OHS & Workers’ Compensation Advisor – December 2018
As we near the end of 2018, we reflect on a year that saw many significant legislative changes and court decisions, both of which led to important developments in occupational health and safety law across Canada.
This Year in Review, which is provided as a follow up to our November 22, 2018 webinar, highlights and provides context for the most significant developments including:
- The legalization of cannabis and the impact of recreational marijuana on fitness for duty in Canadian workplaces
- Administrative monetary penalties in the context of the Canada Labour Code
- Recent arbitration and court decisions that highlight a number of important issues such as the importance of particulars in Alberta proceedings, the expansion of prosecutions of occupational health and safety offences and the potential for manslaughter convictions, and the developing law of corporate officer/director liability
- Key legislative changes that have important implications for employers
A. Cannabis – Recreational Use legal as of October 17
- On October 17, 2018, recreational cannabis use became legal in Canada. Employers are now facing the challenge of dealing with the myriad of issues that accompany the recreational use of an impairing substance that was once confined to specific medical uses and otherwise illegal
- An employer can prohibit use of cannabis at the workplace and workers coming to work impaired by it (i.e. not ‘fit for duty’)
- An employer can prohibit use of cannabis at work social functions even though it is legal
- Implementation of fit-for-work and substance abuse policies are vital
Some of the highlights of the Cannabis Act, SC 2018, c 16 are as follows:
- Some cannabis-related activities that were prohibited (e.g. possession of less than 30g of dried cannabis in public) are now legal
- Some cannabis-related activities, such as the sale of cannabis or cannabis accessories to a young person, are prohibited
- Some prohibited activities are now punishable by the issuance of a ticket rather than prosecuted under the Criminal Code of Canada (the “Criminal Code”)
- Provinces can issue licences and permits for authorized cannabis-related activities
The expansion of the legal use of cannabis, however, does not amount to a licence to be impaired on the job. Employers can choose to address cannabis use in the same way that they handle the use of alcohol and prescription or over-the-counter drugs with impairing effects. Employers can prohibit the use and possession of recreational cannabis at work and, in almost all cases, should prohibit impairment on the job.
Employers should implement policies that explicitly address cannabis and which set clear expectations concerning both medical and recreational drug usage. We recommend that such policies focus on impairment and on ensuring that employees are fit for work/duty. While Health Canada approved testing for impairment related to cannabis is not yet available, testing for presence is both mainstream and reliable. Furthermore, setting out thresholds in policy and testing for presence is an acceptable risk-based approach to managing the hazard of impairment.
The employer should also ensure that drug and alcohol policies distinguish between the use of cannabis for medical purposes and its use for recreational purposes. Employers that prohibit the use of recreational cannabis at the workplace should outline the disciplinary process to be followed if an employee possesses or uses recreational cannabis while at work or comes to work impaired by, or suffering from the after-effects of, its use. Policies covering the use of medical cannabis should outline the forms of medical documentation that will be required to substantiate its use, as well as a commitment to accommodate (to the point of undue hardship).
Policies should also address substance abuse and addiction. We recommend that the policy require employees to proactively report to the employer if they are unfit for duty, a co-worker is suspected of being unfit for duty, and/or they have an addiction to cannabis (or any other impairing drug). The Supreme Court of Canada confirmed in Stewart v. Elk Valley Coal Corp. that an employer is entitled to implement a policy requiring the proactive disclosure of problems with drug or alcohol abuse, dependency and addiction when the objective is to treat such dependency issues. If an employee fails to comply with the policy and only discloses an addiction or dependency subsequent to an incident giving rise to discipline, the employer may be entitled to discipline the employee (up to and including termination for cause) for failure to adhere to the policy. In these instances, the discipline would be for a breach of the policy and not for the employee’s addiction or dependency (which would contravene applicable human rights legislation).
A key concern for employers relating to the legalization of cannabis is workplace safety. Section 25(2) of the Ontario Occupational Health and Safety Act (the “OHSA”) imposes a duty on employers to “take every precaution reasonable in the circumstances for the protection of a worker”. In other words, employers are required to ensure the health and safety of workers and to protect against injuries arising in the course of employment, as far as may be reasonably practicable. Employers in other provinces have the same, or similar, responsibilities.
While Ontario employers are not explicitly required to have a drug and alcohol policy to comply with section 25(2), adjudicators have recognized that a policy is an essential starting point.
Random drug and alcohol testing may soon become more common for employers with workers in safety-sensitive positions. In November 2018, nearly seven years after its random testing policy was first rolled out, Suncor has reached an agreement with Unifor Local 707A to start random testing at its oil sands worksites in Alberta. Random testing further signals a preference for a risk-based approach to managing the hazards associated with inappropriate and unsafe use of alcohol and drugs.
Random testing has been resisted up until now because ‘inappropriate use’ has been poorly understood and defined. There have also been disagreements over the procedures relating to the randomness of the testing.
In 2018, Energy Safety Canada and the Construction Owners Association of Alberta collaborated to produce the updated Canadian Model for Providing a Safe Workplace. The Canadian Model, which applies uniformly to the construction and maintenance sector and the oil and gas sector in Alberta, provides a best practice alcohol and drug policy that stakeholders can adopt and follow as an integral part of an overall safety and risk management policy. It includes science-based laboratory standards for drug and alcohol concentration limits as well as drug and alcohol screening procedures. It is an important starting point for any employer. Please see the article Policy Model offers guidance on workplace impairment to safety-sensitive industries as a resource.
Question: Should an employer allow smoking on a coffee break? Can employees smoke cannabis instead of cigarettes on their breaks?
Answer: Treat recreational cannabis just like any other impairing substance. Employers can prohibit employees from smoking cannabis for recreational purposes even while they are on a break.
Question: How should employers respond to questions from employees about how long they have to wait after consuming cannabis before it is safe to return to work in a safety sensitive position?
Answer: Since it depends on the person to some extent, and how often, how long and how much the employee consumes, you cannot give them a guideline that guarantees no impairment. Many employers in safety sensitive sectors like aviation and policing are saying up to 28 days or no recreational use at all.
Question: Currently we test to see if a worker is using cannabis. How soon before we are able to test for impairment from cannabis?
Answer: Right now, there is no Health Canada approved device that can test for impairment caused by cannabis. It is difficult to predict when there will be a device or test that is capable of doing more than identifying likely impairment or recent use. However, given the financial incentive – likely in the next year or two.
Question: Is there anything else employers should do?
Answer: The employer’s obligation to ensure a safe workplace for all persons remains unchanged. As noted above, though, employers should revisit existing policies to ensure they accommodate changes to the legislation.
Question: Is there a Model Fit for Duty Standard that accommodates all Provinces?
Answer: See the Canadian Model for Providing a Safe Workplace: A best practice guide of the Construction Owners Association of Alberta as a resource. However, each province can, and does, have differences.
B. Bill 177 in Ontario
- The maximum fine that can be imposed on an individual or corporation has substantially increased
- Those most likely to be at risk for higher fines are repeat offenders and very large multinational corporations
- A charge under the OHSA can now be laid more than one year from the date of the alleged contravention of the OHSA or its regulations
On December 14, 2017, Bill 177 introduced the most significant changes to the OHSA in nearly 30 years. The Ontario government has, amongst other things, tripled corporate fines and quadrupled individual fines, introduced uncertainty into the limitation period (previously one year from the date of the alleged contravention), and added to the circumstances requiring notification of the Ministry of Labour. Here, as we did during our Year in Review 2018 Webinar (“YIR”), we discuss the changes and analyze the impetus for them, as well as the potential impact on Ontario employers, management and workers.
- Increased Maximum on Fines
Since 1990, the maximum corporate penalty for a violation of the OHSA has been a fine of $500,000 per charge. Effective December 14, 2017, corporations became liable to a maximum fine of $1,500,000 per charge. Also since 1990, an individual, including a supervisor, worker, director or officer, has been liable to a maximum penalty under the OHSA of a $25,000 fine and/or one year in jail per charge. With the change, individuals are now exposed to a maximum fine of $100,000 per charge for a contravention of the OHSA. This is in addition to a potential jail term – the maximum term of 12 months was not changed. The Victim Fine Surcharge of 25%, automatically imposed under the Provincial Offences Act, still applies to any fine imposed.
The impact of these changes is not yet clear. The prosecutions to which the higher penalties will apply are still in their infancy and it is impossible to predict how Crown prosecutors will seek to apply the increased penalties. The early indications are that there will not be an automatic tripling or quadrupling of fine amounts. However, we do anticipate that the increased sentencing range will have the greatest impact on defendants with prior convictions for similar offences and on very large corporations.
- Limitation Period
Historically, the limitation period for a prosecution under the OHSA has been one year from the date of the alleged contravention. Effective December 14, 2017, the one year limitation period runs from the date on which an Inspector becomes aware of the alleged offence. This means, if an Inspector becomes aware today of a contravention of the OHSA or its regulations that occurred more than one year ago or even prior to December 2017, an investigation can be initiated anytime within the next year. An example of how the expansion of the limitation period could alter the limitation on liability is demonstrated by a circumstance in which an architect or engineer endangers a worker by providing negligent or incompetent advice – an offence pursuant to subsection 31(2) of the OHSA. Previously, the one year limitation period began to run when the advice was given. Consequently, if the evidence of the endangerment by the substandard advice was discovered more than a year after the advice was given, the limitation period would have lapsed and charges could not have been laid. Now, however, the limitation period begins to run when the evidence of the advice and endangerment becomes known to a Ministry of Labour (“MOL”) Inspector.
That is one example of how the change could impact individuals. For organizations, the expansion of the limitation period may require a more strategic approach. One example is how an employer responds to workplace incidents that are not immediately reportable to the MOL. This could include serious injuries that do not meet the definition of a “critical injury”. In such cases, it is possible that the MOL could learn of the injury after significant time has passed and begin an investigation. In light of this, it would be prudent for employers to conduct a detailed internal investigation of all such incidents and to ensure that the proper steps are taken to protect that investigation with solicitor-client privilege. This approach will allow the organization to gather detailed information and documentation, while the matter is fresh, and to resist any MOL requirement for investigation materials, should it investigate the matter.
In sum, this change has the potential to have a profound effect on employer liability under the OHSA, on matters relating to prosecutions, and on the strategic considerations for organizations and management.
- New Reporting Requirements
As of December 14, 2017, an employer must notify the MOL if a joint health and safety committee or a health and safety representative identifies potential structural inadequacies of a workplace as a source of danger or a hazard to workers. This includes potential structural inadequacies in a building, structure or any other part of a workplace, whether temporary or permanent. Notably, and for reasons that are not clear, this obligation does not apply to an employer that owns the workplace.
The OHSA also opens the door for an expansion of the places at which employers or other parties are required to report an accident or other incident under section 53 of the OHSA. This means that incidents like explosions, fires, floods, and equipment failures may need to be reported in future even when they do not result in a fatal, critical, or disabling injury and even when they occur in places other than a construction site or a mine.
Bill 177 also allows for regulations to specify additional notice requirements that must be met when a person is killed or critically injured at a workplace; when a person is disabled or requires medical attention because of an accident, explosion, fire, or incident of violence at a workplace; and when an accident occurs at a project site or mine. This may result in statutory requirements for further details and particulars of investigations and corrective action to be included in accident reports in the foreseeable future.
We anticipate that the changes to the OHSA by Bill 177 will change health and safety enforcement in Ontario. Record-setting fines may loom on the horizon. Historic matters believed to be long over may be actionable through prosecutions, and an increasing number of workplace events and circumstances may have to be reported to the MOL for investigation. Employers and management would be well-advised to ensure that the organization’s health and safety program is robust and well-documented, and that MOL investigations and workplace incidents are addressed in a manner consistent with the possibility of even more significant OHSA liability.
Question: Should a privileged report be created every time there is an investigation?
Answer: A qualified “no”. Not every health and safety investigation needs a privileged report. However, decisions on how to approach an investigation must reflect the level and nature of the risks facing the organization and management as a result of the event which triggered the need for an investigation. The more significant the risk, the greater the justification for a privileged investigation and report. Significant circumstances or events could include serious injuries that are not immediately reportable (in Ontario), matters involving designated substances, or some issues of non-compliance. In light of the potential consequences (from the increased maximum penalties), advice from counsel would be appropriate even when the need for a privileged investigation is not immediately clear.
C. Bill 30 in Alberta
- New workplace roles and responsibilities
- Employers have increased responsibility for the health and safety of their workers
- Employees have the right to participate in health and safety activities
On December 15, 2017, Bill 30: An Act to Protect the Health and Well-being of Working Albertans, received Royal Assent. It took effect on June 1, 2018.
Bill 30 significantly changed Alberta’s Worker’s Compensation Board (“WCB”) and Occupational Health and Safety (“OHS”) legislation. While the Workers’ Compensation Act (“WCA”) was simply amended, the Alberta Occupational Health and Safety Act (the “AOHSA”) was repealed and completely replaced. These changes will have far reaching cost and operational implications for many employers in Alberta.
The WCB changes came out of recommendations provided by an independent panel that completed a comprehensive review of the system in June 2017. It had been more than 15 years since the last WCB review.
The WCB changes highlight the legislature’s desire to bring about a worker-centred system that features greater independence, transparency, stakeholder engagement and accountability. This approach has resulted in the introduction of a worker Code of Rights and Conduct, established under the authority of section 9.2 of the WCA. The effect is that there will be significant additional costs for employers and some uncertainty as the existing system is calibrated in accordance with the new legislation.
It had been more than 30 years since OHS legislation underwent a comprehensive review. The primary focus of the new AOHSA is on the three fundamental rights of workers:
- The right to know
- The right to participate and
- The right to refuse unsafe work
The following section outlines some key changes proposed in Bill 30.
(a) Positive Duties for Employers and Supervisors: Various positive duties and requirements were imposed on employers and supervisors, such as:
- A positive obligation to ensure that none of the workers employed by them or under their supervision participate in acts of workplace violence or harassment
- An obligation to ensure that workers are aware of their rights and duties and are properly trained so as to ensure their health and safety obligations will be protected
- An obligation to ensure that health and safety concerns are addressed and resolved in a timely manner
- A requirement to report any incidents that could have caused a serious injury
- A requirement for an employer with 20 or more employees to have a written health and safety program with prescribed elements
- A requirement for an employer with 20 or more employees to have a joint worksite health and safety committee, and an employer with between 5 and 19 employees to have a health and safety representative
(b) Key Obligations for Workers: Bill 30 also imposes some key obligations on workers to motivate them to take reasonable care to ensure the health and safety of themselves and others around them, including:
- Workers are required to wear all required personal protective equipment or other devices designed to keep them safe at all necessary times on a worksite
- Workers are required to report concerns about unsafe or harmful work to their employer or supervisor
- Workers are required to cooperate with other people for the purposes of protecting the health and safety of workers on a worksite
(c) Other Key Changes: The following key changes were also included:
- The existing obligation to ensure the health, safety and welfare of workers engaged in the work of an employer, or present at the work site at which such work is carried out, was expanded to include anybody who may be affected by the hazards at or in the vicinity of the work site in question
- Workers were granted the right (no longer an express obligation) to refuse unsafe work if the worker reasonably believes that the work poses a threat to their health and safety without an interruption to their regular wages and benefits
- Workers directly affected by stop work orders and stop use orders will be entitled to the same wages and benefits that they would have received had those orders not been issued
- Employers are prohibited from attempting to make a worker work in conditions where the employer or supervisor ought to know that the condition is, or is likely to be, dangerous for the worker
- The implementation of new obligations on prime contractors (now limited to oil and gas and construction activities, sub-contractors, suppliers, supervisors, land owners, and service providers
D. R v Fournier – Manslaughter Conviction for Failing to Comply with Occupational Health and Safety Legislation
- Non-compliance with provincial occupational health and safety legislation can be used as the basis for a manslaughter and/or criminal negligence charge under the Criminal Code
- Criminal law continues to be used to regulate workplace health and safety
- Whether Fournier represents an increased liability risk is debatable. The Crown is still required to prove a “marked departure” meaning the test or threshold for liability may be substantially similar to criminal negligence
On September 18, 2018 excavation contractor Sylvain Fournier (“Fournier”) was sentenced to 18 months in prison followed by two years of probation for committing manslaughter under the Criminal Code.
The events resulting in the conviction occurred in April 2012, when Fournier’s business was replacing a sewer line which required the excavation of a trench. Evidence indicated numerous issues with the trench, including walls that had not been sloped, the absence of shoring, the placement of excavated earth directly on the rim of the trench, and a failure to have an excavation protocol for the safety of the workers. Each of these issues constituted a safety hazard and a breach of Quebec’s health and safety legislation. Tragically, the trench collapsed while a worker and Fournier were working in it. The worker was killed in the collapse and Fournier suffered serious injuries. Based on breaches of health and safety legislation, Fournier was committed to stand trial on charges of criminal negligence and manslaughter. He was found guilty of both. At sentencing the Court heard the following factors:
- The deceased worker was employed by Fournier for more than a decade without being provided training for working in trenches
- Fournier did not have a safety program or protocol for working in trenches
- Fournier was in a coma for two days, and in hospital for ten, as a result of the injuries he sustained from the trench collapse
This is the first decision in which non-compliance with health and safety legislation has resulted in a manslaughter conviction. With only one case as the sample size, it may be early to draw too many conclusions about what this decision means for the regulation of workplace health and safety. However, the Crown was required to prove more than the non-compliance in order to establish Fournier’s guilt on the manslaughter charge. The Crown was required to prove, beyond a reasonable doubt, that Fournier’s conduct amounted to a marked departure from the conduct of a reasonable person in the circumstances. This is very similar to the requirements to prove criminal negligence. As such, and again with only this case to assess, it is debatable whether the potential for criminal liability has been expanded by this decision.
With that being said, the sentence imposed on Fournier will likely be influential in future cases involving individuals convicted of manslaughter or criminal negligence following a workplace accident. There remains a relatively small number of cases in which individuals have been convicted and sentenced for criminal offences arising from workplace incidents, meaning each new case further develops the sentencing range.
In addition, this unique use of the criminal law to address workplace safety should serve as a reminder that businesses, their management, supervisors, officers and directors, as well as workers, can be prosecuted criminally following a serious workplace accident. Both the conviction and the tragedy that precipitated it reinforce the need for all businesses to have a vigorous health and safety system in the workplace.
Question: Have there been any criminal (i.e. Criminal Code) prosecutions in Alberta?
Answer: No, not yet. In large part because the fines under the AOHSA are already so high in Alberta ($500,000 per offence) and a four-month jail sentence has been imposed under the AOHSA. Please see Year in Review 2018 Webinar.
E. R v Precision Diversified Oilfield Services Corp – Crown Burden of Proof for General Duty Clause
- An accident is not proof in and of itself of an employer’s breach of the general duty to protect the health and safety of its workers
- Compliance with industry standards in a closely regulated industry will make it difficult for the Crown to prove that it was reasonably practicable for the employer to do something more to address an unsafe condition
- Good safety records and proper training of workers can go a long way to help an employer show due diligence
The Precision Diversified Oilfield Services Corp. is an Alberta Court of Appeal case about a workplace fatality. The injured worker had been working as a floor hand on a drilling rig operated by Precision Diversified Oilfield Services. The worker suffered a fatal head injury while working on the rig. The employer was charged with two offences contrary to the AOHSA. The Crown alleged that the employer had violated its “general duty” to ensure the health and safety of an employee, and that the employer had failed to adopt engineering or administrative controls in order to mitigate workplace hazards.
The employer was convicted on both counts at trial; however, on appeal, the convictions were overturned and a new trial was ordered. The Crown then appealed the case to the Court of Appeal on two issues. The first was whether the expression “as far as is reasonably practicable for the employer to do so” in the general duty section was part of the actus reus (i.e. the physical components of the offence that the Crown had to prove). The other question upon which leave was granted was whether the appeal judge erred in law in her interpretation and application of the due diligence test.
In short, the Crown put forward the position that it could rely on the “accident as prima facie proof of breach” concept as a way of proving the actus reus and satisfying its legal burden. Ultimately, the Alberta Court of Appeal disagreed and determined that the expression “as far as it is reasonably practicable for the employer to do so” forms one of the elements of the actus reus for an offence under s. 2(1) of the AOHSA. As a result, in order to prove that an employer committed an offence by violating its general duty under s. 2(1), the Crown must establish that the worker was engaged in the work of the employer, that the worker’s health or safety was threatened or compromised, and that it was reasonably practicable for the employer to address the unsafe condition through efforts that it failed to undertake. All of these elements must be proven beyond a reasonable doubt.
In arriving at this conclusion, the Alberta Court of Appeal determined that the analysis was consistent with the language of the provision, the purpose and intent of the legislation, the Supreme Court of Canada’s guidance in Sault Ste. Marie(in which strict liability offences) were defined, and interpretations given to similar provisions in other provinces.
The second ground of appeal, relating to whether the appeal judge had erred in law with respect to the due diligence test, was dismissed.
Question: Will this decision make it harder for companies in Alberta to be successfully prosecuted.
Answer: Yes. Especially where the general duty clause is the basis for a charge. In such instances, details of the alleged breach and what a company should have reasonably done to address the unsafe condition, will have to be shown.
F. R v 1137749 Ontario Ltd. (Operating as Pro-Teck Electric) – Piercing the Corporate Veil to Impose Corporate Fine on Director
- Courts may look to directors if steps are taken to frustrate the sentence against a corporation
- A corporate owner could face personal liability if the court decides that assets were moved out of the corporation in order to evade financial liability for a regulatory breach
The Pro-Teck Electric decision demonstrates that a director can be held personally liable for fines imposed against a corporation for breaches of regulatory legislation. An electrical contractor, Pro-Teck Electric, pleaded guilty to three charges under the Electricity Act and was sentenced to fines totaling $430,000. The charges arose after a Pro-Teck employee had negligently installed a heated floor in a bathroom, which overheated and killed an elderly man.
The sole shareholder and director of Pro-Teck had transferred assets, including vehicles and tools, out of Pro-Teck to himself following the incident – when it became known that charges were probable or pending. The Crown argued that these transfers were deliberately done to avoid payment of potential regulatory fines and asked the court to impose the penalty on the director personally, thereby “piercing the corporate veil”. The Justice of the Peace declined to do so after deciding that she lacked the jurisdiction. The Crown appealed.
The appeal court determined that a Justice of the Peace could pierce the corporate veil in a Provincial Offences Act trial, notwithstanding that there is no specific provision stating as much. The appeal court found that there was an “implied” jurisdiction to do so in appropriate cases. The Court noted that, had the director not transferred the assets, there would have been no basis to seek to fine the director personally.
This decision serves to remind employers that they must proceed carefully to avoid director liability issues when restructuring a company that is or could be subject to quasi-criminal charges.
G. West Fraser Mills Ltd v British Columbia (Workers’ Compensation Appeal Tribunal) – Imposition of Penalty on “Owner” as “Employer”
- The Supreme Court of Canada expands the meaning of ‘employer’ in section 196 of the WCA to include an owner
- There is a trend towards regulatory creep in terms of what it means to be an employer and the imposition of liability
- This case is potentially distinguishable
In West Fraser Mills Ltd. v British Columbia (Workers Compensation Appeal Tribunal), the Supreme Court of Canada upheld a decision of the British Columbia Court of Appeal concerning a site owner’s liability under British Columbia’s Workers Compensation Act (the “WCA”) and the Occupational Health and Safety Regulation (the “OHS Reg”).
The case involved the death of a tree faller who was fatally injured while working in an area of a forest license held by West Fraser Mills (“WFM”). The deceased faller was employed by an independent contractor who operated an unincorporated falling business. As the license holder, WFM was the “owner” of the workplace under the Workers Compensation Act.
After investigating the incident, the Workers Compensation Board (“WCB”) concluded in part that WFM was in violation of section 26.2(1) of the OHS Reg, which states:
The owner of a forestry operation must ensure that all activities of the forestry operation are both planned and conducted in a manner consistent with this Regulation and with safe work practices acceptable to the Board.
As a result, the WCB imposed an administrative penalty in the amount of $75,000 (later reduced by 30%) was issued against West Fraser pursuant to section 196(1) of the WCA.
The legal dispute before the Supreme Court of Canada turned on the particular wording of section 196(1) of the WCA, which provides that:
The Board may, by order, impose on an employer an administrative penalty under this section if the Board is satisfied on a balance of probabilities that WFM argued that it could not be penalized under section 196 because it was not the employer of the deceased worker.
WFM also challenged the ability of the WCB to enact section 26.2(1) of the OHS Reg, on the basis that it impermissibly added to the obligations of a site owner beyond what was contemplated by the Legislature when it passed the WCA.
The WCAT, BCSC, and BCCA all rejected this argument. The majority of the Supreme Court of Canada also rejected the argument, concluding that section 26.2(1) was a reasonable exercise of the delegated power conferred on the WCB by the WCA.
The majority reasoned that an owners’ duties under the WCA are not limited to those set out in section 119 of the WCA. In fact, section 26.2(1) of the OHS Reg is a “natural extension” of the owner’s duty under section 119(a) of the WCA to ensure the health and safety of persons at or near the workplace. In any event, section 119(c) imposes a broad duty on owners to comply with the regulations.
The majority also agreed with the WCB that WFM was an “employer” for the purposes of section 196 because there was a “factual link” between the supervisor employed by WFM and the incident that occurred. Therefore, the WCB’s broad interpretation of section 196 of the WCA, which permits the imposition of an administrative penalty on an employer, was not unreasonable in this instance.
Given the facts – the supervisor knew the faller’s certification had expired; the supervisor walked through and documented hazards at the first work site but neglected to do the same for the second – WFM was deemed to have had sufficient knowledge and control over the worksite to render it responsible for safety of the worksite. It was “implicated” in the fatality as an “employer”.
The majority stated that this interpretation was responsive to the reality that “maintaining workplace safety is a complex exercise involving shared responsibilities of all concerned.”
As this decision was based on the unique wording of British Columbia’s workplace legislation and tree falling activity (which is specifically addressed in the OHS Reg), its impact on other activities in British Columbia (e.g. oil and gas operations) and in other jurisdictions will depend on the specific wording of the legislation. However, site owners across Canada should take note of this decision, as it signals the potential for increased liability on the horizon. In the meantime, site ‘owners’ that are also prime contractors, should ensure that they have an effective contractor management program in place in order to properly manage their risk in this area.
Question: Does this decision mean that prime contractors have the same duties and responsibilities as employers generally under the WCA?
Answer: Not generally. In this instance the legislation was addressing specific activity (tree falling) and was more prescriptive than other parts of the WCA such as those dealing with oil and gas activities generally.
H. Administrative Monetary Penalties under the Canada Labour Code
- Administrative Monetary Penalties (“AMPs”) are increasingly used by government as a means of enforcing workplace health and safety requirements
- They are the principle method of enforcement in British Columbia but are also available in Alberta, Nova Scotia, Manitoba and the Yukon
- The Canada Labour Code (the “CLC”) provides for AMPs which may become a significant method of enforcement
AMPs are used by governments as a means of enforcement and to encourage compliance with regulatory requirements. They are used to address non-compliance with various regulatory regimes including trade and border, environmental, and financial legislation. In recent years, though, AMPs have also proliferated as an enforcement tool to regulate workplace health and safety.
Most jurisdictions in Canada principally enforce health and safety through prosecution, but some have added AMPs to augment the enforcement arsenal. They are used heavily in British Columbia, where the current maximum penalty is $646,000, and in recent years, have become available in Nova Scotia, Manitoba, Alberta and the Yukon. In those jurisdictions, the penalties are substantially less than might be obtained through a prosecution. Indeed, in Nova Scotia the maximum penalty available is $2,000 for a corporation and lesser maximums for supervisors and workers. AMPs are capped at $5,000 in Manitoba, $10,000 in the Yukon and $10,000 in Alberta.
In June 2017, the CLC was amended to include AMPs up to $250,000 as a sanction for non-compliance with health and safety requirements. Their implementation is still underway but having the second highest potential penalty of any Canadian jurisdiction suggests that AMPs could feature prominently in enforcement.
The approach to determining the amount of an AMP varies. Nova Scotia applies set amounts. Other jurisdictions use a more complex formula that incorporates factors such as the size of the company’s payroll, severity of the contravention, risk of harm resulting from the contravention, recipient’s history of compliance (previous orders/directions, prosecutions, penalties, etc.) or an assessment of the recipient’s commitment to health and safety.
In most jurisdictions, AMPs can be issued to various workplace parties including employers, prime contractors, engineers, architects, supervisors, workers and Occupational Health and Safety consultants (whom the Nova Scotia government considers to be amongst the “workplace parties”). That said, employers are the principal recipients of AMPs.
AMPs are issued by health and safety officers — the same individuals who audit for compliance. In most jurisdictions, an AMP is issued at the discretion of the officer. However, in Manitoba, the officer provides evidence of the contravention to the director of Workplace Safety and Health who determines if a penalty will be issued.
The time frame to issue an AMP varies widely. In Nova Scotia, an AMP must be issued within 14 days of the contravention order (extensions are available), while officers in Alberta and under the CLC have up to two years after the contravention which mirrors the limitation period for a prosecution in those jurisdictions.
While prosecutions and AMPs may be seen as two ways to impose penalties, the following differences between the two are worth noting:
(a) Role of government lawyers: Prosecutions are conducted by Crown lawyers and are to be carried out in the public interest. This places a high professional onus on Crown counsel. They must fairly present relevant evidence that they believe establishes the offence. If they believe that the prospect of a conviction has become unreasonable or if it is no longer in the public interest to pursue, they must stop the prosecution.
The professional obligations that attach to a prosecution are not engaged in an administrative proceeding, such as AMP appeals. As such, counsel for the regulator could act more strategically in the appeal hearing. The government would, therefore, be much more like a regular advocate engaged in an adversarial process.
(b) Balance of probabilities: In a prosecution, the Crown must prove the offence “beyond a reasonable doubt.” For an AMP, the government must only establish the contravention on a balance of probabilities. The contravention may be easier to establish because, notwithstanding deficiencies in the evidence, the contravention may still be found more likely than not to have occurred. In essence, AMPs could provide an alternative means for the government to pursue a penalty where the strength of the evidence is insufficient for a successful prosecution.
(c) Requirements for pre-hearing production: Another strategic or procedural advantage that does not exist with respect to AMPs is the ability to keep the defence confidential until a trial or a hearing. In a prosecution, subject to some exceptions, the defence does not have an obligation to reveal its defence until it is presented at trial. The government may, therefore, be hearing and seeing the evidence for the first time at trial.
An AMP is challenged through a proceeding before an administrative tribunal. The tribunal’s rules may include pre-hearing production obligations through which the evidence of witnesses or the content of documents may need to be revealed. Indeed, the obligation to produce documents could extend to anything that is “arguably” relevant to an issue in the case. This could mean that documents and materials the applicant would not wish to produce are required to be included with the material given to the government before the hearing.
(d) Procedural protections: There are also differences in procedural protections and rules. For example, some rights under the Canadian Charter of Rights and Freedoms (the “Charter”) – such as the right to trial within a reasonable time or the right to a fair trial – may not apply. That is because a person or corporation that has received an AMP has not been charged with an offence, which precludes application of certain Charter rights. However, there may be other avenues available to protect the applicant’s interests. This could include raising issues of abuse of process or procedural fairness as those may be guaranteed by the common law or legislation that addresses administrative proceedings.
Further, it should be noted that the strict rules of evidence do not apply before administrative tribunals. This could mean that both the applicant and the government are able to lead evidence that would not have been admissible in a prosecution conducted before a court.
Helpfully, in the jurisdictions in which AMPs are available, the recipient of an AMP cannot also be prosecuted or receive jail time for the same matter. This might provide some comfort in certain situations but, candidly, it seems likely that if the government believed that an individual’s conduct warranted a jail sentence an AMP would not be issued.
(e) Due diligence defence: In some jurisdictions an AMP cannot be avoided on the basis of a due diligence defence. The amended CLC specifically excludes due diligence as a defence to an AMP. Due diligence is either taking all reasonable care to avoid the contravention or reasonably believing in a mistaken set of facts which, if true, would render any act or omission innocent.
In comparison, in British Columbia, an employer is not to receive an AMP if it exercised due diligence. In Nova Scotia, the AMP provisions do not explicitly address a due diligence defence. However, in Guild Contracting Specialties Inc. v. Nova Scotia (Occupational Health and Safety Appeal Panel), the Nova Scotia Court of Appeal held that the defence is to be considered in an appeal against an AMP. It seems the Nova Scotia Labour Board, which adjudicates appeals of AMPs, would revoke it if the defence was established.
It is unclear why an AMP regime would not permit the recipient to avoid the penalty if due diligence had been exercised. An AMP is designed to penalize the recipient as a means of encouraging compliance with health and safety legislation. If the recipient was duly diligent, meaning all reasonable care was taken to comply, the intended effect of the AMP is unnecessary because the recipient does not need to be encouraged to comply.
It is also not clear whether AMPs will expand into other Canadian jurisdictions. Notably, in Ontario, the Occupational Health and Safety Act was amended, in December 2017, to significantly increase monetary penalties but did not provide for AMPs. While we cannot be certain that AMPs are not under consideration, the recent change to the sentencing regime suggests that prosecution will remain the sole enforcement mechanism in Ontario.
AMPs represent a different means of imposing penalties for non-compliance with health and safety legislation. They can, and in some jurisdictions do, attract penalties that are equivalent to or exceed what might be imposed through a prosecution. The means to avoid or mitigate AMPs are largely the same as those to address the risk of prosecution: a robust and demonstrable health and safety program.
This past year was certainly a turbulent one, and yet another one is expected on its heels as the changes made by legislatures and courts alike take effect and are implemented. Stay tuned for further updates and resources from the realm of occupational health and safety in the year to come.
 WCAT-2013-01952; 2015 BCSC 1098; and 2016 BCCA 473.