59. As such, we affirm the decision of the IRO. 60. Dated this 17 th day of August, 2010.

Transcription

1 The Appellant has lead some evidence in this regard but the evidence needs to be further refined and put in context of the other employers in its industry, the other industries in its rate group, and the industries in other rate groups to which it feels it may be better suited, to ground a prima facie case that the Appellant and the [personal information] industry as a whole have been improperly classified. 57. The Employer Advisor makes reference to prior decisions of our counterpart Panels, and of the Board, wherein changes in rate groups were ordered and suggests that for reasons of fairness, reasonableness and consistency we should follow the result of these decisions. In this regard we note that these decisions predate the implementation of the current version of Policy and may be distinguished on that basis, and on the basis that the facts scenarios are not on all fours with the present matter. Further, Decision #107, which we refer to above, is more recent, and more relevant, and we find the reasons contained to be of greater persuasive value than the decisions referred to by the Employer s Representative. 58. It is also worth noting that the Appellant has received experience discounts over the past number of years and that the Appellant s rates, along with all of the rates in rate group [personal information] have increased over the past number of years due to a generally poor claims experience. 59. As such, we affirm the decision of the IRO. 60. Dated this 17 th day of August, Jordan Brown Vice-Chair of the Workers Compensation Appeal Tribunal Concurred: Libba Mobbs, Worker Representative Stu Lavers, Employer Representative

2 Further, one could infer from this that the rest of the surplus in this industry may be bolstering a deficit in another industry within the rate group. However, in our view, the Appellant has failed to adduce sufficient evidence to demonstrate that the Board should utilize their discretion to place them in a different rate group as a result of this. They may well be worse off in a separate rate group. In essence they have failed to account for the possibility that a small number of large claims in their industry could quickly skew the numbers in the opposite direction. This is a large part of the reason for placing a number of related SIC codes into one rate group. Nor was sufficient evidence lead to indicate that they could legitimately constitute their own rate group. In short, we agree that the Board has exercised its judgment in an appropriate manner in assigning the [personal information] to rate group [personal information], and that they have done so on the basis of fair treatment of competitors, being that most other automotive industries are contained within rate group [personal information]. 54. Of note, there does not appear to have been any significant evidence led in relation to the fair treatment of all industries and employers within a rate group, or of one rate group versus the others, other than the evidence as to the monies paid in to the Board as dues versus the monies paid out. This evidence would have to be led in the context of other industries or rate groups to make it significant, and in our view it was not. 55. The type of evidence required to ground a prima facie case for a change in classification was succinctly summarized in Decision #107, where the Vice-Chair stated: If an employer makes a request to the Board for a rate change, it is incumbent on the employer to submit evidence to the Board, that the employer s industry has been assigned to the wrong rate group taking into account the industry s unique characteristics and such considerations as the size of the industry, line of business of the industry, workplace risk of the industry, and claims cost experience of the industry.

3 Did the Appellant lead sufficient evidence to make a prima facie case that the [personal information] should be classified within a different rate group? For the reasons that follow we are of the view that the Appellant did not. 50. As outlined above the Board has, and is required to utilize, a degree of discretion in determining which rate group a particular industry is to be placed within in an effort to ensure the efficient operation of the Fund. This function is essential to allow the Board the ability to compile rate groups that are statistically significant, that combine reasonably similar operations and claims experiences, all of which is a necessity to ensure the viability of the workers compensation scheme. 51. Accordingly, the Appellant must demonstrate that the Board did not use that discretion appropriately in placing the [personal information] in rate group [personal information] based on their primary line of business, bearing in mind that industry characteristics, as opposed to employer characteristics, are paramount. 52. The Appellant did lead evidence indicating that their rates were high compared to their counterparts across the country, though given the fact that each province has a separate and distinct scheme we do not find this to provide a great deal of persuasive value, particularly given the size of the Prince Edward Island rate groups in comparison to those in larger jurisdictions and the recent negative claims experience in rate group [personal information]. The Appellant also led evidence as to the size of the industry and as to the claims history of the industry, indicating that over the preceding 9 years dues in the amount of [personal information] were paid and that only [personal information] was paid out in relation to claims and [personal information] was spent on administrative functions.

4 However, we do not believe that general evidence as to the payroll divide between two facets of an integrated business provides sufficient evidence to rebut the presumption outlined in paragraph 20 of Policy POL02-08 which indicates that business activity ancillary or incidental to the primary business activity is assigned to the classification of the activity being supported, which, in this case is an [personal information]. 46. In short, the onus is on the Appellant to show that their business consists of two separate and distinct operations and that these operations are not incidental to each other. Once they have established this they must then demonstrate that either or both of the distinct operations fit better within a different industry classification. With respect, the evidence led fails to surpass any of these thresholds in our view. 47. The Appellant in its submissions indicated that it did not feel as though it was fair that it had to pay the same rate for all of the employees within their business, when they carried out different functions. This is in fact one of the very tenets of the Scheme. The Scheme is based on strength in numbers. If the rates decreased in one aspect of the Appellant s business, they would have to increase by the same proportion in another. This is the inherent balancing act the Board is required to undertake in placing businesses within industry classifications and industries within rate groups. In an effort to be fair to particular businesses the Board has implemented an experience rating policy, which allows it to consider claims history in undertaking the above noted balancing act, and to attempt to instill fairness in the system. 48. It is also worth noting that the two different SIC codes that were referenced by the Appellant, being [personal information] and [personal information] fall within the same rate group.

5 17 (d) Whether the business activity is a retail or wholesale operation is not really pertinent to this situation, though by analogy the fact that we have not been presented with evidence that the sales and service functions are located separately, or divided in any way, other than by indication that the employees work exclusively either in sales/administration or service, does not bode in the Appellant s favor. (e) Again, by analogy, it would have been helpful to know what percentage of the customers of the service department are associated with sales made by the sales department. (f) As the IRO rightly pointed out there is no evidence as to whether certain tasks are shared by employees of the separate business activities or not. However, the Appellant did provide evidence that large portions of the business were devoted to each of the sales and service aspects, being 72% and 28% respectively. 43. Pursuant to paragraph 19 of Policy POL02-08 there is evidence analogous to the two factors enumerated above that the service aspect of the Appellant s business is a supportive or incidental part of the sales business. That is, that the service portion of the business is analogous to a [personal information] and that [personal information] are carried out by the [personal information] department. 44. The Appellant did lead a great deal of evidence that the predominant business activity of their operation was the sale of [personal information], being that this portion of their business constituted 72% of their assessable payroll. They also led evidence that the remaining 28% of the payroll was attributed to the service portion of their business.

6 16 appropriately classified under another SIC code. Alternatively, they did not demonstrate that each business in the industry shared the same two primary business activities and as a result that the industry as a whole should be classified into multiple SIC codes. 41. It is important to note again that the multiple primary business activities portion of the classification scheme focuses on the characteristics of an individual businesses as opposed to those of the industry as a whole. 42. This aside, assuming that they could be classified within two separate industries, we will give consideration to the analysis of the evidence led in relation to the ensuing factors. (a) The Appellant has not led evidence to demonstrate that more than 50% of the revenues of either of the primary business activities are generated from non-affiliated customers. The Appellant took the position that the Board should have sought out this information. Further to the above references to Decision 757/96 and Decision #107, we find that the Board was not required to do so. (b) It is clear that the products or services provided by the business activities are different, though we were not presented with evidence as to whether the service department provides service primarily in support of the [personal information] sold by the sales department, or whether they serve a different clientele. (c) Nor was any evidence led to separate the two departments other than the fact that the job functions of the employees in each department could be classified differently and that the employees worked exclusively within their broad classifications of sales/administration and service.

7 15 Intermingled Business Activities 22. When two or more business activities cannot be classified separately because of the level of personnel intermingling they will be combined, at the discretion of the Workers Compensation Board, into one classification. 23. The highest rated classification will be used if it accounts for at least 40% of the intermingled group of activities. 39. Should the Appellant s operations be classified into multiple rate groups? For the reasons that follow we confirm the decision of the IRO in holding that the Appellant has not established its prima facie case that it should be classified into multiple rate groups. 40. The Appellant has lead evidence indicating that its operations could be divided into two business activities, which can succinctly be categorized as sales and service. The employer in our view has not led sufficient evidence to show that the two primary business activities would be separately classified if they were the employer s only activity. In our view in order to do so they would have to lead sufficient evidence to ground a prima facie case that each business activity fit better within a different SIC code than it does within its own. They merely suggest possible alternative SIC codes under which the business activities of the employer could be classified. This approach falls short in that it fails to differentiate between the [personal information] which are classified under SIC [personal information] and the aspects of their business which would allow the services portion of the business to be classified under [personal information] with SIC code [personal information]. This would be required to rebut the presumption that like employers will be classified within the same industry. In other words, the Appellant has failed to demonstrate that its operations are materially different than the other members of the [personal information] industry, and assuming they were they did not demonstrate that that part of their operation was more

8 14 - the kinds of products or services the business activity produces or provides; - whether the product or service is used in the employer s principal business activity; - whether the business activity is a retail store or wholesale outlet and whether that outlet is in a separate location or in a separate area within the manufacturing plant producing the goods; - whether less than 50% of the goods being sold are provided by affiliated manufacturing divisions and whether retail activity is incidental to manufacturing; - whether the business activity is performed by specific personnel as their sole function; - whether each business activity has the same personnel performing functions for each one, but at different times of the year. 38. Paragraphs inform the analysis of the above noted factors. The factors we see as relevant in this situation are as follows: Supportive Business Activity 19. Supportive business activities include, but are not limited to: - operation of maintenance or repair shops for servicing/repairing employer s vehicles/equipment; - warranty repairs carried out by an employer on employer s goods; 20. If a business activity has been determined by the Workers Compensation Board to be supportive, ancillary or incidental to, another employer s business activity, then it is assigned to the classification of the activity being supported. 21. The following factors will be considered by the Workers Compensation Board in the classification of a business activity supportive of more than one classification: - the predominant business activity; - the assessable payroll of each business activity; - the percentage of the total assessable payroll represented by each business activity. A business activity that supports two or more classified activities will be assessed in proportion to the assessable payroll of each business activity expressed as a percentage of the total assessable payroll for all business activities being supported.

9 13 - fair treatment of all industries and employers within a rate group; - fair treatment of one rate group versus others. 35. After being so classified the employers then assume the characteristics of the rate group, but are differentiated pursuant to the experience rating system, whereby employers with low claims rates pay lower rates than do those with high claims rates. The employer s classification is determined with regard to the nature of the business activities. If the business activities are similar to an existing industry classification, as per the Statistics Canada SIC manual, the business is generally assigned to that industry group. Where the correlation is not clear as to which industry the business should be assigned, the Board is tasked with fitting the business into the industry that best represents the primary business activity. The SIC codes are then assigned to rate groups by the Board based on the General Concepts of Classification. Generally employers are not assigned to multiple classifications, pursuant to Policy POL02-08 paragraph Thus, in order to ground a prima facie case that the industry should be classified into a different rate group an employer(s) would have to lead evidence in relation to the Board s misapplication of the above noted factors and principles. By contrast, in order to be successful on an appeal that an employer s operation should be classified into multiple business activities, the employer would have to lead evidence pursuant to paragraph 18 of Policy POL02-08 that: - the employer is involved in more than one primary business activity; and - the primary business activity would be separately classified if it were the employer s only activity. 37. The Board then reviews each of the activities of the business (as opposed to the industry) to determine if it should be assigned to multiple classifications. Some of the factors to be considered in this analysis are: - whether more than 50% of the revenue is generated from nonaffiliated customers;

10 12 are large enough to be statistically significant in order to attempt to operate the scheme in a manner that is fair to everyone. 31. Pursuant to Policy POL02-08 paragraph 4 employers are classified based on their primary line of business. Any business incidental to that primary line of business is generally similarly classified. Pursuant to paragraph 6 industry characteristics, not employer characteristics, are key to the assignment of an industry to a rate group. 32. Pursuant to paragraph 7 of Policy POL02-08: The assignment of an industry type (SIC code) to a rate group is determined by taking many factors into account. The most important considerations are the size of the industry, line of business of the industry, workplace risk of the industry, and claims cost experience of the industry. All factors must be weighed and compared according to an industry s unique characteristics. 33. Pursuant to paragraph 8 of Policy POL02-08 the Board has the authority to exercise some judgment in assigning industries SIC codes and in assigning SIC codes to rate groups. This is important in a jurisdiction such as Prince Edward Island where the working population is small enough that one large claim may cause a statistical anomaly to any particular industry or rate group. 34. For this reason, among others, paragraph 9 of Policy POL02-08 outlines some of the factors to be considered in undertaking the assignment of employers into industries and rate groups as follows: The underlying philosophy of the assignment of an employer to an industry (SIC code) and the assignment of an industry (SIC code) to a rate group requires consideration of and includes concern for: - fair treatment of competitors; employers in the same industry who compete against each other will be assigned to the same rate group;

11 11 groups, as they did previously for the carpet and flooring sales and installation business. 28. This panel sees no fault in this manner of proceeding but does acknowledge that the two basis of proceeding, being, 1) a review of the proper rate group for the industry; and, 2) the division of the company s primary business operations into separate classifications, require very different evidence to ground a prima facie case. Seeking a change in rate group on the basis of the entire industry requires a case to be made by leading evidence in relation to the industry as a whole, whereas, seeking a change in rate group on the basis of multiple classifications within one business requires evidence to be led in relation to that particular business. In fact, making a prima facie case on one issue could impede upon a prima facie case being made in relation to the other issue as, in one instance, the objective is to differentiate the industry from the larger group, and in the other, the objective is to differentiate parts of the Employer from the industry but demonstrate similarities of the parts as with other industries or rate groups. Substantive Reasons 29. Pursuant to s. 61 of the Act the Board has the discretion to divide all employers into classes. It is important to note that the stated purpose for doing so is to create and maintain the Accident Fund. This informs the Board s discretion. The Board also has the discretion pursuant to s. 61(2) to rearrange classes or transfer any employer or industry to another class. Pursuant to Policy POL02-08 paragraph 2: the workers compensation system operates on the basis of collective liability for employers. Revenue is pooled from the entire population of assessed employers and is used to pay the present and future costs for workers who incur claims, as well as the administration costs of the compensation system. 30. This further informs the Board s discretion, in that it provides a tacit recognition that discretion will have to be used to group similar employers into industries, that

12 10 In our view, it is not enough to speculate that the Board s classification system might be unfair. In our view, such speculation is not sufficient evidence of the unreasonableness of the Board s classification process. In our opinion, the employer has not provided any evidence that would justify the Tribunal s intervention with the Board s internal process. In our view, it is more appropriate for the employer in this case to marshall his evidence and present it to the Board on behalf of the mini-storage industry as a group. 25. Similarly in Decision #107 our counterparts reasoned that: If an employer makes a request to the Board for a rate change, it is incumbent on the employer to submit evidence to the Board, that the employer s industry has been assigned to the wrong rate group taking into account the industries unique characteristics and such consideration as the size of the industry, the line of business of the industry, workplace risk of the industry, and claims cost experience of the industry. 26. We agree with the foregoing and accordingly find that the onus is on the Employer to lead evidence showing that it has not been properly classified. 27. It is worth noting at this juncture that it appears as though the Appellant fundamentally changed the focus of the basis for their appeal mid stream. The [personal information] first attempted to change their classification as an industry. As stated above, this request was denied on the basis that they had no right of appeal as an industry. Following this, the Appellant sought a review of the Board s decision on the issue in their own right. After being advised that they were not successful at the Board review level, they focused on a new issue, being, as the Employer Advisor states, the issue could be resolved by WCB establishing multiple classifications for the sales/administration and service activities at [personal information] and then assigning them to two separate rate

13 9 Onus 23. Before proceeding to the substance of this appeal, it is important to determine which party bears the evidentiary burden. In other words, the question, in simple terms, ought to be whether the Board is required to justify its classification of the Appellant, or conversely, whether the onus is on the Appellant to show that the Board ought to have classified it differently. This is not a novel issue, and though we, the Workers Compensation Appeal Tribunal, are not bound by decisions of our predecessors or other similarly situated tribunals, we find the decisions rendered by the Ontario Workers Compensation Appeal Tribunal in Decision No. 757/ , CanLII 9227 ( Decision 757/96 ) and the decision from this jurisdiction at Decision #107 PEI WCAT ( Decision #107 ), to be persuasive as they pertain to this issue. 24. In Decision 757/96 the tribunal considered a situation in which a mini storage operator claimed that it was classified in the wrong rate group. It had been classified in a rate group which included other real estate operators and argued that it should have been classified in a group related to the supply of clerical labour. The tribunal found that in order to ground such a case for reclassification the employer was required to lead evidence that not only it, but its entire industry had been wrongly classified. The Appellant argued that the Board was in the best position to lead such evidence and that the tribunal should order the Board to conduct a survey of its industry, and, if appropriate revise their rate group profile. The tribunal found that it did not have the power to order such a survey. In doing so the tribunal referred to Decision No. 888/94 wherein the previous tribunal had entertained a similar request. The tribunal in Decision 757/96 stated: The Panel also concluded in that case, as we have here, that the appellant employers had failed to adduce any prima facie evidence of the probable fairness of the Board s classification of the employers in that case. The panel stated, at page 9:

14 8 20. The IRO acknowledged the Appellant s argument that 72% of the total assessable payroll could be contributed to the [personal information] in the business and indicated that it was not necessarily the percentage of the payroll that was allocated to any one activity versus another, rather, the decision to separate the business into multiple categories must be based on a consideration of several factors as had been previously outlined. The IRO went onto cite section 61 of the Act as providing the Board with the power and discretion to divide employers into classes for purposes of the administration of the capital fund and reasoned that [personal information] are typically a single entity operated under a [personal information] franchise and as such the Board has chosen, in its discretion, to classify [personal information] under SIC Code [personal information] and under the resulting Rate Group [personal information]. The IRO indicated that SIC codes are assigned to a group on the basis of the industry they partake in as opposed to the characteristics of any individual business. Finally, the IRO found that as a result of the foregoing the assignment of the SIC code for [personal information] was performed in accordance with Policy POL Issue: 21. (a) Which party bears the evidentiary burden in this matter? (b) Did the Board assign the Appellant to the proper rate group? Reasons & Decision: Standard of Review 21. Pursuant to the recent decision by the Prince Edward Island Supreme Court, Appeals Division in Workers Compensation Board (P.E.I.) v. Cormier, 2010 PESCAD 10., and their prior decision enunciated at Prince Edward Island (Workers Compensation Board) v. MacDonald, 2007 PESCAD 4., the decision of the IRO may be reviewed by this panel on the standard of correctness. 22. For the reasons that follow this appeal is denied in its entirety and the decision of the IRO, which upheld the Board s decision, is upheld.

15 7 15. In relation to the first factor as noted above, the IRO reasoned that information pertaining to the business non-affiliated revenues was not provided, and as such, could not have been considered. 16. In relation to the second factor, the IRO reasoned that this factor was not relevant to the Appellant as they were not manufacturing a product. 17. In relation to the third factor, the IRO indicated that the essence of this factor is whether the business activity is performed by specific personnel as their sole function. Pursuant to the evidence provided by the employer, roughly 72% of total assessed payroll could be attributed to the administration/sales side of the business and 28% to the service side. The IRO reasoned that it is not clear from the evidence provided whether each business activity is performed by specific personnel as their sole function. She went on to pose rhetorical questions in demonstration of her view that the evidence was lacking in this regard and concluded that because of the lack of evidence the employer had failed to clearly show that there was not an overlap in functions. 18. The IRO does not appear to have specifically addressed the fourth factor in her decision. 19. After addressing the evidence in relation to the above-noted factors, the IRO considered the factors outlined in paragraph 21 of Policy POL which states: The following factors will be considered by the Workers Compensation Board in the classification of a business activity supportive of more than one classification: - the predominant business activity; - the assessable payroll of each business activity; - the percentage of the total assessable payroll represented by each business activity.

16 6 IRO Decision: 13. The decision of the IRO was rendered on April 30, The IRO considered sections 32(1) and (2); 56(1), (1)(1.2), (2), (4), (5) and (6) and sections 61(1), (2) and (3) of the Workers Compensation Act R.S.P.E.I Cap. W-7.1 as amended (the Act ) as well as Policy POL in her Decision. In her Decision the IRO reviewed Policy POL and in particular number 18 of the Policy which states: the Workers Compensation Board may assign a single employer multiple classifications if: (a) the employer is involved in more than one primary business activity; and, (b) the primary business activity would be separately classified if it were the employer s only activity. 14. She noted that the Appellant s case was based on the assertion that there are two primary business activities within their business, being, administrative [personal information]) and technical [personal information]. The IRO then went on to consider the factors outlined in Policy POL at section 18 where it states: The Workers Compensation Board will review each activity to determine if the employer will be assigned multiple classifications. Factors that the Workers Compensation Board may consider include the following: - whether more than 50% of the revenue is generated from nonaffiliated customers; - whether less than 50% of the goods being sold are provided by affiliated manufacturing divisions and whether retail activity is incidental to manufacturing; - whether the business activity is performed by specific personnel as their sole function; - whether each business activity has the same personnel performing functions for each one, but at different times of the year.

17 5 2. whether the product or service is used in the employer s principal business activity. Mr. Rivard reasoned that though [personal information] is the primary function of the Appellant s business the [personal information] of these same [personal information] is a necessary, incidental or derivative part of the business. 10. Mr. Rivard s decision went on to indicate that though he did recognize defined differences in work activities of employees within the business, the Board s classification process was based on the overall business activity. All of the business activities undertaken by the employees of the Appellant are supportive of the primary business operation being an [personal information]. 11. The Appellant was notified of its assessment rate for 2009 by document dated December 9, 2008, indicating a net assessment rate of $2.70 per $ of payroll. On January 5, 2009, the Appellant received correspondence from the Board in relation to its Safety Matters at Work, Experience Counts Program. This correspondence indicated that the Appellant s actual rate for the year would be $2.71 based on the calculations pertaining to this program. 12. By correspondence dated January 16, 2009, the Appellant requested Internal Reconsideration of Mr. Rivard s decision. In their Request for Internal Reconsideration the Appellants sought establishment of separate classifications for sale/administration and service aspects of their business, desiring to have them placed in two separate rate groups.

18 4 characteristics of individual employers in the rate group in assigning SIC codes to a rate group. - Employers are classified based on the SIC Codes that best fit their primary industry. The fact that the Appellant s employees performed various job functions with different risk factors is not germane to the Appellant. Many employees throughout rate groups work in various positions that are incidental to the primary operation. - Employers are assigned to a particular rate group with a view to: 1. fair treatment of competitors; employers in the same industry who compete against each other will be assigned to the same rate group; 2. fair treatment of all industries and employers within a rate group; 3. fair treatment of one rate group versus others. - The employers classified in rate group [personal information] generally include sales and service of [personal information], certain [personal information] equipment and [personal information] services. - The Board reviews each of the employer s activities in an effort to determine if the employer will be assigned multiple classifications. The factors the Board may consider include: 1. the kinds of products or services the business activity produces or provides;

19 3 [personal information] were used in the business. The Appellant indicated that the operation did not involve the construction/ production/manufacture of a tangible end product. The Appellant indicated that it was a retail store or wholesale outlet describing itself as [personal information]. In response to the question, Does the total operation include more than one type of business activity that could be classified separately, i.e. (each activity must be self-sustaining and independent from the others)?, the Appellant indicated yes. Each activity was described as [personal information]. The Appellant indicated that in its opinion a service [personal information] would pose the greatest likelihood of accidents/injury in the business. The Appellant also referred to its earlier letter, which was presumably the letter dated October 28, 2008, as providing additional information that might be added to the form. Board Decision: 8. On November 24, 2008, the Board wrote to the Appellant denying a change to their existing classification. In this correspondence, further reference was made to a work site visit completed on November 19, 2008, wherein Gregory Rivard, Auditor, Employer Services, attended at the work site of the Appellant for the purposes of the review. 9. The Board s Decision, rendered by Mr. Rivard, may be summarized as follows: - It was recognized that the Appellant s operation included multiple departments consisting of different risk assessments. - In referring to Board Policy Mr. Rivard indicated that, though the overall claims experience of the [personal information] class relative to the rate group is favorable, industry characteristics are considered to be more important than the

20 2 5. The President of the Appellant wrote to Greg MacCallum, Manager of Employer Services, on October 30, 2008, seeking clarification as to the methodology employed in settling Workers Compensation rates on Prince Edward Island. The letter indicated that historical data showed assessment revenues of [personal information] less claims payments made of [personal information], plus administrative costs of approximately [personal information] (20% of total assessment revenue) for a total of [personal information], demonstrating an appearance of inequity between the revenue and expenses related to claims involving [personal information], over the previous nine year period. 6. The same correspondence went on to indicate that the Appellant s employees consisted of 72% administrative staff (by payroll) and 28% technical staff (by payroll). As a result the President of the Appellant sought a review of the Appellant s existing classification indicating that he felt as though it was not fair that they would have to pay the same rate for their administrative employees as they would for a typical [personal information] employee. The letter also indicated that Prince Edward Island s rates for [personal information] is significantly higher than at least six other jurisdictions in the country. 7. On November 10, 2008, the Appellant submitted an Employer Services Classification Questionnaire to the Board. On the Questionnaire the Appellant listed sales as the category under which their operation fell, given choices which included: [personal information]. The Appellant indicated that [personal information] sales, leasing and servicing generated the majority of revenue/income for the firm. They indicated that types of goods/services that they produced or provided were [personal information]. The Appellant indicated that 23 people were employed within the business excluding owners. Out of the 23 employees 14 were indicated to work exclusively in an office and/or clerical environment. In response to the question, Is there any type of machinery/equipment used in this operation?, the Appellant indicated that an

21 1 Facts 1. The Appellant is registered with the Workers Compensation Board of Prince Edward Island listing the description of its business as [personal information]. It is listed with the Attorney General for the Province of Prince Edward Island as being in the business of [personal information]. 2. On May 23, 2008, [personal information] sent a letter to Greg MacCallum, Manager Employer Services, Workers Compensation Board of Prince Edward Island (the Board ) asking that a new rate group be established for [personal information]. By correspondence dated September 29, 2008, the Board indicated that a comprehensive review of employer classifications and rate settings had been undertaken by Nexis Actuarial Consultants Limited, an outside consulting firm, in As a result of the review, the consultants found that the current classification system was basically sound and not in need of significant modification. The Board further advised that each employer is classified using Standard Industrial Classification ( SIC ) codes and that these codes are assigned based upon the primary line of business in the industry. 3. Further the September 29, 2008, correspondence from the Board indicated that the rate group which includes [personal information], being rate group [personal information], had incurred increases in premiums due to a poor claims cost experience in the previous two years. 4. In the same correspondence the Board advised that it was unable to provide a formal decision in relation to the reclassification of [personal information] as a result of the letter sent on behalf of the Prince Edward Island [personal information]; however, the Board did indicate that if any particular member that was registered with the Board wished to request a review of their classification, the Board could upon such request consider a reclassification.

22 WORKERS COMPENSATION APPEAL TRIBUNAL BETWEEN: EMPLOYER FIRM # [personal information] APPELLANT AND: WORKERS COMPENSATION BOARD OF PRINCE EDWARD ISLAND RESPONDENT DECISION #128 Appellant Respondent Keith Mullins, Employer Advisor, representing the Employer Brian Waddell, Solicitor representing the Workers Compensation Board Place and Date of Hearing November 24, 2009 Inn on the Hill Charlottetown, Prince Edward Island Date of Decision August 17, 2010