Decision #137/01 - Type: Workers Compensation
Preamble
An Appeal Panel hearing was held on September 20, 2001, at the request of the employer. The Panel discussed this appeal on September 20, 2001.
Issue
Whether or not the Workers Compensation Board should charge the employer a late filing penalty.
Decision
The Workers Compensation Board should not charge the employer a late filing penalty.
Background
The Workers Compensation Board’s (WCB) Employer Services branch automatically charged a late filing penalty of $1,106 to the appellant after it did not submit its “WCB Annual Worker’s Earnings Report for the Calendar Years 2000 and 2001” until eight calendar days past the February 28, 2001 due date. In a letter to the WCB’s Assessment Committee dated April 18, 2001, the appellant requested relief of the late filing penalty based on the following explanation:
“….I was one week late due to an oversight on my part. We have a company in Ontario and the WSIB is due on March 31, 2001 and I marked the date on my calendar as being so, overlooking the fact that Manitoba WCB is due on February 28. As soon as I realized the oversight I sent in the worker’s earnings report immediately.
At the same time I had just gotten a new computer system and was having great difficulty getting electronic T-4s off my system. I barely had them in on the due date. [company’s name] is a new company (we just opened the doors at the end of December 2000). I was trying to have them completely set up on to my new system and was dealing with the usual kinks involved with such a task.
Both of the companies were in a credit position at the end of the year 2000 and I have not had many problems in the past in making my payments. The only issue in 2000 was a cheque I had dropped off for EMA in the drop box and the mailroom sent it to Ontario without opening it to see the Manitoba remittance form inside.”
The Assessment Committee ultimately decided on June 5, 2001 that the appellant would only be required to pay $553.00, which was 50% of the original $1,106 penalty. The Assessment Committee noted WCB policy 35.40.10 listing the criteria necessary before relief from penalties and interest charges could be provided. It determined that the appellant met the criteria for relieving 50% of the late filing penalty. “This was because you have provided the required payroll information within 30 calendar days of the due date, and your firm has no prior history of default. The Assessment Committee does not feel your firm qualifies for 100% relief because the timing of your response is within your control.”
On June 14, 2001, the appellant appealed the Assessment Committee’s decision and an oral hearing was arranged.
Reasons
Section 86(1) of The Workers Compensation Act (the Act) imposes a penalty on an employer where the employer neglects to furnish a payroll return within the prescribed time. However, according to section 86(3) the WCB may relieve the employer in whole or in part from having to pay this penalty if it is satisfied that the employer's default was excusable. In addition to the relief granted under the Act, WCB policy 35.40.10 outlines the criteria under which all of the penalty may be relieved:
"The WCB may grant relief of the penalty which would otherwise be imposed under subsection 86(1) according to the following criteria:
- 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.
- A default will generally be considered excusable and relief of up to 100% of the penalty amount may be provided where the cause of the default was beyond the control of the employer, the employer does not have a prior history of default, the employer has cooperated fully with the WCB, and the default does not extend beyond 60 calendar days."
The Assessment Committee determined that the employer did not qualify for relief of penalty under part a) of the policy because the default was 1 business day past the allowable 5-day limit. As well, the Committee refused to grant relief under part c) of the policy because it was not convinced that the default was beyond the employer's control. Mention was made of the fact that "All firms that do not submit the required form on time are sent a reminder letter in early March."
The employer's bookkeeper testified at the hearing that no reminder notice was ever received from the WCB.
"I did not get a notice, no. They said I had gotten some written notice, that's what had made me aware that I hadn't submitted the report, but actually I had been going through all my reports and all my - like I have a file with all the remittances and reports that are due and I started to go through that to complete them, and that's when I became aware. And I actually called. I don't - I mean I have no record of a letter, a reminder letter, for that report. I went through my file."
It should be noted that there is no copy of any correspondence on file confirming that the WCB had sent a reminder letter to the employer.
The employer's bookkeeper further testified about the circumstances beyond her control, which resulted in the late filing of the WCB's annual earnings report.
"[S]o I started to print T4s on February 26th, and the patch actually did correct some of the problems, but there were still some problems. So I had to go into the file and manually edit, and I believe we had over 1,000 employees that I had to flip through the files to change them manually. So I actually only got my T4s in at the end of February, right on the due date.
So at this time I was behind, because I do all the accounting, I do all the accounts payable and all the payroll and all the bank statements and everything for all - at that time it was ten locations and three companies. So I was catching up my day-to-day stuff nd when I had sat down to do the reports, like it was around March 8th. I had sat down to do the reports and I pulled out all my things, because I wanted to have them in on time.
I noticed the due date for the Workers Compensation report was due actually February 28th. At that time I immediately called Workers Compensation and told them that I just realized that I had overlooked it and I would submit it immediately to them. So I filled out all the information and reviewed everything, made sure it was accurate and faxed it on that day."
We accept the bookkeeper's evidence that she immediately contacted the WCB to advise that she had inadvertently missed the filing deadline. We further accept her evidence that this omission was an oversight because of a serious work overload. The overload had occurred as a result of computer software problems, which in turn eventually delayed the processing of 1000 T4 Canada Customs and Revenue Agency forms required to be issued at the end of February.
Pursuant to section 86(3) of the Act, we are satisfied based on the particular circumstances of this case that the employer's default was entirely excusable. Accordingly, 100% relief of penalty is hereby granted. In addition, we further find that the employer also qualifies for relief of penalty in accordance with parts 1(a) and 1(c) of WCB policy 35.40.10. We note that the employer submitted the necessary forms 1 day after the 5-day grace period had expired. We feel under the circumstances that this is an appropriate case in which to extend the 5-day period. Also as previously outlined, there were certain contingencies beyond the control of the employer's bookkeeper, which ultimately contributed to the late filing of the earnings reports. In our view, the cause of the default was beyond the control of the employer. Inasmuch as the employer has no prior history of default, the employer has cooperated fully with the WCB and the default did not extend beyond 60 calendar days, the default is therefore excusable. We hereby grant 100% relief of penalty and allow the employer's appeal.
Panel Members
R. W. MacNeil, Presiding Officer
A. Finkel, Commissioner
M. Day, Commissioner
Recording Secretary, B. Miller
R. W. MacNeil - Presiding Officer
(on behalf of the panel)
Signed at Winnipeg this 30th day of October, 2001