The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The employer is appealing the decision made by the Workers Compensation Board ("WCB") that they are required to pay a late filing penalty of $508.25. A file review was held on September 13, 2016 to consider the employer's appeal.

Issue

Whether or not the employer is required to pay the reduced late filing penalty of $508.25.

Decision

That the employer is required to pay the reduced late filing penalty of $508.25.

Background

File records show that the employer did not file their Annual Payroll Form on or before the end of February and that filing penalties were assigned to the account. The decision was appealed by the appellant on the basis that he was new to the position (he started in August 2015) and had not been involved with the filing of payroll reports. The appellant stated:

"…they never received the 2015 - 2016 Annual Payroll Form. [Name] mentioned that he received the rate letter in December 2015, and the next mail from the WCB that was received was the reminder letter for filing the Annual Payroll Form. The form has never been late.

He wants to appeal the late filing charge because he was not aware of the required filing and he did not receive any information from us advising the report was due by February 29."

In a decision dated March 9, 2016, the employer was advised by Assessment Services that the late filing penalty would be reduced by 50%, as opposed to 100%, based on the criteria outlined in the Administrative Guidelines of WCB Policy 35.05.10, Reporting and Verifying Payroll. On March 10, 2016, the appellant appealed the decision of March 9, 2016 and requested that the late filing penalty be reduced by 100%. The appellant stated:

"…in the correspondence from…dated March 9, 2016 the reasons for a 100% refund of this penalty would be something that would be considered to be "beyond the employer's control". We did not receive any notice prior to February 29, 2016 indicating that payroll information needed to be submitted, which is obviously a circumstance beyond our control. I am unsure whether the notification letter was not sent or if it was somehow lost in the mail, but it was not received by our office.

The only correspondence that was received since November 2015 were the following:

• A letter on November 30, 2015 indicating changes in the rate calculations for 2016
• An account statement on January 8, 2016
• An overdue notice for payroll information on March 3, 2016

Neither of the letters received before February 29, 2016 indicated anything regarding the submission of payroll information or any due date for such information.

…we have had this account with WCB for 16 years and have never had a late payment or late filing. Due to these reasons we request a 100% reversal of the assessed penalty."

On March 15, 2016 the Assessment Committee denied the appellant's appeal.

In order for the charges to be fully waived, the Assessment Committee noted that the reason for the delay had to be 'beyond the employer's control', as stated in the decision of March 9, 2016. The WCB considered circumstances involving death or serious illness to be 'beyond the employer's control." Lost or misdirected mail was not considered by the WCB to be "beyond the employer's control." The employer can contact the WCB by telephone, email or via the website to be apprised of reporting requirements.

The Assessment Committee indicated there was no reported issue with mailing out the Annual Payroll Forms in January 2016, and there had been no indication of an issue with Canada Post deliveries at the time of the mass WCB mail out. The initial decision to reduce the late filing charges by 50% was therefore confirmed and there was no basis for 100% relief. On June 27, 2016, the appellant appealed the Assessment Committee's decision to the Appeal Commission and a file review was arranged.

Reasons

Applicable Legislation and Policy

The Appeal Commission and this panel are bound by The Workers Compensation Act (the Act), regulations and policies of the WCB 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, provides, in part:

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 employer was represented by its president who provided an appeal letter dated June 20, 2016. The letter indicates, in part:

I understand the need for information to be submitted promptly for the WCB to do its job properly. As soon as the overdue notice for payroll information (dated March 3, 2016) was received, our office quickly submitted the information, and if we had received the original letter the same would have been done on time. As reflected in our history with the WCB, this has always been done by us in the past.

Regardless of whether or not you consider our explanation of the events to be something that was beyond our control, I would ask that the penalty be reversed 100%. The amount of the penalty does not match the offence: this was not an issue of non-payment, or even late payment. This was not an issue of repeated attempts on your behalf to get the necessary information from us. As soon as we were made aware of the situation, the information was submitted to your office…

The employer's representative had previously written to the WCB on March 10, 2016. In this correspondence the employer noted that:

We did not receive any notice prior to February 29, 2016 indicating that payroll information needed to be submitted, which is obviously a circumstance beyond our control. I am unsure whether the notification letter was not sent or if it was somehow lost in the mail, but it was not received by our office.

Analysis

The issue before the panel is whether the employer is required to pay a reduced late filling penalty. As noted above the WCB has established WCB Policy 35.05.10, Reporting and Verifying Payroll. Pursuant to this policy, the WCB has established Administrative Guidelines. This appeal deals with the application of the Administrative Guidelines to the employer's late payment.

While the Appeal Commission and this panel are not bound by the Administrative Guidelines, the panel finds that the Administrative Guidelines provide a reasonable basis for assessing when a penalty ought to be imposed or forgiven.

In this case the employer has, pursuant to the Administrative Guidelines, been granted 50% relief from the penalty. The employer satisfied the first 3 requirements, specifically:

      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.

3. The employer has cooperated fully with the WCB.

The employer has asked that the full penalty be reversed. To obtain 100% relief under the Administrative Guidelines, the following conditions apply:

      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.

The panel notes that the employer submitted the form promptly upon receiving the notice that the form was overdue. This leaves the final criteria for the panel to consider. Was the cause or reason for the delay beyond the control of the employer?

In considering this appeal, the panel notes that on March 9, 2016 an employer representative contacted the WCB regarding the late filing penalty. He advised that he disagreed with being charged the penalty. He explained that he was new in the position, starting in August 2015 and had never had to file the Annual Payroll Form. He also advised that the employer had not received the 2015-2016 Annual Payroll Form. He acknowledged that it had received the Rate Letter in December 2015. The panel notes that the Rate Letter dated December 2015 indicates as follows:

Early in January 2016, we will send you an account statement detailing your coverage amount, the premium owed for your Personal Coverage and the date payment is due. Your Personal Coverage will be cancelled if the payment is not received by the due date. Because you employ workers you are required to report your workers' payroll annually. In January 2016, you will receive instructions on how to report your payroll. This information is required at the WCB offices no later than the last day of February, 2016.

The panel finds that the employer representative's acknowledgement of receipt of the Rate Letter, confirms that the employer had been advised that it must file the worker's payroll no later than the last day of February 2016. This was notice, albeit indirect.

The panel finds that the absence of receipt of the form does not fall in the category of "The cause or reason for the delay was beyond the control of the employer." The panel notes the employer's evidence that it has filed an annual payroll return for 16 years. The panel notes this is an annual event which the employer has historically been required to submit and to submit on time, and should not require a reminder. In any case, the panel finds that the employer received the Rate Letter which provided notice. The panel finds that the provision of the payroll information was completely within the employer's control and accordingly, further relief from the penalty is not warranted.

The employer's appeal is dismissed.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
D. Neal, Commissioner

Recording Secretary, B. Kosc

A. Scramstad - Presiding Officer

Signed at Winnipeg this 29th day of September, 2016