A Northwest Territories wellness business failed to overturn its workers’ compensation classification after an appeal tribunal directed a further review of whether its rental and wellness operations could be assessed separately.
In Decision 26-003, 2026 NTNUWCAT 3, issued October 1, 2026, tribunal chairperson Colin Baile upheld the business’s classification in the health and social services subclass. The supplementary ruling completed the inquiry ordered in Decision 26-002, 2026 NTNUWCAT 2 on May 4. The tribunal did not award the requested refund or direct a new assessment.
The decisions do not identify the business or its owners, in keeping with section 161 of the Workers’ Compensation Act and the tribunal’s practice directive. Although the tribunal serves both territories, this appeal concerned a business in the Northwest Territories.
Wellness services and office rentals were part of one business
The employer earned revenue from wellness services, including float tanks, red-light services and a sauna, and from renting space to independent practitioners. It also provided tenants with administrative support, such as reception, booking and payment services.
The employer argued that it did not directly provide psychological services and should not be assessed as though it did. Its tenants operated independently. Baile accepted that listing their services and booking information on the employer’s website did not itself make the employer a provider of mental health services.
The employer also stressed the administrative and facility-support duties of its own workers. It argued that its assessment did not reflect their work or exposure to injury and sought reclassification and a retroactive refund of premiums it considered excessive.
The Workers’ Safety and Compensation Commission had initially classified the business on the basis of its own description of its proposed services. When that description changed, the commission changed the detailed industry code. But the business remained in the same health and social services subclass, where its assessment rate was set. The later code change did not produce a different rate.
Classification followed the business activity rather than one worker’s duties
Baile explained that the commission’s system groups employers by their business operations and spreads compensation costs through collective liability within industry subclasses. Assessment rates are set at the subclass level, rather than separately for each individual job or detailed industry code.
An employee’s duties considered on their own did not determine the employer’s classification. The relevant inquiry was the business’s primary activity. Comparing an administrative employee’s office environment with a government office therefore did not show that the business belonged in the same assessment category.
The tribunal also distinguished applying the classification system to the employer from questioning the design of the system itself. Baile said the commission’s Governance Council had broad statutory authority over that design, and the tribunal lacked jurisdiction to challenge the means of classification. The employer had not put forward evidence challenging the relevant collective claims experience or actuarial decisions.
The employer raised the transition from an earlier industry-classification guide to the territorial system introduced in 2024. Baile found that adding descriptions of wellness activities to the detailed code was within the Governance Council’s authority. The October reasons found that changes to the system had not materially affected this employer’s assessment.
Tribunal required a further review before deciding the appeal
The May decision nevertheless left the appeal unresolved. The business had two revenue streams, and Baile considered whether it might qualify for multiple industry classifications under the commission’s policy. He directed the commission to examine the operation and report to both the employer and the tribunal, while retaining responsibility for the appeal.
The employer had not specifically requested that form of classification. In the supplementary reasons, Baile explained that the tribunal’s inquisitorial role required him to seek additional information where an evidentiary gap prevented a complete answer to the appeal.
The commission filed its review on June 10, 2026. Both sides were given an opportunity to make submissions on it, and both did so. The review concluded that the employer did not qualify for separate classifications.
Separate revenue streams were not enough
The policy required three conditions for multiple industry classification: separate and distinct operations with independent revenue sources; separate records of revenue, expenses and payroll for each operation; and allocation of workers’ earnings according to the actual time spent in each operation. All three conditions had to be met.
The commission found that the employer’s administrative staff supported both the tenant practitioners and the employer’s own wellness services. The review concluded that this arrangement did not satisfy the separate-records and actual-time allocation requirements. The shared duties also meant the operations did not satisfy the requirement to be separate and distinct.
The review also rejected treating the rental activity as an ordinary non-residential-building operation. Space was offered to health and wellness practitioners rather than prospective tenants generally, consistent with the employer’s main business. The website promotion and administrative services supplied to those tenants went beyond what such a landlord would normally provide.
Baile accepted the review’s conclusion. The employer’s operations, employee duties and record keeping did not meet the multiple-classification criteria. The business would therefore remain in the health and social services subclass.
Existing classification upheld
The employer asked what its original classification would have been if it had been described from the outset as a wellness business, and whether the health and social services subclass was appropriate. Baile declined to decide hypothetical circumstances in isolation. He found that the employer had not identified an alternative classification, or supported an argument that another category better fitted its services.
The October ruling upheld the review committee’s June 7, 2023 decision and left the employer in Class 7, Subclass 74, under detailed industry code 621390. Baile found that the employer had not met its burden of showing an inappropriate classification. The result was tied to this business’s operation and evidence; it did not establish that every wellness business must be classified identically.
