Employer (Re), 2022 CanLII 99430

APPEALS RESOLUTION OFFICER DECISION

DECISION NUMBER: ACCOUNT NUMBER:

20220117

FIRM NUMBER:

XXXXXX

OBJECTING PARTY:

EMPLOYER

REPRESENTED BY:

EMPLOYER REPRESENTATIVE

HEARING:

HEARING IN WRITING

HEARD BY:

marisa la civita, appeals resolution officer

DATED: SEPTEMBER 30, 2022

ISSUES

The employer objects to the Stakeholder Compliance Auditor’s (SCA) decision of February 20, 2020, and subsequent reconsideration decisions of November 22, 2021 and June 24, 2022, which resulted in the transfer of insurable earnings in 2017, 2018, and 2019, from Rate Group 929-01, Classification Unit 7712-001, Supply of Non-clerical Labour Operations to Rate group 570-11, Classification Unit 4599-002, Supply of Drivers and Helpers, with respect to workers supplied to mining clients. Specifically, the employer disputes the reclassification (from Rate Group 929 to Rate Group 570) of earnings paid to any employees/workers supplied for any purpose on a mine site, including driving rock trucks within their mining clients’ operational work sites. As gleaned from the SCA’s February 20, 2020 decision, the only workers who were supplied to mining clients, and whose earnings were transferred from Rate Group 929 to Rate Group 570 were rock truck drivers and haul operators.

Flowing from the identified issue is that the employer also appeals the resulting reallocation of common ancillary earnings from Rate group 929 to Rate Group 570 in 2017, 2018, and 2019.

The employer is seeking that all insurable earnings transferred from Rate Group 929 to Rate Group 570 be transferred back to Rate Group 929 for the years 2017, 2018, and 2019 with respect to workers supplied to mining clients.

The employer states the WSIB should honour the provisions of the Workplace Safety and Insurance Appeals Tribunal (WSIAT) Decision No. 1664/02, and the instruction provided by WSIAT that labour supplied to mining clients should be classified in Rate Group 929 and acknowledge that the employer had a right to rely on that decision until such time as it received a written decision to the contrary, i.e. until February 20, 2020.

The employer is also seeking that the common ancillary earnings transferred from Rate Group 929 to Rate Group 570 be reallocated back to Rate Group 929 for the years 2017, 2018, and 2019.

In addition, the employer is seeking that credit interest be applied to all credit premium adjustments according to WSIB Policy 14-02-16, Credit Interest on Appeals, which applies to all decisions made on or after January 1, 2020. Alternatively, credit interest should be applied according to the terms of Policy 14-02-16 dated April 7, 2008.

BACKGROUND

The employer registered with the Workplace Safety and Insurance Board (WSIB), formerly known as the Workers’ Compensation Board in 1996, under the legal name of XXXX. At the time of registration, the employer’s business activities were classified in the following Rate Groups (RG)/Classification Units (CU):

• RG 119-05, CU 0619-000, Other Metal Mines
• RG 927-01, CU 7711-001, Supply of Clerical Labour Operations
• RG 929-01, CU 7712-001, Supply of Non-Clerical Labour Operations
• RG 570-01, CU 4561-001, General Freight Trucking

Rate Group 570-01, CU 4561-001, General Freight Trucking was deleted from the employer’s account effective January 1, 1999, by the WSIB’s Employer Service Centre as the employer had been reporting zero earnings to this RG/CU.

The employer was scheduled for a WSIB audit on November 15, 2000. During the audit, the Field Auditor (FA) noted that the name of the employer changed to the current employer name.

With respect to the employer’s supply of labour to the mining industry, the FA stated that, in conversation with the president, it was found the employer supplied general maintenance type labourers to a complany’s metallurgical site and mine site on a contractual basis. On occasion, the workers supplied by the employer went underground. During the audit, the FA requested a copy of the contract for review, but the request was denied by the president who cited that the document was confidential.

The FA noted that RG 119-05, CU 0619-000, Other Metal Mines was originally added to the employer’s account at the request of the employer based on the Workers’ Compensation Appeals Tribunal (WCAT) Decision No. 344/92 that was rendered for its company’s contract predecessor.

In a decision dated January 2, 2001, the FA found that Rate group 119-05, CU 0619-000, Other Metal Mines was not applicable to the employer’s activities. The employer did not engage in mining, but rather the supply of labour to the mining industry.

As the labour supplied was non-clerical in nature, and the scope of Rate group 929-01, CU 7712-001, Non-Clerical Labour Operations did not exclude the supply of labour to the mining industry, the labour reported to Rate Group 119-05 was transferred to Rate Group 929-01 as of January 1, 2000.

Rate Group 927-01, CU 7711-001, Supply Clerical Labour Operations (later known as Rate Group 956-01) remained on the account, and the FA confirmed the deletion of Rate Group 570-01, CU 4561-001, General Freight Trucking, noting that the employer was engaged in providing truck drivers to various industries, but had ceased the activity, and no insurable earnings applicable to Rate Group 570-01 were noted during the years under review. The FA also added Rate Group 707-02, CU 4241-099, Plumbing and Heating, Installation to the account effective January 1, 2000 for proration purposes, as the employer provided ancillary services to an associated firm.

The WSIB added Rate Group 737-01, CU 4255-000, Millwright and Rigging Work to the employer’s account following the audit.

The employer appealed the FA’s audit decision of January 2, 2001 on the basis that the issue had already been decided in WCAT Decision No. 344/92. The employer supplied, and the WSIB reviewed, the employer’s contract with the company subsequent to the objection, but the employer did not supply Appendices A, B and C, which were referred to throughout the contract and spoke directly do the nature of ‘Labour Rates by Classification’, and ‘Locations’.

The FA upheld their January 2, 2001 decision, which was deemed final by the Director of the Appeals Branch at that time. The objection proceeded to the Workplace Safety and Insurance Appeals Tribunal (WSIAT).

In considering the FA’s January 2, 2001 decision, in conjunction with WCAT Decision No. 344/92, the WSIAT found there was no basis for issue estoppel in the employer’s case as, although the parties were considered the same, as was the issue, there was a significant change in the WSIB classification scheme in effect at the times of each decision. Therefore, the principle of res judicata was not applicable and the appeal could proceed.

In WSIAT Decision No. 1664/02, the WSIAT had sympathy for the employer’s position that it supplied workers to the company’s mine, who were performing the same job function as those employed directly by KC mine; however, found that Rate Group 929 was the much better fit for its operations as it captured the essence of what the employer did, based upon the evidence and submissions. The employer provided non-clerical workers to an unrelated company pursuant to contractual terms.

The WSIAT decision noted that the work activity of the worker, not the business activity of the employer, determined the classification of the earnings of the workers supplied.

The FA’s January 2, 2001 decision noted a classification change, and stated that premium adjustments were being made to the employer’s payroll for actual reported payroll for the years 1998, 1999 and for 2000 current year payroll. It was not clear to the WSIAT Panel whether the audit adjustment was due to industry classification or due to an error in payroll reporting, as both of the factors were mentioned in the FA’s decision letter.

Therefore, the Panel did not determine whether or not the FA was speaking of a retroactive classification change or not, as it was not clear. What the Panel did conclude was that if the classification change was retroactive, then to better reflect a decision on the merits and justice of the matter, given their finding of hardship, the classification change ought only to be effective in the year of the FA’s decision, i.e. as of January 1, 2001. Taking into consideration that the employer operated its affairs based on the earlier WCAT decision, and that this was a reasonable approach based on the circumstances, the Panel found it would be unjust to change the employer’s classification at any other time.

The WSIAT Panel noted that the WSIB’s counsel submitted the following:

The Board would welcome the opportunity to review fully the work activities of the labour supplied to (the company’s) divisions and to make a final determination on the classification(s) for that payroll.

WSIAT Decision 1664/02 acknowledged that there had been more confusion than perhaps necessary in the overall matter, adding:

63Yet all parties need to now put aside any personality issues and focus on ensuring that this employer is properly classified in all respects on a go-forward basis. If, to that end, the Board and employer wish to jointly address the outstanding issues for which final decisions have not yet been made, or even to review other matters on a go-forward basis, in an amicable and professional fashion, then this would be a positive approach.

[64] If the Board is to further examine this employer’s classification, then the Tribunal urges the Board to assign a senior auditor with a solid understanding of mining operations and those businesses that work with large mining entities. It is also hoped that the employer and its counsel will cooperate fully in such endeavours.

In 2009, the employer was audited by a different FA. According to the Auditor’s Memo, the reason for the audit was that the employer was identified as associated to another employer that had been selected for an audit. The date of notification was June 1, 2009.

In a decision letter dated February 10, 2010, the FA confirmed the existing rate groups/classification units on the account, and added a new one to recognize the supply of drivers. The letter stated:

As a result of my audit, I made changes to your firm’s classification effective January 1, 2009. These changes have impacted insurable earnings already reported since that date, and the necessary transfers were made on audit. You identified insurable earnings paid to drivers and this amount was transferred from rate group 929, to rate group 570…When you file your 2009 year-end reconciliation, please ensure that all insurable earnings paid to drivers is included under this rate group.

The employer did not object to the classification change or any other findings of the FA’s February 10, 2010 decision.

In the same year, the employer’s account was selected as part of a routine audit under the audit plan, and was assigned to the same FA. The FA completed a memorandum saying the employer had recently been audited, and thus they did not recommend another audit at that time. However, the FA recommended flagging the employer’s file for future assignment due to a documented non-reporting of insurable earnings under Rate Group 570, which was added to the employer’s account as a result of the 2009 audit.

The FA was reassigned the file in the following year, and scheduled an audit for February 8, 2011. The FA’s Auditor’s Memo stated that the employer’s payroll included, among other labour, drivers, truck drivers, and bus drivers. The FA found that the drivers’ earnings had not been reported under Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers in 2009, as instructed during the last audit. The FA transferred the 2009 payroll of drivers from Rate Group 929-01, CU 7712-001, Supply of Non-clerical Labour Operations, to Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers, as a result.

The FA added Rate Group 764-07, CU 7712-002, Supply of Labour, Construction to the employer’s account, and confirmed Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers which included “supplying trucking labour (including drivers and driver’s helpers) to any industry except warehousing, i.e. to any business activity falling under a CU in rate group 560. Drivers and driver’s helpers may also load and unload trucks or other vehicles”

The FA’s decision letter of July 7, 2011 noted that when determining classification, the activity of the worker, not the business activity of the employer to whom the worker is supplied, determines the classification of the worker’s earnings. The letter included full descriptions of all 6 Rate Groups/Classification Units on the account (including Rate Group 570-11). The auditor urged the employer to review the descriptions to ensure they were correctly reporting workers under the correct classification unit, and added, “Several classification units have exceptions in their descriptions (eg CU 7712-001 and CU 7712-002) and I encourage you to familiarize yourself with them. If you have any questions regarding classification, please contact your WSIB Account Specialist to discuss the matter”

The employer did not object to the FA’s decision of July 7, 2011.

The employer’s most recent WSIB audit was scheduled for May 8, 2019. In a decision dated February 20, 2020, the Stakeholder Compliance Auditor (SCA) noted the following findings, among others which are not relevant to this appeal:

Premium adjustments are being made to your account for actual reported payroll for the years 2017 and 2018

Industry Classification

As a result of this audit, I confirmed your operations are correctly classified under the following rate groups:

• I-956-45, CU 7711-001, 'Supply of Clerical Labour Operations'
• I-929-01, CU 7712-001, 'Supply of Non-clerical Labour Operations'
• E-570-11, CU 4599-002, 'Supply of Drivers and Helpers'
• I-933-06, CU 9949-000, 'Other Repair Services' (prior to Jan 1/2018 was under RG 737-04, CU 9942-000, Custom Welding Services)
• G-764-07, CU 7712-002, 'Supply of Labour, Construction'
• G-737-01, CU 4255-000,'Millwright and Rigging Work'

Payroll segregation

With respect to 2017 to 2019, your firm had more than one classifiable business activity. The audit noted that several workers' earnings were not allocated to the proper rate group. I reallocated the insurable earnings for 2017 and 2018 based on the worksheets you provided me during the audit. My worksheet with the final payroll segregation adjustments was sent to you on November 21, 2019.

I transferred insurable earnings as follows:

• Driver helpers were transferred from RG 929 - Supply of Non-clerical Labour to RG 570 – Supply of Drivers and Helpers
• Rock truck drivers and haul truck operators were transferred from RG 929 to RG 570
• Construction labourers were transferred from RG 929 to RG 764 - Supply of Construction Labour
• Electricians and plumbers were transferred from RG 929 to RG 764
• Several flag persons and traffic controllers were transferred from RG 929 to RG 764
• Mystery shoppers were transferred from RG 956 - Supply of Clerical Labour to RG 929 - Supply of Non-clerical Labour
• Technical writers, and administrative assistants were transferred from RG 929 to RG 956
• Temporary help workers who were on modified duties providing ancillary work for the employer were transferred from RG 956 to common earnings

Common earnings

During years reviewed, your payroll included common earnings for your internal staff. I prorated their earnings over your direct earnings on audit and included the prorated portions with the earnings in the applicable classification units/rate groups.

On July 15, 2021, after a follow-up meeting with the SCA, the employer emailed their intent to object to the SCA’s audit results.

On November 19, 2021, the employer’s representative again confirmed the employer’s intent to object to any and all decisions in the SCA’s decision letter dated February 20, 2020. For the purposes of providing some rationale, the representative stated that one of the issues in dispute concerned the transfer of insurable earnings for rock truck drivers working entirely on mine sites from Rate Group 929 to Rate Group 570.

On November 22, 2021, in light of the employer’s objection, the SCA reconsidered and upheld their decision of February 20, 2020. The SCA provided the employer and their representative an Objection Form for completion if they disagreed with the decision.

In a submission dated February 10, 2022, the employer representative outlined the issues in dispute as follows:

1. As outlined in the notice of intent to object previously filed on November 19, 2021, the issue in dispute is the transfer of insurable earnings from Rate Group 929 to Rate Group 570 with respect to workers supplied to mining clients.

2. Specifically, the employer disputes the reclassification (from Rate Group 929 to Rate Group

570. of earnings paid to any employees/workers supplied for any purpose on a mine site, including driving rock trucks within their mining clients’ operational work sites.

3. Flowing from the first two issues is that the employer appeals the WSIB’s reallocation of common ancillary earnings from Rate Group 929 to Rate Group 570.

4. The WSIB’s decision of February 20, 2020, is in direct contravention of WSIAT Decision No. 1664/02 that was rendered just 15 years earlier with respect to the classification of workers supplied by the employer to its mining client.

5. The employer has the right to rely on WSIAT Decision No. 1664/02 and the instructions provided by WSIAT.

6. There has been no material change in circumstances that warrant transfer of insurable earnings from Rate Group 929 to Rate Group 570.

7. In light of WSIAT Decision No. 1664/02 that confirmed Rate Group 929 was applicable to the earnings of workers supplied to mining clients, the employer has the right to rely on that decision until such time as it received a written decision to the contrary, i.e., February 20, 2020, so that 2017, 2018, and 2019 should remain classified under Rate Group 929 rather than Rate Group 570 for the earnings of the workers involved.

According to the SCA’s account, on February 17, 2022, a letter was forwarded to the employer representative indicating that the appeal deadline had expired. However, pursuant to the employer representative’s email to the Assistant Director (AD) of Stakeholder Compliance Services, as well as virtual meetings involving the employer, the employer representative, and the WSIB, it was ultimately decided that the employer could move forward with the appeal.

In correspondence dated June 24, 2022, the SCA again reconsidered and upheld their February 20, 2020 decision. Enclosed with the correspondence was another Objection Form for completion and submission to the WSIB.

The employer completed and submitted the Objection Form, dated August 4, 2022, formally objecting to the SCA’s audit decision of February 20, 2020, and subsequent reconsideration decisions of November 22, 2021 and June 24, 2022. The form noted that the evidence, rationale, and legal arguments explaining why the employer does not agree with the WSIB’s decisions with respect to the operation of rock-hauling equipment were provided in the formal appeal submission dated February 10, 2022.

The objection was forwarded to the Appeals Services Division, and on August 18, 2022 the employer representative requested the WSIB’s Appeals Services Division (ASD) issue the final decision of the WSIB without a hearing process at the ASD.

In a letter dated September 2, 2022, the Senior Director (SD) of the ASD denied the employer representative’s request for a deemed final decision, noting that the representative’s reasons for requesting the deemed final decision were not in accordance with the SD’s limited jurisdiction to deem operating area decisions as final decisions of the WSIB.

In response, the employer representative completed a Hearing Request Form, requesting a hearing in writing, with no additional information.

The objection is now before me for review.

AUTHORITY

Legislation:

Subsection 88 (4) of the Workplace Safety and Insurance Act, 1997

Subsection 135 (1) of the Workplace Safety and Insurance Act, 1997

Subsections 159 (2a), (2a.1) of the Workplace Safety and Insurance Act, 1997

Operational Policy Manual:

14-02-06, Employer Premium Adjustments

14-01-02, Single Classification

14-02-08, Determining Insurable Earnings

11-01-03, Merits and Justice

Employer Classification Manual:

I-929-01, CU Code 7712-001: Supply of Non-clerical Labour Operations

E-570-11, CU Code 4599-002: Supply of Drivers and Helpers

E-570-04, CU Code 4564-000: Dry Bulk Materials Trucking

Published:

February 3, 2014

April 1, 2016

April 1, 2016

October 12, 2004

Published:

May 1, 2018

January 3, 2005

January 3, 2005

ANALYSIS

I have carefully considered all of the available information, legislation and relevant operational policies in reaching this decision, and have denied the employer’s objection.

Transfer of Insurable Earnings

Under subsection 88(4) of the Workplace Safety and Insurance Act, 1997 (WSIA), it states that if the Workplace Safety and Insurance Board (WSIB) considers that an employer has incorrectly calculated the amount of its payable premiums and, as a result, has paid an insufficient amount, the WSIB may require the employer to pay additional premiums in an amount sufficient to rectify the error. The WSIB may fix the amount of the additional premiums to be paid.

Policy 14-02-06, Employer Premium Adjustments stipulates that, in applying subsection 88(4) of the WSIA, the WSIB may make premium adjustments to an employer’s account when an employer notifies the WSIB of a premium issue requiring an adjustment, or when the WSIB discovers the need for an adjustment.

Premium adjustments are made to an employer’s account due to corrections in classification, insurable earnings, interest charges, non-compliance penalties, and earnings reported under construction rate group 755, Non-Exempt Partners and Executive Officers in Construction.

The policy, 14-02-06, as published on February 3, 2014, and in effect at the date of notification in this appeal, states that premium adjustments are subject to the Two Year Rule, unless one of the exceptions laid out in the policy applies.

The exceptions to the two year rule are:

• provisional premiums
• voluntary disclosure
• lack of full disclosure
• offences or fraud
• classification changes

In the case of classification changes not involving provisional premiums, lack of full disclosure, and offences or fraud, premium adjustments are limited to January 1 of the current year. Policy 14-02-06 states, “The WSIB considers classification change as a change to an employer’s account that results in the addition or deletion of a Classification Unit (CU) [emphasis added} unless the change falls under one of the other Exception rules.”

In the appeal before me, the audit decision of February 20, 2020 did not result in the addition or deletion of a classification unit, and did not fall under one of the other exception rules. In fact, the SCA’s February 20, 2020 decision confirmed the employer’s classification, as follows:

As a result of this audit, I confirmed your operations are correctly classified under the following rate groups:

• I-956-45, CU 7711-001, 'Supply of Clerical Labour Operations'
• I-929-01, CU 7712-001, 'Supply of Non-clerical Labour Operations'
• E-570-11, CU 4599-002, 'Supply of Drivers and Helpers'
• I-933-06, CU 9949-000, 'Other Repair Services' (prior to Jan 1/2018 was under RG 737-04, CU 9942-000, Custom Welding Services)
• G-764-07, CU 7712-002, 'Supply of Labour, Construction'
• G-737-01, CU 4255-000,'Millwright and Rigging Work'

The employer representative asserts that the transferring of payroll from one rate group/classification unit to another is tantamount to a classification change, and thus the changes are not allowed retroactively. Whereas the SCA considers that this was a correction of insurable earnings requiring a transfer of payroll between already existing classification units, and therefore, adjustments can be made in accordance with the Two-Year rule, i.e. retroactively to January 1, 2017.

I find, on this point, I must concur with the SCA that the reallocation of payroll, does not meet the criteria of what the WSIB clearly considers to be a classification change. When reviewing the history of Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers, on the employer’s account, I find it was added to the employer’s account as of January 1, 2009, over ten years prior to the SCA’s audit decision, during a previous audit of the employer that was initiated by a FA in 2009, and completed on February 10, 2010.

I acknowledge the employer representative’s argument that the Workplace Safety and Insurance Appeals Tribunal (WSIAT) has, in the past, considered similar transfers of payrolls to be classification changes; however, WSIB decision-makers are not bound by legal precedent, and must make decisions based on the merits and justice of each case, in accordance with laws and policies in place during the relevant times of their decisions. Furthermore, I must recognize that the WSIAT decisions referred to by the employer representative predate the version of WSIB’s policy 14-02-06, Employer Premium Adjustments, applicable in this appeal. For example, while WSIAT Decision No. 386/08 remarks that Operational Policy Manual Document No. 14-02-06 applies to the issue of retroactivity, it also states,

11In this case the notification date was May 2001. The policy does not define the term “classification”.

The applicable version of policy 14-02-06 at that time was published on August 18, 2000, and the same prior version of policy 14-02-06 was applicable in WSIAT Decision No. 1060/04 which was also cited as relevant by the employer’s representative.

Historical changes to policy 14-02-06, Employer Premium Adjustments were significant in identifying the WSIB’s intent with respect to what it considers a classification change. In older versions of the policy, as in the version relevant to the WSIAT decisions referred to by the employer representative, the WSIB’s definition of a classification change was not clearly articulated, which left room for interpretation by employers, WSIB decision-makers, and by the WSIAT alike. However, in latter versions of the policy, including in the version published on February 3, 2014, and thus applicable here, the WSIB made its intent clear with respect to what it considers a classification change that is exempt from the Two-Year Rule, and that is that a classification change requires there to be an addition or deletion of a classification unit.

Subsection 159 (2) of the WSIA states, in part:

(2) Subject to this Act, the Board has the powers of a natural person including the power,

(a) to establish policies concerning the premiums payable by employers under the insurance plan;

(a.1) to establish policies concerning the interpretation and application of this Act;

Policy 14-02-06, Employer Premium Adjustments, as published on February 3, 2014, makes clear the WSIB’s intent with respect to the retroactive application of premium adjustments to an employer’s account, and establishes the WSIB’s interpretation and intent in regards to what it considers a classification change.

Therefore, as no classification units were added or deleted as a result of the SCA’s decision of February 20, 2020, the decision did not constitute a classification change under policy 14-02-06, and thus is not exempt from the Two-Year Rule of employer premium adjustments. Instead, I find the decision involved an insurable earnings correction in which insurable earnings were incorrectly reported, and thus were transferred from one existing classification unit to another.

Under the Two Year Rule, the WSIB makes debit or credit premium adjustments to employer accounts from:

• the notification date back to January 1 of the second prior year, or
• the notification date back to the actual date that the change giving rise to the adjustment took place if the change occurred after January 1 of the second prior year.

For WSIB’s audit area, the notification date for a premium adjustment is the date of the audit visit or the due date as indicated on the Notice of Audit. In the appeal before me, the due date indicated on the Notice of Audit was May 8, 2019. Therefore, I find the SCA was justified in adjusting the employer’s insurable earnings retroactively to January 1, 2017, i.e. to January 1 of the second prior year.

Allocation of Common Ancillary Earnings

As explained in WSIB Policy 14-01-02, Single Classification, the WSIB defines an ancillary operation as an operation that supports or is incidental to the employer’s business activity. Therefore, the WSIB does not classify ancillary operations differently from the employer’s business activity. Hence, as I found that the SCA’s decision of February 20, 2020 did not constitute a classification change, I find the same to be true for the adjustment of ancillary earnings that support the employer’s business activities.

According to WSIB Policy 14-02-08, Determining Insurable Earnings, common earnings are insurable earnings from an ancillary operation (or optional insurance) that are not segregated and cannot be directly assigned to a classification code, and must be prorated over the direct earnings of the relevant classification units. Therefore, when retroactively correcting the allocation of an employer’s insurable earnings per classification unit as permitted under Policy 14-02-06, it naturally follows that the employer’s common earnings allocation would also have to be adjusted. The adjustment of common earnings, in cases such as this, does not constitute a classification change, but rather a correction of insurable earnings.

Again, while I appreciate the employer representative’s reference to WSIAT Decision Nos. 386/08 and 1060/04 in support of their arguments pertaining to the retroactive adjustment of common earnings, I have already established that there were different versions of policies in place at the time those decisions were rendered. In addition, the circumstances in those cases differ from those present in the appeal before me. Especially when considering WSIAT Decision No. 1060/04, I find that the scenario was not at all the same, as it pertained to the transferring of payroll from subsidiary corporations to their parent company, which was an entirely separate legal entity. Another key difference in WSIAT Decision No. 1060/04 is that the subsidiary corporations’ accounts were not already classified in rate groups/classification units to which the common earnings were reallocated, whereas in the employer’s case, Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers, to which the employer’s 2017 and 2018 common earnings were reallocated, was already present on the employer’s account, and had been present on the account since its addition as a result of a FA’s February 10, 2010 decision.

The employer received instruction from the WSIB to segregate and report their payroll per classification unit, and to prorate their common earnings based on the direct labour in each classification unit in both the FA’s February 10, 2010 decision letter and in a separate decision by the FA dated July 7, 2011.

Prior WSIAT Decisions

The employer representative argues that the SCA’s February 20, 2020 decision is in direct contravention of WSIAT Decision No. 1664/02 that was rendered just 15 years prior with respect to the classification of workers supplied by the employer to its mining client. In their view, res judicata (the idea that a dispute once judged with finality is not subject to re-litigation) should be a consideration in this matter. They add that there has been no material change in circumstances that warrants a transfer of insurable earnings from Rate group 929 to Rate Group 570, and that the employer had the right to rely on WSIAT Decision No. 1664/02 that confirmed Rate Group 929 was applicable to the earnings of workers supplied to mining clients until such time as they received a written decision to the contrary, i.e. until February 20, 2020.

In considering the principle of res judicata, a form of which is issue estoppel, I find there is no basis for its application in this appeal. As outlined in WSIAT Decision No. 1664/02, in order to establish the applicability of issue estoppel, three conditions must be met:

1. The same question must have been decided,
2. there must be a final judicial decision to create estoppel, and
3. the parties to the judicial decision or their privies are the same person as the parties to the proceedings in which the question of estoppel is raised.

While there is no question that the parties in WSIAT Decision No. 1664/02 and the parties in this appeal are the same, and that WSIAT Decision No. 1664/02 constituted a final judicial decision, I find the issues are not the same.

The issue decided in WSIAT Decision No. 1664/02 was the classification of non-clerical labour the employer supplied to its mining client. In the decision, the Panel found that, based upon the evidence before them, the WSIB had correctly classified the employer’s activity of supplying non-clerical labour to the mining industry in Rate Group 929, Supply of Non-clerical labour operations, as opposed to in Rate Group 119, Other Metal Mines. The decision dealt with a Field Auditor’s (FA) January 2, 2001 decision regarding the classification of “general maintenance type labourers” that were supplied by the employer to its mining client.

What I found important in distinguishing the issues, is that the FA whose decision was appealed in WSIAT Decision No 1664/02, noted in their Auditor’s Memo, that the employer had been classified in Rate Group 570, as it had engaged in providing truck drivers to various industries, but had ceased the activity, and that no insurable earnings applicable to Rate Group 570 were noted during the years under review.

The Panel in WSIAT Decision No. 1664/02 found, as the FA did at that time, that Rate Group 929 was ultimately the much better fit for its operations. “Rate group 929 in the Panel’s view captured the essence of what this employer does, based upon the evidence and submissions. This employer, after all, provides non-clerical workers [emphasis added] to an unrelated company pursuant to contractual terms.

Rate Group 929, classification unit (CU) 7712-001, Supply of Non-clerical Labour Operations, as it existed in the WSIB’s Employer Classification Manual at the time, was set out in WSIAT Decision 1664/02 and noted that the CU excluded non-clerical workers whose work activities fell under the following CUs:

• A-030-01, Logging Operations.
• E-560-04, Marine Cargo Handling.
• E-570-11, Supply of Drivers and Helpers. [emphasis added]
• G-723-06, Supply of Labour, Construction.
• G-732-02, Large Bridge, Construction.
• G-737-01, Millwright and Rigging Work.
• G-748-01, Wrecking and Structural Demolition.
• G-748-03, Structural Steel Erection.
• G-748-09, Form Work (high-rise).
• G-751-08, Steel Reinforcing.
• H-861-05, Child Daycare and Nursery School Services.
• H-875-14, Offices of Social Workers.
• I-919-05, Supply of Labour, Restaurant / Catering.

The description of Rate Group 929, CU 7712-001, Supply of Non-clerical Labour Operations also noted that, in the supply of labour industry, the activity of the worker, not the business activity of the employer to whom the worker is supplied, determines the classification of the worker’s earnings.

As confirmed by the FA, in their Auditor’s Memo, the employer did not supply drivers at that time, and thus WSIAT Decision No. 1664/02 made no substantive findings with respect to the classification of drivers supplied to the mining industry.

Furthermore, in WSIAT Decision No. 1664/02, the Panel noted the submissions of WSIB’s counsel that, “The Board would welcome the opportunity to review fully the work activities of the labour supplied to the company and to make a final determination on the classification(s) for that payroll, and acknowledged that, “if to that end, the Board and employer wish to jointly address the outstanding issues for which final decisions have not yet been made, or even to review other matters on a go-forward basis, in an amicable and professional fashion, then this would be a positive approach.”

The decision also stated:

[64] If the Board is to further examine this employer’s classification, then the Tribunal urges the Board to assign a senior auditor with a solid understanding of mining operations and those businesses that work with large mining entities. It is also hoped that the employer and its counsel will cooperate fully in such endeavours.

As I read and understand WSIAT Decision No. 1664/02, the Panel recognized that there were outstanding classification issues pertaining to the employer’s supply of labour to the mining industry, for which final decisions were not rendered, and intentionally left the door open for future classification decisions.

Material Change in Circumstance

More importantly, the WSIB and the employer did jointly address outstanding classification issues in a subsequent audit that was commenced by a second FA in 2009 and concluded in 2010. That FA, in their decision letter of February 10, 2010, confirmed the existing rate groups/classification units on the employer’s account, but stated they had added a new rate group to recognize the employer’s business activity of supplying of drivers.

In the letter, the FA’s description of Rate Group 929, CU 7712-001, Supply of Non-clericall Labour Operations noted that the scope of the CU excluded non-clerical workers whose work activities fell under Rate Group 570-11, Supply of Drivers and Helpers. The letter instructed the employer to keep and report payroll and wage records based on labour time spent by workers under each classification unit, and to prorate the payroll of common or ancillary workers based on the direct labour reported in each classification unit (CU). The FA also instructed the employer to ensure, when filing their 2009 year-end WSIB Reconciliation, that all insurable earnings paid to drivers were included under the new rate group.

Therefore, contrary to the employer representative’s argument, I find there was in fact a material change in the employer’s business activities following the WSIAT’s rendering of Decision No. 1664/02. The employer had resumed its activity of supplying drivers, which it had ceased prior to the commencement of the 2001 audit and resulting WSIAT Decision No. 1664/02. Moreover, although the FA’s February 10, 2010 decision letter clearly informed the employer of their right to appeal the decision within six months, the employer did not appeal, or submit an intent to object to the FA’s February 10, 2010 decision to classify the employer’s supply of drivers operation under Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers.

The employer was audited by the second FA again 2011. In the 2011 Auditor’s Memo, the FA indicated they discussed the reason for this second audit in 2011, so soon after the last one was completed, with the employer’s controller. The FA explained that during the last audit, they had opened Rate Group 570 and transferred some insurable earnings to the new rate group; however, when the employer completed their 2009 year-end Reconciliation Form, the insurable earnings for the new rate group were zeroed out. The controller explained that the Reconciliation Form the employer completed did not have Rate Group 570 listed on it, and so “he ignored it.”

Given the documented non-reporting of earnings under Rate Group 570 following the FA’s audit decision of February 10, 2010, I find the 2011 audit was warranted under subsection 135 (1) of the WSIA, which states that the WSIB or a person authorized by the WSIB may examine the books and accounts of an employer, and may investigate and make such inquiries as the WSIB considers necessary for the following purposes:

1. To ascertain whether a statement given to the WSIB by the employer is accurate.
2. To ascertain the amount of the employer’s payroll.
3. To ascertain whether the employer is a Schedule 1 or a Schedule 2 employer.
4. To ascertain whether an employer has contravened section 22.1.

In their 2011 Auditor’s Memo, the FA confirmed Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers, and specified that the scope of the CU includes “supplying trucking labour (including drivers and drivers’ helpers) to any industry [emphasis added] except warehousing, i.e. to any business activity falling under a CU in rate group 560. Drivers and driver’s helpers may also load and unload trucks or other vehicles.”

The FA’s decision letter of July 7, 2011 communicated that when determining classification, the activity of the worker, and not the business activity of the employer to whom the worker is supplied, determines the classification of the worker’s earnings. The letter included full descriptions of all 6 CUs on the account and the FA urged the employer to review the descriptions to ensure they were correctly reporting workers under the correct CU. The FA’s letter included the following:

Several classification units have exceptions in their descriptions (e.g. CU 7712-001 and CU 7712-002) and I encourage you to familiarize yourself with them. If you have any questions regarding classification, please contact your WSIB Account Specialist to discuss the matter.

Again, although afforded the right to object if they disagreed, the employer did not object to the FA’s decision of July 7, 2011, which confirmed that the activity of supplying drivers to any industry was covered in Rate Group 570, Supply of Drivers and Helpers.

While this would not alter the facts of the case, in reaching my decision, I considered the circumstances leading up to the SCA’s February 20, 2020 decision, and if there was a possibility that the employer misunderstood, or misconstrued, the decision and instructions of the FA, in 2010 and 2011, with respect to the reporting of drivers supplied to any industry, and more specifically, with respect to rock truck drivers or haul operators supplied to the mining industry. This lead me to a review of the employer’s claims reporting practices with respect to said drivers, and upon conducting my review, found on a balance of probabilities that the employer was clearly instructed, and understood that drivers supplied to the mining industry were covered under Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers.

A transfer of cost decision dated February 16, 2017 is on record on the employer’s account file with respect to a motor vehicle accident, which took place in 2014, involving their worker. The Employer’s Report of Injury, as filed by the employer, identified the worker as a rock truck driver, operating a 777 (i.e. haul truck), and reported the claim under Rate Group 570. This was over four years after the addition of Rate Group 570 to the employer’s account. In 2018, a separate claim was reported for a different worker who was injured while also operating a 777 haul truck, and again, the Employer’s Report of Injury allocated the claim to Rate Group 570.

The FA’s decision letters of February 10, 2010 and July 7, 2011 both informed the employer that experience rating adjustments were based on an employer’s accident cost experience, and reminded the employer of the importance of recording accident costs against the correct classification unit. Yet, while the employer reported the drivers’ claims under Rate group 570, Supply of Drivers and Helpers, they reported the drivers’ earnings under Rate Group 929, Supply of Non-clerical Labour Operations. This had the potential of affecting the employer’s experience rating in a way that was beneficial to the employer given that the accident costs of the drivers, when allocated to Rate Group 570, would have no negative effects on the actual premium rates paid for the drivers under Rate Group 929.

I find, in considering the circumstances, that the employer’s objection to allocating the 2017 and 2018 earnings of drivers to Rate Group 570 is, in essence, an objection to the FA’s classification decision of February 10, 2010, over which I have no jurisdiction. The employer was aware, since the FA’s decision of February 10, 2010 that drivers were covered under Rate Group 570, yet continued to report their earnings in Rate group 929. The classification decision was confirmed by the FA’s decision letter of July 7, 2011, and the employer was informed, on multiple occasions, that in the supply of labour industry, classification is based on the worker’s activity, and not on the activities of their clients.

Therefore, I am unable to accept the employer representative’s assertion that a transfer of earnings between rate groups in 2017, 2018, and 2019 was, in this case, tantamount to a classification change. Accepting such an argument would suggest that it is reasonable for multi-rated employers to incorrectly allocate their insurable earnings or underpay their WSIB premiums and, at the same time, expect no premium adjustments or repercussions upon discovery by the WSIB. Additionally, in cases where earnings are incorrectly reported to a rate group with a lower premium rate, this would have the effect of granting a competitive advantage to multi-rated employers in comparison to their single-rated competitors.

Classification of Rock Truck Drivers/Haul Operators as of 2019

The SCA in this appeal, in their decision of February 20, 2020 and subsequent reconsiderations, decided that the activity of supplying rock truck drivers and haul operators to the mining industry should remain classified in Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers in current year 2019, and the employer has clearly objected to this decision as well. As a result, I find I do have jurisdiction to review the employer’s current year (i.e. 2019) classification with respect to the rock truck drivers/haul operators.

For clarity, I add that the employer supplies other workers to the mining industry, including, but not limited to core shack technicians, heavy duty equipment mechanics, skilled labourers, underground trainers, geo samplers, geo technicians, health and safety officers, relief superintendents, relief workers, utility operators, warehouse labourers, wash-bay attendants, water treatment consultants, and water treatment operators. The SCA classified the employer’s activity of supplying these workers to the mining industry in Rate Group 929-01, CU 7712-001, Supply of Non-clerical Labour Operations, which the employer has not disputed.

According to the SCA’s Reconsideration Issue Sheet, dated June 24 2022, a rock truck is the common term for an ‘articulated dump truck’, which is a rigid dump truck specifically designed to handle heavy loads of materials from mines, quarries, gravel pits, construction sites, and oil fields. In the employer’s case, the trucks are used to transport large rocks containing ore from the client’s quarry to their crushing area, and the employer supplies drivers to its clients to operate the trucks. The SCA added that articulated dump trucks are marketed for use by a number of industries including sand and gravel pits/quarries, construction, mining, and oil fields.

The employer representative argued that the rock trucks operated by the employer’s workers are unlicensed as they operate on mine site property only. They do not travel on any other roads but mine haulage roads. They added that rock haul trucks cannot be considered dump trucks, hopper trucks or dry bulk tank trucks as described in the scope of Rate Group 570-04, CU 4564-000, Dry Bulk Materials Trucking, and that business activities described in Rate Group 570-04, CU 4564-000, Dry Bulk Materials Trucking are all conducted as normal trucking operations hauling materials on public roads, and would be carried out using vehicles licensed for operation on public roads. Whereas, in contrast, the operation of rock haul trucks is intrinsic to the mining operations of the employer’s clients.

In pondering the classification decision, I reviewed documents in the WSIB’s Employer Classification Manual, as they existed at the date of notification, i.e. at May 8, 2019.

The scope of Rate Group 929-01, CU 7712-001, Supply of Non-clerical Labour Operations, includes the operations of employment and temporary help agencies which supply non-clerical workers to non-associated employers on a temporary or long-term basis. However, it specifically excludes the supply of non-clerical workers whose work activities fall under E-570-11, Supply of Drivers and Helpers, as well as other listed rate groups that are not relevant to this appeal.

Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers covers the business activities of supplying trucking labour (including drivers and driver’s helpers) to any industry except warehousing, and clarifies that drivers and driver’s helpers may also load and unload trucks or other vehicles. Trucking labour supplied under this CU includes all trucking labour whose work activities fall under one of the CUs in Rate Group 570, as well as automobile marshalling, and the custom loading and unloading of railway cars, trucks or other vehicles when carried out as a business in its own right.

Both CUs note that in the supply of labour industry, the workers perform a variety of functions that are normally part of the day-to-day operations of the employer to whom the workers are supplied, and are usually carried out by that employer’s permanent staff. However, it is the activity of the worker, not the business activity of the employer to whom the worker is supplied that determines the classification of the worker’s earnings. An example of this, as given in Rate group 570-11, CU 4599-002, Supply of Drivers and Helpers of the Employer Classification Manual, states, “For example, the earnings of a truck driver supplied to a manufacturing operation are classified in this CU.”

Taking note of this, while I do not disagree with the employer representative’s statement that the operation of rock haul trucks is intrinsic to the mining operations of the employer’s clients, I must find that it is not the client’s activities that determine the classification, but rather the workers’ activities that do so, and in the appeal before me, the workers are drivers.

The employer representative asserted that the rock trucks were not licensed to operate on public roads, citing the size of the rock trucks as a contributing factor to this, and further asserted that rock trucks could not be considered dump trucks, hopper trucks, or dry bulk tank trucks as described under the scope of Rate Group 570, CU 4564-000, Dry Bulk Materials Trucking. In response, the SCA in their Reconsideration Issue Sheet of June 24, 2022, acknowledged the size difference between the rock trucks (articulated dump trucks) and dump trucks that one might normally find on public roadways; however, maintained that both are still dump trucks and both require drivers for their operation, and thus should be treated equally with respect to the classification issue at hand. The SCA likened the operation of dump trucks versus articulated dump trucks to the operation of small airplanes such as Cessna’s versus very large aircraft such as 747s, saying that regardless of their size differences, and even acknowledging that training and licensing requirements may vary for each, both are considered airplanes, with their operators considered pilots.

The crux of my classification decision, as I see it, rests on whether I consider the rock trucks in this appeal to be trucks or mining equipment, and I find they are in fact trucks, operated by drivers. First of all, the use of rock trucks is not limited to mining operations alone. Rock trucks are used on construction sites, quarries/gravel pits, and oil fields. Secondly, according to the SCA’s Reconsideration Issue Sheet of June 22, 2022, as per an email from the employer representative dated May 19, 2022, the only licencing required to operate the rock trucks is a class G2 licence. While there is no evidence before me with respect to the Ontario Ministry of Transportation’s licencing requirements for the operation of articulated dump trucks, I find the employer representative’s email would still suggest that the employer required the rock truck/haul operators to be licenced drivers. Furthermore, neither Rate Group 570-04, CU 4564-000, Dry Bulk Materials Trucking or Rate Group 570-11, CU 4599-000, Supply of Drivers and Helpers, specify the class of licence a driver must hold, nor make mention of any size or operating restrictions with respect to the vehicles themselves. Lastly, while the scope of Rate group 570-04, CU 4564-000, Dry Bulk Materials Trucking includes the transporting of dry bulk materials such as cement, fill, gravel, sand, and debris, including snow, I find the use of the term “such as” signals that this is not an exhaustive list of dry bulk materials, but rather examples of dry bulk materials. Bearing this in mind, I find that the large rocks containing ore, as transported by the employer’s rock truck drivers, qualify as dry bulk materials.

In light of the above, I conclude that if the rock truck drivers/haul operators carried out their activities as businesses in their own right, their business activities would be covered in Rate Group 570-04, CU 4564-000, Dry Bulk Materials Trucking. Therefore, the business activity of supplying the rock truck drivers/haul operators to any industry except warehousing, as carried out by the employer in this appeal, is correctly classified in Rate group 570-11, CU 4599-000, Supply of Drivers and Helpers.

Merits and Justice

The employer asserts that Policy No. 11-01-03, Merits and Justice provides that a WSIB decision-maker may use discretion and depart from a policy if it can be shown that the case has exceptional circumstances that justify doing so. The Workers’ Compensation Appeals Tribunal (WCAT) Decision No. 344/92 was cited as was WSIAT Decision No. 870/14, as examples of decisions in which Tribunals departed from policy due to exceptional circumstances.

With respect to WCAT Decision No. 344/92, the employer representative stated that they fully understood that the decision was rendered based on the WSIB’s classification scheme that ended in 1992 and would not be applicable as far as the classification scheme that ran from 1993 to 2019. However, I must point out that not only was the classification system different, but the legislative authority applied in the decision significantly pre-dated the Workplace Safety and Insurance Act, 1997 (WSIA) which is applicable in this appeal.

WSIAT Decision No. 870/14 makes reference to other WSIAT decisions including 2152/04, 195/00 and 1402/02. It discusses that in WSIAT Decision No. 1402/02 some exceptional circumstances were identified as: the degree of diligence of the employer; the impact in actual dollars of retroactive classification change; the amount of benefit that the employer received up until the time of the classification change; whether there was detrimental reliance; and some recognition that the Board subsequently changed the policy.

Based on past WSIAT decisions, the employer representative reasons that detrimental reliance is a fundamental legal principle that must be considered in cases involving retroactivity, and an employer should be able to rely prospectively on information provided by the WSIB, until such time as they receive information to the contrary. They submit that a reasonable person must concur that the employer exercised a high degree of due diligence and relied, to its detriment, on the WSIB. In addition, the financial impact of the decision was punitive and brought financial difficulty to the employer. The employer had no competitive advantage, as it did not charge clients a higher rate for the supply of drivers while reporting the drivers’ earnings to the rate group with the lower premium rate, and there is no way for the employer to go back to clients and bill for additional costs.

WSIAT Decision No. 870/14 states:

The principal of detrimental reliance was discussed in Tribunal Decision 195 00. It states:

It seems to us reasonable, and consistent with the intent of the Board Minute, that an employer should be able to rely prospectively on information provided by the Board, until the employer receives information to the contrary. Information to the contrary will, generally, be contained in the most recent audit or fact-finding exercise undertaken by the Board.

I concur that employers should be able to rely on information received by the WSIB until such time as they receive information to the contrary. However, the employer representative’s reasoning with respect to the employer’s detrimental reliance on WSIAT Decision No. 1664/02 ignores a key fact, which is that the employer was audited, not once, but twice following that decision, and prior to the SCA’s decision of February 20, 2020.

The employer was able to rely on the classification decision issued by the FA in 2001, and upheld in WSIAT Decision No. 1664/02 until February 10, 2010 upon receiving information to the contrary as a result of a more recent audit undertaken by the WSIB. In that more recent audit, Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers was added to the employer’s account as the employer was found to be supplying drivers to various industries. That classification decision was confirmed in a 2011 audit where the employer was again instructed to report the earnings of drivers supplied to any industry to Rate Group 570-11, CU 4599-002, Supply of Drivers and Helpers. Therefore, I find the employer representative’s argument of detrimental reliance on WSIAT Decision No. 1664/02, which was issued on June 16, 2005, is not supported with respect to the SCA’s decision of February 20, 2020, almost 20 years later. I find it was not reasonable for the employer to have relied on a decision from 2005 when there were material changes to the employer’s business activities following that decision, and there were two undisputed audits that were rendered since that decision.

I do not find the employer has been especially diligent with respect to following the WSIB’s instructions to report the earnings of drivers supplied to any industry, except warehousing, to Rate Group 570-11. While the WSIB has a responsibility in correctly classifying an employer, and in communicating information and instruction to the employer, the employer also has a responsibility to follow the WSIB’s instructions with respect to decisions made under WSIB laws, policies, and procedures. In the FA’s decision letter of July 7, 2011, the FA encouraged the employer to review the classification units on their account and familiarize themselves with exceptions to classification units, including those exceptions listed in Rate Group 929-01, CU 7712-001, Supply of Non-clerical Labour Operations. The FA also urged the employer to contact the WSIB if they had questions regarding classification. Yet, I do not find the employer was proactive in ensuring the direct earnings of their rock truck drivers/haul operators were being reported correctly, especially in view of the discrepancies between the employers’ claims reporting and earnings reporting practices for these workers. WSIB records show no enquiries, on the employer’s part, pertaining to the reporting of the drivers’ earnings prior to the SCA’s decision of February 20, 2020.

While the employer representative argues that the financial impact of the retroactive adjustments is punitive, they reference the total audit adjustment, which is not solely contributable to the issues under appeal. The SCA’s Auditor’s Memo and audit decision letter of February 20, 2020 note that adjustments were also made in 2017 and/or 2018 for under-reported gross T4 earnings (Box 71), excess earnings, out-of-province earnings, other payroll transfers/segregation issues, and other common earnings corrections. Furthermore, WSIB policy 14-02-06, Employer Premium Adjustments notes that, as a consequence of applying any adjustment rule, a premium adjustment results in a credit or a debit. Therefore, it is the WSIB’s intent that premium adjustments will result in financial consequences. However, it is also the WSIB’s intent that those consequences be limited based on the retroactivity rules as set out in policy 14-02-06. In the employer’s case, the retroactivity of the issue under appeal is limited to two years. At the same time, the employer has, in all probability, been incorrectly reporting the earnings of its rock truck drivers/haul operators to a rate group with a lower premium rate since 2011, which may have been a potential benefit to the employer.

Concerning the financial benefit that the employer received by paying a lower premium rate for its rock truck drivers/haul operators up until the time of the SCA’s February 20, 2020 decision, the employer representative states that there was no such benefit for the employer, as the employer did not charge its clients a higher rate for the drivers, and cannot go back and charge clients additional costs for the drivers. However, there is no evidentiary basis upon which I may either confirm or deny this statement. Yet, if this was the case, it would stand to reason that the ability to charge clients lower rates for these drivers, since 2011, would have granted the employer a significant advantage over their competitors, who also supplied drivers, when vying for jobs. The fact remains that the employer has, in comparison to their competitors, paid lower premium rates for drivers supplied to the mining industry as a result of their own insurable earnings reporting errors.

Lastly, the employer representative submits that, as in WSIAT Decision 1402/02’s outline of exceptional circumstances that might limit retroactive premium increases, a WSIB decision-maker should give some recognition where the WSIB subsequently changes its policy. The employer representative pointed out that a new WSIB classification scheme came into effect as of January 1, 2020 whereby, in the supply of labour industry, labour is to be classified according to the classification of the client to whom the labour is supplied. In the employer’s case, the new regulation and new classification scheme means that labour supplied to a mine is classified in Class B, ‘Mining, quarrying and oil and gas extraction’.

Although I acknowledge the employer representative’s submission pertaining to the new classification system that was adopted by the WSIB as of January 1, 2020, the new classification system was introduced 11 years after the application of Rate group 570-11, Classification Unit 4599-002, Supply of Drivers and Helpers on the employer’s account. Therefore, the new WSIB classification system was not a new development in relation to classification changes applied to the employer’s account. For that reason, I find that a limitation of retroactive premium adjustments is not justified in the employer’s case.

Under Policy 11-01-03, Merits and Justice, decision makers must take into account the facts and circumstances relating to the case, along with the relevant WSIB policy or policies, and the relevant provision or provisions of the WSIA. The obligation to decide each case on the basis of merits and justice does not authorize a WSIB decision-maker, to disregard the relevant legislation and policy in the case. However, a decision-maker may depart from policy in rare cases, where the application of a relevant policy would lead to an absurd or unfair result that the WSIB never intended.

Upon careful consideration of all of the circumstances in this appeal, I did not find them to be extraordinary. The SCA’s February 20, 2020 decision applied relevant legislation and policy, and did not lead to an absurd or unfair result that the WSIB did not intend. The employer has under-reported premiums since its last audit of 2011, and as a result of the SCA’s February 20, 2020 decision, the employer’s premiums were adjusted retroactively, only to January 1, 2017, in accordance with Policy 14-02-06. Disregarding policy, in this case, would result in a decision that would be unfair to other Schedule 1 employers, and in particular, to the employer’s competitors who were correctly reporting their payroll all along. Therefore, I have no basis upon which I may depart from the application of policy in this appeal, and must uphold the SCA’s February 20, 2020 decision.

As the outcome of this appeal is not in the employer’s favour, the employer is not entitled to credit interest as outlined in WSIB Policy 14-02-16, Credit Interest on Appeals.

CONCLUSION

The employer’s objection is, therefore, denied.