In recent months, the Workplace Safety and Insurance Appeals Tribunal (WSIAT) has released a number of decisions in revenue appeals, which may be of interest to employers. Let’s look at three of these, which respectively deal with the issues of retroactive experience rating adjustment, transfer of experience rating credits in a sale of a business and single versus multiple rate group classification for related businesses.
In Decision No. 1405 11 the WSIAT determined that an employer was entitled to a retroactive experience rating adjustment of its CAD-7 experience rating account even though it did not fall squarely within the parameters of WSIB policy for such an adjustment.
The employer had benefitted from a 2009 WSIB decision to transfer certain claims costs to another employer, which were related to a 2006 accident. However, the decision was prospective only, for the years 2010 and 2011. The employer sought to have the credit applied as if the transfer of costs had been recognized at the time of the accident, which would relieve the employer of penalties paid in earlier years.
As noted by the WSIAT, under the applicable WSIB policy, a retroactive adjustment is normally only available when there is an increase or decrease in benefits already paid to a worker, not when there is a change in the benefit costs for which an employer is responsible. However, the WSIAT determined that the merits and justice of the case required the requested retroactive adjustment in the employer’s favor. Noting that WSIB policy allows for retroactive experience rating adjustments on the basis of an SIEF decision in an employer’s favor when there has been adjudicative delay, the WSIAT held that the same principle should apply in the case at hand, in which there had been a long adjudicative delay and where the employer had acted with due diligence in seeking to uphold its rights. Significantly, the WSIAT determined that with respect to the issue of adjudicative delay, there was no requirement to show that the WSIB was at fault for this.
Decision No. 1277 11 involved an appeal where the WSIB refused to transfer experience rating credits to a new company, which had the same owners and workers as the old company but different managers. The WSIAT dismissed the employer’s appeal. It noted that WSIB policy on account closures allows for an account to flow through to a new employer in the case of an amalgamation, merger or share sale but not in the case of what in essence is an asset purchase. The WSIAT found that the complex transaction in this case was akin to an asset purchase, which meant that the WSIB was correct in treating the new employer as a new and distinct business entity with a new account.
Finally, in Decision No. 1149 11, the employer appealed the classification of its quarry operation separately from its shingle manufacturing operation, the result of which was to significantly increase the WSIB premiums paid for the quarry operation. The manufacturing operation was classified in rate group 507 (Note : Petroleum and Coal Products, 2011 premium rate $1.13) whereas the quarry rate group 134 had a much more expensive premium (Note: Aggregates, 2011 premium rate $6.24).
Although the employer might have been able to have the two operations classified as one in other circumstances, the WSIAT found that WSIB policy would not so allow in this case because the two operations were treated as distinct profit centres and were at separate locations, with different workforces, unions and supervisors.
The WSIAT also ended up rejecting the employer’s argument that the quarry operation should be classified under the less expensive manufacturing rate group as an “ancillary” operation. Although the quarry arguably supported the manufacturing operation, the provisions of the applicable regulation (O. Reg. 175/98, s. 6) would not allow for such a classification because neither quarrying nor manufacturing of roofing granules were among the activities listed under the regulation.
The WSIAT did end up partly allowing the employer’s appeal though. Since the employer contracted out blasting at the quarry and its operations at the quarry really consisted in crushing and coloring the quarried product, the WSIAT found that the best fit for the employer was Rate Group 501, which specifically includes manufacturing of roofing granules (Note – Non-Metallic Mineral Products, 2011 premium rate $2.87).