Understanding employer liability for accidents at construction projects

On November 10, 2023, the Supreme Court of Canada released its much-anticipated decision in R. v. Greater Sudbury (City), ‎2023 SCC 28‎.  A 2021 Ontario Court of Appeal decision in the same proceeding created waves in the construction industry in finding that liability for a construction site fatality could potentially attach to a project owner by virtue of its role as an “employer” on the project.

In a split decision, the Supreme Court of Canada has ruled that an owner of a construction project is indeed an “employer” and is therefore subject to an employer’s duties under the Occupational Health and Safety Act (the “OHSA”). In arriving at this conclusion, all eight judges of the SCC agreed that the degree of control over the services or work being performed is not a relevant consideration in determining whether a person or group is an “employer” and therefore required to adhere to an employer’s duties under the OHSA. Owners may take some solace in the SCC’s clarification that the owner’s degree of control over the workplace or the workers is relevant in determining whether the owner exercised due diligence. 

As a practical matter, this decision means that in many instances where construction accidents occur, the initial onus for the Crown to establish the presumptive liability of an owner for these strict liability offences will be lower than what many would assume. The burden will then shift to the project owner to demonstrate through their defence that they are not culpable. The Sudbury decision is therefore significant for project owners across the country.

Background

In September 2015, a pedestrian crossing an intersection within a construction zone was fatally struck by a road grader in Sudbury, Ontario.

The road grader was being driven by an employee of Interpaving Limited (“Interpaving”). The City of Greater Sudbury (the “City”) had contracted with Interpaving to undertake the construction project in downtown Greater Sudbury. The City sent inspectors to oversee quality control on the project. In response to the fatality, the Ministry of Labour Immigration, Training, and Skills Development (the “MOL”) charged both Interpaving and the City with breaching their duties as “employers” under the OHSA. Under s. 25(1)(c) of the OHSA, employers are obligated to ensure that safety measures and procedures are carried out in the workplace, as required by the OHSA’s regulations. In this case, the required safety measures included a fence between the construction work and the public intersection, and signallers assisting the road grader operator. Both the fence and signallers were absent from the construction site.

Although it was the owner of the project, the City denied it was an “employer” under the OHSA for the purpose of the proceedings, arguing that it lacked control over the repair work performed by Interpaving’s employees.

The decisions below

The City was acquitted at trial, as the trial judge determined the City was not an employer within the meaning of the OHSA. Under s. 1(1) of the OHSA, an employer is defined as a person who employs or contracts for the services of one or more workers. The finding was based on the trial judge’s determination that “the City did not have control of the conduct of the workplace to bring it within the obligations intended or created by the [OHSA] for employers.”

The MOL appealed the acquittal to the Ontario Superior Court of Justice, where the provincial offences appeal court judge dismissed the appeal. The MOL was then granted leave to appeal to the Ontario Court of Appeal, where the MOL’s appeal was allowed. The Ontario Court of Appeal concluded that the City was an “employer” under s. 1(1) of the OHSA, and was liable for violating the safety requirements of the OHSA’s accompanying regulation, O. Reg. 213/91: Construction Projects (the “Regulation”) unless the City could establish a due diligence defence. The Ontario Court of Appeal therefore set aside the trial judge’s decision and remitted the issue of the City’s due diligence defence to the provincial offences appeal court judge.

Decision of the Supreme Court of Canada

The City appealed the decision to the Supreme Court of Canada, who upheld the determination that the City was an “employer” within the meaning of the OHSA. In particular, the City had its own employees at the construction project (its inspectors) and it was also an employer of Interpaving, with whom it contracted to undertake the construction project. In addition, the SCC upheld the conclusion that the City had breached its employer duty under s. 25(1)(c).

The SCC decision focused on the issue of control – specifically, that the degree of control an owner has over the workers at the workplace does not play a role in establishing whether the owner is an employer or subject to the duties of an employer under the OHSA.

In arriving at its decision, the SCC looked at the purpose of the OHSA. It was the SCC’s view that the OHSA is a public welfare statute, with its purpose being to maintain and promote a reasonable level of protection for the health and safety of workers in and about their workplace. The SCC’s concern was that a control requirement could defeat the public welfare purpose of creating overlapping responsibility and give workplace actors a tool for frustrating regulatory prosecutions at the outset by arguing they had no control over a hazard because another party had greater comparative control over that hazard.

Therefore, both the City and Interpaving could be liable as employers for the purposes of s. 25(1)(c). The SCC’s decision embraces the “belt and braces” approach to occupational health and safety, which makes multiple workplace entities responsible for the same protective functions and measures. This suggests that both owners and constructors have equal responsibility as employers in ensuring the health and safety of the workplace.

Despite the SCC eschewing control as a relevant factor in the “employer” analysis, the SCC confirmed that an owner’s degree of control is a relevant consideration in evaluating its due diligence defence. Therefore, even if an owner of a construction project is subject to employer duties and guilty of a strict liability offence under the OHSA, the owner will not be subject to penalties under the OHSA if it can show that it took every precaution reasonable in the circumstances to avoid breaching the OHSA. The SCC likened a due diligence defence to that of “a safety valve, in which the presence of control may be a factor in assessing due diligence”.

In that regard, the SCC clarified that relevant considerations for the due diligence defence may include, but are not limited to:

• the owner’s degree of control over the workplace or the workers there;
  
  
• whether the owner delegated control to a more experienced constructor in an effort to overcome its own lack of skill, knowledge or expertise;
  
  
• whether the owner took steps to pre-screen and evaluate the constructor’s ability to ensure compliance with the Regulation before deciding to contract for its services; and
  
  
• whether the owner effectively monitored and supervised the constructor’s work on the project to ensure that the prescriptions in the Regulation were carried out in the workplace.

Analysis

The result of the landmark decision is that an owner, simply by virtue of contracting for the services of a constructor, can be prosecuted for breaching employers’ duties under the OHSA for not ensuring that the required safety measures and procedures are carried out in the workplace.

The decision could have a far-reaching impact on the construction industry. Traditionally, owners of a construction project would delegate a majority of the responsibility for workplace health and safety requirements to the constructors they hire. In such circumstances, s. 1(3) of the OHSA explicitly permits owners to engage architects, engineers and other persons to oversee quality control at a project, while still not taking on the “constructor” role.

However, the SCC has confirmed that no such exemption applies to “employer” duties. Specifically, the exclusion of a control requirement in defining who is an “employer” for the purposes of the OHSA may result in owners having to assume additional health and safety duties they otherwise may not have anticipated. Owners could now be responsible for ensuring health and safety on parts of their construction project which they may not have any direct involvement in. The line between an owner and constructor, along with their respective workplace health and safety duties as employers, has been significantly blurred as a result of this decision.

Although the decision also attempts to provide clarity with respect to how an owner might leverage their lack of control as part of their due diligence defence, such a defence is necessarily circumstantial and owners will need to wait and see how this factor plays out in practice.

Owners may now find themselves in an all-or-nothing scenario, where they can choose to exercise total control over a construction project to ensure compliance with the OHSA, or choose to delegate complete control to constructors with an aim to rely on a due diligence defence in the event of a workplace accident.

It is important to note that this decision was an even 4-4 split amongst the justices of the Supreme Court of Canada. An evenly decided decision by the Supreme Court of Canada may not result in a binding legal precedent, although the decision is still entitled to “great respect”. This result may have unique implications for future litigation involving this issue, both in Ontario and across Canada.

Conclusion

The decision generates uncertainty and challenges for owners of construction projects who rely on constructors for the completion of their construction work. Further understanding of this important issue may ultimately be achieved through government enforcement of the OHSA and future court decisions.

If you have any questions about how this decision could impact your business, please contact any member of our DLA Piper Canadian Employment ‎and ‎Labour Law ‎Group or our DLA Piper Construction Law Group, who will ‎ensure that ‎you are acting upon the most up-to-date information.