Highlights of Noteworthy Decisions

Decision 2348 11
S. Martel
  • Assessment of employers (retroactivity)
  • Board Directives and Guidelines (employer assessment) (retroactivity)
  • Class of employer
  • Experience rating (CAD-7) (retroactive adjustment)

In Decision No. 1479/02, the Tribunal found that the employer was entitled to reclassification from Rate Group 854 to Rate Group 864 for the years from 1986 to 1992. In implementing the decision, the Board also recalculated the employer CAD-7 experience rating credits. The result was that the credits received by the employer due to the reclassification were essentially annulled by the CAD-7 recalculation. The employer now appealed on the issue of the retroactive CAD-7 adjustments.

The Board applied Operational Policy Manual, Document No. 13-02-05, regarding adjustments to CAD-7 refunds and surcharges. The policy states that it applies to all decisions made on or after January 1, 2001. The employer submitted that this policy was not applicable because it was not in place for the years that the employer had been granted the reclassification. The employer further submitted that, even if it were applicable, it did not necessarily allow unlimited cost-related adjustments, particularly with respect to retroactive classification changes.
Tribunal decisions have generally stated that that the appropriate retroactivity period that may be ordered in a classification appeal is to be found in the policy in place at the time of the employer's request for reclassification.
The Vice-Chair found that the applicable policy in this case was Document No. 08-06-03, which was the policy applied in Decision No. 1479/02. That policy, as opposed to later policies, allowed for retroactivity up to six years, related to discrepancies in industry classification. It applied to experience-rated employers and it applied to adjustments resulting in credits or debits.
The Vice-Chair found that the wording of Document No. 08-06-03 was sufficiently wide in scope to allow for six years of retroactivity for experience rating adjustments. The Vice-Chair also applied previous Tribunal decisions on NEER adjustments to the situation in this case of CAD-7 adjustments, that it would be inappropriate to recalculate the premium amount without also recalculating the experience rating adjustments. Accordingly, it was appropriate for the Board to recalculate the employer's CAD-7 charges and refunds.
However, only the years affected by the reclassification change should be affected by the CAD-7 recalculation. Thus, the CAD-7 recalculation should be limited to the years from 1986 to 1992. It appeared that the Board had also included 1993, in which year the employer had been correctly classified, and a claim in 1995. The Panel concluded that the Board should not make any adjustments affecting the years beyond 1992.
The appeal was allowed in part.