The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

An Appeal Panel review was held on February 11, 2000, at the request of the employer.

Issue

Whether or not the employer has been properly classified.

Decision

The employer has not been properly classified.

Background

In the spring of 1999, the employer was required to register with the Workers Compensation Board (WCB) as it was determined that the firm had been awarded contracts for the installation of irrigation systems. The firm completed and returned a WCB questionnaire letter which provided details regarding actual workers' earnings for 1997, 1998 and an estimate for 1999. The employer stated that their business activities included installing lawn sprinklers in residential and commercial areas, manual dig 8" deep to install heads, no heavy equipment was involved. The employer was assessed for the years concerned under rate code 402-04, "Plumbing, Mechanical, Insulation".

The employer appealed his being assessed for years prior to 1999 as he was under the impression that the company's activities would be classified as landscaping, an industry not considered compulsory under the Workers Compensation Act (the Act). The employer was of the view that it was unfair to be assessed for prior years as the company was not covered by the WCB and that he would like to see their industry code changed back to the landscaping code. The employer stated that they install their product using "a small walk behind plow to pull in pipe". All other work was manual labour with shovels and workers were hired on a part time basis.

File documentation showed that the employer was registered with the WCB from 1988 to 1992 and was classified under rate code 402-04, "Plumbing, Mechanical, Insulation," a compulsory industry under the Act. During 1995, the name of the classification was changed from "Plumbing, Heat, Vent," to "Plumbing, Mechanical, Insulation". In 1993 the employer advised the WCB that workers were no longer being employed and the assessment file was closed. A review of the file revealed that the employer was never classified as a landscaping operation by the WCB nor was there any documentation indicating that the employer was informed that his activities would be considered landscaping by the WCB.

In a decision of the Assessment Committee, dated September 24, 1999, the employer was notified that the firm must pay the required assessments for prior years and that it was properly classified under rate code 402-04 "Plumbing, Mechanical, Insulation".

The Assessment Committee referred to the Schedule referred to in section 73 of the Workers Compensation Act which states in part,

40 Sewer construction, tunneling, shaft-sinking and well-digging, the maintenance and operation of a waterworks system; excavation work for cellars, foundations and canals; trenching less than six feet deep, for gas pipes, water pipes or wire conduits; and all excavation work where the depth is more than six feet and the width is less than half the depth.

From the employer's own description of his operations, i.e. digging trenches to install the required water pipes for irrigation systems, and given the present classification structure, the Assessment Committee determined that these activities was grouped with similar activities under 402-04, "Plumbing, Mechanical, Insulation."

In December 1999, the employer appealed the above decision to the Appeal Commission. Prior to the non-oral file review scheduled for February 11, 2000, the Acting Registrar at the Appeal Commission contacted the employer to obtain clarification with respect to the nature of the work performed by the company. The employer explained that they use a vibrating plow that trenches or pulls the irrigation pipe into the ground. The machine automatically fills in the trench once the pipe is laid. With respect to connecting to a water supply, this is done with simple "quick connect" adapters. If the property does not have an exterior water supply, the employer would hire a plumbing contractor to put in the necessary piping. With respect to electrical, the employer indicated that the systems work on low voltage and are simply plugged into a normal 110 V outlet. If an electrical outlet was not available, then an electrical contractor would have to be hired to perform the necessary wiring.

Reasons

The facts of this case are almost identical to those in Decision No. 278/94. The firm contests its classification under "Plumbing, Mechanical, Insulation", rate code 402-04. In a memorandum, dated January 10th, 2000, the Acting Secretary to the Assessment Committee outlined the rationale with respect to its decision denying the firm's appeal. "A review of files for other firms engaged in installation and on site repairs of lawn and garden sprinkler systems indicated all companies are classified under 'Plumbing, Mechanical, Insulation', rate code 402-04. All firms engaged in this type of activity are classified as indicated, ensuring a 'level playing field' for competing firms." If the Assessment Committee had reviewed the above decision, it would have become apparent that its foregoing statements were inaccurate.

The appellant firm submitted the following argument in support of its appeal to the Appeal Commission:

"I do not understand why we (Irrigators) are classified the same as Plumbers and Mechanical Contractors. As it stands today we can not do any plumbing work for General Contractors, or ourselves, because we do not have a plumbing licence. We can not do any mechanical contract work because we do not have a mechanical licence. Why are we classified in this category?

In my and other irrigating contractors opinion, we do not fit in this category (code), and should have our own code or to be included in the landscaping code.

It does not take any special training to install irrigation. Just a vehicle, shovels and a strong back. Anybody can install irrigation with no prerequisites."

Section 60.8(5) of The Workers Compensation Act furnishes the Appeal Commission with jurisdiction to confirm, vary or reverse administrative decisions. And section 60(2)(i) conveys jurisdiction to determine:

Whether or not an employer's undertaking or any part, branch or department of an employer's undertaking is in an industry within the scope of this Part, and the class, sub-class, group or sub-group to which an employer's undertaking or any part, branch or department thereof should be assigned.

We agree with the employer that his firm has been incorrectly classified under the "Plumbing, Mechanical, Insulation", rate code 402-04. The employer advised that if the job site did not have an exterior water supply, then he would hire a plumbing contractor to install the necessary piping. Similarly, if there were no electrical outlet available, then he would hire an electrical contractor to do the necessary wiring. We note, also, that when the sprinkler system is installed a walk behind plow to pull pipe is used. Inasmuch as risk is an important factor used in the classification of industries, we suggest that this firm be assigned a more appropriate rate category. Perhaps landscaping might be considered.

Panel Members

R. W. MacNeil, Presiding Officer
A. Finkel, Commissioner
R. Frisken, Commissioner

Recording Secretary, B. Miller

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

Signed at Winnipeg this 29th day of February, 2000