Widening the Lens of Liability: The Supreme Court’s Decision in R. v. Greater Sudbury (City)

In R. v. Greater Sudbury (City), the Supreme Court of Canada (SCC) has ruled that the City of Greater Sudbury (City) can be held liable as an “employer” under Ontario’s Occupational Health and Safety Act (OHSA) for the death of a pedestrian, despite having appointed a third-party as the project’s “constructor.”

Background

In May 2015, the City began construction in downtown Sudbury. While the City was the project owner, it engaged Interpaving Limited (Interpaving) as the project’s “constructor.” The only City employees working on the project were a small group of quality control inspectors.

In September 2015, an Interpaving employee fatally struck a pedestrian while driving a construction vehicle, and the City and Interpaving were charged with having violated the OHSA’s Construction Projects regulation, O. Reg. 213/91 (O. Reg 213/91). At trial, the City was successful in having the charges dropped on the basis that it was neither a “constructor” nor “employer.” While the trial judge’s finding was upheld on appeal to the provincial offences appeal court, the Ontario Court of Appeal (ONCA) unanimously held that the City was an “employer” and the case should be remitted to the provincial court to determine whether the City acted with due diligence.

In a rare judgement, the SCC was divided 4-4 in its decision. Since a majority is required to overturn a lower court’s ruling, the appeal was dismissed, and the ONCA’s decision was upheld.

The SCC’s Decision

Defining “Employer”

Justice Martin (writing on behalf of 4) held that the City was an “employer” for the purposes of determining liability under Ontario’s OHSA.

Section 25(1)(c) of the OHSA provides that an “employer” shall ensure that certain measures and procedures under the legislation are carried out in the workplace. Justice Martin noted that, under Ontario’s statutory scheme, an owner is an “employer” if it employs workers at a workplace where an alleged breach of section 25(1)(c) occurs, or where it contracts for the services of a worker at that workplace, including for the services of a contractor. According to Justice Martin, whether an owner is an employer under Ontario’s OHSA does not depend on whether it exercises control over the workplace or the workers. Per Justice Martin, the City was an employer of both the quality control inspectors whom it employed, and of Interpaving with whom it contracted to undertake the construction project.

Section 25(1)(c) of the OHSA

As noted above, section 25(1)(c) of the OHSA requires an employer to carry out any measures and procedures prescribed for the workplace under the OHSA regulations, which includes O. Reg. 213/91. The Ministry of Labour must prove beyond a reasonable doubt that the measures and procedures prescribed under the regulations were not carried out in the workplace to which the employer is “connected” by a contractual relationship with employees and/or independent contractors. Whether the employer has control over either the workplace or the workers is not relevant. Since two safety measures prescribed under O. Reg 213/91 were not implemented at the construction project, Justice Martin was satisfied that section 25(1)(c) had been breached. 

Exercising Due Diligence

Section 66(3)(b) provides a statutory due diligence defence to employers. An employer can avoid penalty if it can prove, on a balance of probabilities, that it took every reasonable precaution in the circumstances to discharge its duties under that section. It is at this step in the analysis that control can be considered, and an employer can argue that its lack of control suggests that it took all reasonable steps. Justice Martin, in dismissing the appeal, upheld the ONCA’s order remitting the issue of whether the City had established the due diligence defence to the provincial offences appeal court.

Dissenting Opinions

Justices Rowe and O’Bonsawin (with Justice Karakatsanis concurring) agreed that the City was an employer of its quality control inspectors but disagreed that the City was an employer of the workers retained by Interpaving. They held that an employer’s duty under section 25(1)(c) only applies to work which the employer controlled and performed through their workers. They explained that their functional view of the section 25(1)(c) duty avoids an overly broad interpretation that assigns liability to parties who are not responsible for an undertaking. The Justices would have remitted the matter to the Ontario Court of Justice to assess whether the regulations fell within the City’s section 25(1)(c) duty.

Justice Côté would have restored the trial judge’s acquittal on the basis the City was not an “employer” owing regulatory obligations.

Key Takeaways

This decision from the SCC is likely to have far reaching consequences for employers and project owners, including:

• The expansive definition of an “employer” under the OHSA, and the lack of a “control test” at the initial stages of the analysis, suggests that the section 25(1)(c) duty (and potentially other employer-specific duties under the OHSA) will be imposed on employers at all workplaces in which it employs individuals and/or engages contractors. Therefore, if the SCC’s ruling is liberally applied by Ministry of Labour inspectors going forward, employers may be unable to shield themselves from potential liability under the OHSA by hiring contractors, as the duty will still apply. A due diligence defence may, however, still be relied on, depending on the facts of the case.

• Employers should remain active and diligent in ensuring that the measures and procedures prescribed under the regulations are properly enforced in the workplace(s) where they employ and/or engage individuals, whether they have direct control over such workplace(s) or not.

• It remains to be seen how the provincial offences appeal court will weigh the City’s due diligence defence, and whether it will consider the City’s appointment of a constructor with specialized expertise and knowledge as a complete defence. Until such time as further judicial clarity is received, it will be important for project owners to carefully consider the processes and procedures they have in place to ensure that health and safety remains a priority for all parties involved in the execution of a project.

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