Navigating Construction Season: Protecting Yourself Against Fraud
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July 9, 2024Intro
It’s not often that the Supreme Court of Canada (“SCC”) hears a case concerning a construction issue, but when it does, it usually has a seismic impact on the industry.
On November 10, 2023, the Supreme Court of Canada released its much-anticipated decision in R. v. Greater Sudbury (City) (“Sudbury“), upholding the Ontario Court of Appeal’s decision to hold the City of Sudbury (“City”) liable under the Occupational Health and Safety Act for the death of a pedestrian struck by a road grading machine being operated during a watermain restoration project in the City’s downtown area.
The kicker here? The City hired Interpaving Limited (“Interpaving”) as the general contractor for the watermain project, and it was Interpaving’s own employee that was operating the road grading machine. Nevertheless, the City was held liable for the death of the pedestrian both as an “owner” of the project, as well as an “employer”, under OHSA.
So how is it that the City can be held liable as an employer when Interpaving employed the worker directly?
OHSA
To answer that question we need to take a closer look at Ontario’s Occupational Health and Safety Act (“OHSA” or the “Act”).
OHSA is a piece of public welfare legislation designed to protect workers in all workplaces in the province. The Act is meant to benefit society as a whole and works to limit or prevent parties who try to shield themselves from liability for unsafe working conditions where the government has determined that certain measures must be taken to protect workers and the public at large.
It is an intentionally broad piece of legislation, applying to a wide range of parties, with the aim of promoting and maintaining a reasonable level of protection for the health and safety of those affected by a workplace. For instance, an “owner” is defined as follows:
“Includes a trustee, receiver, mortgagee in possession, tenant, lessee, or occupier of any lands or premises used or to be used as a workplace, and a person who acts for or on behalf of an owner as an agent or delegate [Emphasis added]”.
Further, OHSA imposes health and safety obligations on an “employer”, broadly defined 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 [Emphasis added]”.
Take note of the bolded sections above. As you can see, the definitions of an owner and an employer are both quite broad — an owner can be anyone who occupies the land where construction will take place. This even includes tenants of property and not just the actual landlords. Likewise, an employer is any person who contracts out their work to a third party. Keep this in mind as it will be important for the decision.
The Decision
So why exactly was the City held liable?
Notably, the SCC found that the City met the definition of an employer under OHSA, for two separate reasons. (1) The City contracted with, or employed, Interpaving, satisfying the bolded section of the definition set out above; and (2) the City had their own inspectors attend the project site to oversee quality control of the construction.
At the trial level, the trial judge determined that “the City did not have control of the conduct at the workplace”, such that they were not an employer under OHSA. However, the Supreme Court clarified that control over the workers or workplace is not relevant to determining whether or not a party is an employer. Nothing within the definition of an employer includes control over the workplace. As long as the City meets the definition of an employer, then it has all of the obligations of an employer as set out under the Act. Full stop.
The SCC went on to explain that control of the workplace is relevant to sentencing, however, where due diligence matters. The City could still argue that they maintained minimal control over the project site, at least as compared to Interpaving, and could demonstrate that it took every reasonable precaution in the circumstances to discharge its duties under the Act. As such, while the City may still be guilty of failing to maintain proper safety standards, it could still minimize the consequences for itself by showing that it took every reasonable precaution they could to prevent the situation from happening.
Implications
The decision in Sudbury has huge implications for anyone working in the construction industry. Owners can no longer choose to be completely hands off when it comes to their construction projects even if they hire someone else to carry out the actual work. Even under these circumstances, owners are considered employers and have to ensure that proper safety precautions are in place at construction sites. If they see that the contractor is not maintaining proper safety standards, an owner may even be obligated to step in and force a work stoppage until the safety standards are satisfied. This can cause massive delays and an increase in the overall costs of the project, on top of any potential fines that could be imposed by the government for violating OHSA. It is imperative that owners have open and frank discussions with the people they hire before work even starts. The costs of maintaining safety standards should be built into the estimated costs of the project before anything gets underway.
An airtight contract will also not be enough to avoid liability under OHSA. Public welfare legislation like OHSA is not concerned with contractual obligations, so there are no damages payable to an injured party for violating the Act. Rather, the obligations under OHSA are owed to society at large. As such, owners may still have fines imposed upon them, upwards of $2 million, and even potential jail time if the breach of OHSA is egregious enough.
Take heed owners — it does not pay to cut corners or turn a blind eye to unsafe conditions. The Supreme Court is watching.