- Discretion, Board (employer assessment)
- Statutory interpretation
- Experience rating (fatal claim premium adjustment)
- Assessment of employers (fatal claim premium adjustment)
- Board Directives and Guidelines (employer assessment) (fatal claim premium adjustment)
- Words and phrases (premium)
- Referral to Board (fatal claim premium adjustment)
In 2008, the employer was expecting to receive premium rebate of more than $1,000,000, under the NEER experience rating plan based on its accident record for the years 2005, 2006 and 2007. On October 30, 2008, a worker died as a result of a workplace accident. The Board denied the premium adjustment in accordance with Operational Policy Manual, Document No. 14-02-17, on fatal claim premium adjustment. The employer appealed. The employer submitted that provisions of the fatal claim premium adjustment policy were not authorized by the WSIA. In Decision No. 2346/12I2, the Panel requested additional submissions from the Board regarding its authority for the policy.
Section 82 provides that the Board may increase or decrease premiums payable by an employer in circumstances including: 1. the employer has not taken sufficient precautions to prevent accidents; 2. the employ's accident record has been consistently good; 3. the employer has complied with regulations under the WSIA or OHSA; 4. frequency of injuries and accident cost is consistently higher than average for the industry.The employer submitted that the word "premium" should be interpreted in a manner similar to its meaning in the private insurance contract, so that premiums charged to an employer must reflect expected claim costs. The Panel considered the history and purpose of the WSIA and the way in which "premium" is used in the WSIA. The Panel noted differences between the workplace insurance system and private insurance. Private insurers can charge whatever premiums they like, although competition will usually keep premiums down. The cost of workplace insurance is not set by competition between insurers. The Board cannot refuse to deal with employers who are mandatorily covered. The Panel found that the word "premium" as used in ss. 81 to 83 refers to an employer's obligation to pay into the workplace insurance fund, and does not require the Board to calculate an employer's premium based upon private insurance principles that create a strong correlation between premium and risk.Section 82 is intended to allow the Board to establish program to encourage Schedule 1 employer to pursue occupational health and safety objectives. It allows the Board to do so by creating financial rewards to encourage desirable behaviour and financial disincentives to discourage undesirable behaviour.The majority of the Panel found that the fatal claim premium adjustment policy achieves a result that was not intended by the provisions of s. 82, in that employers with consistently good records face premium increases based on one accident, whereas employers who do not qualify for experience rating rebates do not face increases. Further, the better the accident record prior to the fatal accident, the higher the increase will be. The Board has discretion under s. 82, but the exercise of the discretion cannot be arbitrary.Further, s. 82 is intended to apply to the general circumstances of an employer and not to single incidents. In addition, the increases under fatal claim premium adjustment policy are not tied to deficiencies in the health and safety standards of the employer. Reference in the Board policy to the merits and justice does not save the policy. Merits and justice considerations cannot be used to vary the clear, stated intention of a policy.The majority of the Panel noted that it considered whether the fatal claim premium adjustment policy was authorized under s. 83. First, the Board asserted authority for the policy under s. 82, not s. 83. Secondly, the Tribunal does not have jurisdiction over appeals regarding design of the Board's experience rating programs under s. 83.The majority of the Panel concluded that the fatal claim premium adjustment policy was not authorized by s. 82. The policy was referred to the Board for review pursuant to s. 126.The Worker Member, dissenting, considered the modern principles of interpretation and found, considering s. 82 in the entire context of the WSIA, that the policy was within the scope of the discretion conferred upon the Board. The Worker Member also found that the Board properly takes the merits and justice into account in administration of the fatal claim premium adjustment policy.