Decision #147/11 - Type: Workers Compensation

Preamble

The appellant is appealing a decision of the Workers Compensation Board ("WCB") Assessment Committee which determined that the off-reserve work performed by employees of the firm was required to have mandatory WCB coverage. A hearing was held on August 25, 2011 to consider the matter.

Issue

Whether or not off-reserve work performed by employees of the firm requires mandatory WCB coverage.

Decision

Off-reserve work performed by employees of the firm does not require mandatory WCB coverage.

Background

The firm is a health care centre incorporated under the laws of Manitoba which is fully owned by a First Nation. The firm's mandated purpose is to deliver health care services to its members who live on reserve.

On November 8, 2008, an employee of the firm emailed the WCB requesting information on WCB coverage. The email stated:

Can you provide information about rules regarding employees of First Nation organizations on-reserve (federal lands)? We are a health organization and interested in coverage for our employees. If it is not mandatory that our employees be covered, can we voluntarily opt to obtain coverage and what is the cost?

On November 17, 2008, a WCB representative spoke with the employee regarding the business activities of the firm. The WCB file notes stated:

[Employee] indicated that the health care centre is on the reserve and ll employees work on the reserve with the exception of the mediacl (sic) transportation that they provide the patients to and from the hospitals. The patients are transferred to various hospitals in the community and the drivers leave the reserve to transport the patients. She indicated that they will provide an email to me to outline the business activities on and off the reserve. They transport them by van for dr's appt or ambulance for emergencies.

She's aware that drivers that transport the patients are in a compulsory industry and aware that we go back two years from current year reporting. Also late filing penalties apply, she's aware of that.

By letter dated February 24, 2009, the WCB advised the firm that registration was required for employees who work off the reserve. Over the next nine months, a series of letters requesting information were sent by the WCB to the firm.

On November 20, 2009, a consultant for the firm spoke with a WCB representative. Subsequently, on November 23, 2009, the consultant provided the earnings for the off reserve employees for the years 2006, 2007, 2008 and 2009. She informed the WCB that the employees who transported patients were off-reserve 80% of the time while performing their duties. A WCB registration was set up the same day for the prior years and late filing penalties were applied. A WCB account statement was printed and faxed to the firm.

On November 27, 2009, the consultant contacted the WCB and indicated that the firm was upset with the account statement and the fact that they must register for their medical transportation drivers. She also indicated that the percentages provided earlier were too high. The WCB was informed that the firm would be pursuing the issue of whether it was required at all to report to the WCB for off reserve earnings.

On January 21, 2010, the WCB was contacted by legal counsel acting for the firm. An authorization was provided and a copy of the firm's WCB assessment file was requested.

On March 15, 2010, the firm received an account statement from the WCB showing they had an outstanding balance owing of $14,588.07 as at March 5, 2010.

On May 17, 2010, the WCB's Collection Department sent a letter requesting that the firm submit their 2009 actual workers earnings and 2010 estimate of workers earnings. The letter also requested payment of the outstanding balance.

On May 27, 2010, the firm's legal representative submitted an appeal to the Assessment Committee. It was noted that at no time had the firm sought voluntary coverage for its workers. The firm's position was that the WCB incorrectly determined that the firm fell within a compulsory industry, specifically the transportation industry. Further, it was submitted that the WCB inaccurately determined that the firm was "employing workers in its business operation off reserve". The firm felt that it was not required to cover its workers under The Workers Compensation Act as the firm's business was on reserve, and as such it owed nothing to the WCB. The firm relied on three main points to support its position:

1. Under section 17 of the Excluded Industries, Employers and Workers Regulation, M.R. 196/2005, First Nation employers, engaged in any industry on reserve land, are exempt from compulsory coverage. The firm was a corporation owned solely by and for the benefit of the First Nation. As such, to the extent that the firm carried on its business on the reserve, all of its employees were exempt from compulsory coverage.

2. Assessments are not calculated based on the jobs individual employees perform. The industry classification scheme, under The Workers Compensation Act, follows the primary industry of the employer. The jobs that individual employees fulfill do not determine whether an employer is required to cover those specific workers.

3. Under the Excluded Industries, Employers and Workers Regulation, health care services are an excluded industry, pursuant to subsection 16(1).

On June 30, 2010, the Assessment Committee denied the firm's appeal and found that the off-reserve work performed by employees of the firm was required to have mandatory WCB coverage. The Assessment Committee stated that based on a prior decision from the Appeal Commission (Public Decision 39/2009), the coverage was mandatory. The following passage from Public Decision 39/2009 was quoted by the Assessment Committee:

The legislation very clearly limits the exclusion to industry or business by an Indian or Indian band while on reserve land. If the exclusion was meant to apply to all business activities by an Indian or band regardless of where it occurs, then the words "on reserve land" would not have been included in paragraph 46 (now paragraph 17). We find that the intent of the regulation is quite clear and is meant only to apply to activity occurring on a reserve. The panel acknowledges that an argument could be made to say that an off-reserve activity reasonably ancillary to an excluded industry or business under paragraph 46 should also be excluded. On the facts of this case, however, we find that the transportation duties being performed by the medical drivers cannot be considered "ancillary".

Following the release of the June 30, 2010 decision, the firm's legal representative contacted the Assessment Committee expressing concerns about the adequacy of the Assessment Committee's deliberations, and asked to provide further submissions on the assessment appeal.

On August 4, 2010, the firm was informed that the Assessment Committee would be reconsidering the assessment appeal and the firm was granted an opportunity to provide a further submission.

On September 14, 2010, the Assessment Committee met to further consider the issue. At that time, the Assessment Committee confirmed its earlier decision of June 30, 2010 in which it determined that the off-reserve transportation component of the firm was engaged in a compulsory industry for which workers compensation was required. In making its decision, the Assessment Committee stated its rationale as follows:

Appeal Decision No. 39/2009

Although Assessment Committee acknowledges that it could have used clearer language in describing the use to which it put Appeal Decision No. 39/2009, Assessment Committee does not agree with your characterization that it wrongly fettered its discretion by relying upon Appeal Decision No. 39/2009 in coming to a decision in this case.

You will note that Appeal Decision No. 39/2009 upheld the decision made both by the primary decision-maker and by the Assessment Committee with respect to a business that appears to be in all material respects the same as your client's business - namely, transporting individuals from a Reserve to an off-reserve location and back for health purposes. The Assessment Committee agrees with the decision reached by the Appeal Commission in Appeal Decision No. 39/2009 and with its reasoning in coming to that decision.

Section 60 of The Workers Compensation Act (the "Act") provides as follows:

Legal precedent

60(4) The decisions of the board shall always be given upon the real merits and justice of the case; and it is not bound to follow strict legal precedent.

While the WCB "is not bound to follow strict legal precedent", it is not precluded from following a precedent with which it agrees, as occurred in this case. "The real merits and justice of the case" includes treating similar facts in a similar way.

The WCB's Jurisdiction

Assessment Committee does not agree with your argument that "once the WCB has made a determination that the employer is an Indian or an Indian Band carrying on any industry or business on reserve land the WCB's jurisdiction ends." The WCB can and does regularly make determinations that a particular employer is carrying on a number of different industries (see, for example, Policy No. 35.20.10 - Classification of Employers into Sub-Groups).

Sometimes an employer operates in a number of compulsory industries to which different industry codes and rates may be assigned. Other times, an employer may operate in both a compulsory and a non-compulsory industry. There is no jurisdictional impediment to the WCB making the determination that an employer is operating both a compulsory and a non-compulsory industry.

The issue in this case is whether the Health Centre is operating a compulsory industry off-reserve in addition to a non-compulsory industry on-reserve. Assessment Committee has determined that the transportation component is a separate industry which is operating off-reserve. This determination is based on the following facts:

· Employees of the Health Centre who transport patients do not do any other work for the Health Centre - their sole occupation is transporting patients;

· These employees spend approximately 80% of their time off reserve either driving patients to appointments or waiting for patients to finish at their appointments;

· Although all transports either begin or end on the reserve, the greatest distance travelled and time spent is off reserve.

· No medical care is provided during transportation - it is purely a transport service.

The WCB accepts that the clients of the Health Centre must sometimes leave the reserve to obtain health care. However, it does not follow from this that the transportation component is necessarily incidental to the operation of the Health Centre. The Health Centre and the transportation component could be operated by two separate entities. The fact that they are operated by the same entity does not exempt the transportation component from coverage. The Assessment Committee finds, the transportation component is a separate entity operating off reserve. Therefore, it is subject to compulsory workers compensation coverage.

On November 8, 2010, the firm's legal representative appealed the Assessment Committee's decisions (June 30, 2010 and September 27, 2010) to the Appeal Commission and a hearing was scheduled for August 25, 2011.

In the meantime, by letter dated March 1, 2011, the firm's legal representative forwarded information to the WCB which provided a breakdown of the time spent by the firm's employees driving off reserve. According to the calculations, none of the employees were driving off reserve more than 25% of the time and it was submitted that any assessment amount calculated by the WCB should be calculated as 25% of the three drivers assessable earnings, to reflect the reality of the time spent driving on the reserve versus off the reserve.

As a result of this information, the WCB reduced the outstanding assessment to $5,437.38. It also agreed to suspend collection proceedings against the firm and its directors pending the outcome of the Appeal Commission hearing.

Reasons

Chairperson Choy and Commissioner Finkel:

Applicable Legislation and Policy

The Appeal Commission and its panels are bound by The Workers Compensation Act (the “Act”), regulations and policies of the Board of Directors.

Part I of the Act establishes the compensation system and sets out the rights of workers and employers under the system. Section 2 of the Act provides that Part I applies to all employers and all workers in all industries in Manitoba except for those excluded by regulation. Thus the Act operates under an exclusionary coverage model which means that WCB coverage is mandatory, unless specifically excluded.

Manitoba Regulation 169/2008, Excluded Industries, Employers and Workers Regulation (formerly Man. Reg. 196/2005)(the “Regulation”) lists the industries, employers and workers which do not fall under the mandatory coverage. Section 17 (formerly section 46) of Schedule A of the Regulation deals with Indian bands and provides the following exclusion:

Industry or employer on reserve land

17 Carrying on of any industry or business by an Indian or an Indian band or bands on reserve land, including the management and operation of the band and band council.

(Where the industry or business is carried on by a corporation or partnership, the majority ownership must be held by an Indian or Indian band.)

Previous Appeal Commission Decision

The Appeal Commission has, in a previous appeal, been requested to consider the exclusion contained in section 17 of the Regulation. In Public Decision 39/2009, the panel conducted a file review of an appeal filed by a firm who objected to being registered as an employer in a compulsory industry and being assessed premiums in respect of the off reserve work performed by its medical drivers. The firm in that case was also an undertaking carried on by a First Nation which provided community health prevention and educational programs on reserve land. The Assessment Committee determined that the work performed by the firm's employees while off reserve was compulsory and therefore the medical drivers' earnings while off reserve were to be reported to the WCB and assessed.

In Public Decision 39/2009, the Appeal Commission upheld the Assessment Committee's determination and found that the section 17 exclusion did not apply to the drivers as they were hired only to transport people and their work was performed off reserve land on a regular basis. The panel confirmed the approach taken by the Assessment Committee whereby the location where work was performed by employees was the primary consideration, and assessment was based on the amount of payroll which was "earned" while off reserve.

A consequence of this approach was that a specific analysis of when and to what extent work was performed off reserve would be required for each employee. In its written reasons, the panel recognized that there may be occasions where an employee who would normally be captured under the section 17 exclusion may be required to go off-reserve in the course of duties, and the panel left open the possibility that an off-reserve activity reasonably ancillary to an excluded industry or business could also be excluded.

Submissions

Appearing at the hearing was legal counsel for the firm, accompanied by the firm's Medical Transportation Coordinator. Also appearing was legal counsel for the WCB, who, prior to the hearing, requested and was granted standing to participate in the appeal as a party with a direct interest in the matter. Both the firm and the WCB were of the position that the Assessment Committee took an incorrect approach towards the interpretation of the paragraph 17 exclusion for "industry or employer on reserve land". It was submitted that the approach of splitting one industry between compulsory and non-compulsory based on how much work was done on and off reserve was not supported by the legislation and was inconsistent with the analysis used by the WCB for other exclusions contained in the Regulation.

The proper approach was to consider the business of the firm as a whole, and classify the employer as set out in WCB Policy 35.20.10, Classification of Employers in to Industry Sectors and Sub-Groups (the "Policy").

The opening paragraph of the Policy reads as follows:

When the Workers Compensation Board (WCB) sets an employer's assessment rate, it first assigns each employer to the appropriate industry sector or sub-group based on the industry of the employer. Where an employer's business includes a number of different departments engaged in a variety of industrial activities, the WCB may classify the entire operation based on the principal activity, or may classify each department separately.

It was submitted that the exemption from mandatory coverage under the Act flows to the business itself, and not the workers directly and that it was inappropriate to hive off particular groups of workers for coverage, as this was contrary to the presumption set out in the Policy. The presumption in the Policy was that an employer will be assigned to one sub-group unless the employer qualifies for more than one sub-group in accordance with the criteria established under the Policy. Industry sub-groups are not assigned based on the jobs individual employees do. The industry classification scheme under the Act follows the primary industry of the employer. The jobs that the individual employees fulfill do not generally determine whether an employer is required to cover those specific workers.

In this case, it was submitted that the firm fell within the section 17 exemption as it was owned by a corporation which was controlled by a First Nation and it operated on reserve land. The question was whether patient transportation was integral to, or a necessarily ancillary part of, the firm's business. If it was, then the work performed by the drivers, regardless of whether it occurred on or off reserve, should also be exempt.

Counsel for the WCB further submitted that if the panel concluded that patient transportation was not part of the firm's business (or necessarily ancillary to it), then the work performed by the drivers may still nevertheless be excluded if the panel accepted that a majority of the drivers' time was spent on reserve. This is because the patient transportation, as a separate industry in and of itself, would still fall within section 17 as a business carried on by an Indian or Indian band on reserve land.

If, on the other hand, a majority of the drivers' time was spent off-reserve then the business would not be "carried on" on reserve land, and the exemption would not apply. The business would then be subject to assessment by the WCB, which would include all travel regardless of whether it occurred on or off reserve.

Overall, the approach supported by the firm and legal counsel for the WCB focused not on where the individual employees were actually performing the work at a particular moment in time, but rather examined where the business operated. The exemption applied to the business of the firm, not to the particular task being performed by the employee.

Analysis

In this appeal, the panel is asked to choose between two approaches towards the interpretation and application of the exclusion contained in section 17. In the majority's opinion, both interpretations are sustainable on the wording of section 17. Assuming that it is already established that the industry or business is being carried on by an Indian or Indian band, the two alternative approaches can be summarized as follows:

Approach A - Collection of data regarding the geographic location of employees while performing work, and the exemption applies only to the wages earned by employees while physically on the reserve. The proportion of wages earned by employees while off reserve would be subject to assessment. This approach would also incorporate some provision for off-reserve activity reasonably ancillary to the firm's on-reserve industry or business, which may also be excluded from assessment.

Approach B - The industry or business being carried on by the firm as a whole is considered and classified in accordance with the principles and criteria set out in the Policy. Where the business includes a number of different departments engaged in a variety of industrial activities, the entire operation may be classified based on the principal activity, or each department may be classified separately.

The majority recognizes that Approach B is at odds with Approach A which was endorsed by the Appeal Commission in Public Decision 39/2009. It is notable, however, that Approach B was never previously presented or argued before the Appeal Commission. After consideration of the merits of each approach, both in terms of integration with the scheme of the Act as a whole and in terms of the practical logistics of administering the scheme, the majority finds that Approach B is to be preferred. Our reasons for so finding are as follows:

  • The majority accepts that classification according to the employer's business rather than the employee's specific activity and geographic location is more in keeping with the analysis used for other exclusions contained in the Regulation and leads to greater consistency in administration of the Act.
  • WCB legal counsel submitted that section 17 and its predecessor exclusions were notoriously difficult for the WCB to interpret and apply, and that First Nation businesses have evolved significantly from the time that the board order was originally written. The majority recognizes that times change and we are therefore inclined to give less weight to historic application and more weight to pragmatic effect.
  • The majority has concerns regarding the practical challenges associated with the collection of data necessary for Approach A. For example, how is the payroll to be apportioned? It could be according to amount of time spent off reserve, or to distance, or to the time period when wages are earned. There are also uncertainties as to when employees would be considered to be off reserve. At the hearing, evidence was submitted regarding the uncertainty regarding the legal boundaries of the reserve. The question of when an activity might be considered "reasonably ancillary" would also need to be delineated.
  • It was noted that most, if not all, reserve industries would involve some off reserve activity. For example, employees may need to leave the reserve to pick up supplies or attend meetings or training. The WCB does not inquire into off reserve activities in those cases.
  • It was argued by the firm that the wording of section 17 does not limit the exclusion to businesses "while" on reserve and the interpretation used in Approach A effectively narrows the exclusion and thus changes the scope of the exclusion. We accept this statutory interpretation argument.
  • It is notable that there are no parties present who are arguing for Approach A. The Assessment Committee minutes make it clear that their decision was largely influenced by the previous Appeal Commission decision. We were not presented with any compelling arguments as to why Approach A ought to be favoured over Approach B.

In application Approach B to the present facts, the majority finds that we do not need to go farther than the first stage of the Approach B analysis. When considering the business of the firm as a whole, the majority finds that the health centre is engaged in providing the delivery of services to the members of the First Nation who live on reserve. As such, the firm's business clearly falls within the section 17 exclusion. The transportation division of the health centre is fundamentally part and parcel of the delivery of healthcare and is therefore also covered by the section 17 exclusion. The evidence does not support a finding that the transportation service drivers are operating as a separate industry. The evidence at the hearing was that the health centre had approximately 87 employees, and seven of these employees worked as part of the transportation program. There were five drivers, an administrative assistant and the medical transportation coordinator. The salaries and benefits constituted less than 10 percent of the salary and benefits for the whole operation. The reserve itself was geographically spread out over sixty-four square miles and physically divided by a body of water. The unemployment rate was high and many residents did not have the use of a vehicle. There is no taxi, bus or other public transportation available. If the health centre did not offer a transportation component, it was submitted that it could not function because people would not be able to access its services. The majority accepts this submission as an accurate reflection of the firm's business.

It is acknowledged that a proportion (approximately 25%) of the service drivers' work takes place off reserve. This, however, is of no great significance in our analysis as we have found that the transportation component is an integral part of the health centre's business and that business is without doubt predominantly carried on within the boundaries of the reserve.

Based on the foregoing, the majority is satisfied that the transportation services are integrally connected to the delivery of healthcare by the firm and should not be considered a separate industry. We therefore do not need to engage in the second stage of the analysis which would be to consider whether the transportation service department in and of itself would be an exempt business under section 17.

The majority therefore finds that the "off" reserve work performed by the employees of the firm does not require mandatory WCB coverage. The firm's appeal is allowed.

Panel Members

L. Choy, Presiding Officer
A. Finkel, Commissioner

Recording Secretary, B. Kosc

L. Choy - Presiding Officer

Signed at Winnipeg this 10th day of November, 2011

Commissioner's Dissent

Commissioner Walker's Dissent:

The panel has been asked to make a finding that "off reserve" work is not compulsory by extension of the Act and the Regulation that exempts a First Nation business conducted "on reserve". I am unable to make that finding for the reasons that follow.

Reasons:

Applicable Legislation:

The Appeal Commission and its panels are bound by The Workers Compensation Act (the “Act”), regulations and policies of the Board of Directors. Section 2 of the Act provides, in part, that:


2. This part applies to


(a) All employers and all workers in all industries in Manitoba except those excluded by regulation under section 2.1 (exclusion);

Subsection 2.1(1) provides, in part, that:

2.1(1) The Lieutenant Governor in Council may, by regulation, exclude an industry, an employer or workers from being within the scope of this Part and, in doing so, may

(a) Provide that the regulation applies to only part of the province or the whole of the province;

Regulation 196/2005, Excluded Industries, Employers and Workers Regulation (the "Regulation") was established after consultation with industries, employers and workers pursuant to Subsection 2.1(2) of the Act which requires the WCB to consult with affected industries, employers and workers before a regulation can be made.

Paragraph 46 of Schedule A of the Regulation dealt with Indian bands and provided the following exclusion:

Industry or employer on reserve land

46. Carrying on of any industry or business by an Indian or an Indian band or bands on reserve land, including the management and operation of the band and band council.

(Where the industry or business is carried on by a corporation or partnership, the majority ownership must be held by an Indian or Indian Band.)

Regulation 196/2005 was amended August 9, 2006 to repeal Sections 10, 33, 49, 50, 56, 62, 80, 81, and 90 and further amended November 4, 2008 to repeal sections that make compulsory other industries and employers pursuant to Subsection 2.1(2) of the Act. The new Regulation 169/2008 renumbered paragraph 46 to become paragraph 17 with no change to the exemption.

Evidence:

This First Nation reserve in which a Health Center ("Center") is situated is centrally divided by a river flowing east to west with a main road along each side of the river. A bridge to cross the river is located east of the First Nation reserve and outside the boundaries. Travelers leave and re-enter the reserve via a 9 kilometer route to access the north and south sides of the First Nation reserve. A Regional Health Association ("RHA") General Hospital is located in a neighboring town 2 kilometers from the south east boundary and 7 kilometers from the north east boundary.

At the hearing, the employer submitted evidence regarding services available at the Center in two buildings one half kilometer apart, located on the south side and fully within the First Nation boundaries. A doctor and a dentist provide daily appointments, a podiatrist once a week and an optometrist once a month. There are monthly baby clinics for mother and child and various counseling programs for First Nation residents.

Neither the doctor or dentist refer any First Nation patients to their Winnipeg office for a procedure or treatment that they are unable to do at the Center. They do not provide services to their First Nation patients at any other location off the reserve.

It was the employer's evidence that some services are not available or provided by the Center and include treatments such as dialysis, physiotherapy, laboratory testing, imaging such as MRIs and CT scan. These services are provided either at the neighboring RHA hospital or in towns and cities in Manitoba.

The transportation program is restricted to those members who live on the First Nation reserve. Transportation is provided to both "on reserve" and "off reserve" locations. No person living in a community off the reserve is transported.

The employer identified the "on reserve" trips as;

  • Taking people from their homes to the Center to attend medical appointments or programs and then back home.
  • Made constantly in a loop fashion and comprise any number of persons in different locations requiring a ride.
  • Stops at the pharmacy located on reserve for prescription pickup.
  • Pickup of a First Nation member specifically to take to the nearby RHA hospital for dialysis treatment and then return home.
  • Drop off to the nearby RHA hospital for either tests or clinic work after visiting the Center and later picked up at the RHA hospital and taken to their homes.
  • Not all trips include a stop at the RHA hospital.

The employer identified "off reserve" trips as;

  • Trips to see specialists located in [city] with confirmed appointments.
  • Trips for CT scans, MRI, Ultrasound etc in various towns in Manitoba.
  • Trips for surgery or treatments not available at the nearby RHA hospital.
  • Limited to the patient and, in certain circumstances, one escort who is generally a family member.
  • Any trip to an urban location in Manitoba.

For "off reserve" trips, a van makes one trip in the morning to take patients to their appointments, then returns to the First Nation. A second van makes a trip later in the day to those locations to pick up the patients and bring them back to the First Nation.

Analysis:

This appeal is complex and unique as it deals with a geographic exemption rather than an industry or business exemption and included a presentation by the WCB agreeing with the employer's position.

The threshold question is the interpretation of the exemption as defined by the Act and the Regulation, Schedule 'A' paragraph 17 (formerly paragraph 46). I find the wording to be plain and the interpretation unequivocal that the exemption applies to the Transportation Program and only while on reserve land.

The support for this interpretation is in subsection 2.1(1)(a) of the Act, which states that the regulation may apply to only part of the province or the whole of the province. In this case, the part of the province this exemption applies to is the First Nation reserve land only, as the wording in paragraph 17 is "Carrying on of any industry or business…on reserve land" (emphasis added). Had the Legislature wanted to extend the exemption to apply to activities while off the reserve, it would have included wording to that effect.

Historically, the WCB was established in Manitoba under an inclusionary Act with all compulsory industries identified in an attached Schedule. In 2006 the Act was amended to apply to all industries in Manitoba unless excluded by Regulation as noted previously in this dissent. Further, with the debate on April 14, 2005 of Bill 25-The Workers Compensation Amendment Act, the Minister charged with the administration of the Workers Compensation Act (Hansard 38th Legislature, 3rd Session, November 22, 2005 to October 26, 2005, page 1352) stated the following to the house:

The day that Bill 25 is passed in this Legislature, the coverage for Workers Compensation, the industries will look absolutely no different than they look today. I can guarantee the member that. It will be status quo.

To clarify the status quo, I note the original policy adopted by the Board of Directors under Board Order 165/82 Coverage Relating to Indian Reservations provides in part:

"The operation of an Indian Reservation does not come within the compulsory provisions of the Act"

"Where the Chief & Council, or certain members of the band, undertake certain separate projects or businesses, on the Reservation…the operations would not come within the compulsory provisions of the Act"

"Where work which normally comes within the compulsory provisions of the Act is performed within and without the Reservation, the portion of the project performed without is compulsory and the portion of the project performed within is on an elective basis, but both will be assessed at the industry rate." (emphasis added)

The original policy, rescinded by the Board of Directors on May 31, 2006 as being superseded by Regulation 196/2005, is compelling and unambiguous evidence on how the new exemption is to be interpreted. I therefore find that "off reserve" work is not automatically exempt and requires coverage if in a compulsory industry.

The second question therefore becomes; is the transportation of patients that the First Nation drivers are involved in while "off reserve" a compulsory industry covered by the Act. I find the work done while "off reserve" does require coverage as there is no exemption listed in Schedule A of Regulation 169/2008.

According to the employer's evidence, the drivers provide no treatment or medical assistance to the First Nation patients while taking them to their various appointments. The evidence also establishes that the "off reserve" trips are for services and medical treatments not available at the Health Center located "on reserve".

Classification 50309 specifically states:

"Classification 50309 - firms providing transportation to and from medical appointments or treatments, including wheelchair and stretcher service where medical assistance is not provided."

I therefore find that the transportation of First Nation members for appointments to see specialists, or undergo imaging tests, laboratory tests, treatments and surgical procedures requires compulsory coverage and those earnings are assessable.

The employer's counsel suggested that the transportation of First Nation patients is "incidental or ancillary to" the "on reserve" business of the Health Center. The terms "incidental or ancillary" are not defined in the Act or the Regulation and are subject to various interpretations and applications.

I find common interpretations are more applicable in this instance. Incidental is something happening by chance or without intention while carrying out another function. Ancillary means subsidiary or subservient to which denotes being a part of.

The evidence shows that to access the north and south sides of the First Nation reserve, a 9 kilometer "off reserve" route to cross the river by use of a bridge is required. I find that this 9 kilometer route is incidental to the transportation of First Nation patients to or from the Health Center and required due to a barrier of nature. Given this, these trips are exempt from compulsory coverage.

The evidence also establishes that the main task of the transportation is to take patients to the Health Center. Transporting patients for services that are not available on the First Nation reserve are planned events based on scheduled appointments not under the control of the Health Center. I find that the transportation of First Nation patients to urban facilities for services that are not available or provided on the reserve, such as visits to specialists, certain tests, both imaging and laboratory, or treatments is not incidental to the "on reserve" delivery of services by the Health Center. I further find that the urban facilities are not a subsidiary of the Health Center nor subordinate to the Center and as such cannot be considered ancillary.

Employer's counsel submitted that the panel should consider the application of Policy 35.20.10 Classification of Employers into Industry Sectors and Sub-Groups, and find that multi-classification has implications in this case. Given my finding on the interpretation of the exemption guaranteed in Schedule 'A', paragraph 17 of the Regulation while on reserve, I find that the application of the policy quoted by counsel is not needed as all work done off reserve is compulsory.

Both the employer's counsel and the WCB's representative made arguments that suggest if the majority of the work is "on reserve" it is all exempt, if the majority of the work is "off reserve" it is all compulsory. Given my finding on the interpretation of the exemption in Regulation Schedule 'A', paragraph 17 of the Regulation, I find that to include any "on reserve" work would be in violation of the exemption guaranteed in paragraph 17.

For the reasons noted above, I find that "off reserve" work performed by the employees of the firm requires compulsory WCB coverage. I would dismiss the employer's appeal.

P. Walker

Commissioner

Signed at Winnipeg, this 10th day of November, 2011.

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