The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

A non-oral file review was held on February 1, 2002, at the request of a liaison worker.

Issue

Whether or not the Workers Compensation Board should charge the employer premiums for special coverage from January 1, 2001 to August 22, 2001, plus subsequent late payment penalties.

Decision

That the Workers Compensation Board should not charge the employer premiums for special coverage from January 1, 2001 to August 22, 2001, plus subsequent late payment penalties.

Decision: Unanimous

Background

In September 2000, the Workers Compensation Board (WCB) received an application for special coverage for the employer as a sole proprietor of a small logging business. The employer resides in Saskatchewan and sought coverage for a 40 day contract in Manitoba. The application for special coverage was approved effective October 10, 2000.

In a letter dated September 26, 2000, an employer services representative advised the employer that the special coverage would remain in effect until December 31 of any calendar year, unless a request for cancellation was received or the WCB previously cancelled the coverage due to non-compliance with the requirements of the Workers Compensation Act (the Act). The letter also indicated that if payment was not made within the indicated time frame, special coverage would be cancelled and the employer would be liable for the assessment of the period of time coverage was in effect.

The employer did not file the Annual Workers Earnings Report for 2000-2001.

An Employer Services Representative wrote the employer on September 4, 2001. The employer was advised that the WCB did not receive payment of his required premium and as a result, the WCB was canceling his special coverage as a sole proprietor effective August 22, 2001. The employer was given the option of either reinstating coverage or canceling his coverage and submitting a premium of $820.46.

On October 3, 2001, an accountant, acting on behalf of the employer, wrote to the WCB and indicated the following:

"Mr. [the employer], does not read or write well enough to comprehend your letter requesting funds for special coverage for January to August 2001. He did not get the contract for Dwarf Mistletoe eradication in Manitoba for 2001 and did not understand that he should have let your offices know the same. He did not employ any workers and did not need special coverage for himself."

On November 7, 2001, the Assessment Committee confirmed that the employer was responsible to pay the costs of special coverage for [name] from January 1, 2001 to August 22, 2001. The Assessment Committee noted that an assessment for special coverage applied to sole proprietors that had an active registration with the WCB, in anticipation of obtaining work in Manitoba. It was a general principle of insurance that coverage is purchased prior to exposure to risk. Purchasing workers compensation coverage was no guarantee that contract work would be obtained. As the special coverage was in effect, this meant that the WCB would have accepted liability for any compensation injuries suffered by [name]. The employer therefore was responsible to pay the costs of special coverage from January 1, 2001 to August 22, 2001. On December 7, 2001, the employer appealed the Assessment Committee's decision and a non oral file review was scheduled.

Reasons

As the background notes indicate, the appellant is the sole proprietor of a small logging business. On or about September 25th, 2000, he applied to the WCB for special personal compensation coverage. The appellant clearly indicated in his application that he required coverage for only a 40-day period being the term of his logging contract. The requested coverage was to be effective October 10th 2000. A letter dated September 26th, 2000 from the WCB to the appellant confirmed and acknowledged that special coverage would be in effect until December 31st, 2000. There was no indication of any automatic renewal. We note that the appellant did not secure the contract for 'dwarf mistletoe' eradication in Manitoba for 2001.

Notwithstanding several requests by the appellant's general contractor for a clearance certificate, it is evident from a review of the file that the request for clearance was with respect to "mistletoe cutting started Oct 9, finished mid Dec." Both the general contractor and the appellant's accountant advised the WCB that the appellant undertook no work in Manitoba for the year 2001.

We find based on a preponderance of evidence that the WCB should not have charged the appellant special coverage premiums for the period from January 1, 2001 to August 22, 2001 together with late payment penalties. The appellant's appeal is hereby allowed.

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 27th day of February, 2002