This three-part Year in Review highlights and provides context for the most significant developments in occupational health and safety law across Canada in 2018. This second part covers recent arbitration and court decisions that highlight a number of important issues for employers.

By: Loretta Bouwmeester, Jeremy Warning, Paul D. McLean, Deanah I. Shelly

Firm: Mathews, Dinsdale & Clark LLP

R v Precision Diversified Oilfield Services Corp – Crown Burden of Proof for General Duty Clause

Key takeaways:

  • An accident is not proof in and of itself of an employer’s breach of the general duty to protect the health and safety of its workers.
  • Compliance with industry standards in a closely regulated industry will make it difficult for the Crown to prove that it was reasonably practicable for the employer to do something more to address an unsafe condition.
  • Good safety records and proper training of workers can go a long way to help an employer show due diligence.

Precision Diversified Oilfield Services Corp. is an Alberta Court of Appeal case about a workplace fatality. The injured worker had been working as a floor hand on a drilling rig operated by Precision Diversified Oilfield Services. The worker suffered a fatal head injury while working on the rig. The employer was charged with two offences contrary to the Alberta Occupational Health and Safety Act (‘AOHSA’). The Crown alleged that the employer had violated its ‘general duty’ to ensure the health and safety of an employee, and that the employer had failed to adopt engineering or administrative controls in order to mitigate workplace hazards.

The employer was convicted on both counts at trial; however, on appeal, the convictions were overturned and a new trial was ordered. The Crown then appealed the case to the Court of Appeal on two issues. The first was whether the expression ‘as far as is reasonably practicable for the employer to do so’ in the general duty section was part of the actus reus (i.e. the physical components of the offence that the Crown had to prove). The other question upon which leave was granted was whether the appeal judge erred in law in her interpretation and application of the due diligence test.

In short, the Crown put forward the position that it could rely on the ‘accident as prima facie proof of breach’ concept as a way of proving the actus reus and satisfying its legal burden. Ultimately, the Alberta Court of Appeal disagreed and determined that the expression ‘as far as it is reasonably practicable for the employer to do so’ forms one of the elements of the actus reus for an offence under s. 2(1) of the AOHSA. As a result, in order to prove that an employer committed an offence by violating its general duty under s. 2(1), the Crown must establish that the worker was engaged in the work of the employer, that the worker’s health or safety was threatened or compromised, and that it was reasonably practicable for the employer to address the unsafe condition through efforts that it failed to undertake. All of these elements must be proven beyond a reasonable doubt.

In arriving at this conclusion, the Alberta Court of Appeal determined that the analysis was consistent with the language of the provision, the purpose and intent of the legislation, the Supreme Court of Canada’s guidance in Sault Ste. Marie (in which strict liability offences were defined), and interpretations given to similar provisions in other provinces.

The second ground of appeal, relating to whether the appeal judge had erred in law with respect to the due diligence test, was dismissed.

Key question: Will this decision make it harder for companies in Alberta to be successfully prosecuted?

Answer: Yes. Especially where the employer’s general duty to ensure the health and safety of employees is the basis for a charge. In such instances, details of the alleged breach and what a company should have reasonably done to address the unsafe condition will have to be shown.

R v 1137749 Ontario Ltd. (Operating as Pro-Teck Electric) – Piercing the Corporate Veil to Impose Corporate Fine on Director

Key takeaways:

  • Courts may look to directors if steps are taken to frustrate the sentence against a corporation.
  • A corporate owner could face personal liability if the court decides that assets were moved out of the corporation in order to evade financial liability for a regulatory breach

The Pro-Teck Electric decision demonstrates that a director can be held personally liable for fines imposed against a corporation for breaches of regulatory legislation. An electrical contractor, Pro-Teck Electric, pleaded guilty to three charges under the Electricity Act and was sentenced to fines totaling CAD 430,000. The charges arose after a Pro-Teck employee had negligently installed a heated floor in a bathroom, which overheated and killed an elderly man.

The sole shareholder and director of Pro-Teck had transferred assets, including vehicles and tools, out of Pro-Teck to himself following the incident, when it became known that charges were probable or pending. The Crown argued that these transfers were deliberately done to avoid payment of potential regulatory fines and asked the court to impose the penalty on the director personally, thereby ‘piercing the corporate veil’. The Justice of the Peace declined to do so after deciding that she lacked the jurisdiction. The Crown appealed.

The appeal court determined that a Justice of the Peace could pierce the corporate veil in a Provincial Offences Act trial, notwithstanding that there is no specific provision stating as much. The appeal court found that there was an ‘implied’ jurisdiction to do so in appropriate cases. The Court noted that, had the director not transferred the assets, there would have been no basis to seek to fine the director personally.

This decision serves to remind employers that they must proceed carefully to avoid director liability issues when restructuring a company that is or could be subject to quasi-criminal charges.

R v Fournier – Manslaughter Conviction for Failing to Comply with Occupational Health and Safety Legislation

Key takeaways:

  • Non-compliance with provincial occupational health and safety legislation can be used as the basis for a manslaughter and/or criminal negligence charge under the Criminal Code.
  • Criminal law continues to be used to regulate workplace health and safety.
  • Whether Fournier represents an increased liability risk is debatable. The Crown is still required to prove a ‘marked departure’ meaning the test or threshold for liability may be substantially similar to criminal negligence.

Key question: Have there been any criminal (i.e. Criminal Code) prosecutions in Alberta?

Answer: No, not yet. In large part because the fines under the AOHSA are already so high in Alberta (CAD 500,000 per offence) and a four-month jail sentence has been imposed under the AOHSA.

West Fraser Mills Ltd v British Columbia (Workers’ Compensation Appeal Tribunal) – Imposition of Penalty on ‘Owner’ as ‘Employer’

Key takeaways:

  • The Supreme Court of Canada expands the meaning of ‘employer’ in section 196 of the British Columbia Workers’ Compensation Act (’WCA’) to include an owner.
  • There is a trend towards regulatory creep in terms of what it means to be an employer and the imposition of liability.
  • This case is potentially distinguishable as the decision was based on the unique wording of British Columbia’s workplace legislation and specifically on tree felling as an activity.

A full analysis of West Fraser Mills is available here

Key question: Does this decision mean that prime contractors have the same duties and responsibilities as employers generally under the WCA?

Answer: Not generally. In this instance the legislation was addressing specific activity (tree felling) and was more prescriptive than other parts of the WCA such as those dealing with oil and gas activities generally.