Ontario Court of Appeal ruling ‘sending alarm bells’ through construction industry, says lawyer

A recent decision from the Ontario Court of Appeal is “sending alarm bells” through the construction world, says Sahil Shoor, construction and infrastructure lawyer at Gowling WLG.

Prior to the ruling, when an owner of a construction project and its general contractor signed a contract, the latter would agree to assume responsibility for health and safety standards under the Occupational Health and Safety Act, says Shoor, a partner at Gowling’s Waterloo office. Though the owner is not regularly on the job site, they will send inspectors to approve and review work. In so doing, the owner is liable if work is not up to OHSA’s standards.

“What I’d say is changed is the long-standing practices that existed in the construction world when it comes down to monitoring, quality control, safety and management,” says Shoor. 

“What this decision does is it says irrespective of what you agreed… you cannot displace that authority on somebody else.”

The decision does not change the law, but reinforces what the law has always been, says David McCaskill, Senior Crown Counsel for the Attorney General of Ontario, who acted for the appellant, the Ontario Ministry of Labour.

The decision was a “strong reaffirmation” of the Ontario Court of Appeal’s ruling in R. v. Wyssen, which is on of the “seminal cases on the definition of employer,” McCaskill says.

“It reinforced, as well, the concept that I don't think the Court of Appeal has particularly weighed in on – but lower courts have – that any one party on a construction site can play more than one role,” he says. “They could be an owner, they could be a constructor, they could be an employer. And that's something that I think is very valuable to reinforce for the courts below, as well for the trial courts.”

The case arose from an accident on a construction site in Sudbury, Ont. While performing road repair, a road grader struck and killed a woman. The grader was operated by a company that had been contracted by the city. Both the city and the company, Interpaving, were charged with violating Construction Projects, O. Reg. 213/9, contrary to contrary to s. 25(1)(c) of the Occupational Health and Safety Act.

The parties were tried in separate proceedings. The trial judge found the grader operator was working without a signaller and there was no fence to separate the public way and the worksite. While Interpaving was found guilty, the city was acquitted, as the judge found Sudbury was neither an employer nor a constructor and owed no duties under OHSA. But Sudbury would have been clear, regardless, as the trial judge also found the city had a due diligence defence to the charges.

After its appeal to the Superior Court was dismissed, the Crown was then granted leave to the Court of Appeal to determine whether the trial judge erred in concluding the city was not an employer under the act. Because its status as a constructor was an issue of mixed fact and law, that question was not subject to the appeal.

Justices Michael Fairburn, David Watt and Grant Huscroft reversed the lower court’s ruling and found Sudbury was indeed an employer under the act and liable for violations to its regulation, unless it is able to establish a due diligence defence. The Court remitted the case for a hearing concerning the Crown’s appeal of the due diligence finding.

The Court referred to the 1992 Ontario Court of Appeal decision in R. v. Wyssen, which defined employer in OHSA as covering two relationships: a person who employs workers and a person who contracts for the services of workers. The act puts employers “virtually” in the position of an insurer, which must ensure workers are complying with safety regulations before work is undertaken, said the Court.

In the case of the Sudbury construction site at issue, inspectors employed directly by the city had monitored the site for quality control and work progress, “plainly” making Sudbury an employer for the purposes of OHSA, said the Court. This was enough to dispose of the appeal.

The Court left unanswered the question raised by the lower court judge as to whether “control” would be a requirement where the municipality has contracted work to a third party.