In R. v. Sudbury Greater Sudbury (City)[1], the Supreme Court of Canada expanded a property owner’s potential legal liability with respect to a construction project at its property, four justices finding that a property owner can breach its obligations as an “employer” under Ontario’s Occupational Health and Safety Act (the “OHSA”) even where another party has expressly agreed to be the constructor pursuant to a written agreement with the property owner.
Facts
The Corporation of the City of Greater Sudbury (the “City”) contracted with Interpaving Limited (“Interpaving”) to repair a downtown watermain. More specifically, the City agreed with Interpaving that Interpaving would act as “constructor” and would assume control over the entire project, as well as ensuring requirements of the OHSA were met. During the work, an Interpaving employee struck and killed a pedestrian while driving a road grader in reverse through an intersection. At the time of the incident, contrary to O. Reg. 213/91 (Construction Projects) (the “Regulation”), no signaler was assisting the Interpaving worker and there was no fence in place between the construction project and the public intersection. Prior to the incident, two City quality control inspectors had visited the project site to inspect workmanship.
Clause 25(1)(c) of the OHSA requires that an employer ensure that “the measures and procedures prescribed are carried out in the workplace.” As a strict liability offence, this section is breached by an employer if safety measures prescribed in the Regulation are not carried out. There is a statutory defence of due diligence in clause 66(3)(b) of the OHSA available to those accused under clause 25(1)(c), which requires that the accused prove on a balance of probabilities that every precaution reasonable in the circumstances was taken.
The Ontario Ministry of the Attorney General (Ministry of Labour, Training, Skills and Development) (the “Ministry”) charged both the City and Interpaving. The City was charged under OHSA for alleged breaches of sections 65, 67(4), and 104(3) of the Regulation. Due to prior judicial determinations, the Supreme Court of Canada only considered the City’s alleged status as an “employer” and its liability under clause 25(1)(c) of the OHSA for its alleged breaches of sections 65 and 104(3) of the Regulation.[2] In its role as constructor, Interpaving was found guilty in separate proceedings.
The City conceded that it was the owner of the construction project and that it sent quality control inspectors to the project, but the City denied that it was an employer, arguing that the City lacked control over the repair work that had been delegated to Interpaving.[3]
The trial judge held that the City was not liable as, among other things, an employer and, alternatively, that even if the City were considered an employer, the City had established the due diligence defence. The provincial offences appeal court upheld the trial decision and did not address whether the City had acted with due diligence.[4] The Ontario Court of Appeal heard an appeal on certain issues and found the City to be an employer under the OHSA due to the City’s employment of the inspectors.[5] The Ontario Court of Appeal concluded that it was not necessary to consider whether control is an element of the definition of “employer” where a municipality contracts work to a third party. The Court of Appeal remitted the matter to the provincial offences appeal court to determine whether the City had exercised due diligence and/or the City’s appropriate penalty or sentence.[6]
Decision
The Supreme Court of Canada rendered a 4-4 split decision. The Ontario Court of Appeal decision was thus upheld, the City was found liable under the OHSA as an employer and the matter was remitted to trial court to determine the viability of the City’s due diligence defence.
- City is liable as an employer
Chief Justice Wagner and Justices Martin, Kasirer and Jamal upheld the Court of Appeal decision. They held that control is not relevant to the definition of “employer” which is defined in the OHSA as “a person who employs one or more workers or contracts for the services of one or more workers and includes a contractor or subcontractor who performs work or supplies services and a contractor or subcontractor who undertakes with an owner, constructor, contractor or subcontractor to perform work or supply services.” [7] Further, they indicated that clause 25(1)(c) of the OHSA does not require an accused to have intent or control as “diminishing an employer’s duties by reading in a control requirement… would thwart the purpose of this remedial public welfare legislation.”[8] They also noted that the OHSA distributes safety duties among qualifying entities in a “belt and braces” approach of concurrent, overlapping duties, in order to eliminate the defence of blaming another entity for safety failures.[9] This results in a broad interpretation of the definition of employer and means that there can be more than one employer who is responsible for the safety of a workplace or workers.
They indicated that control may be a factor in assessing the due diligence, which serves as a safety valve. [10] As part of a due diligence defence, the onus would be on an employer to demonstrate that a lack of control affected what reasonable steps could be taken in the specific circumstances. According to this view, shifting the burden of establishing the due diligence defence to an employer incentivizes employers to “take all steps within their control to achieve workplace safety and prevent future harm so that they may avail themselves of the defence should harm occur.”[11]
- City is not liable as an employer
Justices Karakatsanis, Rowe and O’Bonsawin would allow the appeal and remit the matter to the provincial court to determine whether sections 65 and 104(3) of the Regulation apply to the City as an employer, and if so, whether the City was in compliance with clause 25(1)(c) of the OHSA in its role as an employer of the quality control inspectors.[12]
They held that the definition of “employer” should be focused on a party’s relationship to its workers. The City should be considered an “employer” of its quality control inspectors, but not of Interpaving’s employees as the City’s relationship with Interpaving reflects an owner-constructor relationship and not an employer-worker relationship, according to these dissenting judges.[13] They noted that the OHSA is specifically drafted such that “an owner can take a hands-off approach to overseeing the project relative to the constructor” who undertakes the project (including the coordination of health and safety aspects of the project), and that, “It would defeat the structure of the scheme to treat the owner-constructor relationship as giving rise to an employer-worker relationship”.[14]
With respect to clause 25(1)(c) of the OHSA, they emphasized that, “It would be absurd to interpret… as obligating every employer at a construction project to ensure compliance with all the measures contained within the Regulations”[15] and that the provision was only intended to refer to provisions of the OHSA and Regulation applicable to that employer based on the work that it controlled and performed through the employer’s workers.[16] This dissent went further to note that, in the complex construction context to which this Regulation applies, safety issues could arise if multiple employers with no relationship to the duty or expertise in an area seek to enforce their own version of a particular safety procedure on other workers. If each employer assumes that duties owed by all employers will have been fulfilled by someone else, such “limitless responsibilities” could lead to confusion and a lack of coordination on a construction project.[17]
This dissent indicated that the Ministry’s focus on the due diligence defence flips the structure of the offences on its head by every employer being captured by the offence as soon as any regulatory measure is not met, and then the accused must bear the burden of showing that they were not properly considered part of the offence.[18] “If most of the employer’s obligations are outside of their control, they have no ability to even know whether the measures are being complied with or what they could be charged with at any moment” by the OHS regulator. If exposed to hefty legal defence fees to mount a successful due diligence defence, many parties (such as, small businesses, sole proprietors and homeowners) may decide to plead guilty. As a result, the existence of a due diligence defence may not be an effective “safety valve”.[19]
Justice Côté would have allowed the appeal and restored the acquittals by the trial judge.[20] She indicated that Interpaving had sole control of the project and so was solely responsible for the incident, and that it is irrelevant who was the employer and the scope of that party’s corresponding statutory duties.[21] She added that the City did not become an employer solely because it had sent quality control inspectors on site and that a due diligence defence can only be discharged by an employer on a construction project with some connection to, or control over, the safety obligation in question. Further, the constructor distinction which exists under the OHSA would no longer matter if every property owner was held strictly liable for all safety hazards it encounters in its quality control efforts.[22]
Going Forward: Due Diligence Defence
The due diligence defence under clause 66(3)(b) of the OHSA is evaluated on a balance of probabilities. As we await the provincial offences appeal court’s determination regarding the City’s due diligence in this case, there remains a lack of clarity as to what property owners should be doing to ensure that they have acted with due diligence in the context of their construction projects where they are not also the constructor.
Relevant due diligence considerations for property owners identified in this case may include but are not limited to the following factors.
- Evaluating the constructor’s ability to ensure compliance with the Regulation before deciding to contract for its services.[23]
Relevant considerations may include pre-screening the constructor before hiring the constructor to ascertain whether the constructor has superior expertise, a track record free of prior convictions for breach of the OHSA, and the capacity to ensure compliance with the OHSA and the Regulation.[24]
- The accused’s degree of control over the workplace or the workers there.[25]
The Court noted existing jurisprudence on the reasonableness of care, which is contextual based on the special circumstances of each case. The degree of care warranted in different contexts is principally governed by the following circumstances: (a) the gravity of potential harm, (b) alternatives available to the accused, (c) likelihood of harm, (d) degree of knowledge or skill expected of the accused, and (e) extent to which underlying causes of the offence are beyond the control of the accused.[26] The Court also noted that the fact-finder should assess, either in absolute or comparative terms, whether an employer had control over the worker and the workplace.[27]
- Delegated control to the constructor in an effort to overcome the owner’s own lack of skill, knowledge or expertise to complete the project in compliance with the Regulation.[28]
The Court indicated that an accused’s relative inexperience might support a finding that the accident was unforeseeable, at least from its standpoint. In the construction context, it may be open to a judge to find that the owner took every reasonable precaution because the owner decided to delegate control of the project and responsibility for workplace safety to a more experienced constructor.[29]
- Monitoring and supervising the constructor’s work on the project to ensure that the prescriptions in the Regulation are carried out in the workplace.[30]
The Court noted that supervision and inspection have long been seen as sensible steps and the City sending quality control inspectors to the worksite to monitor Interpaving’s work “may well assist the City in establishing due diligence and escaping liability”.[31] Another consideration might be whether the owner “informed the constructor of any hazards at the workplace and monitored the quality of the constructor’s work”.[32] For government property owners, Justice Martin also noted that “a municipality, such as the City, has the ability to require its contractors to uphold health and safety requirements on a project, since it is in a position to control those whom it hires… and supervise the activity, either through the provisions of the contract or municipal by-laws.”[33]
Property owners can minimize OHSA risk related to construction projects occurring on their lands by taking appropriate measures to promote workplace safety, while ensuring that property owners do not blur or otherwise affect the lines of communication and responsibility for health and safety. As part of such an approach, when owners engage in collaborative efforts with contractors to address workplace safety requirements, owners will mitigate health and safety risks at their projects, reducing potential liability under the OHSA and, if required, enhance the effectiveness of a due diligence defence.
[1] 2023 SCC 28 [Sudbury].
[2] At the Court of Appeal, the Ministry conceded that the trial judge had not made the necessary factual findings to determine guilt of the alleged breach of section 67(4).
[4] 2019 ONSC 3285, para 37; Sudbury, para. 71.
[5] 2021 ONCA 252, para. 14; Sudbury, paras. 72 and 73.
[7] Sudbury, paras. 16, 17, 22 and 35.
[13] Sudbury, paras. 88 and 99.
[14] Sudbury, paras. 100 and 102.
[16] Sudbury, para. 109-115.
[17] Sudbury, paras. 127132.
[19] Sudbury, paras. 146 and 148.
[21] Sudbury, paras. 163-165.
[26] Sudbury, paras. 55 and 60.
Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.