- Assessment of employers (retroactivity)
- Class of employer
- Merits and justice
The employer appealed a decision of the Appeals Resolution Officer denying retroactivity of the employer's reclassification beyond the current year.
The employer registered with the Board in 2007 and was classified in the rate group for finished carpentry. In 2012, the Board conducted an audit of the employer's operations for the years 2010 and 2011. As a result of the audit, the Board reclassified the employer to the rate group for industrial, commercial and institutional construction, which had lower premiums that the rate group for finished carpentry. In accordance with Board Operational Policy Manual, Document No. 14-02-06, the reclassification was limited to January 1 of the current year which, in this case, was January 1, 2012.In addition, the auditor found that the employer had significantly under-reported its payroll in 2010 and 2011. This resulted in a debit adjustment of $163,000, which was charged to the employer's account for premiums for the years 2010 and 2011. Thus, the additional premiums were charged on the basis of the more expensive rate group for finished carpentry.The employer requested relief based on the merits and justice provisions in Board policy. That policy allows for exceptions if application of a relevant policy would lead to an absurd or unfair result that the Board never intended. The Panel found that payment of premiums with respect to a rate group in which an employer was improperly classified is not an absurd or unfair result that the Board never intended. On the contrary, by limiting reclassification to beginning of the current year, the premium adjustment policy clearly anticipates and accepts that there will be prior years for which an employer was improperly classified but for which no reclassification will occur. In some cases, this will work to the employer's benefit and, in some cases, it will work to the employer's detriment. However, it is the clear intention of the policy to limit adjustments in this manner, in the interests of administrative efficiency.Some Tribunal decisions have relied on the merits and justice policy to extend retroactive adjustments. However, those cases generally involve some instance of egregious error on the part of the Board. In this case, the Board arrived at the original classification based on the information supplied by the employer. Thus, there was no error on the part of the Board. Even if the Board did err in its original classification, the error would be, at most, an error in judgment typical of the administration of any compensation system and not the type of egregious error that might attract relief as an exceptional circumstance.The appeal was dismissed.