The Ontario Superior Court of Justice recently provided insight into what steps an owner must take to establish a defence of due diligence and avoid liability under the Ontario Occupation Health and Safety Act, R.S.O. 1990, c. O.1 (“OHSA”).
Last year, the Supreme Court of Canada greatly expanded the legal liability of owners who engage a constructor on their project in the decision of R v Greater Sudbury (City), 2023 SCC 28. The Supreme Court ruled that owners who engage a “constructor” are “employers” under the OHSA and, therefore, are liable for all health and safety violations that occur throughout the course of a project.
The Supreme Court held that owners could avoid liability under the OHSA by demonstrating due diligence. While the Supreme Court identified principles for lower courts to apply as part of the due diligence analysis, the Court ultimately remitted to the lower court the question of whether the City of Greater Sudbury (“City”) acted with due diligence.
The Superior Court’s recent decision in R v Greater Sudbury (City), 2024 ONSC 3959, which applies the principles identified by the Supreme Court, provides important insight as to how courts in Ontario will assess whether an owner has acted with due diligence under the OHSA. The Superior Court confirmed the trial decision of the Ontario Court of Justice that the City acted with due diligence.
Factual background
The City contracted Interpaving Limited (“Interpaving”) to repair a watermain. The construction contract provided that Interpaving would assume control over the entire project, including the role of “constructor” under the OHSA. The City also contracted quality control inspectors to ensure the work was performed in accordance with the construction contract.
An Interpaving employee struck and killed a pedestrian. No fence was erected between the project and public intersection and no signaller was on site as required by Construction Projects, O. Reg. 213/91 (the “Regulation”).
Procedural History and Supreme Court Decision
The Ministry of the Attorney General charged the City, amongst other things, as an employer under s. 25(1)(c) for failing to ensure that appropriate safety measures were in place. The City conceded it was an “owner” but denied it was an “employer” under s. 1(1), arguing that it lacked control over the work. The trial judge at the Ontario Court of Justice agreed and the City was acquitted on all charges. The Ministry appealed.
The Superior Court of Justice dismissed the appeal and found that characterizing the City as an employer would substantially alter the allocation of liability under the OHSA.
The Ontario Court of Appeal overturned the trial decision. It found that the City was an “employer” under s. 1(1) because it employed quality control inspectors at the workplace and, therefore, was liable for the pedestrian’s death unless the City could establish that it acted with due diligence. The Court of Appeal found it unnecessary to determine whether the City was also an employer under s. 1(1) because it engaged Interpaving as a “constructor.”
The City was granted leave to appeal to the Supreme Court of Canada.
The question before the Supreme Court of Canada was whether the City was liable as an “employer” under s. 25(1)(c) for the breach of ss. 65 and 104(3) of the Regulation.
The Supreme Court was divided in analysis and result, providing three sets of reasons. Each set of reasons addresses the following questions:
1. Whether the owner is an “employer” under s. 1(1).
2. Whether the owner as an “employer” breached s. 25(1)(c).
3. Whether the owner should nevertheless avoid liability as an “employer” because it exercised due diligence in accordance with s. 66(3)(b).
In addition, each set of reasons was informed by a “belt and braces” approach to health and safety legislation where overlapping responsibilities are used to better ensure the health and safety of workers. However, here the Court was again divided as to what exactly a “belt and braces” interpretation of ss. 1(1), 25(1)(c), and 66(3)(b) meant.
Reasons of Wagner CJ and Jamal, Kasirer, and Martin JJ
Justice Martin wrote the reasons on behalf of herself, Chief Justice Wagner and Justices Jamal and Kasirer.
Justice Martin reasoned that an owner is an “employer” under s. 1(1) if the owner: (a) employs workers at a workplace where an alleged breach of s. 25(1)(c) occurs; or (b) contracts for the services of workers at that workplace—including for the services of a constructor. Justice Martin was clear, whether the owner has control of the workers or workplace is immaterial to the analysis under s. 1(1). Considering the City employed quality control inspectors and also contracted for the services of Interpaving, there could be no doubt the City was an “employer” under s. 1(1).
Justice Martin then reasoned that s. 25(1)(c) is breached where health and safety measures prescribed by regulation are not met. Here, the measures prescribed by ss. 65 and 104(3) of the Regulation were not met; no fence was erected between the project and public intersection and no signaller was on site. As such, the City had breached s. 25(1)(c).
Justice Martin justified her reasons, in part, by reference to s. 66(3)(b) which provides employers with a defence of due diligence. Nowhere in Justice Martin’s reasons, however, was there a detailed analysis of what was necessary to demonstrate that “every precaution reasonable in the circumstances was taken”.
Justice Martin remitted the analysis of whether the City acted with due diligence back to the trial court, noting that in assessing due diligence relevant considerations include:
- The accused’s degree of knowledge, skill or experience and the gravity and likelihood of harm (i.e., the foreseeability of the accident).
- Whether the owner had control of the workers or workplace.
- Whether the owner delegated control to the constructor in an effort to overcome its own lack of skill, knowledge or expertise to complete the project in compliance with the regulations.
- Whether the owner took steps to evaluate the constructor’s ability to ensure compliance with the regulations before deciding to contract for its services (e.g., pre-screening the constructor, 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 regulations).
- Whether after executing the contract the owner informed the constructor of any hazards at the workplace.
- Whether the owner effectively monitored and supervised the constructor’s work to ensure that the safety measures prescribed by regulation were carried out in the workplace.
Justice Martin’s reasons, however, provided no real guidance as to how these factors should be weighed and how the due diligence defence is to be made out in practice.
Reasons of Karakatsanis, O’Bonsawin, and Rowe JJ
Justices O’Bonsawin and Rowe, writing also for Justice Karakatsanis, agreed with Justice Martin that the City satisfied the definition of “employer” under the first branch. They disagreed, however, that the City satisfied the definition of “employer” under the second branch. While the City “employed” quality control inspectors, it did not “employ” Interpaving.
As Justices O’Bonsawin and Rowe reason, when an owner contracts with a constructor, they are not seeking to subcontract out particular tasks to an independent contractor instead of hiring workers directly. Instead, they are asking the constructor to assume complete oversight and authority of the project, including with respect to on-site health and safety. Put differently, the owner is contracting for a “constructor”, a party separately defined under s. 1(1). For Justices O’Bonsawin and Rowe, the City’s relationship with Interpaving was more accurately defined as an owner-constructor relationship—not an employer-worker relationship.
Justices O’Bonsawin and Rowe further reason that simply because an owner is an “employer” under s. 1(1) does not mean that it is an employer of every worker. Rather, s. 25(1)(c) only requires an employer to comply with the health and safety measures that actually apply to it. Certain regulatory measures indicate their subject expressly. For example, s. 21 of the Regulation requires workers to wear protective clothing and provides that the “worker’s employer” is responsible for compliance. For these measures, the required link is clear and no further analysis is needed. Most regulatory measures, however, do not indicate their subject expressly. In these cases, the measure applies to an employer only where it relates to work controlled by the employer and performed by its workers.
As the Ministry itself recognized in its “Constructor Guideline”, the intent of the OHSA is to have one person with overall authority for health and safety matters on a project. This person is the constructor. In contrast, the employer is entrusted with particular work on the project; they make an essential contribution to worker health and safety by ensuring that their work complies with the applicable measures.
As Justices O’Bonsawin and Rowe note, it is far from clear that making each employer liable for the acts of every other employer in carrying out regulatory measures meaningfully improves on-site health or safety. The vast majority of an employer’s responsibilities under s. 25(1)(c) are likely to be unrelated to their work and, therefore, impossible for them to carry out, but could nevertheless result in them being charged under the OHSA. In other words, “everyone who employs anyone is responsible for everything that anyone does”.
Lastly, focusing on control at the due diligence stage flips the structure of the offence on its head. Every employer is captured by the offence as soon as any regulatory measure is not met. The employer then bears the burden of pulling themselves out of the ambit of the offence and are effectively forced to argue at the defence stage that the offence should not apply to them.
Reasons of Côté J
In separate reasons, Justice Côté largely agreed with Justices O’Bonsawin and Rowe. The main point of difference for Justice Côté was that the City was not an “employer” under the first branch of s. 1(1); namely, because the City was not responsible for any construction work and did not supervise any construction workers.
The Supreme Court remitted the case to the lower court for reconsideration in light of the test articulated by Justice Martin. The results of that reconsideration are discussed below.
Importance of the Supreme Court decision
Arguably the most important construction law case to reach the Supreme Court of Canada in years, R v Greater Sudbury (City) greatly expands the legal liability of an owner who engages a constructor on a project. The Court’s decision establishes that owners who enter into a contract with a “constructor” are “employers” under the OHSA and, therefore, are liable for all OHSA violations that occur throughout the course of the project.
The impact of the Court’s decision cannot be overstated. Previously, an owner could, by engaging a contractor to act as its “constructor”, transfer responsibility for on-site health and safety from the owner to those with the relevant expertise. Following the Court’s decision, however, owners are responsible for ensuring that all health and safety measures are met—irrespective of whether they have control over the work, workers, or workplace to which those measures apply.
To avoid liability, an owner must demonstrate that it exercised due diligence. The Court’s reasons, however, provide little to no practical guidance on how an owner’s responsibilities are to be carried out such that a due diligence defence can be made out. To the contrary, the Court’s reasons suggest both that an owner must “supervise” and “inspect” the work in exercising due diligence, but also that “control” of the work by the owner may impose a higher duty on the owner. There was no clarity whatsoever as to when supervision and inspection become control of the work.
The result created profound legal uncertainty for owners on construction projects, including everything from large projects to home renovations.
Application of the Supreme Court of Canada test by the Ontario Superior Court
The Ontario Superior Court of Justice, applying the factors set out in the Supreme Court’s decision, recently provided insight into what steps an owner must take to establish a defence of due diligence and avoid liability under the OHSA.
The Superior Court concluded that the trial judge made no palpable or overriding error in finding that the City had acted with due diligence.
1. The City’s Degree of Control over the Workplace and Workers
The Superior Court rejected the Crown’s arguments that the City had “outright control” over the workplace.
The Crown pointed to a traffic control concern the City had raised with Interpaving; a concern which was subsequently addressed by Interpaving. Ultimately, the Superior Court agreed with the City that as it was Interpaving who took steps to address the situation this was an example of the City’s due diligence.
The Crown also pointed to the City’s “sweeping” contractual powers – including the right to fire workers or to suspend work. However, the Court noted that there was no evidence that the City had ever exercised these powers. Likewise, although the City had arranged for paid-duty police officers, it was done at the request of Interpaving who directed the police officers. Additionally, while the City had a process for receiving project-related complaints, it was Interpaving’s responsibility to respond to them.
Lastly, the Court commented that while the City conducted quality control inspections, such inspections did constitute control over the workplace.
The Superior Court distinguished the City’s actions from those discussed in Imperial Oil (Re:), [1993] O.O.H.S.A.D. No. 8, where the owner was directly involved in monitoring safety and compliance, issued notices of contravention, threatened to remove workers from site, directed the performance of technical aspects of the role, and exercised a level of control that usurped the role of the constructor.
2. The City’s Skill, Knowledge, Expertise, and Delegation of Control to Interpaving
The Superior Court accepted that the City did not have the skill, knowledge or expertise to complete the project in compliance with the Regulation, and that the City had paid a premium to Interpaving as Interpaving had the expertise that the City lacked.
While not explicit, the Court’s conclusion on this point is that the City delegated control to overcome its own lack of skill, knowledge and expertise.
3. The City’s Evaluation of whether Interpaving had the Capacity to Perform the Work and Enforce Compliance with the Regulation
The Superior Court accepted that the City had assessed the capacity of Interpaving to perform the work safely. The evidence at trial showed that the City had used Interpaving on approximately 40 different projects in the five years prior to the accident. Further, the City required Interpaving employees to complete safety training designed for City projects.
4. The City’s Monitoring and Supervision of Interpaving’s Work
The Superior Court accepted that the City had monitored and supervised Interpaving’s work. It did so by notifying Interpaving of the traffic control concern, including raising concerns about signage and insufficient sidewalk access; taking complaints from the public and advising Interpaving of same; and attending periodic progress meetings.
Conclusion
While the Supreme Court of Canada’s decision will continue to create uncertainty for owners, the Superior Court’s decision provides a measure of guidance towards avoiding liability.
The proper response, however, is statutory. In our view, it was never the intention of the Legislature that owners should bear potential liability under OHSA. A statutory amendment to preclude the possibility of owners being charged for accidents which occur in the course of construction would be the most advisable response to the Supreme Court’s decision.
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.