The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

An Appeal Panel review was held on January 21, 2000, at the request of the firm.

Issue

Whether or not the employer must pay the reduced late filing penalty of $625.00.

Decision

That the employer is not required to pay the reduced filing penalty of $625.00.

Background

In accordance with the Workers Compensation Act, an employer must file their Quarterly Earnings Report by the 20th day of April, July, October and January of any given year. In this particular case, the employer did not submit their October 20th report until November 2, 1999. The employer was therefore charged a late filing penalty of $1,250.00. The employer appealed the late filing penalty indicating that it was an oversight on their part as they had inadvertently sent in the cheque without including the report.

On December 8, 1999, the Assessment Committee reduced the late filing penalty to $625.00. This reduction was based on part "b" of the criteria outlined in WCB policy 35.40.10. Part "b" states:

"A default will generally be considered excusable and relief of up to 50% of the penalty amount may be provided where the period of default is less than 30 calendar days, the employer does not have a prior history of default, and has cooperated fully with the WCB."

As the employer did not have a history of default, and had submitted the report within 30 calendar days, the Assessment Committee adjusted the late filing penalty to $625.00.

On December 10, 1999, the employer appealed the above decision to the Appeal Commission stating "We are new to the quarterly reporting system (began in 1999). Our history of payments to the WCB over the years has been good. All payments while on the quarterly reporting system have been received by the WCB by the due date. We feel that a $625.00 penalty for not filing the report is quite excessive. The report was prepared but inadvertently not submitted when the payment was made. In future we will fax the report prior to the payment."

On January 21, 2000, a non-oral file review was held to consider the employer's appeal.

Reasons

Section 86(1) of The Workers Compensation Act prescribes that an employer shall pay a penalty to the WCB where the employer refuses or neglects to furnish the WCB with a payroll return or other required statement within the appointed time. In this particular case, the employer omitted to submit its third quarter "WCB Quarterly Earnings Report" on or before October 20th, 1999 and was subsequently charged a late filing penalty.

The Assessment Committee, on appeal, reduced the amount of the employer's penalty by 50% to $625.00 in accordance with WCB policy 35.40.10, which states in part as follows:

"The WCB may grant relief of the penalty which would otherwise be imposed under subsection 86(1) according to the following criteria:

b) A default will generally be considered excusable and relief of up to 50% of the penalty amount may be provided where the period of default is less than 30 calendar days, the employer does not have a prior history of default, and has cooperated fully with the WCB."

The employer appealed this decision to the Appeal Commission contending that it had inadvertently neglected to include the Quarterly Earnings Report when it mailed its third quarter cheque in the amount of $10,590.39 to the WCB. The evidence confirms that the employer's cheque was received by the WCB on the due date being the same day that the report was to be received. The evidence further establishes that the employer has no past history of being late in submitting its reports and that the employer was new to the quarterly reporting system. Also, there is no contrary evidence suggesting that the amount of the employer's cheque did not reasonably reflect the actual third quarter payroll assessment that was due and payable to the WCB.

Section 86(3) of the Act furnishes the WCB with the discretion to grant relief from penalty in whole or in part. "Notwithstanding anything in this section, the board, if satisfied that the default was excusable, may in any case relieve the employer in whole or in part from liability under this section." As well, it should be noted that under 1(a) of the previously referred to policy, the WCB has the discretion to extend the period of default. "A default will generally be considered excusable and relief of up to 100% of the penalty amount may be provided where the period of default is less than 5 business days. Where circumstances warrant, the 5 day period may be extended at the discretion of the Executive Director responsible for Assessments."

In light of the evidence, we have no hesitation in reaching the conclusion that the employer's mistake was both innocent and inadvertent. Accordingly, pursuant to the section 86(3), we find that the employer should not have to pay the reduced late filing penalty of $625.00.

Panel Members

R. W. MacNeil, Presiding Officer
P. Challoner, Commissioner
R. Frisken, Commissioner

Recording Secretary, B. Miller

R. W. MacNeil - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 1st day of February, 2000