The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

An Appeal Panel review was held on July 13, 2000, at the request of the employer.

Issue

Whether or not the employer should be charged assessments retroactive to the date workers were employed.

Decision

That the employer should be charged assessments from January 1, 1998; and that any penalties and/or interest that may be payable for failure to pay these assessments should be waived.

Background

On February 17, 2000, a Workers Compensation Board (WCB) Employer Services Representative wrote to the appellant company to advise that the firm's business operations came within the compulsory provisions of the Workers Compensation Act of Manitoba (the Act) and that registration was required. The appellant company employed workers in the retail sale of cellular phones, pagers, accessories and other incidental items. The employer was asked to submit a statement of actual earnings for the years 1998 and 1999 as well as an estimate of earnings for 2000. The appellant company was advised that after the requested information was received, an assessment would be levied at the rates of $0.83 for 1998, $0.67 for 1999 and $0.73 for 2000. In addition, there was a minimum annual assessment of $100.00.

In response to the above request, the appellant company submitted an appeal dated March 15, 2000. It questioned why its firm was considered compulsory as its operation was very low risk. The firm was no different from a bank or a management company as far as a risk element was concerned and both of these areas were exempt from registration. The appellant company argued that it had created a health and medical plan for employees which would be adequate coverage in the course of its day-to-day operations. The firm was of the view that it was unfair of the WCB to ask the firm to pay premiums for the years that it did not have coverage and that there were no compensation claims processed on behalf of any employees. The appellant company asked that the WCB waive any premiums and penalties as it was not informed of the compulsory nature of coverage prior to this.

File information showed that the appellant company's business name was changed from [name of company] to its present name. The WCB sent out a questionnaire in January 1995 requesting the [name of company] to provide details of its business activities to determine whether registration with the WCB was required. A reply was not sent.

On May 2, 2000, the Assessment Committee determined that the appellant's business activities fell within the compulsory provisions of the Act and that the appellant was required to register with the WCB. This decision was reached in accordance with the Schedule under Section 73 of the Act which states that employers engaged in compulsory activities such as the appellant's are required to register with the WCB.

With regard to the overall issue, the Assessment Committee determined that the appellant company must report workers' earnings to the WCB from January 1, 1998. This decision was made in accordance with Subsection 80(7) of the Act. The Assessment Committee noted that the appellant company had been engaging the services of workers in an industry which fell within the compulsory provisions of the Act. Had it responded to the WCB's questionnaire in 1995, it would have been aware of its requirement to register. The employer's failure to provide the proper information to the WCB did not excuse it from reporting workers' earnings from the time it started employing workers.

On May 19, 2000, the appellant company appealed the Assessment Committee's decision and requested a non-oral file review.

Reasons

The WCB's Assessment Committee determined that the appellant employer's business activities fall within the compulsory provisions of the Workers Compensation Act (the Act). As such, the employer was required to register with the WCB.

As part of its May 2nd, 2000 decision letter, the Assessment Committee stated the following:

"In the case of this employer, they have been engaging the services of workers in an industry which falls within the compulsory provisions of the Act. Had they responded to the WCB's questionnaire in 1995, they would have been advised of their requirement to register. The employer's failure to provide the proper information to the WCB does not excuse them from reporting workers' earnings from the time they started employing workers. Therefore, the committee is of the opinion, the employer must report workers earnings to the WCB as of January 1, 1998." (Emphasis ours)

In its appeal submission dated May 19th, 2000 the employer advised:

"The company was a shelved (sic) [shelf?] company in 1995 owned by other principals, and would not have been required to register, even if they (sic) had returned the questionnaire as there was no activity. The company was sold to the present owners in a later year and the name was changed to reflect the new nature of its operation. There was no contact from the WCB since that occurred so that we were uninformed of the compulsory requirements." (Emphasis ours)

We agree with the Assessment Committee's decision that the appellant company is responsible for the 1998 and 1999 payroll assessments. However, we do not feel that it should be liable for any late payment penalties and/or interest for its failing to pay the above assessments. We accept the employer's evidence that it acquired the company as a shelf company and agree that it would not, therefore, have received the questionnaire in 1995.

Panel Members

R. W. MacNeil, Presiding Officer
A. Finkel, Commissioner
C. Monk, Commissioner

Recording Secretary, B. Miller

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

Signed at Winnipeg this 28th day of July, 2000