The Supreme Court of Canada’s (SCC) decision in R. v. Greater Sudbury (City), 2023 SCC 28 was equally divided (4-4).  In the absence of a majority SCC decision, the City's appeal was dismissed, and the decision of the Court of Appeal of Ontario (OCA) was upheld. The OCA had decided that an “owner” of a construction project can be considered an “employer” within the meaning of the Occupational Health and Safety Act (OHSA).  As such, it can be held liable, subject to a due diligence defence, for a contractor’s violations of workplace safety on a construction project site, even when it properly engages a reputable contractor to act as the project’s “constructor,” and none of its employees are involved in the construction project.  The decision of the SCC upholding the OCA’s decision is significant for the construction sector. 

OHSA

Section 25(1)(c) of OHSA provides that an “employer” shall ensure that prescribed measures and procedures are carried out in the workplace.  Section 25(1)(c) is breached if prescribed health and safety measures are not carried out in a workplace to which an employer is connected. 

Under OHSA, a “constructor” is identified as, “a person who undertakes a project for an owner and includes an owner who undertakes all or part of a project by himself or by more than one employer.” OHSA allows an “employer” to delegate some of its responsibilities to carry out health and safety measures on a construction project to a “constructor,” provided applicable rules are followed and certain requirements pertaining to the constructor are fulfilled.

OHSA defines an “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

Section 66(3)(b) of OHSA outlines what is known as the due diligence defence.  It provides that on a prosecution for failure to comply with certain provisions of OHSA (including s. 25(1)(c)), it will be a defence for the accused to prove that every precaution reasonable in the circumstances was taken to comply with the provision. 

Background

In 2015, the City began construction downtown. The City was the owner of the project, but Interpaving Limited (Interpaving), a general contractor, was hired to be the project’s “constructor.” None of the City’s employees were involved in the construction of the project; however, the City occasionally sent its employees to inspect the project’s quality. 

Four months after construction began, an Interpaving employee driving a construction vehicle hit a pedestrian who was crossing the street at a traffic light.  The pedestrian died.  No measures were taken at the worksite to protect pedestrians. 

The City and Interpaving were charged with violations of OHSA. The City was charged as a “constructor” and “employer” under OHSA.

Interpaving pleaded guilty and was fined; however, the City pleaded not guilty and the matter went to trial.

Proceedings

Trial

At trial, charges against the City were dropped based on a finding that it was not a “constructor” or “employer.”  Interpaving was the “constructor” and the City was an “employer” only with respect to its employees who were occasionally sent to inspect the project.

Superior Court of Justice (SCJ)

An appeal to the SCJ was dismissed and the decision of the trial judge was upheld.  

OCA Decision

When the Crown appealed the matter to the OCA, the OCA observed that OHSA’s definition of “employer” “embraces both employing and contracting for the services of workers.”  Referring to judicial precedent, the court noted that under OHSA, employers have a duty to act “virtually in the position of an insurer of safety in the workplace prior to work being undertaken by either employees or independent contractors.”  The OCA emphasized that the City’s inspectors, whom it employed, were at the worksite; the court concluded that because the City “employed one or more workers at the project site” it was an “employer” under OHSA.  The court then ordered that the matter be remitted to the SCJ so that it could decide whether the City acted with due diligence, and if it did not, what its penalty or sentence should be.

The City appealed the OCA’s decision to the SCC. 

Decision of the SCC

As the Supreme Court was equally split 4:4, there was no majority decision, and the appeal was dismissed.

In Justice Martin’s reasons (on behalf of four SCC’s judges), he emphasized that OHSA is public welfare legislation designed to promote safe workspaces by allocating concurrent and overlapping responsibilities for occupational health and safety duties among various classes of workplace actors, including constructors, employers, and owners.

Justice Martin agreed with the OCA that a construction project’s “owner” can also be considered an “employer” obliged under OHSA to ensure safety on the project, even when none of the owner’s employees are involved in the construction activities. He agreed further that the City was an “employer” for purposes of determining liability under OHSA:  not only was it an “employer” of its own employees who were occasionally sent to the construction project to inspect its quality, it was also an “employer” of the workers employed by Interpaving.  Justice Martin emphasized that whether an owner is an “employer” under OHSA is independent of whether it controls the workplace or the workers. 

Justice Martin found that, subject to a due diligence defence, as an “employer” under OHSA, the City committed an offence under s. 25(1)(c) because it failed to ensure that prescribed safety measures and procedures were taken at the site of the construction project, including two such measures prescribed by O. Reg. 213/91 (Construction Projects):  there was no fence between the construction work and the public way, and no signallers.

Justice Martin emphasized that s. 66(3)(b), which provides that employers who breach s. 25(1)(c) will not be subject to penalties under OHSA if they can show they took all reasonable steps to avoid the breach, “functions as a safety valve.”  He stressed that control should be considered at this stage of the analysis and an accused’s lack of control may suggest that it took all reasonable steps in the circumstances.  Justice Martin outlined relevant considerations that would assist a court’s analysis at this stage: the accused’s degree of control over the workplace or the workers; whether it delegated control to the constructor in an effort to overcome its own lack of skill, knowledge or expertise to complete the project in accordance with the Regulation; whether it took steps to evaluate the constructor’s ability to ensure compliance with the Regulation before deciding to engage the constructor’s services; and whether it effectively monitored and supervised the constructor’s work on the project to ensure that what is prescribed in the Regulation was carried out in the workplace.

Upon dismissing the appeal, Justice Martin upheld the OCA’s order remitting the question whether the City could establish the due diligence defence to the provincial offences appeal court. 

Dissenting Decision

All but one of the dissenting judges agreed with the OCA and Justice Martin that the City was an “employer” of its own employees who were occasionally sent to the construction project to inspect it; however, they did not concur with the OCA and Justice Martin that the City was also an employer of the workers retained by Interpaving. Their narrower view was that an employer’s duty under section 25(1)(c) applies only to work it controls and that is performed by its workers. They said:

Put simply, a measure contained in the Regulation applies to an employer where it relates to the work that the employer controlled and performed through their workers.  Otherwise, employers would have no ability to ensure compliance with that measure nor would the measure bear any relation to their workers’ tasks.  The structure of the [OHSA], the division of roles in the construction context, the relationship with other employer duties, the purpose of protecting workers, and the presumption against absurdity call for such an approach. 

Finally, Justice Côté took the trial judge’s position that the City was not an “employer” and, therefore, it was not liable; Interpaving was solely responsible for the pedestrian’s death because it had full control over the project.

Bottom Line for Employers

The decision of the SCC in R. v. Sudbury suggests that, in the context of a construction project, subject to a due diligence test, the hiring of reputable contractor/constructor by an owner/employer may no longer protect the owner/employer from the risk of liability for violations of health and safety obligations under OHSA.  This is the case even when none of the owner/employer’s own employees are involved in the project’s construction activities, and they have no control over the contractor/constructor’s employees. 

Given this new reality, owner/employers on construction projects should do all they can to meet the due diligence standard, taking into consideration the list of relevant considerations offered by Justice Martin.  If owner/employers work collaboratively with constructors/contractors in taking such precautions, there will be fewer accidents on construction projects and, should an accident occur, the due diligence defence will be stronger.