“Owner” of a Construction Project can also be an “Employer” under OHSA
In a recent decision Ontario (Labour) v Sudbury (City), the Ontario Court of Appeal (“ONCA”) held that the “owner” of a construction project, the City of Greater Sudbury (the “City”), was also an “employer” within the meaning of the Occupational Health and Safety Act (the “OHSA” or the “Act”) with the statutory duties of an employer to ensure health and safety at the workplace.
A member of the public tragically died after being struck by a road grader while crossing a street being repaired on a construction project in downtown Sudbury. The woman had been struck by a grader driven by an employee of the general contractor, Interpaving Limited (the “GC”). The City, as the owner of the project, had contracted with the GC to complete the construction. It was a term of the contract that the GC assumed the role of “constructor” for the project, with overall responsibility for health and safety. The City employed inspectors at the project site to monitor contract compliance and quality assurance. The inspectors were the only City staff on the project.
After an investigation by the Ministry of Labour, Training and Skills Development, the GC and the City were charged for having violated provisions of the Construction Projects, O. Reg. 213/91 (the “Regulation”), contrary to the OHSA. The City was charged on the basis that it was both a “constructor” and an “employer” within the meaning of the OHSA. At trial, the City was acquitted of all of the charges, with the trial judge concluding that the City was not a constructor nor an employer on the project. The Crown appealed the acquittal to the Superior Court of Justice, which upheld the trial decision. The appellate court agreed with the trial judge that the City was neither a constructor nor an employer and did not consider whether the City would have a due diligence defence. The Crown appealed to the ONCA to determine whether the trial judge erred in concluding that the City was not an employer under the Act.
The Decision and Analysis
Emphasizing that the OHSA should be interpreted generously given that it is public welfare legislation, the ONCA held that the City was indeed an “employer” within the definition of the OHSA and was therefore liable for the violations of the Regulation found by the trial judge, unless it could establish a due diligence defence.
Whether the City met the definition of an “employer” turned on the application of the definition of employer from s. 1(1) of the OHSA which provides that:
“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; (“employeur”) …
The ONCA determined that anyone who “employs one or more workers” is an employer for the purposes of the Act and so, as an employer, is “responsible for ensuring compliance with the Act in the workplace”. The quality control inspectors at the project site were employed directly by the City. The Court stated, “Plainly the City employed one or more workers at the project site within the meaning of s. 1(1)”, and thus found the City to fall within the definition of “employer” under the OHSA. The Court determined that the exemption found at s. 1(3) of the OHSA, which serves to exclude an owner from becoming a constructor solely by engaging a person to oversee quality control, does not exclude an owner from being an employer for the purposes of the OHSA.
The ONCA declined to thoroughly examine a question raised by Brown J. A. in granting leave to appeal to the ONCA, regarding whether it is necessary to determine the degree of “control” a municipality must have in order to fall within the definition of “employer” in instances where the municipality has contracted work to a third party. The ONCA stated that it was not necessary to resolve that question given its finding that the City was an employer simply by virtue of employing its own quality control inspectors on the project.
The issue of the City’s possible due diligence defence was remitted to the Superior Court for consideration. The City is currently seeking leave to appeal the ONCA decision to the Supreme Court of Canada.
Implications for Owners
The potential implications of the City of Greater Sudbury decision are significant and troubling for owners of construction projects in that it appears to represent a departure from how the OHSA scheme has traditionally been applied in interpreting the respective duties of owners, constructors and employers on construction projects.
Based on the reasoning of the ONCA, depending upon the circumstances, an owner may be found to have duties to ensure health and safety on a project as an employer, not just in relation to the owner’s own workers but potentially more broadly, to other aspects of the project, even where there is a third party constructor in place. The decision also leaves open the question of what steps an owner would be required to take as an employer in order to make out a due diligence defence in such circumstances. These uncertainties pose challenges for owners of construction projects that may only ultimately be resolved through further litigation and future court decisions.
Should you have any questions regarding the impact of this decision on your business, please do not hesitate to contact McCarthy Tétrault’s Labour and Employment group.
Employment Law Occupational Health and Safety Act Occupational Health and Safety Act (Ontario)