Background Information on Administrative Penalties,
Claims Cost Levies, and Review and Appeal
Administrative Penalty
What is an administrative penalty?
An administrative penalty is a fine against an employer for violations of the
Workers Compensation Act (the “Act”) or the Occupational Health and Safety
Regulation (“OHSR”).
Section 196 of the Act provides in part:
“(1) The Board may, by order, impose an administrative penalty on an employer
under this section if it considers that
(a) the employer has failed to take sufficient precautions for the prevention of
work related injuries or illnesses,
(b) the employer has not complied with this Part, the regulations or an
applicable order, or
(c) the employer’s workplace or working conditions are not safe.”
How is a penalty calculated?
The amount of an administrative penalty is based on the size of employer's
assessable payroll and the circumstances set out in policy. This policy also
provides that, in certain circumstances, penalties can depart from amounts
based on payroll. Penalties are greater for violations that are high risk, those
committed wilfully or with reckless disregard, or those where a worker has died
or suffered a serious injury.
The method of calculation is set out in Prevention Policy Manual Item D12-196-6
which is available online at www.worksafebc.com.
How much is the penalty in regard to Lakeland Mills Ltd.?
The total penalty amount imposed is $97,500.00 ($75,000.00 + 30% upward
variation). $75,000.00 is the amount that can be imposed by law and policy for
a Category “A” penalty (Prevention Policy D12-196-6 page 2). Category “A”
penalties are the higher penalty amounts reserved for incidents where there is:
•
a serious injury or death actually resulted from the violation;
•
a high risk of serious injury, serious illness, or death; or
•
the non-compliance was willful or with reckless disregard.
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In some circumstances, officers may exercise discretion to vary the basic amount of
a penalty by up to 30% (higher or lower) using the criteria in policy (D12-196-6
page 4) under the heading “Variation Factors” which include:
•
nature of the violation;
•
nature of the hazard created by the violation;
•
degree of actual risk created by the violation;
•
whether the employer knew about the situation giving rise to the
violation;
•
the extent of the measures undertaken by the employer to comply;
•
the extent to which the behaviour of other workplace parties has
contributed to the violation;
•
employer history;
•
whether the financial impact of the penalty would be unduly harsh in view
of the employer’s size; and
•
any other factors relevant to the particular workplace.
In this case, the officer concluded that the violations merit an upward variation
by 30%. The total penalty amount imposed is $97,500.00.
Why is a penalty being imposed now?
Consideration of an administrative penalty was held in abeyance pending the
decision of Crown Counsel.
Claims Cost Levy
What is a claims cost levy?
Section 73 of the Act authorizes WorkSafeBC to levy and collect from an
employer all or part of the compensation payable in respect of an injury or
death. Section 73 provides:
“(1) If
(a) an injury, death or disablement from occupational disease in respect
of which compensation is payable occurs to a worker, and
(b) the Board considers that this was due substantially to
(i) the gross negligence of an employer,
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(ii) the failure of an employer to adopt reasonable means for the
prevention of injuries, deaths or occupational diseases, or
(iii) the failure of an employer to comply with the orders or directions
of the Board, or with the regulations made under Part 3 of this Act,
the Board may levy and collect from that employer as a contribution to the
accident fund all or part of the amount of the compensation payable in
respect of the injury, death or occupational disease, to a maximum of
$52,221.94 per claim.
(2) The payment of an amount levied under subsection (1) may be
enforced in the same manner as the payment of an assessment may be
enforced.”
How much is the claims cost levy in regard to Lakeland Mills Ltd.?
The claims cost levy is $626,663.28.
How is a claims cost levy calculated?
Claims cost levies are calculated on a case by case basis in accordance with the
Act, Policy and jurisprudence.
Is this the total cost of claims associated with this incident?
No. The total claims cost that fell within the scope of Section 73 on the date of
the officer’s decision totalled $5,221,136.48.
Review and Appeal Rights
Can the employer request a review of the penalty and claims cost levy?
Yes, to the Review Division of WorkSafeBC within 90 days of the decision to
impose the penalty and claims cost levy. If the employer is unsatisfied with the
Review Division decision, the employer can appeal to the Workers’
Compensation Appeal Tribunal (WCAT) within 30 days of the Review Division's
decision.
Can anyone else request a review of the penalty and claims cost levy decision?
Yes, section 96.3(3) of the Act sets who may appeal this type of order/decision.
It provides:
“Any of the following persons who is directly affected by a decision or order
referred to in section 96.2(1)(c) may request a review of that decision or order:
(a) a worker;
(b) an employer within the meaning of Part 3;
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(c) an owner as defined in section 106;
(d) a supplier as defined in section 106;
(e) a union as defined in section 106;
(f) a member of a family of a deceased worker’s family.”
General
What happens to a penalty or and claims cost levy?
Penalties and claims costs paid to WorkSafeBC by an employer are deposited
into the Accident Fund.
Are the Inspection Report and Penalty Order publicly available?
The Act requires that the employer must post a copy of the Inspection Report
containing the Order(s) in a conspicuous place at or near the workplace
inspected. A copy of the report must also be given to the joint committee or
worker health and safety representative, as applicable.
Inspection Reports are public documents and available upon request from the
WorkSafeBC Freedom of Information and Protection of Privacy Department.
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