May 18, 2018

The Ever-Expanding Safety Obligations of Site Owners:  “Employers” OHS Obligations Are Imposed on Worksite Owners

In a decision released today, the Supreme Court of Canada has upheld a decision of the British Columbia Court of Appeal concerning a site owner’s liability under the Occupational Health and Safety provisions of British Columbia’s Workers Compensation Act, following the death of a worker employed by a third party on the worksite.
The decision of West Fraser Mills Ltd. v British Columbia (Workers Compensation Appeal Tribunal), 2018 SCC 22, concerned a tree faller whom was struck by a rotting fir tree and suffered fatal injuries.  At the time of the incident the worker was engaged in hazardous logging work in a location where West Fraser Mills Ltd. (“West Fraser”) held a Forest license.  While West Fraser was the “owner” of the worksite by virtue of the licence it held, it was not the employer of the worker, whom worked for a contracting company on the land in question.
After investigating the incident, the Workers Compensation Board (“WCB”)determined that West Fraser did not meet various obligations under section 26.2(1) of British Columbia’s Occupational Health and Safety Regulation (the “OHS Regs”), which imposes certain safety obligations on owners of workplaces.  As a result of these breaches, an administrative penalty in the amount of $75,000 (later reduced by 30%) was issued against West Fraser pursuant to section 196(1) of British Columbia’s Workers Compensation Act (the “Act”).
The legal dispute at issue before the Supreme Court of Canada turned on the particular wording of section 196(1) of the Act, 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…”  

On the basis West Fraser was the site owner and not the employer of the deceased worker, it argued that it could not be issued a penalty under s. 196.
West Fraser also challenged the ability of the WCB to enact section 26.2(1) of the OHS Regs, on the basis that it impermissibly added to the obligations of a site owner beyond what was contemplated by Parliament when it passed the Act.
The majority of the Supreme Court of Canada rejected both of West Fraser’s arguments.
In response to West Fraser’s challenge to the WCB’s authority to create regulations which add to the obligations expressly set out in the Act, the Court reasoned that the Act gave WCB a large discretion to craft regulations related to occupational health and safety, and that s. 26.2(1) was consistent with the mandate of the Act.
The Supreme Court also determined that the Tribunal’s interpretation of section 196(1) as permitting an administrative penalty to be issued against any employer, even when they are not acting in the position of an employer, was not patently unreasonable. In the Court’s view, West Fraser, while it was the owner of the license, was also necessarily an “employer” in relation to the worksite, even if it was not the employer of the worker in question.
The Supreme Court reasoned that West Fraser was required to, and did, employ an individual to carry out the duties imposed by the Act and OHS Regs concerning the worksite, and thus was an “employer” for purposes of s. 196(1).   West Fraser was therefore both “owner” for the purposes of s. 26.2(1) of the OHS Reg and “employer” for the purposes of s. 196(1) the Act.
Of particular importance was the Supreme Court’s endorsement of the proposition that a site owner can be an “employer” for purposes of the Act by virtue of a relationship to the worksite itself, even in the absence of any direct employment relationship with those involved in a workplace accident.
As this decision was based on the unique wording of British Columbia’s workplace legislation, its impact in other jurisdictions will depend on the specific wording of each provincial statute.  However, site owners across Canada should take note of this decision, as it signals increased potential liability on the horizon.  Employers should ensure that any contractors working on their worksites are in compliance with all applicable safety standards in order to effectively manage their risk in this area.
If you have any questions about this decision or any other questions relating to workplace law, please do not hesitate to contact one of our Mathews Dinsdale lawyers.