On October 31, 2013, the Alberta Court of Queen’s Bench issued a large fine against an employer under the Occupational Health and Safety Act (Alberta), sending a strong message that other employers may find frightening.
A previous blog post from August 29, 2013, identified that the Alberta Court of Appeal had dismissed an employer’s appeal of two convictions pursuant to the Occupational Health and Safety Act.
On October 31, the Alberta Court of Queen’s Bench issued its decision on the sentence to be imposed on the employer, XI Technologies. The Court continued a recent trend of imposing substantial fines for violations of the Occupational Health and Safety Act, particularly where the violation led to a fatality.
In 2002, the Alberta Legislature increased the maximum penalty for a first offence under the Occupational Health and Safety Act from $150,000 to $500,000. In the past few years, courts have indicated their willingness to impose more substantial fines in accordance with the increase to the maximum penalties. In R. v. Independent Automatic Sprinkler Ltd., 2009 ABQB 264, the Court imposed a fine of $350,000 in a case involving a high degree of employer negligence leading to the death of one employee and resulting in another employee’s suffering severe, permanent injury.
In R. v. XI Technologies Inc, 2013 ABQB 651, despite the presence of several mitigating factors, the Court imposed a fine of $275,000. XI Technologies was convicted of failing to ensure the safety of a worker and failing to ensure that all equipment used at a worksite would safely perform the function for which it was intended, after a worker was killed during the operation of a calf-roping machine ride at a Calgary Stampede party hosted by the employer. The blog posting on August 29 discusses the facts of the case in greater detail.
The Court began its decision on sentencing by highlighting that the increase in the maximum fines that may be imposed pursuant to the Occupational Health and Safety Act reflects the significance Alberta has placed on worker safety and the intention to give courts greater flexibility to impose a fine commensurate with the severity of the offence. The Court then reviewed several previous sentencing decisions for charges pursuant to the Act, and identified a number of factors used by the courts when determining the fines in those cases.
However, the Court found that this was a unique case because, when the accident occurred, the employee was not working in his normal work environment or performing his normal duties.
Importantly, the Court accepted that management did not know about the risks associated with the operation of the machine. No one from management was present during the actual operation of the machine, only three employees. Nonetheless, the Court affirmed that responsibility to ensure a safe workplace cannot be delegated to employees. Primary responsibility for safety always rests with the employer.
One significant mitigating factor was that, while a risk of injury was likely, risk of death was not. This, the Court found, distinguished the case from others like Independent Automatic Sprinkler, mentioned above, where risk of death was clearly a foreseeable consequence of any accident.
Other mitigating factors included that the employer did take some sincere, but insufficient, steps to ensure safety, and that the employer was not knowingly non-compliant with safety standards or recklessly indifferent to employee safety. Therefore, the Court characterized the offence as stemming from a bona fide ignorance of risk as opposed to willfully or recklessly ignoring a dangerous situation.
The Court also accepted that the employer was genuinely remorseful, involved with the family of the deceased employee, and had no prior record of safety infractions. The employer also made a donation to the University of Calgary to fund a memorial bursary in the name of the employee. While the Court appreciated this gesture and agreed that donations will often reduce the amount of a fine, the Court held that any reduction of the fine will not be on a dollar-for-dollar basis.
In light of the mitigating factors but also the fact that the offence led to a fatality, which the Court emphasized should result in fines nearer to the maximum allowable, a fine of $275,000 was imposed on XI Technologies. The portion of $175,000 was for failing to ensure that equipment was operated safely, which the Court found to be the more serious offence, and the remaining $100,000 was for failing to ensure the safety of a worker.
The key points for employers to take away from the sentence imposed and the reasons given for that sentence in R. v. XI Technologies Inc. include the following:
- Courts in Alberta will continue to impose significant fines for breaches of the Occupational Health and Safety Act;
- Employers must be vigilant to ensure safety even when operating outside of core or normal work functions or environment;
- Employers cannot delegate the responsibility to ensure safety to their employees or any third parties;
- When a breach of the Occupational Health and Safety Act leads to a fatality, courts will tend to impose a fine closer to the maximum allowable under that Act, despite the presence of numerous mitigating factors;
- Donations will not be deducted from the fine to be imposed on a dollar-for-dollar basis, though those donations are significant mitigating factor.