Decision #122/03 - Type: Workers Compensation

Preamble

An Appeal Panel hearing was held on September 25, 2003, at the request of the appellant. The Panel discussed this appeal on September 25, 2003.

Issue

Whether or not the firm's activity has been properly classified.

Decision

That the firm's activity has been properly classified.

Decision: Unanimous

Background

Information on file revealed that the firm's activity was classified by the Workers Compensation Board (WCB) under industry code 503 08 "Taxi".

On April 21, 1998, the firm's general manager expressed his opinion that the firm was being assessed improperly and was charged too high of a premium. The letter indicated that the WCB lumped their office staff along with the taxi drivers under the taxi category. As the office staff did nothing except normal office duties, they should have a much lower assessment rate than the taxi drivers who worked out on the streets.

In a decision by the Assessment Committee dated May 25, 1998, it was determined that the firm's activities would remain classified under industry code 503 08 "Taxi". The decision stated, in part,
"In this case, the employer is in the business of operating a taxi service. This type of activity falls within the compulsory provisions of the Act under "transportation". The work performed by office staff is considered incidental to the business of operating the taxi service. Office workers are engaged solely for the purpose of operating the taxi service. In the absence of the taxi service, the office would have no reason to exist. Therefore, the office workers are in place for the sole purpose of serving the taxi service. As such, all workers involved in the operation of a taxi service should be classified under the industry code 503 08 "Taxi"."
On February 11, 2003, the firm's general manager asked the Assessment Committee to review its current classification under the industry code 503 08 "Taxi". The general manager maintained that the assigned category was inappropriate and he submitted details with respect to the firm's organizational structure.

On May 8, 2003, the Assessment Committee reconfirmed its previous decision from 1998. The decision stated, in part, that the WCB classified the firm's operations as a whole and that their classification (503 08 Taxi) applied to both the dispatch service and independent operators. Although the firm argued that each independent operator was a separate legal entity, there was no question these operators and the dispatch service existed to support each other. The Assessment Committee stated that in their own way, the firm agreed that the taxicab operation cannot exist on its own without the dispatch service. On May 22, 2003, the Assessment Committee's decision was appealed by the firm and an oral hearing was arranged.

Reasons

The firm’s advocate presented an extremely articulate and most persuasive case on behalf of his client. The presentation was well organized and very succinct. Needless to say, we were impressed with the rationalization that was advanced with respect to the firm’s being improperly classified.

However, as pointed out to the advocate and the general manager of the appellant firm, we, as an Appeal Panel, were bound to apply the provisions of The Workers Compensation Act (the Act), regulations to the Act as well as any policies enunciated from time to time by the WCB’s Board of Directors. It should be noted that the WCB’s classification manual under industry code 503 08 specifically states:

“The employers in this class operate a taxi. These employers provide local personal transportation on a fee basis. This operation covers large fleets as well as individuals who own their own vehicles.

This class includes a dispatch service for taxis, horse drawn carriage service, and a rickshaw service.” (Emphasis ours)

The main thrust of the appellant firm’s argument was as follows:

“It [i.e. the firm] specifically provides a service of receiving telephone calls and channeling them to a service provider. That is what [firm name] does. We have no association with the traditional industry so to speak in service delivery. We’re a call centre.

…We think that the fact that our services are utilized by another legal entity out there to provide transportation services is irrelevant, it is an incidental connection.

We are not asking for categorization or different category -- we are not asking to be placed in a different category based on occupation, we’re seeking that distinction based on function.

Again, the functional relationship is very important, it is emphasized by the assessment committee. We agree with that characterization, absolutely agree that if there is an industry or a firm that is multi-functional where various functions are performed, it is appropriate to relate it to the industry.

But in this case the functional distinctions are very, very concrete. We do not have a multi-functional organization.

This corporate entity has single function.”

The evidence confirms that the dispatch service/call centre “is owned by the individual shareholders, who are also owners of operating licences they operate their taxicabs.” In addition, one hundred per cent of the business of the appellant firm is the provision of dispatch services to taxicab drivers and more specifically only to those who are shareholders of this particular firm. The appellant firm’s revenues are exclusively provided by the taxicab operators themselves.

The evidence further establishes that 60-70% of the cab drivers’ calls are derived from the dispatch services of the appellant firm. We find based on the preponderance of evidence that the dispatch service is both incidental and essential to the operation of the taxi service. We also find that the appellant firm falls within the WCB industry code 503 08. Accordingly, the firm’s activity has been properly classified.

As an aside, the relief being sought by this particular firm is beyond our jurisdiction in light of the provisions contained in WCB policy 35.20.10, which states in part as follows: “It [the policy] establishes criteria for determining when employers will be considered ‘associated’ and whether they will be classified separately or together. It also establishes criteria on how the WCB will classify an employer whose business includes a non-compulsory component.” The firm may possibly be better served by requesting the WCB for an industry audit or alternatively seeking legislative and/or policy change.

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 23rd day of October, 2003

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