- Class of employer (business activity)
- Registration of employers
- Class of employer (best fit)
- Class of employer (employment and executive search services) (home renovation)
The issues under appeal were whether the classification of NAICS Code 236110 should be removed, and whether the employer's registration obligation should be reversed.
The Board determined that NAICS Code 236110, Residential Building Construction was the appropriate Code. The employer submitted that NAICS Code 531310 Employment Placement Agencies and Executive Search Services was the appropriate registration code for the company. The Panel noted that it is clear that not all business activities fit squarely within a particular NAICS Code. In this situation, the Code that is the "best fit" is chosen, on the understanding that particular business activities are not always a precise match. The appeal was allowed.The Panel determined that the employer was not "primarily engaged in the construction or remodeling and renovation of single-family and multi-family residential buildings." The company was not involved in any construction activity. Additionally, none of its employees had construction sector-related experience or skills, the business activities did not involve tools of the construction trade, and, subject to a minor role in some situations involving dispute resolution, there was no direct relationship between company personnel and any individual homeowner receiving construction-related services. The company also had no involvement in negotiating individual contracts between professionals and homeowners, or any role in overseeing the quality of work being performed. Furthermore, the Panel acknowledged that NAICS Code 56130 was also not an exact fit, but, in the Panel's view, it was the "best fit" for the employer's business activity. Following the direction set out in Decision No. 114/97I2, the Panel looked at the primary purpose of the employer's business, taking into account "the nature of the business, the equipment used, the hours worked and the activity that generates the major revenue." The employer's business activity included the development and maintenance of a marketplace platform to make it easier for homeowners and contractors to connect with each other on home renovation projects. The company's revenue was generated from fees paid by professionals who used the platform for this purpose, not from the work activities undertaken by the professionals. It was pointed out that a number of the illustrative examples listed under Code 56130 included services provided by "an intermediary platform service." Although home renovation services was not among those listed, in the Panel's view, it could reasonably be considered analogous to those that were listed, and therefore, the Panel found that Code 56130 was the "best fit" for the employer's business activity.Accordingly, the Panel found that NAICS Code 236110 was to be removed and replaced with NAICS Code 56130, and the employer's registration obligation concerning Code 236110 should be reversed. In addition, as the new Code was also a non-compulsory classification, the employer was entitled to the return of any premiums paid to the Board pursuant to the incorrect classification, and it would be left to the Board to determine the interest payable on such premiums, subject to the usual rights of appeal.