not take the individual employer’s risk, claim experience or accident cost history into account when classifying the employer’s operations. It also states that the WSIB may define a business activity by considering the nature of the service or product and/or the process and risk involved, and it may also take into account competitive situations in the marketplace when defining a business activity and determining its most appropriate placement within the classification scheme. Consideration of these things is relevant to the WSIB’s formulation of the classification scheme (i.e. the decision about what to include when writing the scope of each CU and RG). Once it has done that, the WSIB then classifies each individual employer based on which CU describes its business activity.

If an employer’s business activity does not fall squarely into the language of any CU, or if it falls within the language of more than one, it is to be classified based on which one is the “best fit.”

To decide on the “best fit,” the decision-maker must interpret the intended meaning of the wording of a CU and determine the WSIB’s intent about where a particular business activity is to be classified.

As per the ECM, employers captured by RG I-958-16, Technical and Business Services, CU 7799-001, Miscellaneous Services, include those that take contracts to provide interior design services. This includes providing advice and recommendations to clients on the implementation and/or modification of their designs. The services may include periodic on-site meetings and inspections. However, the ECM document is very specific and clear that interior design employers falling within this CU are those providing design services only.

While the evidence shows that the employer provides interior design services, it is not strictly involved in only the design aspect of the project. The evidence also confirms that it is intimately involved and intertwined with its construction partners on its projects.

On its own website the employer advertises to the general public and potential clients that it:

• Can handle all phases of a project from initial concept to project completion, from project management, interior design and space planning, right through to construction administration and final move coordination;
• Is experienced at managing multi-disciplinary teams providing architectural design and project management, prime consultant services as well as managing the structural, mechanical and electrical systems evaluation and engineering services;
• Has completed projects from upgrading a family kitchen to completely renovating an asbestos-filled 29-storey Ottawa building;
• Can plan and co-ordinate the basebuilding and fit-up work of any office space;
• Will design, prepare the architecture permit drawings and conduct site reviews to ensure that the construction of a new home proceeds as planned and as contracted; and,
• Provides the following services;
  • Tender evaluation for the construction project;
  • The completion of construction documents, including budget estimates for construction and coordination with architects and engineers; and,
  • Construction administration, including coordination with the contractor, field observation reports, status reports, site instructions, site inspections, coordination of deficiencies completion and review of progress draws.

I do not doubt that the employer intends to update its website. However, the public information currently available on it as of today confirms that its business activity goes well beyond “design only” in relation to its interior design services.

This was corroborated and buttressed by the employer during its conversation with the AS on February 15, 2017. It confirmed that it assists the project subcontractors with the tendering process. It also coordinates them on the site, telling them who needs to come and go and what needs to be done and when. Sometimes its role does not end until the project is complete. The contracts provided by the employer do not alter these facts and circumstances.

According to the ECM, employers classified within RG G-723-05, Industrial, Commercial, and Institutional Construction, CU 4411-000, Construction Project Management, manage some or all phases of a construction project by contractually providing field supervision and technical services. Their responsibilities include ensuring that construction work is completed on time, within budget, and according to specifications. Also included is maintaining and amending schedules, checking shop drawings and orders, and providing cost statements and progress billings. These employers may hire or supervise contractors or subcontractors directly or on behalf of the project owner and a significant part of their time is spent on the construction site.

The information provided by the employer, both verbally and through its website, shows that its interior design business activity is extended past “design only” to such an extent that it can include the management of a construction project requiring that it spend a significant amount of its time on site, ensuring that the work is completed on schedule, within budget and according to its design specifications. While an interior designer can certainly perform activities beyond simply “design only” ones, that it does so necessarily prevents it from being categorized within RG I-958-16, Technical and Business Services, CU 7799-001, Miscellaneous Services. Therefore, I find that the employer cannot be classified within that RG and that RG G-723-05, Industrial, Commercial, and Institutional Construction, CU 4411-000, Construction Project Management, is its best fit.

Conclusion

I find that the employer is not entitled to be reclassified within rate group I-958-16, Technical and Business Services, classification unit 77799-001, Miscellaneous Services.

The employer’s objection is, therefore, denied.

DATED February 22, 2018.

C. da Cunha Appeals Resolution Officer Appeals Services Division