The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The employer is appealing the decision made by the Workers Compensation Board (“WCB”) that they should be assessed a $4,000.00 penalty for contravening section 19.1(1) of The Workers Compensation Act, C.C.S.M. c. W200 (“the Act”). A hearing was held February 15, 2024 to consider the employer’s appeal.

Issue

Whether or not the employer should be assessed a $4,000.00 penalty for contravening section 19.1(1) of the Act.

Decision

The employer should not be assessed a $4,000.00 penalty for contravening s 19.1(1) of the Act.

Background

On May 11, 2023, the WCB's Compliance Services provided the employer with a Notice of Allegation, alleging that the employer attempted to prevent or discourage a worker from claiming compensation in contravention of section 19.1(1) of the Act.

The allegation relates to a telephone interview conducted on April 24, 2023 between a WCB adjudicator and the employer’s assistant general manager. The offence occurred when the assistant general manager informed the WCB adjudicator that the worker never worked for the employer, when the worker actually had.

The duration of the worker’s employment was for a period of three days between April 4 to April 6, 2023. The worker began their shift as a kitchen employee on April 4. On that day, the worker began training and worked a full shift. The worker did not come to work on April 5 or communicate to the employer that they would be absent. The worker came to work on April 6, but was not scheduled to work on that day by the employer. On this day, the worker only worked for one to three hours. This is the same day that the worker claimed that they sustained a workplace injury.

On April 13, 2023, the worker reported their injury to the WCB. The WCB mailed the employer a copy of the worker incident report on the same day, addressed to the mailing address that the WCB had on file. A second request from WCB was sent to the employer on April 17, 2023. Neither of these requests were responded to by the employer.

On April 20, 2023, the WCB adjudicator telephoned the employer’s corporate director, and left a voice message. WCB did not receive a response.

The contact information, mailing address and telephone number of the corporate directors of the employer, and the employer’s accountant were the only contact information for the employer that WCB had on file at the material time.

The worker subsequently provided the assistant general manager’s cellphone number to the WCB. The worker also identified the assistant general manager as her supervisor. This is how the April 24, 2023, telephone conversation between the WCB and the assistant general manager, which is central to this issue in this appeal, arose.

On September 29, 2023, the WCB Compliances Services determined that the employer contravened section 19.1(1) of the Act and rendered an administrative penalty of $4,000.00.

The employer filed an appeal with the Appeal Commission on October 24, 2023 and a hearing was arranged.

Reasons

The Appeal Commission and its panels are bound by the Act, regulations under the Act, and policies established by the WCB's Board of Directors.

Section 19.1 of the Act prohibits employers and their representatives from taking action to discourage making claims under the WCA. Section 19.1 provides as follows:

Discouraging worker from claiming compensation 

19.1(1) No employer or person acting on behalf of an employer shall take any action that prevents or discourages or attempts to prevent or discourage a worker from applying for compensation, pursuing an application that has been made or receiving compensation under this Part. 

… 

Offence 

19.1(4) A person who contravenes this section commits an offence.

Where a person commits an offence under s 19.1, section 109.7(1) provides that the panel may impose an administrative penalty. Manitoba Regulation 71/2021 sets out the amount of $4,000.00 for the first offence. The relevant portions of section 109.7(1) are as follows:

Administrative penalty 

109.7(1) The board may impose an administrative penalty in accordance with this Act and the regulations on:

(a) a person who makes a false statement to the board 

… 

(d) a person who contravenes any of the following provisions: 

… 

(viii) subsection 19.1(1) or (2) (prohibitions re claim suppression),

WCB Policy 22.20, Compliance and Enforcement (“the Policy”) and the accompanying Administrative Guidelines provide available defences to an offence under Section 19.1 of the Act. The relevant portion of the Administrative Guidelines is as follows:

C. CONTRAVENTIONS FOR WHICH DEFENCES ARE AVAILABLE 

… 

In the case of most contraventions of the Act and regulations, if the WCB is satisfied, on the basis of the evidence it has gathered, that the person under investigation has committed the prohibited act or omission, the WCB will determine that a contravention has occurred.

In some cases however, more is required. For certain contraventions, even when there is sufficient evidence to demonstrate that the person under investigation committed the prohibited act of omission, the WCB will determine that they have not contravened the Act where the evidence also demonstrates, on a balance of probabilities, that they:

• took all reasonable care to avoid committing the contravention; or 

• reasonably believed in a mistaken set of facts which, if true, would have rendered the act innocent.

Contraventions where these defences are available:

• false statements affecting a person's entitlement to compensation or an employer's assessment, or false statements made to obtain payment for goods and services (clause 109.7(1)(a) of the Act); 

• failure to inform the WCB of a material change in circumstances affecting a worker's entitlement to compensation (clause 109.7(1)(b) of the Act); 

• prohibitions against claim suppression and discriminatory action (subclause 109.7(1)(d)(viii) of the Act); 

• breach of re-employment obligations (subclause 109.7(1)(d)(x) of the Act); and 

• failure to destroy documents (subclause 109.7(1)(d)(xvii) of the Act.

Evidence that the person under investigation took all reasonable care to avoid the contravention or reasonably believed in a mistaken set of facts frequently comes from that person, but may also come from other sources.

The WCB Compliance Service’s findings

The WCB’s Compliance Services provided a Final Investigation Report dated September 29, 2023 (“the Report”).

The Report primarily relies on the memorandum of the adjudicator dated April 24, 2023, (“April 24 Memo”), which set out the notes of the adjudicator relating to the April 24, 2023, telephone call with the employer’s assistant general manager. The April 24 Memo purports to contain the denials made by the assistant general manager. It provides as follows:

“I advised that I was calling for the worker's claim. They advised they do not have an employee by that name. He confirmed he worked for the Marlborough hotel.

I advised that [the worker] advised that she was working on April 6 and that she was injured that day. He advised she never worked for them. They advised she was never hired. He reports that there is no proof that she worked for them. I advised that the worker indicated she had text message as proof. He said then that she came but walked off the job.

I advised that there are some discrepancies on the account and that I understood what he was saying however there is an investigation that is being opened on the file. He advised that was fine. I advised that the worker had also indicated that she may go to the labour board as well. He advised that was no problem. I thanked him for his time and ended the call.”

The Report concludes that since the statements made by the employer’s assistant general manager during the April 24, 2023, telephone interview occurred, and since that it has established the existence of the worker’s employment, the employer is thereby in contravention of section 19.1(1) of the Act.

Analysis

The issue before the panel is whether or not the employer should be assessed a $4,000.00 penalty for contravening section 19.1(1.) of the Act. For the employer's appeal to be successful, the panel must find, on a balance of probabilities, that either the employer did not contravene the Act, or if they did contravene the Act, can avail themselves of the defences under the Administrative Guidelines to have the administrative penalty reduced or waived.

Based on our review of the evidence and submissions on file, and as presented at the hearing, the panel is satisfied, on a balance of probabilities, that the employer did not contravene the Act and that the appeal is therefore granted for the reasons outlined below. Furthermore, it is apparent to the panel the WCB’s Compliances Services failed to fully investigate and properly consider this evidence when making their decision.

The employer registered with the WCB approximately one year prior to the event at issue. Despite this short involvement, the employer had been involved in other WCB claims. The employer’s general manager testified during the hearing, and during his interview with compliances services, that he was the sole individual who deals with WCB claims. He stated that he had prior contact with the WCB for the hotel’s employees on other matters. The employer’s general manager has been consistent in this position, and there is a lack of evidence available to the panel that would show otherwise.

For reasons unknown, the contact information for the employer that the WCB had on file was the employer’s corporate director, and the employer’s accountant. There is no evidence that the accountant was contacted by WCB regarding this claim. The general manager explained during the hearing that the corporate director was not directly involved with the operations of the employer.

No explanation was provided as to why the general manager was not listed on WCB’s file as a contact despite being the individual that had been communicating with WCB for the employer’s other WCB claims. The panel accepts that this is the reason why the earlier letters and voicemails sent by the WCB went unanswered.

The general manager further explained during the hearing that there was confusion on the part of the assistant general manager as to the status of the worker’s employment. The worker’s employment only lasted a span of three days. The worker did not report to work on her second day, and on her third day, appears (at least from the employer’s perspective at the time) to have walked off the employer’s premises, without informing the employer. The employer explained that the assistant general manager had never met the worker. The assistant general manager did not schedule, train or hire the worker. The panel is of the opinion that the status of employment of the worker played a role in the assistant manager's lack of understanding when questioned by WCB.

When the assistant general manager was interviewed by WCB’s Compliances Services on June 20, 2023, he provided consistent evidence, and stated that due to an ongoing illness, he was at home during the days that the worker was present. He was not fully aware as to who or how the worker was hired. There is no evidence before the panel that would contradict this position.

When WCB did establish contact with the general manager, it appears from the evidence that the general manager corrected the employer’s position. The general manager provided the following explanation during his interview with WCB’s Compliances Services on June 27, 2023:

[WCB Staff]: April 24th. [Assistant General Manager]. was speaking with the WCB adjudicator, and the adjudicator asked about this person, and he said 'she never worked for the hotel, she was never hired.'

[General Manager]: Never hired, correct. And as I told you about her schedule of work, [Assistant General Manager] had no -- no idea. So I don't -- he just say it, and he explained that that he -- he didn't have any -- of any knowledge on her schedule, or shift, and that's why he probably say it, but when he talked to me, we corrected it and I -- I corrected it with you. So we are on the same page. When I talk to -- when he give -- pass everything on me, we -- we correct it that no, she worked. So he didn't -- he didn't know that, so I won't count on what he said. That was not any intention to, you know, stop her from going to WCB, so this was the -- once I came into the scene, I -- I -- I was the one who knew that she worked. I did not support that [Assistant General Manager] did -- and [Assistant General Manager] did out of ignorance, like, that he didn't know that her schedule or her shift, as I told you, that he didn't have information of nature of schedule or shift of [the worker]. So from there, he told. But then he – I think he talked to you guys and he said that after he talked to me, he knew that he -- she was. And then he never changed that word anymore, that -- about her work she -- she worked.” [emphasis ours]

The evidence before the panel shows that prompt responses were provided by the employer once contact was established between WCB and the general manager. WCB acknowledged that the employer cooperated fully with the investigation.

Furthermore, it appears to the panel that the employer, through the general manger, expressly corrects their position as to the status of the worker’s employment on more than one occasion. It appears that any prior statements from the assistant general manager were made erroneously.

The evidence on file from the worker does not challenge the narrative from the employer. When the worker was interviewed by WCB’s Compliances Services on June 15, 2023, they explained that they were unaware as to who their superiors were, and that they were only able to contact the assistant general manager when a friend provided the contact information. The worker was only able to communicate with the assistant general manager by text messages after April 6, 2023.

Misapprehension of evidence in the Report

WCB’s Report indicates that the accuracy of the April 24 Memo is not in dispute. The Report also states that it is not in dispute that the assistant general manager informed the WCB adjudicator that the worker never worked for the employer and was never hired by the employer.

However, when the WCB interviewed the assistant general manager on June 20, 2023, it is apparent from reading the transcript of the interview that the assistant general manager did not understand what was being asked of him. The comments and clarification from the assistant general manager were as follows:

“I -- I -- I have to, like -- if I am not wrong, I think the most you have, like, it's -- it's kind of miscommunication, not the --whoever has written over there because if you have the recording of the call, I can go through it all again, or have explained. I think she misunderstood my whole statement.” [emphasis ours]

The assistant general manager further comments and states:

“And then on April 6th, during that time, I -- I was not in the office for, like, almost seven, eight days because of my -- because I was sick. And I got -- suddenly I got a message from a number claiming she is [the worker] and she is working -- she's working in the kitchen, on April 6th. I – I thought she started from that day. And then, as I told you, I handle other departments. So I also heard, like, one of the lady came and she walked out. So that is a statement I give to that (inaudible) report. Like, she didn't work for that day. And you saying being hired, that I said, because I was not aware of she was hired or she was a casual labour, as per -- as per my understanding, she was a casual labour. And I -- everything is handled by the general manager, I usually don't deal with it, but she keeps texting me, so I give her some response. And I didn't -- like, you know, this is my cell -- personal cell number and -- and I am thinking that time I was really sick and I was not attending my work, even – I was lying on my bed all the time. So giving her some information and then I'm not sure about the date, it should be on the April 8th or 9th, I think you – you have my -- all my text record, I already submitted to the company. I think you --you should have it on your file, right?” [emphasis added.]

The panel finds that the explanation provided by the assistant general manager during his interview to be reasonable. In particular, their explanation that they were unaware as to when the worker actually worked, and that the individual that ought to be answering the questions by WCB ought to be the general manager. The assistant general manager goes on to state during his interview:

“…So that's the scenario from my side. And I -- I think the other conversation, before the conversation, we really had, like, a miscommunication. I tried to (inaudible) like, she -- she came on the 6th, April 6th, but she walked out. She didn't work, that's what I meant on that day. And the hiring process, I have -- I talked to [the general manager], he say -- he said he -- she -- he hired her as casual labour, like, she was a casual labour. And I think better than me, [general manager] can explain all this situation.  Like, what happened over there. And I also got to know, like, I discouraged her not to fill out the form or something that -- that would be totally a misstatement or -- I never told her not to fill out any form or anything.” [emphasis added]

It is apparent to the panel that the difficulty in communication was created by the fact that English was the second language of the assistant general manager. The assistant general manager indicated in his interview that when he was contacted by the WCB, he had only been speaking English for 4 or 5 years.

Be that as it may, the assistant general manager expressly states that they did not agree with the information that the April 24 Memo purports to convey. The assistant general manager states as much in the following exchange: 

[WCB Staff]: And do you feel there was a miscommunication between you and the WCB on April 24th?

[Assistant General Manager]: [Y]eah. Obviously there is a -- I won't say miscommunication, misunderstanding about my statement and ---

[WCB Staff]: Miscommunication with [WCB] about your statement

[Assistant General Manager]: [Y]eah. Misunderstanding. I think she understood, like, I say overall. I -- she (inaudible) a casual labour, she (inaudible) hired. Like, I had to also corrected myself. Like I told she never had, she has had casual labour.”

The assistant general manager further clarifies that he misunderstood what was being asked of him. His transcript provides the following:

“I just wanted to say from my side, I'm not saying -- like, as a human being, I'm saying so whatever I said, it was based on April 6th and I had no benefit by giving you the false information to WCB or I -- I don't have anything to hide. So I think whatever happened on the 24th, that -- that was really misunderstanding from my side, I (inaudible) a little bit miscommunication. But we -- we never had the intention to, like -- to --like, tell she never worked for the hotel, right? And you -- even clearly (inaudible) I'm totally mentioned about the worker compensation, like, the – fill out of the form (inaudible)…

…But if you see on my messages, clearly, I never ignored her, she got injured. Like I (inaudible) talk to the employees and I did. I did actually talk to all the employees, how -- how it happened that. And yes, I -- I -- it was clearly a miscommunication, but it was never intention not to hide any fact, that I can guarantee as a human being.”

The panel has concerns that Compliance Services’ decision to find the contravention of section 19.1 was entirely reliant on the telephone conversation of April 24, 2023. The Administrative Guidelines recognize that in some cases, more is required than just considering a single event, statement or conversation.

The panel finds, on a balance of probabilities, the evidence shows that:

• The general manager, once contact was established with the WCB’s Compliance Services, took all reasonable care to avoid committing the contravention; and

• The assistant general manager, in his April 24, 2023 interview with the WCB’s Compliance Services, reasonably believed in a mistaken set of facts.

Conclusion

It is apparent to the panel that the investigation carried out by the WCB’s Compliances Services did not fully and properly consider the evidence before it. It further failed to consider evidence that reasonably explained how the series of errors which occurred in this case lead to the contravention.

The Administrative Guidelines provide the opportunity for employers who are accused of this contravention to correct statements which were erroneously made. The events surrounding this claim is an example of why that defence is required.

The employer's appeal is allowed.

Panel Members

R. Mamucud, Presiding Officer
J. Peterson, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, J. Lee

R. Mamucud - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 12th day of April, 2024