CA 250

Posts from category "WSIB"

Employer wins extension of Time Limit to Appeal and then successfully appeals Entitlement

 

The claim was initially allowed after the worker suffered multiple injuries (fracture and sprain) falling from a counter-top in the cafeteria in which the worker was employed. The incident occurred outside of the worker’s usual working hours and did not involve a task for which the worker was being compensated by the employer in any manner. The worker did however have permission of the employer to decorate the room after hours. The fact that the employer had granted permission to three employees to decorate the cafeteria for a colleague who was transferring to another department, that the injury took place on the employer’s premises and that the activity allegedly benefitted workplace morale led to the WSIB seeing the activity as “reasonably incidental” to the workplace.

The employer initially proclaimed their objection to entitlement on the Form 7, and later in a telephone conversation with the Eligibility Adjudicator, a conversation which was mentioned in the Adjudicator’s decision. They faxed their written objection the day the decision was received, but upon reviewing this claim as new employer representatives it was discovered that there had been an error message on the fax transmission sheet and that the written objection had never been received by the WSIB. A new objection was submitted, citing the employer’s intention to object as expressed in the Form 7 and over the phone. The Eligibility Adjudicator denied the employer’s right to object on the grounds that the timeline had not been met. We appealed this decision on the merits and justice of the case, asking that the employer’s clear intent to object be recognized in spite of their unfortunately unnoticed mistake. Nearly four years after the date of injury, the Appeals Resolution Officer agreed and allowed the employer to proceed with their objection.

Four months later, an Appeals Resolution Officer (ARO) overturned entitlement . The employer’s appeal focused on three elements of the case: 1) the worker was engaged in a personal activity not reasonably incidental to their employment, and 2) the incident happened outside of working hours and was not organized or paid for by the employer, and 3) the employer did not experience any direct benefit from the actions of the worker. In fact, this large employer (hospital) with approximately 2000 employees would suffer a detriment if workers were regularly granted permission to engage in this type of personal activity.The Director of Food Services, in granting permission for the workers to engage in this personal activity very wisely set out some clear guidelines which were: 1) it had to be done on their own time 2) It had to be done after work 3) the decorations had to be removed after the day was completed and 4) the decorations had to be acceptable to their public health and safety. Even with these very clear restrictions, the claim for an injury arising out of a personal activity after work was still allowed by the WSIB. This claim cost the employer over $80,000 which will now be refunded by way of a manual adjustment plus interest.  

The ARO found particularly convincing that the employer had no involvement in the activity other than providing permission, that the worker was acting to satisfy a personal need rather than a professional one and that the activity engaged in by the worker was not at all typical for employees but rather if conducted at all, would be performed by management.  Both of these employer appeals were done by written submission only.

 

 

Trucker kids as employees – further details emerge

When we wrote about our client a few days ago, we decried the WSIB’s rush to judgment in declaring this Independent Owner/Operator (IO/O) to have employees when, in fact, he does not. We’ve now learned the confusion might have arisen because of the tax receipts the corporation issued to acknowledge income splitting. But that won’t excuse the WSIB from exercising poor judgment.

WSIB matches up records with Canada Revenue Agency and they received a report that this IO/O had issued T4 slips to his children. From the WSIB perspective, that appears like there are employees in this corporation. The IO/O, on the other hand, does not have a WSIB account because he is entirely self-employed and has his own private disability insurance. Like many independent operators, though, he does exercise his right under CRA rules to split income with family members.

So WSIB sent him a letter on September 30, 2010 demanding that he register an account. When he didn’t reply by October 13th, they called him and were advised that both he and his accountant were on vacation when the letter arrived, and were still away. WSIB was apparently unwilling to wait a short while for their return.

For their part, WSIB defends their action by saying they did write to the IO/O for clarification. But they waited two weeks for an answer and, even knowing he wasn’t available to answer, went ahead without hearing from him.They waited two weeks! When is the last time WSIB made a decision within two weeks?

Here’s the problem – issuing the tax forms appears to be an accounting matter. We’re told the T4 may not be the best way to share profits (note: we are  not taxation experts); but it was the issuing of those forms that got WSIB excited in the first place. So you would think a reasonable and sensible solution would be a discussion with the IO/O and an inquiry into whether or not there are any ‘employees’ under a contract of service with the corporation. Nope. Rather than a discussion, or to await the IO/O’s return from vacation, WSIB arbitrarily registered an account, listing the two children as employees, and demanded two years of retroactive premiums. [It isn’t hard to tell WSIB is getting desperate for money these days.]

These kids are NOT employees. No documentation filed, correctly or incorrectly, with any agency changes that fact. It cannot create an employee where none exists. Both WSIB and the Workplace Safety and Insurance Appeals Tribunal tell us this regularly, when ruling on the ’employee versus independent operator’ issue. You cannot create an ‘independent operator’ simply by completing enough documentation (or even forming a Corporation) to generate the appearance of independent status as a way of avoiding the ball-and-chain that an employer/employee relationship involves. In the same way, WSIB shouldn’t be permitted to create an ’employee’ out of thin air, or thin paper, as it were, simply by completing their own forms.

CRA permits the splitting of income and that does NOT create an employer/employee relationship.  There is no contract of service, no service performed, and hence no need for premiums and no ’employer’ as defined by  WSIB’s own governing legislation. To see just how little sense this makes, we can ask: “who would these premiums be protecting?” and “who could possibly file a WSIB claim”?  The director who drives the truck has valid private disability insurance and absolutely no need for WSIB protection. There is no one else to protect.

In a subsequent discussion with the manager in charge at WSIB, she refuses to even consider that this decision was simply wrong and offers the appeal process instead. There is no reason this IO/O should need to go through the expense of an appeal over a situation so inane. Far too often, adjudicators and managers who do not want to be held accountable for objective, legal, and evidenced-based decisions just pass the buck to Appeals, having no regard for the cost and the valuable resources being wasted.

It is quite clear that the WSIB rushed to judgment and has an incomplete understanding of the concept of income splitting, and even their own legal definition of an ’employer’. That is scary. We wonder how many ‘documentary’ deemed employers have been created in Ontario? As we pointed out in our last blog, there is not a lot of value to WSIB connecting and sharing information with CRA if they can’t grasp how to properly use the information the taxman gives them.