By Felisia Milana
Introduction
Municipalities are being kept on their toes with the recent Supreme Court of Canada (“SCC”) decision in R v Greater Sudbury (City).[1] The SCC held that owners of a construction project fall within the definition of an “employer” under the Occupation Health and Safety Act (“OHSA”)[2] and are subject to the required duties and liabilities of an employer.
Moving forward, municipalities will have a difficult time insulating themselves from liability under the OHSA when contracting out services.
Overview
In May 2015, the City of Greater Sudbury (“City”) contracted with Interpaving Limited (“Interpaving”), a general contractor, to complete water main repairs in downtown Sudbury.[3] According to the contract, Interpaving agreed to serve as the “constructor” for the project and maintained control over day-to-day management. Quality control inspectors were hired by the City to occasionally observe the construction site and workers.[4]
In September 2015, a pedestrian was fatally struck by an Interpaving employee driving a road grader in reverse through an intersection.[5] As a result of the accident, the City and Interpaving were charged by the Ministry of Labour for violating the OHSA.
Interpaving was tried and convicted for breaching the duty of employers under s. 25(1)(c) of the OHSA.[6] The City denied that it was an employer and took the position that it could not be held liable under the OHSA because the City had delegated control of the repair work to Interpaving.[7]
The question of whether the City had a statutory liability as an employer under the OHSA lay at the heart of the appeal.[8] Both the Ontario Court of Justice (“OCJ”) and the Superior Court of Justice (“SCJ”) held that the City was not an employer under the OHSA.[9] The Ontario Court of Appeal (“ONCA”) unanimously overturned the verdicts of the OCJ and SCJ.[10] The ONCA found that the City was an employer under the OHSA and had a duty to ensure that the provisions and regulations of the OHSA were carried out at the workplace.[11] In a 4-4 decision, the SCC upheld the decision of the ONCA and dismissed the appeal.
The OHSA
The purpose of the OHSA is to ensure safe working conditions in the province of Ontario and hold employers liable for failure to meet their duties.[12]
Section 25(1) of the OHSA outlines the duties and responsibilities of employers to ensure a safe working environment.[13] Section 66(3)(b) allows a due diligence defence to be proven.[14]
Section 1 defines “employer” 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.[15]
Lower Court Decisions in Favour of the City
The OCJ and SCJ held that the City was not an employer as defined by the OHSA. Both Courts attributed the City’s lack of control over the workers on site to conclude that they were not employers and could not be held liable under the OHSA.[16] The OCJ provided that in the alternative, even if the City breached its obligations as an employer under the OHSA, it had acted with due diligence and could not be held liable.[17] On appeal to the SCJ, the Court did not comment on the due diligence defence.
Ontario Court of Appeal Unanimously in Favour of the Ministry
The ONCA took a more broad and liberal interpretation of the definition of “employer” under the OHSA. The Court dismissed the appeal and held that a person “who employs one or more workers” is an employer with the responsibility of ensuring compliance with the provisions and regulations of the OHSA.[18] The argument of due diligence was only raised at the OCJ and not on appeal to the SCJ, therefore, the ONCA remitted the question of due diligence back to the OCJ.[19]
Supreme Court of Canada Split
The SCC upheld the decision of the ONCA in concluding that the City was an “employer” under the OHSA of both its quality control inspectors and of Interpaving, and therefore breached s. 25(1)(c) of the OHSA.[20]
As a strict liability offence, the onus of the Ministry of Labour was to prove actus reus beyond a reasonable doubt.[21] The issue of due diligence was remitted to provincial court, as the ONCA had previously done.[22] In classic SCC fashion, the majority clarified the definition of an “employer” under the OHSA and provided a three-step test.
Analysis
Justice Martin, writing for the majority,[23] made it clear that the degree of control by an owner is not relevant to the determination on whether they are an employer or not but can still lend weight to a due diligence defence.[24] She laid out three questions the court must consider when considering whether an owner who contracts for the services of a constructor on a project is prosecuted for a breach of s. 25(1)(c):
1. Has the Ministry proven beyond a reasonable doubt that the OHSA applied to the accused because the accused was an employer under s.1(1) of the OHSA?;
2. Has the Ministry proven beyond a reasonable doubt that the accused breached s.25(1)(c) of the OHSA?; and
3. If the Ministry proves the above, has the accused proven on a balance of probabilities that it should avoid liability because it exercised due diligence under s. 66(3)(b) of the OHSA?[25]
At the first step, the Court makes clear that an owner is an employer if it: (i) employed workers at a workplace where an alleged breach of s.25(1)(c) occurred; or (ii) contracted for the services of a worker at the workplace (including for the services of a constructor).[26]
For both steps 1 and 2, the Ministry is not required to prove that the owner had control over the workplace or the workers. An owner’s degree of control will only be considered at the third step, after the Ministry has been able to prove that the accused was an employer under the OHSA and that there is a strict liability offence for a breach of s. 25(1)(c). The court may then consider a due diligence defence based on the accused’s degree of, and/or, delegated control over the workplace and workers. Any steps taken by the accused to ensure compliance with the Regulations that lend to effective monitoring and supervising of the project may be considered.[27]
Strong Dissenting Opinion
As if the back-and-forth decisions between court levels were not enough, the dissenting opinions among the SCC itself strongly departed from the majority. Joint dissenting reasons were provided by Justice Rowe and Justice O’Bonsawin with Justice Karakatsanis concurring.[28] Justice Côté provided separate dissenting reasons.[29]
The joint dissenting reasons emphasize that the duties of employers under s.25(1)(c) of the OHSA must be read in context and together with applicable regulations.[30] They explain how s. 25(1)(c) requires an employer to ensure compliance with all applicable regulatory measures.[31] Where most of an employer’s s. 25(1)(c) duties would be unrelated to their work, it would be absurd and almost impossible for them to fulfill all regulatory measures.[32]
Applying this interpretation would be “inconsistent with the text of the Regulation itself, the structure of the Act, and the statutory purpose of protecting workers.”[33] Justice Côté quoted van Rensburg J.A. in Bondfield, reminding that a “generous interpretation should not be confused with a limitless one” in that the OHSA seeks to achieve a reasonable level of worker protection and not an entirely risk-free work environment.[34]
Justice Rowe and Justice O’Bonsawin agreed that the City was the employer of the Quality Control Inspectors hired through a contract of employment. However, by contracting with a constructor, the City did not become the employer of the workers that the constructor retained.[35] The owner-constructor contract reflects a distinct relationship contemplated in the OHSA that does not fall within the definition of an employer and should exist on its own.[36]
Justice Côté substantially agreed with the joint dissenting opinion. She quoted the intervening municipalities that “it is an ‘extravagant proposition’…to say that a municipal project owner ‘becomes an employer of every person on a project’ by attending the project for the limited purpose of quality assurance.”[37] She concluded that the City’s lack of involvement or control over the work could not make them an employer of the project and would therefore allow the appeal and restore the trial court decision on all charges.[38]
Take Aways
Even the SCC is split on whether control should be the leading factor in defining an “employer” under the OHSA. Justice Brown was absent in the final disposition of judgment, and it is interesting to consider which way the scale of justice would have tipped had there been one more judicial voice.
Regardless of its strong dissent, in an equal split decision the SCC must uphold the decision of the ONCA and dismiss the appeal. In its majority opinion, the SCC has now placed municipalities in an uncomfortable position by concluding that they fall into the definition of an “employer” under the OHSA. This subjects municipalities to a strict liability offence under s.25(1)(c) of the OHSA if an issue were to arise with workers they have contracted for services.
Moving forward, the Ministry must prove beyond a reasonable doubt that a municipality employed workers at a workplace or contracted for services of a worker at the workplace, in order to demonstrate that a breach of s.25(1)(c) occurred.
The onus will then fall to the municipality to prove on a balance of probabilities that it satisfied a due diligence defence under s. 66(3)(b) of the OHSA to avoid liability.
[1] R v Greater Sudbury (City), 2023 SCC 28 (CanLII). [“SCC Decision”]
[2] Occupational Health and Safety Act, R.S.O. 1990, c. O.1. [“OHSA”]
[3] SCC Decision, supra note 1, at para 1.
[6] Ibid.
[9] Ibid; see also R v Greater Sudbury (City), 2019 ONSC 3285 (CanLII) [“SCJ Decision”]
[10]Ibid; see also Ontario (Labour) v Sudbury (City), 2021 ONCA 252 (CanLII) [“ONCA Decision”]
[11]Ibid.
[12] SCC Decision, supra note 1, at para 8.
[13] OHSA, supra note 2 at s.25(1).
[14] Ibid, at s. 63(3)(b).
[16] SCC Decision, supra note 1, at para 3.
[17] Ibid.
[18] ONCA Decision, supra note 10, at para 10.
[20] SCC Decision, supra note 1, at para 6.
[23] Reasons provided by Martin J. (Wagner C.J., and Kasirer and Jamal JJ., concurring).
[24] SCC Decision, supra note 1, at para 61.
[25] Ibid.
[26] Ibid.
[27] Ibid.
[31] Ibid.
[34] Ibid, at para 175; see also R v Bondfield Construction Company Limited, 2022 ONCA 302 (CanLII) at para 59.
[36] SCC Decision, supra note 1, at para 139.
[37] Ibid, at para 200; Citing Transcript at para 51.
[38] Ibid.
