Ontario Court of Appeal finds “owner” of a construction project is “employer” with expanded safety obligations under the OHSA

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A recent decision of the Ontario Court of Appeal upends the traditional allocation of responsibility for health and safety on construction sites. In Ontario (Labour) v. Sudbury (City) (April, 2021) Ontario’s highest court found that the City of Sudbury (City) was not only the “owner” but also an “employer” for the purposes of the Occupational Health and Safety Act (OHSA). The Court of Appeal’s decision meant that the City had additional health and safety obligations and could be liable for violations of the OHSA.

By way of background, the City hired a general contractor to undertake road and watermain repairs. The construction contract was typical in that it identified the general contractor as the “constructor” for the purposes of the OHSA. This designation was generally understood to mean that the general contractor was the party primarily responsible for health and safety on the project.

In September of 2015 a pedestrian walking through the construction zone was fatally injured by a road grader that was being operated by an employee of the general contractor. The Ministry of Labour (Ministry) investigated and found that at the time of the accident various protective measures were not employed. These included:

  • separation fencing to keep pedestrians away from construction equipment;
  • a paid-duty police officer to control and direct traffic; and
  • a signaller to communicate with the grader operator.

The Ministry charged the general contractor and the City with various violations of O. Reg. 213/91 Construction Projects made under the OHSA. Notably the City was charged as both a “constructor” and an “employer”. The general contractor was ultimately found to be guilty. In a separate proceeding the City pleaded not guilty.

The trial judge found that while there were violations of the OHSA, the City was neither an “employer” nor a “constructor” and therefore did not have any duties under the OHSA. The trial judge also held that the City had a due diligence defence. This decision was upheld on appeal. The Crown, however, appealed to the Ontario Court of Appeal arguing that the previous decision erred in finding that the City was not an “employer” under the OHSA.

The Court of Appeal commenced its analysis by noting that as a public welfare statute, the OHSA had to be interpreted liberally, as opposed to narrowly or technically, in order to allow it to fulfill its purpose of protecting the health and safety of workers. Next, the Court considered whether the City was captured by the OHSA definition of “employer”:

“employer” means 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;

The Court of Appeal focused its attention on the first branch of the definition and noted that there was “no doubt” that City inspectors were on the construction site at different times performing a variety of tasks such as quality control, progress monitoring and general contract compliance. As such, the Court of Appeal concluded that the City fell squarely within the meaning of the definition of “employer”.

The Court of Appeal decision discussed the role of an “employer” under the OHSA by quoting from its own decision in R. v. Wyssen (1992):

In Wyssen, at p. 9, the court noted that the relevant enforcement provisions in the Act put employers “virtually in the position of an insurer who must make certain that the prescribed regulations for safety in the work place have been complied with before work is undertaken by either employees or independent contractors.

The concept of overlapping responsibility between workplace parties was also discussed. The Court noted that one entity may meet the OHSA definitions for various workplace parties and would be required to assume the duties of each of those parties at the same time. A person could be an owner, constructor and employer, and subject to the OHSA obligations of all three.

Two other issues were briefly discussed in the Court’s decision. First, that the OHSA exemption in s. 1(3) (which precludes an owner from being a constructor if the owner engages a third party to oversee quality control) does not operate to preclude an owner from being an employer.

The second issue related to the question of whether, in order to be an “employer” under the OHSA, a municipality must exercise some level of control over a third party contracted to perform the work. The Court of Appeal decision stated that it was not necessary to decide this issue since the City was an employer under the first branch of the definition, and that the question had not been sufficiently canvassed by the parties.

The Court of Appeal summarized its decision as follows:

We conclude that the City was an employer within the meaning of the Act and, as a result, was liable for violations of the Regulation found by the trial judge unless it could establish a due diligence defence. The appeal is allowed and the decision is remitted as set out below to hear the Crown’s appeal of the trial judge’s due diligence finding.

 

In Our View

This decision creates significant uncertainty in terms of an owner’s obligations under the OHSA. The traditional understanding was that the party in direct control of the worksite and the employees was primarily responsible for ensuring safety and the OHSA compliance. Other “employers” that attended the site were generally only responsible for their own particular spheres of work. What is troubling about this decision is that the owner only had inspectors on site checking for general contract compliance and progress. These inspectors did not appear to have control over the work or the employees of the general contractor. Nevertheless, in the view of the Court of Appeal their presence was sufficient to make the owner an employer with an expanded set of obligations and potential liability for violations of the OHSA.

For more information, please contact Paul Lalonde at 613-940-2759Neil Dzuba at 613-940-2757 or Sébastien Huard at 613-940-2744.