The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The appellant disagrees with the decision made by the AssessmentCommittee of the Workers CompensationBoard ("WCB") to charge a late filing penalty to his firm.  A file review was held on July 2, 2015to consider the matter.

Issue

Whether or not the employer is required to pay the annualpayroll late filing penalty.

Decision

That the employer is required to pay the annual payroll late filing penalty.

Decision: Unanimous

Background

The WCB charged the appellant a late filing penalty when the firm did not submit the Annual Payroll Form on or before February 28, 2014 as required by WCB policy. File records showed that an Assessment Accounts Representative reviewed the file information and found that the appellant had been assessed late filing penalties in each of the past four years. Based on this finding, it was determined that the appellant did not qualify for a reduction.

On August 22, 2014, the appellant appealed the WCB's decision not to waive or reduce the late filing penalty. The appellant's submission stated:

They wish to charge me $105.00 for "some sort" of minimum charge even though I have no employee on payroll this year - I may have one in September if an eligible can be found - I explained this (to) a gentleman at WCB in June and he said to disregard any billing, but to let me know if I did hire an employee in the Fall of 2014. Now they continue to bill me and threaten me by sending a collection agency after me - This is very unfair, unreasonable and unethical to say the least & any charges need to be reversed as such time I have an employee.

The appellant's submission also stated:

1. A charge for what?? They are providing no employee coverage - so no charges are warranted.
2. They have no business leveling arbitrary decisions of this sort - their business is protecting workers.
3. Except for the WCB gentleman I spoke to in June - they have been most unreasonable and I surely do not appreciate being threatened with a collection agency.
4. Please find enclosed (attached) my cover letter. (emphasis original)

On September 24, 2014, the WCB Assessment Committee denied the appellant's appeal. The decision stated, in part, that the employer had been registered with the WCB since December of 2008 and has had late filing notices and late filing penalties applied in each year since 2010. There was no indication of any communication from the employer as to the seasonal nature of his work and associated issues until the 2014 experience.

The Assessment Committee stated that employers are required to file an Annual Payroll Report Form with the WCB on or before February 28 of each year pursuant to The Workers Compensation Act (the "Act"). Firms that fail to file the reports will be subject to late filing penalties as prescribed. In this particular case, the employer was penalized after repeated but unsuccessful requests for payroll information, and therefore he did not qualify for a reduction of the assessed penalties.

On October 30, 2014, the appellant appealed the Assessment Committee's decision to the Appeal Commission and a file review was arranged. On November 12, 2014, the appellant provided the appeal panel with a written submission in support of his appeal.

Reasons

Applicable Legislation and Policy

The Appeal Commission and its panels are bound by the Act, regulations and policies of the Board of Directors.

Subsection 80(1) of the Act sets out the requirement of employers covered by the Act to furnish the WCB with an estimate of their payroll for the following year and at the close of the year furnish certified copies of the payroll. Subsection 86(1) of the Act provides "Where a) an employer refuses or neglects to furnish the board, within the prescribed time, with a payroll return or other statement required under subsections 80(1)…the employer is subject to an administrative penalty…"

WCB Policy 35.05.10 Reporting and Verifying Payroll (the "Reporting Responsibilities Policy") provides the principles to guide the WCB in establishing and collecting assessments from any employer, business or independent contractor who has coverage under the various provisions of the Act. The Administrative Guidelines appendixes to the policy form an integral part of the Reporting Responsibilities Policy. The guideline provides in part:

Registration/Reactivation of Mandatory Coverage

…

· The minimum late-reporting/filing penalty the WCB will charge (if applicable) is $5.00 per calendar year.

Annual Payroll Reporting Requirements for Mandatory Coverage

Annual Payroll Forms ("APF") are sent to registered employers in January of each year. The employer must provide their prior year actual assessable payroll and an estimate of payroll for the current year…Employers are required to complete the APF form and return it to the WCB by the last calendar day in February.

Late or Missed Reporting Deadlines: Mandatory Coverage

· Generally, the date the WCB receives the APF is the date used to determine if penalties apply…

· If the WCB has not received the APF by the end of the 2nd Business day in March, a late reporting/filing penalty will be applied to the Assessment Account provided the information is received before May 1.

Relief of Late/Non Reporting/Filing Penalties

…the WCB will reverse 50% of the employer's late/non reporting/filing penalty if the employer meets all three of the following criteria: (emphasis original)

1. The employer submitted the payroll information within 60 calendar days of the due date.

2. The employer does not have a history of default.

· Assessment Accounts with any late/non reporting/filing penalty or late payment interest charged to their Assessment Account in the two prior calendar years are considered to have a history of default…

3. The employer has cooperated fully with the WCB.

…the WCB will waive 100% of the employer's late/non reporting/filing penalty if the employer meets both the following criteria: (emphasis original)

1. The employer submitted their payroll information within 60 calendar days of the due date.

2. The cause or reason for the delay was beyond the control of the employer. This would include:

· The death or serious illness of an employee, an owner, or a family member of the owner(s) of the business.

· A natural disaster (e.g. flood or fire), where the employer has been directly impacted.

· A technical problem encountered when submitting the APF, provided the employer can provide proof…

Employer's position

The appellant was self represented and on his appeal form he noted he had notified the WCB in December 2013 that he had planned to have no employees in 2014. He was informed by a WCB employee to ignore erroneous billings and to call them if later in the year (2014) he decided to hire anyone. To support his appeal he included a copy of the letter he states he submitted the prior December. The letter stated:

This is to inform you that my one last employee has retired and thus I will have no employees for 2014, so please cancel my W.C.B. account with you, effective as of Dec 31, 2014 (sic).

The appellant noted that for the year 2014 he did not submit any estimate and before he was able to inform his accountant of this they had submitted an estimate. He further noted that it was his error that he did not inform his accountant of his non-hiring intention but questioned why the WCB would be asking for an estimate when he had asked to have his account cancelled.

Analysis:

The key issue to be determined by the panel deals with the employer's entitlement to relief of a late filing penalty. In order for the appellant's appeal to be successful the panel must find the employer qualifies for relief under the policy. For the reasons that follow, the panel is unable to make this finding.

The documentary evidence on file shows the business is a mandatorily covered industry since 2008. The evidence further shows that they had filed their APF on April 26, 2011 for the 2010 actual payroll and the 2011 estimated payroll.

On March 9, 2011 the firm was notified that they were in default as their APF had not been received by the due date of February 28th.

On May 24, 2011, the appellant appealed the decision by stating:

As I am not back in the country until near the end of April each year, I strongly protest the 5% ($8.94) late filing fee and kindly ask that you reverse this charge.

As I do not have a receptionist secretary your earlier statement was not dealt with in a timely manner - I do regret this and will make efforts in future for someone to carry any correspondence from you, to my accountant while I am away, so she can deal with same.

In decision letter dated June 8, 2011 the Assessment Account Representative noted the appeal was denied as the firm had a two year prior history of being penalized for filing late, with the last being April 27, 2010.

In subsequent years the APF was filed April 24, 2012, April 22, 2013 and April 29, 2014.

The panel notes the appellant's reason stated for the late submissions was due to his being out of the country until April each year. The panel finds that the appellant has a documented four year history of late filing well beyond the end of February but prior to May 1st each year.

The panel places little weight on the employer's submission on October 30, 2014 regarding a December 8, 2013 letter to the WCB informing them of a plan to have no employees for the 2014 year that the appellant asserts was sent at that time. There is no record of such a letter on the firm's account file and no indication that the appellant brought this to the attention of Assessment Services during the intervening year while pursuing an appeal with Assessment Services and prior to his final appeal to the Appeal Commission.

The panel read all correspondence on the file and notes the employer made two notations that he would redirect his WCB mail to his accountant to deal with the filing of his APF by the end of February in order to comply with the WCB's filing deadlines. This was finally accomplished when the APF was signed and submitted by the accountant on February 4, 2015. The panel finds this extended time frame between the appellant's letter of May 24, 2011 and his handwritten note on his 2014 APF to be a lack of cooperation with the WCB and all of these delays were within the control of the employer.

The panel finds that the appellant's business does not meet any part of the policy and its guideline that allow for relief of late filing. Therefore it follows that the employer is required to pay the annual payroll late filing penalty. The employer's appeal is dismissed.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
P. Walker, Commissioner

Recording Secretary, B. Kosc

A. Scramstad - Presiding Officer

Signed at Winnipeg this 12th day of August, 2015