- Board Directives and Guidelines (retroactivity)
- Earnings basis (dependent contractor)
- Board Directives and Guidelines (earnings basis) (dependent contractor)
The worker was a dependent contractor when he was injured in 2001. In determining his long-term average earnings basis, the Board applied OPM Document No. 18-02-04, Determining Long-Term Average Earnings: Workers in Non-Permanent or Irregular Employment. His LOE benefits were based on net earnings of $340.87 per week. The worker appealed the calculation of his long-term earnings basis. The worker submitted that OPM Document No. 18-02-08, Determining Average Earnings – Exceptional Cases, which was first published after the date of the accident, should be applied retroactively, and that various deductions from income should be added back to the worker's earnings basis.
The appeal was allowed in part. The appropriate policy for the appeal was OPM Document No. 18-02-04, as it was the applicable policy when the Board determined the long-term earnings basis in 2001. Tribunal case law has generally not accepted the retroactive application of Board policy. However, as OPM Document No. 18-02-04 did not specifically address dependent contractors, OPM Document No. 18-02-08 could be used as a resource in determining the worker's long-term average earnings under the broad statutory authority in s. 53(3) to consider other appropriate information. OPM Document No. 18-02-08 recognizes that certain workers such as dependent contractors are paid differently by an employer to avoid certain obligations owed to a worker paid on an hourly basis. Under this policy, average earnings for dependent contractors are determined by using the net business income reported for tax purposes and then including (adding back) various deductions listed in the policy. The add-back deductions are those of a personal nature rather than business expenses. The category of "other items as appropriate" is not a catch-all for all deductions made from overall business income. Rather, items in this category must have an analogous personal or theoretical component such that the dependent contractor's real earnings may be said to include those amounts. Direct business expenses ought not to be added back to net business income as they are the cost of doing business and not analogous to the add-back items listed in the policy. The worker sought the add-back of deductions from his gross income during relevant period. However, the worker did not provide any evidence upon which to assess the nature of the deductions. There was no evidence that the deductions had an analogous personal or theoretical component. There was no basis on which to reclassify the deductions reported to Revenue Canada as business deductions as personal expenses. The exception was a deduction for an RRSP contribution, which was likely personal and was to be added back to the worker's net business income.