OHS & Workers’ Compensation Advisor
A safe, happy, and prosperous New Year to you! As 2020 is now in full swing, we look back on the most significant cases, legislative changes, and developments that shaped Occupational Health & Safety law in Canada in 2019. Our goal in doing so is to help you and your team achieve success in tumultuous times.
This Year in Review article, which is provided as a follow up and update to our November 29, 2019 webinar OHS in Canada: The Year in Review 2019 analyzes and provides further context on the most significant OHS developments across Canada in 2019, including:
- The rise and use of “Administrative Monetary Penalties” in Canada;
- Health and safety issues in the Film & Television sector;
- Recent arbitration and court decisions that highlight a number of important issues such as an Alberta decision finding that a director can be held personally liable for injuries, an Ontario decision expanding the definition of what it means to be an owner on a construction site, and a Nova Scotia decision which involved the first criminal prosecutions for negligence matters in Canada;
- Changes to the WorkSafeBC criminal investigation process; and
- Key legislative changes that have important implications for employers.
The Rise and Use of Administrative Monetary Penalties
- Rate of use and penalty amounts are increasing;
- A near miss can result in a significant penalty;
- Canada Labour Code poised to implement Administrative Monetary Penalties in 2020; and
- The defence of due diligence may not be available.
Even though many Canadian jurisdictions continue to rely solely on prosecutions as a means to enforce Occupational Health and Safety (“OHS”) obligations, Administrative Monetary Penalties (“AMPs”) continue to grow in use as an additional or alternative means of enforcement – or, in the case of British Columbia, the principal enforcement method. They are now available and used to greater or lesser degrees in Nova Scotia, Manitoba, Alberta, and the Yukon. They can be issued to various workplace parties including employers, prime contractors, engineers, architects, supervisors, suppliers, workers, and OHS consultants. Indeed, both the Alberta and Nova Scotia governments have the ability to take regulatory action against OHS consultants. That said, employers are the principal recipients of AMPs.
An AMP, in most jurisdictions, simply requires that an OHS regulator (the same regulator auditing for compliance) determine if a contravention has occurred and, at his or her discretion, serve a notice of penalty on the person or corporation. However, under some regimes, the OHS regulator provides evidence of the contravention to a health and safety tribunal, Workers’ Compensation tribunal, or the Director of a government Safety and Health Branch who then determines if a penalty will be issued.
An AMP is very different from an OHS prosecution. In an OHS prosecution, a prosecutor must prove, in court, that the alleged offence occurred beyond a reasonable doubt. If successful, a defendant can avoid a conviction and penalty by establishing, on a balance of probabilities, that all reasonable care was taken or that the defendant was operating under a reasonable mistake of fact such that their action or inaction is excused. In other words, prove due diligence. However, in several AMP jurisdictions, a due diligence defence is not expressly available on review or in an appeal seeking to set aside or reduce the AMP. Troublingly, in others, due diligence is not available as a defence at all. Examples of where due diligence defences are unavailable include the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act (as noted below) and the Canada Labour Code, when its OHS AMP system comes into force.
Under virtually all Canadian OHS systems permitting AMPs, the recipient of an AMP cannot also be prosecuted for the same matter addressed by the penalty. It is one consequence or the other.
AMPs can be significant. This can be demonstrated by a recent case from Nova Scotia, which shows just how significant OHS-related AMPs can be – even for a near miss involving no injury.
On July 12, 2019, ExxonMobil Canada Ltd. was issued a $40,000 AMP by the Canada-Nova Scotia Offshore Petroleum Board, which regulates health and safety in the Nova Scotia offshore oil industry. The penalty was issued following a November 2018 incident in which five workers on a drilling rig were almost struck by a chain with swivel and shackle, weighing over 100 k.g., which fell nearly eighteen metres during a lifting operation offshore. ExxonMobil was found to have failed to comply with Section 25(a) of the Nova Scotia Offshore Petroleum Drilling and Production Regulations, by failing to both maintain and operate equipment in a way that would have avoided the incident. An inspection revealed that the chain was not correctly fastened with the appropriate equipment, and certain equipment showed signs of corrosion and improper installation, leading to the near miss in question. Significant efforts to develop and implement corrective action were reportedly taken post-incident.
In Western Canada, substantial AMP’s, including imposition of the statutory maximums, are becoming more common.
As a case in point, in July 2019, in British Columbia, Rio Tinto Alcan Inc. was fined the statutory maximum of $662,102.48 after maintenance workers suffered exposure injuries while trapped inside a gas treatment centre reactor. The work had been done without all locks in place as required by the key box procedure, there was no record of a risk assessment for the work task, and the key box procedure did not name all individuals who applied the locks. In short, the company failed to ensure that energy-isolating devices were locked in a safe position using acceptable procedures made available to all workers required to work on the equipment. This was a high-risk violation. The employer has requested a review of the decision to WorkSafeBC’s Review Division.
In another British Columbia case from August of 2019, Peace River Hydro Partners Construction Ltd. was fined $662,102.48 following an electrical shock injury. A worker was injured while accessing the main circuit breaker in a high-voltage electrical cabinet on tunneling equipment. The main electrical breaker extensions on the door of the company’s tunneling equipment were not functioning, the de-energizing switches had been subverted, and the main breaker switch-box isolation covers were in disrepair. An inspection by WorkSafeBC revealed that workers commonly accessed the main breaker without following lockout procedures and that the company failed to ensure its equipment was capable of safely performing its functions; failed to provide its workers with the information, instruction, training and supervision necessary to ensure their health and safety; and failed to effectively isolate and control hazardous energy sources, which was a high-risk violation. The same company had been fined over $300,000.00 in 2018 for a high risk violation relating to its exposure control plan.
The rise and use of AMPs in place of fines is worrisome for employers for a number of reasons:
- Professional Obligations of a Prosecutor do not Apply: The professional obligations of Crown prosecutors in a prosecution are not engaged in an administrative proceeding. Unlike a prosecutor, counsel for the regulator is not required to continually assess whether there is a reasonable prospect of conviction or if it is in the public interest to proceed with a particular case. As such, counsel for the regulator could act more strategically in the presentation of the regulator’s case. The government would, therefore, be much more like a regular advocate engaged in an adversarial process. Lawyers are also not necessarily involved at all, which is challenging given the legal analysis and attention to procedural fairness that they can bring to the table.
- Different Burden of Proof: With respect to an AMP, the government must only establish the contravention on a balance of probabilities. This is a lower burden of proof than the standard set for prosecutions, which is beyond a reasonable doubt. This lesser standard of proof can make it easier to establish contraventions.
- Production Obligations: Another strategic or procedural difference that does not exist in a prosecution is the obligation to produce information to government lawyers. In a prosecution, subject to some limited exceptions, the defence does not have an obligation to reveal its defence or provide any of the evidence that will be called until it is presented at trial. The government may, therefore, be hearing and seeing the evidence for the first time at trial. However, different pre-hearing production obligations arise when challenging AMPs before an administrative tribunal. An employer may have to produce evidence in advance of the hearing which could identify positions to be taken and could require employers to reveal, not only the evidence that will be relied on, but also, to produce unfavourable information that it may not have intended to use.
- Diminished Procedural Protections?: Additionally, prosecutions provide some protections not necessarily available in relation to AMPs. This could include the right to trial within a reasonable time and to be secure from unreasonable search and seizure as guaranteed by the Canadian Charter of Rights and Freedoms. That is because a person or corporation that has received an AMP has not been charged with an offence, which may preclude the application of the right to trial within a reasonable time. Additionally, if the regulator only issues an AMP, it may not be possible to argue that its predominant purpose was to gather information for prosecution, which may mean that search and seizure guarantees are not engaged.
Health and Safety in the Film & Television Sector
- Possible greater scrutiny by OHS regulators;
- Relatively few instances of enforcement for incidents occurring during performance; and
- Potential for broad health and safety liability.
The most recent statistics available tell us that the Canadian film and television sector generates over twelve billion dollars in annual labour income and supports over 260,000 full time equivalent jobs. While the film industry is unquestionably a unique business, it is no different than any other when it comes to the responsibility to control hazards and ensure the health and safety of workers. A recent determination by the British Columbia Workers’ Compensation Board makes this clear and provides helpful guidance to employers both within and outside the film and television sector.
On August 14, 2017, during filming for Deadpool 2 in Vancouver, British Columbia, a stunt double was fatally injured when she was thrown from the motorcycle she was operating and hit a window frame of a nearby building. Deadpool 2 was being filmed by TCF Vancouver Productions Ltd. (“TCF”), a subsidiary of Twentieth Century Fox. The stunt double was a professional motorcycle rider who was new to the industry and had no previous experience as a stunt double. On the day of the accident, the stunt double was required to ride a motorcycle through the doors of the Vancouver Convention Centre and down a set of stairs. Prior to attending on set, the stunt double did not receive any new worker orientation. After a number of rehearsals, she attempted the stunt at “filming speed” and, as noted, was thrown from the motorcycle, striking her head on a window frame of a nearby building.
At the time of the accident, TCF had a formal occupational health and safety program; however, WorkSafeBC found that many components of the program were not followed. TCF did not undertake a written risk assessment for the stunt in question. Similarly, despite the stunt involving ten to fifteen stunt performers, including the stunt double, TCF did not classify the scene as a “stunt” under its own policies, and therefore did not complete a stunt safety inspection checklist. WorkSafeBC also concluded that a production activity notification checklist, another internal requirement of TCF, was not completed, despite specialized vehicles, specifically motorcycles, being used in the stunt. The production activity notification was designed to facilitate involvement of the Production Safety Department with the production. Finally, there was no evidence that the stunt double wore a helmet; to the contrary, TCF stated that the stunt double was not to wear a helmet as the character the stunt double was playing in the film did not wear one.
As a result of the failures noted, WorkSafeBC cited TCF for multiple violations of the Workers Compensation Act and Occupational Health and Safety Regulation, including that TCF had:
- failed to ensure the health and safety of all workers;
- failed to ensure the stunt double wore safety headgear;
- failed to provide adequate supervision;
- failed to provide new worker orientation; and
- instructed the stunt double not to wear a safety helmet.
WorkSafeBC is now considering the appropriate Administrative Monetary Penalty to impose as a result of these violations. Depending on the assessable payroll of the production, any such penalty may be close to the statutory maximum of $662,102.49.
The WorkSafeBC report strongly suggests that had TCF followed its own policies and procedures, the accident likely could have been avoided, or the risks of serious injury significantly mitigated. It serves as a useful reminder to any employer of the following:
- Serious incidents can lead to serious consequences – even in the film and television sector;
- Written policies are only effective if implemented; and
- New and young workers will be treated as especially vulnerable workers on a job site and the employer must ensure new worker orientation is both meaningful and actually undertaken before the new worker begins working.
Not coincidentally, in 2018, WorkSafeBC announced a 2018-2020 Film and Production Initiative, which, in part, saw WorkSafeBC engaging the major studios doing film and production work in British Columbia, focusing on the studios’ responsibility for occupational health and safety, and stressing the need for major studios to recognize their role in the health and safety of local productions (Since 2018, in British Columbia, over eighty serious injuries have been reported on film sets). As of the end of August 2019, approximately sixty n OHS inspections have been completed for these focus areas of motion picture, commercial, or television production.
How Much Owner Control is Too Much on a Jobsite?
- Crown position would:
- Expand Employer obligations beyond functional role on the project;
- Read out Owner and Constructor role;
- Fundamentally alter Ontario Occupational Health and Safety Act (“OHSA”) obligations when contracting for a construction project; and
- The Constructor is still determined by the “control test”.
A potentially landscape-altering contracting case will be heard by the Ontario Court of Appeal. The issue that will be considered is the scope of OHSA responsibilities of the “owner” of a construction project. In particular, the court will consider whether, by having quality control representatives on the project, the “owner” was an “employer” with broad health and safety responsibilities on the project.
On October 28, 2019, the Ontario Court of Appeal granted leave to the Crown in Ontario (Labour) v. Sudbury (City), 2019 ONCA 854, to consider whether an “owner” of a construction project can also be an “employer” with obligations to ensure safety on the project. As part of considering this issue, the court will determine whether the analysis involves an assessment of the degree of control the owner has exercised on the project. Should the Court of Appeal conclude that an “employer” on a construction project has obligations to ensure compliance with the OHSA in circumstances not involving workers the employer employs or has engaged, or based on the activities of the employer endangering a worker, this would fundamentally alter OHSA obligations when contracting on a construction project. It could also have implications in other jurisdictions whose OHS legislation has functionally similar provisions.
In this case, the Corporation of the City of Greater Sudbury (the City) tendered a typical construction project that included road and water main repair. The City contracted with a general contractor (“GC”) for completion of the project. The GC undertook the project as its “constructor”. Under the OHSA, the “constructor” is the party with overall responsibility for health and safety on the project. There were standard contractual provisions and arrangements in the agreement between the City and GC. The agreement required the GC to control the entirety of the project for the City, ensure compliance with the OHSA, and file a Notice of Project with the Ministry of Labour (“MOL”), thereby confirming its role as “constructor”. As the “owner”, the City monitored project quality and contract compliance through quality control inspectors that it sent to the project. The City did not direct the work of the project or control the project.
Tragically, in September 2015, a member of the public was struck and killed by a grader operated by an employee of the GC. At the time, the pedestrian was crossing a street at a traffic light in a construction zone. A signaller for the involved equipment, fencing to separate pedestrians from equipment, and a paid duty police officer to direct traffic and vehicles would have provided protective measures but were absent at the time of the accident. The MOL investigated and, eventually, the City and the GC were both charged with various violations of the OHSA. The City was charged both as a “constructor” and an “employer”. The “constructor” charges were, essentially, identical to the “employer” charges.
Before discussing the rulings in this case (and their potential implications), it would be prudent to set out how OHSA obligations have traditionally applied on a construction project in Ontario. Historically, it has been recognized that workplace parties on construction projects have varying degrees of health and safety responsibilities under the OHSA. The OHSA permits an owner to hire a “constructor” (often a GC) who takes on overall responsibility for safety on the project. In fact, the OHSA makes a “constructor” responsible for all employers and all workers on the project. The “owner” is required to carry out any OHSA owner obligations – which mainly deal with providing information about designated substances on the project. In addition, if the “owner” were to send its own workers or a contractor into the project, it would be expected to ensure, as an “employer”, that OHSA requirements are met in respect of those workers. Traditionally, it was this functional lens that determined the scope of “employer” responsibilities under the OHSA. If the health and safety issue involved the work of the employer’s workers, OHSA responsibility may follow. If not, the “employer” would not have OHSA responsibility. It is this functional analysis that may be altered by the Court of Appeal in this case because the Crown’s position is that the City had OHSA responsibilities in respect of work performed by the GC.
As mentioned above, the City was charged both as an “employer” and as a “constructor”. It defended the charges at trial. The City was acquitted and those acquittals were upheld at the Crown’s first appeal. Both the trial and appeal courts found that the City was neither “constructor” nor “employer” because of the following:
- The City had a clear contract with the GC that identified the GC as the “constructor” and the City as “owner”;
- The City hired that particular GC because it had the knowledge and resources to complete the work of the project, which the City did not;
- The City did not exercise control and direction over activities at the project site;
- The City‘s quality control inspectors attended from time to time for quality assurance purposes only and to ensure that the work being performed was in accordance with the contract only, so the City could make progress payments to the GC. When attending on site, quality control inspectors followed the health and safety guidelines of the GC. This did not amount to control; and
- Even where the City quality control inspectors found the GC in breach of contractual requirements for safety, the City acted appropriately by stopping work and making the GC aware of the violation to correct it. This did not cause the City to take over the role of “constructor” and was commendable.
Finding that the City was not the “constructor” or an “employer” with responsibility for the incident was consistent with the traditional approach to OHSA duties on a construction project. However, in the trial and appeal, the Crown took a novel and surprising legal position respecting the City‘s OHSA obligations at the project. The Crown’s arguments were that the following factors were indicative of control that rendered the City a “constructor” with responsibility for preventing the accident:
- The City paid police officers assigned for paid duty to assist at the construction project directly (it was administratively easier for the City to be this conduit than for the GC to pay and charge back the City);
- The City could require the GC to fire incompetent employees on site;
- The City issued forms and appraisals to evaluate the quality of the GC’s work and provide feedback as part of contractor management processes;
- The City insisted on a particular level of training for the GC over and above what was required under the OHSA;
- City representatives attended progress meetings with the GC at different locations, including City property, and sometimes took meeting minutes;
- The contract between the City and GC permitted the City to take back control of the project or direct work (a matter that did not occur during the project, despite certain violations by the GC); and
- The contract permitted the City to suspend work on the project at its discretion.
It’s important to note that none of the above matters dealt with by the courts or argued by the Crown have previously been found to be “control” sufficient to render an “owner” the “constructor” where the “owner” has contracted with the “constructor” of the site. Courts have repeatedly confirmed that the identity of the “constructor” at a project is determined through a “control test”. While OHSA definitions and roles of workplace parties are somewhat broad and imprecise, the OHSA definition of “constructor” permits an “owner” to select a “constructor” to undertake a project for it. Another provision of the OHSA, subsection 1(3), states that the “owner” does not become the “constructor” because it has engaged a person solely to oversee quality control at a project. The MOL Constructor Guidelines in Ontario also confirm the acceptability of the “control test”, and many of the above general factors as indicative of control which, if exercised by a GC, render it the “constructor” rather than the “owner”.
Interestingly, in its appeal case, the Crown also argued that the “employer” definition and role under the OHSA does not require an analysis of control and that subsection 1(3) does not apply to the “employer” analysis. It was argued that the City, by virtue of using quality control personnel at the project, was an “employer” responsible to ensure OHSA compliance by workers of the GC.
The appeal court rejected this argument which, in our view, is appropriate as the Crown’s argument flies in the face of longstanding existing MOL guidance to “owners” and “constructors”, the provisions of the OHSA, and logic. Upholding the Crown’s position would undoubtedly lead to confusion in instances where an “owner” has contracted a GC to undertake a project as the “constructor” but then engaged in quality oversight. Under the Crown’s position, such oversight (which is an industry best practice) could lead to a finding that the “owner” was an “employer” on the project with broad OHSA responsibilities. This approach, effectively, reads out the “constructor” role because there would be no distinction in the scope of the OHSA obligations of a “constructor” and “employer” as both would have overall responsibility for health and safety on the project. It would also negate the “owner” role because, as soon as an “owner” sent quality control personnel to the project, it would be responsible for ensuring OHSA compliance on the project.
The Crown renewed its arguments in an Application for Leave to Appeal to the Court of Appeal. Fortunately, the Court of Appeal confirmed the prior finding that the City was not the “constructor”. It also confirmed that this “constructor” determination properly involved a “control test”. However, what remains concerning is the granting of leave to hear the question of whether the City was an “employer” under the OHSA, and breached its “employer” duties in the circumstances. We should note that in R. v. Wyssen the Court of Appeal interpreted the duties of an “employer” under the OHSA, which are very broad, as requiring an “employer” to act as a virtual insurer of safety in the workplace. This creates the possibility that the City, and other construction project “owners” in the future, could be held to have a residual “employer” role, not just for their workers on a project, but for the entirety of a project.
As well, should the Crown’s position prevail, it stands to reason that all “employers” on a project could see their OHSA obligations expanded beyond the function they carried out on the project. This raises the possibility of significant future uncertainty for municipalities, other project “owners” and other construction “employers”, respecting the scope of their OHSA responsibilities when a GC is acting as “constructor” and is clearly controlling and directing safety at a project for the “owner”.
The Court of Appeal’s decision could fundamentally alter the landscape of OHSA responsibilities on construction projects. We will keep our clients and readers updated on this case and communicate the Court of Appeal’s decision when it is made.
No Criminal Negligence Without Harm
- Negligence does not become criminal unless it causes death or bodily harm; and
- Dispassionate application Crown’s burden of proof.
This year saw the first prosecution in Nova Scotia under Bill C-45, also known as the Westray law. In R. v. Hoyeck, 2019 NSSC 7, (“Hoyeck”) the owner of a garage was charged under section 220(b) of the Criminal Code for criminal negligence causing death following a tragic, fatal workplace accident.
On September 20, 2013, the deceased worker, a fifty eight year old Red Seal Mechanic, began to strip a 1998 Dodge Caravan with another worker. The deceased worker was under the van using an acetylene torch to remove the steel straps that attached the gas tank. This resulted in an explosion. The deceased worker suffered severe burns to ninety percent of his body and died the next day.
Sections 219 and 220 of the Criminal Code provide that “everyone is criminally negligent who in doing anything, or in omitting to do anything that it is his duty to do, shows wanton or reckless disregard for the lives or safety of other persons” and “every person who by criminal negligence causes death to another person is guilty of an indictable offence and liable… to imprisonment for life.”
As the owner and supervisor of the garage, Hoyeck was someone who undertook, or had the authority, to direct the deceased worker in stripping the van. As such, he had a legal duty, under section 217.1 of the Criminal Code, to “take reasonable steps to prevent bodily harm” to the worker in the performance of the work.
At trial, the evidence revealed that there were a number of health and safety issues in how the van was stripped. The shortcomings, which were contrary to safety and industry standards, included the failure to utilize proper Personal Protective Equipment; the failure to properly raise the van to safely work underneath it; the failure to employ proper procedures for working underneath the van; the failure to drain gas tank and fuel lines; poor lighting; tripping hazards; poor storage and housekeeping practices on site; and the improper storage of acetylene tanks.
The principal safety shortfall was the use of the torch to remove the gas tank. An expert witness testified that the deceased worker appeared to have initially used proper tools to remove some of the bolts attaching the gas tanks to the van but went on to use a torch to remove a bolt and the gas tank ignited. The evidence was clear that in no scenario would it make sense to use a torch near a gas tank, and that a Red Seal Mechanic was trained to know this.
In arguing that Hoyeck was guilty of criminal negligence causing death, the Crown submitted that the work environment exposed the deceased worker and others to serious risk of bodily harm or death and that he directed the two workers to engage in dangerous and risky work, took no steps to manage the serious risks inherent in the work, and ignored patently dangerous conditions and practices that he saw occurring. The defence argued that as chaotic as the work environment may have been, even if the conditions themselves were negligent or contrary to legal requirements, those matters were irrelevant if they did not cause the worker’s death. The defence argued that the Crown had not proven, beyond a reasonable doubt, that Hoyeck directed the deceased worker to use the torch or was aware that a torch would be used to remove the gas tank.
Ultimately, the Court found that Hoyeck had directed the workers to remove the gas tank without specifying the tools to be used, that he was not present when the worker used the torch, and, significantly, that there was no evidence that he knew the worker was going to use the torch to remove the gas tank.
Furthermore, the Court concluded that, although the condition of the workplace showed the employer’s wanton or reckless disregard for the lives or safety of others and himself, this did not cause the worker’s death. The worker died as a result of his decision to use the acetylene torch to remove the gas tank – something the Court noted a trained mechanic should know better than to do.
The Hoyeck decision confirms that negligence does not become criminal unless it causes death or bodily harm. There is no offence of simple criminal negligence. The decision also confirms that the Crown’s burden, to establish that the criminal negligence caused the death or bodily harm beyond a reasonable doubt, is a high standard that will be dispassionately applied.
Indeed, in this case, the Court found that the “deplorable” state of the workplace, described as “an accident waiting to happen”, could not be causally connected to the death. The issue of whether any alleged negligence caused the death or bodily harm will be determined on the specific circumstances of each case. However, in this particular matter, the worker being a trained mechanic performing a common task, the absence of an instruction to use the torch, and Hoyeck’s ignorance regarding the use of the torch were significant factors in determining that his behaviour did not cause the death.
It is important to recognize that this analysis may have been quite different in a prosecution under an occupational health and safety statute because, in those cases, death or injury are, generally, not something the Crown has to prove were caused by the violation; the violation itself is an offence whether anyone is injured or not. That said, if the violation can be causally linked to a death or injury, a convicted defendant would be subject to a much more significant penalty.
Hoyeck was also charged under the Nova Scotia Occupational Health and Safety Act (“OHSA”) and, following his acquittal of the criminal charges, plead guilty to three charges under the OHSA in September of 2019: failing to ensure the safety of employees, failing to adequately maintain work equipment and failing to develop a written emergency procedure. Sentencing arguments were to be made on November 1, 2019, but further information has not yet been publicly released.
While Hoyeck may have been the first criminal negligence charge laid in relation to a workplace safety matter in Nova Scotia, 2019 also saw the second criminal negligence charge in that province. In November 2019, a supervisor was charged with criminal negligence causing death after a worker fell from a roof in March 2018. We will be following the case closely and will provide updates as they become available.
- Moral blameworthiness matters;
- Sentences must be proportional and should have parity with similar cases; and
- Jail sentences can be appropriate for first time offenders.
In Ontario (Labour) v. New Mex Canada Inc., 2019 ONCA 30, the Ontario Court of Appeal considered the appropriate sentence following an appeal of convictions under the Ontario Occupational Health and Safety Act (“OHSA”).
In January of 2013, a worker was found on the ground below the elevated platform of an order-picker: a forklift with an open-sided platform used to permit materials to be retrieved from industrial racking. The platform was not equipped with fall protection equipment. The worker, who died, was wearing dress shoes, had no tether or safety harness and had received no health or safety training. The worker suffered from epilepsy and had fainted twice before at work.
New Mex and two directors were charged with violations under the OHSA and each plead guilty to two offences. Before a Justice of the Peace, the company was fined $250,000.00, plus a victim surcharge, while the two directors were sentenced to twenty five days in jail and twelve months’ probation. The company and the directors appealed and were successful in having the sentences varied. The provincial offences appeal judge reduced the corporate fine to $50,000, set aside jail sentences, and imposed a fine of $15,000 on each of the directors.
The Crown appealed the decision to the Ontario Court of Appeal. In dismissing the appeal, the Court affirmed the following principles of sentencing for regulatory offences:
- Moral Blameworthiness: Sentencing for a breach of a regulatory offence must include consideration of moral blameworthiness. Such a consideration must be viewed on a spectrum: a sentence must be proportionate to both the seriousness of the offence and the culpability of the offender. Where an offender has a higher degree of moral culpability (which may be because he or she has engaged in a repeated pattern of non-compliance, was wilfully blind to workplace hazards, or flouted health and safety requirements) a more serious penalty should follow. However, matters in which there is minimal or no moral blameworthiness would not see a reduction in the appropriate sentence.
- Judicial Restraint: In criminal law, when considering whether to sentence an individual to a custodial term, a court is expected to exercise restraint such that the sentence should constitute the minimum necessary intervention in the particular circumstances. This means that a jail sentence should not be imposed if a lesser sentence would be fit. However, in New Mex the Court of Appeal held that the doctrine of restraint does not speak as loudly in OHSA or other regulatory matters. The court held that the principle of restraint had a different application because of the shorter periods of incarceration imposed for regulatory offences that do not carry the stigma of criminalization. Further, the court justified a difference in the application of restraint because the paramount sentencing consideration in regulatory matters is general deterrence and because jail time is more difficult for those not already criminalized. Ultimately, this may mean that jail sentences are more easily obtained in OHSA or regulatory matters. However, and helpfully for employers, the court noted that the doctrine of restraint also applies to fines such that “corporations should not be harmed by sentences that are harsher than they need to be”.
- Jail Available: While the Court of Appeal did not reinstate the jail sentences initially imposed on the directors (because the directors’ personal circumstances had changed over the course of the appeals), it was made clear that jail sentences may be acceptable, even for first time offenders. In so holding, the Court rejected the relative rarity of jail sentences in OHSA matters as a sentencing consideration. Jail sentences may be imposed where the applicable sentencing factors demonstrate that it is a fit sentence.
- Jail is not to be Imposed Because of Fines Would be Difficult to Pay: The difficulty a party would have paying a fine or the consequence of having to do so is not to be used as a reason to impose a jail sentence. In New Mex, the trial court imposed jail sentences on the directors because it found that imposing fines would “only cause more financial hardship”. The Court of Appeal held that, even though jail sentences may have been appropriate in this particular case, it was a serious error in sentencing principle to substitute a custodial sentence because of the hardship the directors may have endured by the imposition of fines.
- The Principle of Parity: Similar defendants should receive similar fines for similar offences committed in similar circumstances. The Court of Appeal held that this principle is equally applicable to sentencing for regulatory offences and criminal offences. It found that, in imposing the $250,000 fine on New Mex, a very small company with only a handful of workers, the trial court had not applied the principle of parity. That fine was significantly more than the Crown had sought (it suggested at least $100,000) and significantly more than had been imposed on similar companies. Indeed, the fine imposed by the trial court was consistent with the amount that might be imposed on large, multinational organizations. The Court of Appeal held that the penalty might have been appropriate if other sentencing principles suggested that it should issue. However, the trial court did not provide any sentencing rationale for its decision to impose such a significant penalty on such a small organization.
- Director Fines Should Not Be Influenced by Corporate Fines: In New Mex, the fines imposed on the directors were, in part, determined by considering that the directors would have to pay the fine imposed on New Mex. However, the Court of Appeal confirmed that a director is not under any legal obligation to pay a fine imposed against a corporation. As a result, the fine imposed on a director should not be reduced on the basis that they might contribute to paying the corporate fine. Without a legal obligation to pay the fine, the director might choose not to but would have received a reduced personal fine on the basis of anticipated payment.
The New Mex decision is already proving to be an influential decision and will continue to be a touchstone case in sentencing for OHSA and other regulatory matters.
In Alberta, the sentencing ranges have not changed (i.e. $275,000.00 to $325,000 approximately for a single fatality where there is no corporate protection ordered, and $70,000.00 to $125,000.00 for a serious injury). However as of January 1, 2020, police will now be assigned to investigate serious workplace injuries and/or fatalities along with OHS officers, which will increase the potential for a Criminal Code charges and could result in better quality evidence gathering.
Of further note in Alberta, 2019 was the first time, as far as we are aware, that a fine was issued in the OHS context for failure to comply with probation conditions. The probation order was issued to 1800375 Alberta Ltd. following its conviction, under the Alberta Occupational Health and Safety Act, related to a serious incident that took place in Calgary on May 27, 2014. A worker was seriously injured after falling approximately 10 feet from one floor to another of a house that was under construction. The probation order required, in part, that a corporate representative take three identified safety courses through the Alberta Construction Association within 12 months and provide certificates as proof of completion. This did not happen and the company was fined $500.
New Report Proposes More Changes to WorkSafeBC Criminal Investigation Process
- Recommendations favoured by organized labour;
- Recommendations are the product of broader and ongoing legislative reform in British Columbia; and
- It appears probable that the recommendations will receive serious consideration for implementation.
A report reviewing how WorkSafeBC responded to two fatal sawmill explosions in the province proposes a new investigative process and the establishment of a confidential process for workers to report safety concerns.
The report, titled “WorkSafeBC and Government Action Review: Crossing the Rubicon” was prepared by Ms. Lisa Helps – a Vancouver criminal defense lawyer – and contains eleven recommendations that may be adopted by the current NDP government. When the Report was released, Trade unions immediately called for all of the recommendations to be implemented.
The recommendations include:
- Introducing a “quasi-criminal” approach to investigations: Currently, WorkSafeBC starts with an investigation stage, and if it believes a prosecution may be necessary, a prosecution-type investigation starts. The report proposes to get rid of this “regulatory first, quasi-criminal second” model and initiate the prosecution-centred investigation first, when warranted.
- Restructure the Fatal and Serious Incident Investigation Team: The report proposes that an independent, one-team model be adopted. Currently, one team is responsible for investigations into cause and prevention of incidents, and another team is responsible for conducting investigations that may lead to prosecutions of employers that are not in compliance.
- Remove charge approval from WorkSafeBC Board: This would mean that the team conducting an investigation into an incident would have the independence to decide whether there was enough evidence gathered to recommend to a Crown prosecutor that charges be laid under the Workers Compensation Act, and then make such a recommendation to Crown Counsel.
- Amend the Workers’ Compensation Act to include search and seizure powers: This would give WorkSafeBC investigators the power to obtain a search warrant – over the telephone (without notice to the employer), in order to seize evidence and documents in relation to an investigation. The report also proposes giving WorkSafeBC investigators the power to test or take samples, and to obtain orders for employers to compel documents. These powers already exist for OHS officers in Alberta without a search warrant.
- Increase communication with police for certain Criminal Code offenses: The report proposes designating specific contacts within the regional police forces and RCMP to deal with workplace incidents under sections 217.1 and 218 of the Criminal Code (“Duty of persons directing work” and “Criminal negligence”). The report also proposes that a training policy be developed for Crown prosecutors so that the laying of charges arising from workplace investigations is streamlined.
- Increase protection of workers who refuse unsafe work: Currently, a worker has a right to refuse unsafe work under the Occupational Health and Safety Regulations. The report proposes that any subsequent worker be notified of the prior worker’s work refusal, giving them the option to refuse the work, and then imposing a process for documenting that refusal.
- Stronger protection for workers who report safety infractions: The report calls for greater protection of anonymity for workers who contact WorkSafeBC in relation to concerns over safety violations. To achieve this, the report recommends having WorkSafeBC separate the caller’s personal information and store it in a separate, restricted database to ensure that the investigating officer or inspector does not know who initiated the call. However, we believe that this information would still have to be made available to the employer as part of disclosure if there was any regulatory action against them.
- Victim Impact Statements and Publications: The report proposes use of victim impact statements and publication of facts relating to the commission of an offence or contravention as part of sentencing under certain sections of the Workers’ Compensation Act.
Given the trajectory of other legislative reform around workplace laws in B.C., employers should brace themselves for these proposals, as they are likely to be implemented in the near future.
Exposure to Civil Claims for Workplace Accidents
- Depending on the provisions of applicable workers’ compensation legislation, corporate representatives (working owner or director) may not be immune from liability in a workplace accident; and
- Where workers’ compensation registration is optional for directors performing work on a project, the director should consider registering for workers’ compensation insurance.
The Alberta Court of Appeal has confirmed that a director can be personally financially liable for workplace injuries unless they purchase additional, specific, Workers’ Compensation Board insurance protecting them.
In Canada, compensation for injuries arising out of or in the course of employment generally falls under the umbrella of the workers’ compensation system. The workers’ compensation system represents a “historic trade-off” where injured workers are compensated for workplace injuries, regardless of fault or an employer’s ability to pay, in exchange for losing the ability to bring a lawsuit against a covered employer or a co-worker. However, there are circumstances that may mean the workers’ compensation system will not protect against liability and the ‘corporate veil’ may also not insulate a director from personal liability.
Recently the Alberta Court of Appeal explored the intersection between the workers’ compensation regime and corporate liability in Hall v. Stewart, 2019 ABCA 98. The central issue in this case was whether a director of a corporation could be held personally liable for damages caused by his own wrongful (tortious) conduct, while acting as a representative of the corporation in the context of a workplace accident.
The respondent was a director of a construction company that had been hired as a sub-contractor to perform work on the construction of a new home. Part of that work included the installation of a staircase into the basement, which collapsed and injured workers employed by another sub-contractor. The director was involved in not only the supervision of the work, but also the installation of the staircase. The injured workers were compensated under the workers’ compensation system, as their employer and the construction company had coverage under the Alberta Workers’ Compensation Act.
The Workers Compensation Board (“WCB”) brought a lawsuit (i.e. a subrogated action) against the director to recover the amounts it paid to the injured workers. He then brought an application to have the action against him summarily dismissed, arguing that any negligent act he committed was done as part of his duties as an employee, not as a director of the construction company.
The Master in Chambers granted the application and dismissed the action against the respondent because the corporation was immune from suit due to its coverage under the workers’ compensation system. The WCB appealed the decision and a chambers judge confirmed the decision. The WCB then appealed that decision to the Alberta Court of Appeal arguing that the action should not have been summarily dismissed.
The Alberta Court of Appeal reviewed the workers’ compensation regime, noting that while immunity from suit applied to the construction company, it does not apply to directors unless additional coverage is purchased from the WCB. The respondent in this case did not have that coverage and the Court determined that he therefore was not covered by the workers’ compensation system.
The Court of Appeal then turned its attention to the idea of immunity from suit based on the corporation as a separate legal entity. Generally, representatives of corporations, like the respondent, have limited personal liability when acting within the scope of their duties as representatives. However, the Court of Appeal found that there are exceptions to the limitation of personal liability. One such exception being where the corporation itself is immune from suit but the individual is not, which was the situation in this case.
The Court of Appeal found that both the construction company and the respondent director owed a duty of care to the other workers on site during the installation of the stairs, and without immunity under the workers’ compensation system, the construction company would have been liable. However, the respondent director did not have the benefit of the immunity that the construction company did.
Lastly, the Court of Appeal considered the policy arguments for and against attaching personal liability to tortuous acts of corporate representatives that were not “independent” of the business of the corporation, and determined that the deciding factor was the nature of the damages. The nature of the damages in this case was personal injury. The Court determined that there were strong public policy reasons to ensure that injured plaintiffs are compensated and that the recognition of a corporation as a separate legal entity was not designed to provide immunity to a director in these situations.
Ultimately, the Court of Appeal allowed the appeal, and set aside the summary dismissal of the action. This means that the dispute regarding whether the staircase was negligently installed, and whether that was the cause of the failure and the resulting injuries of the workers, would be allowed to be decided at trial.
Although the decision did not address the specific amount of damages or liability of the director, it serves as an important warning to corporate representatives that they may not always be immune from personal liability in workplace accidents. As such, they should evaluate their risk based on the applicable provisions of workers’ compensation legislation in their jurisdiction and their own circumstances. Those considerations should be used to determine whether purchasing additional workers’ compensation insurance would be a prudent step in risk management.
Cannabis Update: One Year On
- “Vibrant” illegal market continues (problematic for dosing/use for medical purposes);
- Alberta holds title as Canada’s top cannabis market for sales with $123.6M sold;
- Edibles were scheduled to be available for retail sale by the 2019 Holiday Season; and
- Update health and safety policy to address edibles at the workplace.
Edibles – More Impairment Challenges
The recent legalization of “edibles”, or – more formally – “cannabis-infused products for commercial production and sale”, which occurred on October 17, 2019, creates additional challenges for employers.
Under the Regulations Amending the Cannabis Regulations, SOR/2019-206, the federal government has regulated edibles, topicals (e.g. lotions) and extracts. The regulation sets a limit of 10 mg of THC in a single serving of edible product and a package of edibles cannot exceed 10 mg of THC. Given the realities of government licensing delays and edible production timelines, it will likely be several more months before commercially produced edibles are readily available for purchase nationally.
Edibles are the same as marijuana in its traditional form, in that, employers may regulate possession and consumption in the workplace. From a workplace safety perspective, the legalization of edibles brings its own challenges:
- Identification: Edibles can be found in a wide array of products, from cookies to gummy candies. Unlike marijuana in leaf form, employers may not be able to readily identify edible products found in the workplace. However their policy should require that any cannabis containing product be labeled as such.
- Impairment: The effects of consuming THC through an edible, as opposed to smoking or vaping, can last significantly longer. An employee who has smoked marijuana twelve hours before attending in the workplace, and not noticed signs of impairment, or felt impaired, may find they are significantly impaired twelve hours after edible consumption as it is processed differently by the body. The reason for this is that, depending on the route of administration (i.e. smoking vs. eating), the cannabinoids (including THC) are metabolized to different degrees in different parts of the body. With eating it, the stomach and liver are engaged and this results in a different high (slower to start, but longer lasting and more potent typically). However, the effect of edibles will differ from person to person depending on factors like their metabolism, what they ate earlier and the terpenes (organic compounds within the marijuana) they are exposed to among others.
- Over Consumption: The onset of symptoms from edible consumption is slower than when THC is consumed through smoking or vaping. It may take between thirty minutes to four hours for full effects to be felt, and is absorbed through digestive systems unpredictably. Employees may unintentionally overconsume edibles if they do not notice symptoms shortly after ingesting.
While the effects of legalization of marijuana on workplaces appear to have been less severe than anticipated, it is still the early days for employers. Things only get more complicated with the new introduction of legal edibles. Employers, particularly those who operate in safety sensitive environments, should update their drug and alcohol policies to reflect the legalization of edibles, and continue to consistently enforce existing policies to ensure a safe workplace free of cannabis impairment.
- New Brunswick: Fishing vessels may be defined as a “workplace” and its Captain a “supervisor” for OHS purposes;
- Prince Edward Island: OHSA workplace harassment obligations;
- Alberta: Changes to health and safety protections in farming and ranching industry (Bill 6) may be repealed by the UCP;
- British Columbia: Administrative Monetary Penalties don’t prevent criminal charges;
- British Columbia: NDP government effect (Patterson Report, July 2019); and
- Federal: Workplace committee inspections not required for areas the employer does not control.
WorkSafeNB is considering changes to the provincial Occupational Health and Safety Act so that fishing vessels are considered a place of employment. Presently, fishing vessels are not considered a workplace, meaning the vessels are not bound by WorkSafeNB compliance requirements. The proposed legislative changes would impose binding safety obligations on captains of vessels.
Statistics showed that 2018 was the deadliest year for the Canadian fishing industry in more than a decade, with seventeen people dying onboard fishing vessels that year.
Down On the Farm
In 2016, Alberta’s NDP government enacted the Enhanced Protection for Farm and Ranch Workers Act, which resulted in a number of critical changes for farm owners and operators in the province, including making farms and ranches subject to provincial occupational health and safety legislation.
Following the election of the UCP in Alberta, the government immediately announced that it would be implementing the Farm Freedom and Safety Act which would, amongst other things, repeal the Enhanced Protection for Farm and Ranch Workers Act. Consultations were held throughout the province this summer and on November 20, 2019, Bill 26: The Farm Freedom and Safety Act was introduced by the UCP and will come into effect on January 31, 2020. Bill 26 does not remove the basic occupational health and safety protections for paid, non-family farm and ranch workers enacted by the NDP. It does, however, exempt farms and ranches from labour relations and employment standards legislation; in addition to giving farm and ranch owners the choice to have WCB or other insurance where they employ six or more employees (not including temporary or family member workers). No insurance is required for smaller farms and ranches.
Ten Years After a British Columbia Workplace Accident – Criminal Code Charges Laid
In 2009, Sam Fitzpatrick, a worker employed by Peter Kiewit Sons Co. was crushed by a falling boulder on a worksite. Ten years later, in May of 2019, an indictment was sworn charging the company and two of its former managers with criminal negligence causing death under section 220 of the Criminal Code.
Kiewit, one of the largest construction companies in North America, was initially fined $250,000 by WorkSafeBC following the incident, but had that penalty reduced on appeal in 2013 to just under $100,000.00. The worker’s family and his union then lobbied police authorities to lay criminal charges against the company and the managers involved. Now, ten years after the accident, all face the prospect of criminal convictions.
This is the second time, in British Columbia, that Criminal Code charges have been laid years after the events they seek to address. Criminal charges were laid against Stave Lake Quarries approximately eight years after a young worker was killed when the dump truck she was operating flipped and landed on her. The delay in instituting the charges meant that constitutional challenges were pending when Stave Lake Quarries pleaded guilty and jointly recommended a fine of $100,000. In considering the aggravating and mitigating sentencing factors involved, the trial court noted that not having to address the pending challenges saved a significant amount of court time. Therefore, the pre-charge delay does appear to have affected the sentence imposed. It remains to be seen what, if any, impact the delay will have in the Kiewit matter.
Canada Post and the Duty to Inspect its ‘Workplaces’
Since our webinar on November 29, 2019, the Supreme Court of Canada (“SCC”) released a long awaited federal decision involving the inspection of Canada Post mail carrier routes for any potential hazards that may be present for postal workers [Canada Post Corp. v Canadian Union of Postal Workers, 2019 SCC 67]. The SCC returned to the position held by the Appeals Officer at the Occupational Health and Safety Tribunal Canada, confirming that Work Place Committee inspections are limited to employer property and do not extend to include what an employer is not in a position to fix or alter. In coming to its decision the SCC acknowledged the practical considerations requiring an employer to perform safety inspections on seventy two-million linear kilometers with 8.7 million points of call across the country.
2019 saw a number of significant changes that shaped and influenced the Canadian occupational health and safety landscape, and another eventful year is expected on its heels. Our OHS team remains committed to continuing to provide further useful updates and resources in the year to come.
 WorkSafeBC determined the risk and potential harm to workers meant a penalty was to be considered and a high risk violation can multiply the penalty.
This newsletter is not intended as legal advice. Any employer or organization seeking assistance should feel free to contact a Mathews Dinsdale lawyer for assistance.