October 26, 2023 marks the date that corporate Occupational Health and Safety Act (the “OHSA”) fines in Ontario increased, yet again, to the highest in Canada for a single contravention. With little fanfare, Bill 79, the Working for Workers Act, 2023 (the “Bill”), received Royal Assent. Importantly for Ontario corporations, the Bill amends subsection 66(2) to increase the maximum corporate fine that can be imposed under the OHSA. The increase moves the maximum from $1,500,000 to $2,000,000 per charge[1]. With government prosecutors already seeking significantly increased OHSA penalties for both corporations and individuals, this latest amendment could see even further upward pressure on fines.
When Does the Increased Penalty Take Effect?
The new $2 million maximum fine became law with Royal Assent. Under the Canadian Charter of Rights and Freedoms increased penalties only apply to matters arising after the new maximum took effect: on or after, October 26, 2023. Existing OHSA prosecutions will therefore remain subject to the previous $1.5 million maximum. Practically speaking, because the Ministry of Labour, Immigration, Training and Skills Development (“Ministry”), who enforce the OHSA, has two years in which to lay charges after it determines the OHSA has been contravened, we will likely not see court cases to which the new maximum applies for a year or more.
Our Analysis- Putting This Increase in Context
A. Maximum Corporate and Individual Fines Already Increased in 2017
It is worth noting that this recent change builds on previous amendments made in December 2017 and July 2022. Corporate and individual fines were increased dramatically in mid-December 2017. Then, the maximum corporate OHSA fine was tripled from $500,000 to $1.5 million per contravention. Maximum fines against individuals were quadrupled from $25,000 to $100,000. At that time, the maximum corporate fine had not been increased since the early 1990’s and individual fines had not increased since 1980.
No pressing need for a further increase in the maximum fine was made clear even at that time. Experience since the amendments were made does not indicate that a maximum corporate fine of $1.5 million has been inadequate. To date, the highest fine ever imposed on a corporation under the OHSA is $1.3 million. That penalty was imposed in 2018 – when the defendant was subject to a maximum fine of $500,000 per charge – following a double fatality in a mine. The involved corporation, out of business by the time of trial, was convicted of six offences for which fines ranging from $100,000 to $350,000 were imposed to total $1.3 million. . Since the 2017 increase, the highest corporate fine imposed for a single event has been $375,000. That was imposed in May 2021, against an employer after a temporary worker was fatally injured while operating a machine. The employer pleaded guilty to failing to ensure a machine was properly guarded.
This history does not point to an insufficient maximum penalty.
B. 2022: Individual Sentences Increased Again
Amendments to the OHSA in 2022 saw increased maximum fines that could be imposed on individual defendants. Effective July 1, 2022, Ontario corporate directors and officers, who were subject to a maximum fine of $100,000 per contravention, began to face a maximum fine of fifteen times that amount: $1,500,000 per charge. The maximum fine for all other individuals increased to $500,000 per contravention– a five-fold increase from the previous maximum.[2]
In 2022 there were also amendments germane to sentencing corporations. The OHSA was amended to include legislated aggravating sentencing factors. An aggravating factor is one that suggests a higher penalty is appropriate. The opposite of an aggravating factor is a mitigating factor (one that suggests a lesser penalty is appropriate) and there are no legislated mitigating factors.
The aggravating factors that became part of the OHSA on July 1, 2022, are:
- The offence resulted in the death, serious injury or illness of one or more workers.
- The defendant committed the offence recklessly.
- The defendant disregarded an order of an inspector.
- The defendant was previously convicted of an offence under this or another Act.
- The defendant has a record of prior non-compliance with this Act or the regulations.
- The defendant lacks remorse.
- There is an element of moral blameworthiness to the defendant’s conduct.
- In committing the offence, the defendant was motivated by a desire to increase revenue or decrease costs.
- After the commission of the offence, the defendant,
a) attempted to conceal the commission of the offence from the Ministry or other public authorities, or
b) failed to co-operate with the Ministry or other public authorities. - Any other circumstance that is prescribed as an aggravating factor.
Crown prosecutors will determine how these factors are used in any case. However, given statements made by the Ontario government, before passing the 2022 amendments, there is cause for concern. While speaking about the Bill during Third Reading on April 6, 2022, a representative of the current government said: “The greater the number of aggravating factors that are put before the court, the stronger the case that can be made for a higher fine”. It appears, therefore, that the government believes that penalties under the OHSA need to increase. Eighteen months later, the further increase in the maximum corporate fine suggests the same.
A review of the aggravating factors shows that some of them are routinely considered as part of sentencing now: the extent of harm to a worker, prior convictions, and a lack of remorse for example. However, some of the listed factors are not usually before the court and are of concern.
One new listed factor, effective July 2022, provides that a record of non-compliance with the OHSA or its regulations is an aggravating factor. We do not read this as a reference to having previously been convicted of an offence under the OHSA because that is addressed in the fourth factor. Rather it applies to a corporation having received previous orders from the Ministry – and, we note, there is no time limit on the record of non-compliance that is relevant. Arguably, a defendant’s entire regulatory history could be put forward to support a higher fine. We anticipate the courts will look at contextual factors in considering a defendant’s prior non-compliance. Factors such as the number of prior orders, the similarity between the prior non-compliance and the offence(s) for which the defendant has been convicted, and how long ago the non-compliance took place may be taken into account. The fewer orders that have been issued, the longer ago they were, and the less similar they are to the current offence should mean that the record of non-compliance is less aggravating.
Another new aggravating factor introduced in July 2022 is failing to cooperate with the Ministry or other public authorities. It is not at all clear what kind of behaviour or conduct this is meant to address. The OHSA already contains offences for obstructing a Ministry inspector[3], failing to furnish the inspector with all necessary means to facilitate his or her activities, or providing false or misleading information, which are all strictly enforced. This potential aggravating factor is not limited to those offences. It would apply to any OHSA contravention and it is reasonable to anticipate that the Ministry and the Crown may well have a different concept of expected cooperation than the regulated corporation.
As counsel representing and advising corporations, our concern with this aggravating factor is its implications for the assertion of legal rights by a corporation and the implementation of strategic responses following a serious workplace event. After an event has occurred, many organizations conduct their own investigation and try to control the flow of information about it – to the extent legally permissible – while the Ministry investigation is ongoing. Depending on the circumstances, this may mean an organization only provides the Ministry with the information it requires to be produced and nothing more. This allows the organization to determine when and how such information will be used. Will such a strategic response now be seen as uncooperative and justification for a harsher sentence? Courts will likely have to determine the meaning of this provision but the addition of this aggravating factor as leading to potentially increased penalties does raise a concern that strategic and legal behaviour could be used against an organization convicted under the OHSA.
Will Fines Actually Go Up?
For a couple of reasons, we think they will.
A. “COVID Deals” Are Over
After the 2017 amendment, there was not a dramatic increase in sentences sought by Crown prosecutors or imposed by courts. However, that may be explained. The 2017 increase took effect on December 17, meaning it applied only to contraventions occurring on or after that date. In most cases, there is some delay between the date of the alleged contravention and the Ministry laying charges. In our experience, that delay often approaches a year. Thus cases to which the 2017 maximum fine, of $1.5 million per charge, applied would likely have started in late 2018. In those cases there was not an immediate increase in the fine amounts being sought by Crown prosecutors.
Then, a little more than a year after cases subject to the 2017 maximum started working their way through the system, the COVID-19 pandemic began. Provincial Offences Courts across Ontario closed. These courts were much slower in resuming operations than the criminal and civil courts. Trials did not happen because courts were not prepared to hold them – even virtually. The resulting tremendous backlog of cases put pressure on the Crowns prosecuting OHSA contraventions to clear cases both to assist the courts in a transition to full operations, and to avoid the dismissal of cases because of unreasonable delay for violation of rights under the Canadian Charter of Rights and Freedoms. As a result, in many “COVID deals”, Crown prosecutors agreed to resolve matters for fines that were meaningfully lower than might otherwise have been sought or imposed. Those days are now over. In our experience, the backlog of OHSA cases has been addressed and the courts have turned a corner by, largely, resuming full operations. This has meant those rare “COVID deals” on OHSA penalties have ended.
B. New Case Law Supporting Higher Fines
Since 2017, OHS caselaw has developed confirming that, where an increase in the maximum penalty occurs, courts should impose harsher sentences. The application of this tenet to occupational health and safety cases arose prominently in Nova Scotia, but has seen support in other courts.
In R. v. Hoyeck, a 2021 decision of the Supreme Court of Nova Scotia, the court allowed a Crown appeal and increased the fines imposed on an individual defendant who had pleaded guilty to three charges under Nova Scotia’s Occupational Health and Safety Act. The court more than tripled fines imposed at the time of his plea. Noting the increase in maximum fines under the Occupational Health and Safety Act (of nearly 10 years earlier) and an April 2020 decision of the Supreme Court of Canada (called Friesen) the court wrote:
A legislator’s decision to increase maximum sentences should generally result in the imposing of higher sentences than the sentences imposed in cases that preceded the increases in maximum sentences. Therefore, the range of sentences pre-Friesen are of limited value, as Friesen imposes on a sentencing judge the creation of a new range in line with the increased maximum sentences. (emphasis our own)
Ontario Crown prosecutors are now adopting a position, much in line with Hoyeck, that the 2017 increase means that higher fines should be imposed. Anecdotally, we are generally seeing significant increases in sentencing positions taken by Crown prosecutors in matters currently before the courts. We expect that to continue and anticipate prosecutors will seize on the new increase to corporate penalties to justify further increases.
What Should Corporations Do To Prepare?
A. Document Due Diligence Measures
While always important, this potential for significantly increased penalties should lead to organizations further assessing their health and safety programs and ensuring health and safety personnel are implementing, enforcing, and documenting program expectations. In addition to determining (with external assistance as needed) whether gaps exist in measures taken or in the implementation of the program, the organization should assess how the positive steps taken to ensure worker safety are documented in particular. It is the organization’s obligation to prove it took all reasonable care to avoid a contravention – something that may prove difficult to demonstrate without useful documentation created at the time of training, orientation, reminders of rules and policies, site inspections and other steps, on an ongoing basis. Memories fade and the importance of a particular step is probably not patent at the time it is taken. It is generally after OHSA charges have been laid for a workplace event that the importance of a particular pre-incident measure becomes clear. Any difficulty or inability to demonstrate the steps taken to ensure compliance increases the likelihood of a conviction and a higher penalty.
Documenting of all positive reasonable care steps on an ongoing basis can and should include amongst other matters:
- having a written health and safety program with detailed worksite-specific rules that conform to applicable OHSA requirements – not simply general rules;
- keeping proof all workers were shown, trained in, and understood these rules;
- keeping details of training provided to workers and supervisors, keeping certifications obtained by workers and supervisors, including all course or training details which may be required at a later date;
- workplace audits or inspections (beyond those done by the JHSC) which record monitoring of key worksite-specific risks and conditions that could cause serious injury;
- monitoring of work activities by supervisors for health and safety compliance with the OHSA and rules, and keeping ongoing daily records of reminders, toolbox talks, verbal or written reminders and discipline to any workers or subcontractors violating rules.
This is a high level list of bare minimum standards for corporate OHSA due diligence. Organizations will have their own processes and documents for steps and measures to address workplace safety. Whatever those may be for the operation or site in question, documenting all of them in detail, on an ongoing basis, will best position the organization to ensure safety and to be able to demonstrate the care taken – should it become necessary to do so. That can result in the withdrawal of OHSA charges once commenced or even the avoidance of OHSA charges in the first place.
B. Investigate All Workplace Incidents and Record Reasonable Care Taken
Ministry inspectors do not investigate reasonable care taken on an organization’s behalf. They will not necessarily seek or collect any information that is positive or helpful to the organization. They may not ask the right questions and may not explore some issues – or not explore them fully. Sometimes, they also get things wrong. The best way to ensure the organization gathers helpful information about an incident, that can be utilized should the organization be charged in future, is for the organization to do its own investigation. We always recommend that, after a serious workplace event, organizations conduct their own robust investigation, including shadowing and recording what the Ministry investigates, asks and records, so that: (1) information can be collected while it is fresh; (2) details that are positive for the organization showing any and all of its reasonable care to prevent the event can be investigated; and (3) the organization can gather information while witnesses are available and before their memories have faded.
If the potential consequences of a workplace incident are increasing, so should the importance of gathering detailed information in a carefully recorded report, in a complete and timely way. OHS consultants, and legal counsel for organizations, can assist with investigations. If contacted immediately, counsel can often assist with advice and recording of details under privilege which can keep such details out of the hands of the Ministry.
It should be kept in mind that one of the OHSA amendments from July 2022, increased the limitation period for commencing an OHSA charge to two years after an event – further increasing the importance of the immediate preservation of positive reasonable care and other details necessary to defend an OHSA charge.
C. Consider Challenging Orders
Finally, in light of the aggravating sentencing factors, organizations may wish to consider more strategic approaches to compliance orders under the OHSA than may have previously been employed. It is not uncommon that a compliance order is received and, notwithstanding disagreement or concerns with the order, a decision is made that it is easier to comply and move on than to challenge the order, even after a serious event. The costs associated with compliance may not be significant and compliance may be the most expeditious way to put the issue to rest – a seemingly reasonable approach.
However, compliance orders mean that a Ministry inspector has concluded the party named in the order – the employer or constructor – has contravened the OHSA. The order may well be the foundation for an OHSA prosecution. Further, an approach of compliance without objection or challenge may have to be reconsidered if the number and nature of prior orders will be used as part of a future sentencing proceeding. Ontario organizations may need to give serious consideration to appealing all OHSA compliance order believed to be legally or factually incorrect so that the history of non-compliance is minimized where possible.
Concluding Thoughts
The impact of this most recent increase to the maximum corporate fine remains to be seen. Crown prosecutors are already seeking increased penalties in those cases currently before the courts. Prosecutors are supported by prosecution-friendly case law and, now, a further 33% increase in the available maximum fine. Organizations would be well-advised not to ignore this increase but to respond by an appropriate review to confirm full implementation of its occupational health and safety program, adopting strategic responses to health and safety issues and incidents, and ensuring that steps taken to ensure safety in the workplace are well-documented.
[1] A 25% surcharge is added to any fine over $1,000.
[2] In addition to these substantially increased maximums, individuals also face up to a maximum of 12 months in jail.
[3] We do note that the OHSA does not actually contain an explicit obligation or duty to cooperate with the Ministry. Rather, the obligations and duties are to provide assistance to facilitate an inspection, investigation, or execution of a search warrant, not to provide knowingly false information, and not to obstruct. The legal obligations are, therefore, to be truthful, to allow an inspector to do his or her inspection without interference, and to provide such assistance as may be necessary for the inspector to carry out their statutory duties. It is worrisome if a potentially harsher sentence is used to require more than that.
