In Ontario (Labour) v Sudbury (City), the Ontario Court of Appeal recently held that a construction owner may be liable for violations of Ontario’s Occupational Health and Safety Act (the “OHSA”) on a construction project as an employer. On December 9, 2021, the Supreme Court of Canada granted leave to the City of Sudbury (the “City”) to appeal this notable decision.
In 2015, the City entered into a contract with a general contractor, Interpaving Limited (“Interpaving”), to repair one of the City’s water mains. While the City was the owner of the construction project, the contract between the City and Interpaving stipulated that Interpaving would assume control over the entire project, including ensuring that all health and safety requirements under the OHSA were met.
A fatal accident occurred on the project when a woman was struck by a road grader while crossing the street. Contrary to the OHSA, no signallers were present to assist the grader operator and the required fencing was not in place.
Notwithstanding that Interpaving was responsible for all health and safety obligations on the project pursuant to the contract, the City was charged with violations of the OHSA on the basis that it was both a “constructor” and an “employer” within the meaning of the legislation. The trial judge held that the City was neither an employer nor a constructor and so it owed no duties under the OHSA. The Crown appealed the trial judge’s decision, first to an appeal judge and then to the Ontario Court of Appeal.
The Ontario Court of Appeal’s Decision
On appeal, the Ontario Court of Appeal addressed the narrow issue of whether the City was an employer under the OHSA. The Court concluded that the City was an employer within the meaning of the OHSA, and as a result was liable for violations of the OHSA on the project site unless it could establish a due diligence defence.
The appeal turned on the definition of “employer” in section 1(1) of the OHSA, which states:
“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 Court held that this definition of “employer” covers two relationships: first, that of a person who employs workers and second, that of one who contracts for the services of workers.
In this case, inspectors who were employed by the City were on the project site and performed a number of tasks on site, including monitoring the progress of the project and monitoring the quality of the work being performed by Interpaving. The Court concluded that the City employed one or more workers at the project site within the meaning of section 1(1) of the OHSA. The Court further held that the exemption in section 1(3) of the OHSA, which precludes an owner from becoming a constructor by engaging a person to oversee quality control, does not preclude owners from becoming employers.
The Court therefore held that the City was an employer and could be liable under the OHSA for breach of an employer’s prescribed duties under the legislation and its regulations. However, the Court remitted issues relating to the due diligence defence back to the appeal judge.
The Court of Appeal’s decision in this case underscores that health and safety is truly a shared responsibility on a construction project, and that no one actor can avoid responsibility for OHSA compliance simply because they lack control over the construction site or expect another party to assume health and safety obligations. This decision is also significant because the OHSA and its regulations impose broad duties on employers in the construction context, including an obligation to monitor the project site and to take every precaution reasonable in the circumstances to keep the project safe.
Furthermore, the Court’s ruling suggests that contractual language that places OHSA obligations firmly on the shoulders of the general contractor will not shield an owner from liability under the OHSA where the owner employs workers or inspectors on the job site. In light of the risks posed by this decision, owners may wish to engage a general contractor as well as a consultant on the project to oversee the work so that this responsibility is completely removed from the owner. That is, owners ought to avoid the temptation to keep one foot in the project by having their own employees oversee and inspect the work, as having employees on site will give rise to extensive duties under the OHSA.
We anticipate that the Supreme Court of Canada will rule on the City’s appeal this coming year. In the meantime, construction owners who employ workers or contract for the services of workers on Ontario construction projects should ensure that they are meeting the prescribed responsibilities of employers under the OHSA and its regulations.