“Owners” of Forestry Licenses in British Columbia can receive Administrative Penalties, even if the Owner is not the Injured Worker’s Employer

May 29, 2018 | Tari M. Hiebert

May 18, 2018:  the Supreme Court of Canada releases its decision in West Fraser Mills Ltd. v.  British Columbia (Workers’ Compensation Appeal Tribunal), 2018 SCC 22. Click here for the full text of the SCC’s decision.

Introduction

The Supreme Court of Canada (“SCC”) has released its decision on whether administrative penalties for non-compliance with British Columbia’s Occupational Health and Safety Regulation, B.C. Reg. 296/97  (“Regulation”) can be applied to “owners” of forestry licenses, even if the “owner” is not the “employer” of the injured worker. The answer was “yes”.

This case arose from a review of the Workers Compensation Appeal Tribunal decision, WCAT 2013-01952.

The Accident

In this case, a tree faller was fatally injured when he was struck by a rotting tree. He was working within an area of a forest license held by West Fraser Mills Ltd. (“WFM”).

WFM was the “owner” of the workplace, as defined in Part 3 of British Columbia’s  Workers Compensation Act , R.S.B.C. 1996, c. 492  (“Act”). Part 3 of the Act addresses occupational health and safety.

WFM had entered into a verbal contract with an independent contractor, whose business was unincorporated[1],  to fell so-called “trap trees” in order to reduce the beetle population on WFM’s property.

The contractor hired the individual faller, who reported to, and was supervised by, the contractor. The injured faller was not employed by WFM.

WFM had its own employees at the worksite, including a supervisor whose duties included monitoring the worksite for compliance with the Regulation. The supervisor met with the contractor and the individual faller on the day the work was scheduled to begin. They completed a walk-through of only one of the two areas where trees were to be felled. WFM’s supervisor reviewed emergency documents, identified hazards and provided maps of the area to the contractor and the faller. During this meeting, the supervisor learned that the contractor’s certification to fell trees had expired.

In his interview with an officer during the investigation, the WFM supervisor confirmed that his job was to supervise contractors at the start-up of a project, to conduct pre-work planning and to supervise the day-to-day operations in terms of log quality and contractors’ work habits.

The Consequences

The Workers’ Compensation Board of British Columbia (“WCB”) investigated the accident and determined that WFM had failed to ensure all activities of the forestry operation were planned and conducted in a manner consistent with ss. 26.2(1) of the Regulation.

This subsection of the Regulation requires the “owner” of a forestry operation to “ensure that all activities of the forestry operation are both planned and conducted in a manner consistent with this Regulation and with safe work practices acceptable to the Board.” The following subsection also requires that “[e]very person who has knowledge and control of any particular activity in a forestry operation must ensure that the activity is both planned and conducted in a manner consistent with this Regulation and with safe work practices acceptable to the Board”.[2]

WFM received an administrative penalty of $75,000 under the authority of ss. 196(1) of the Act.  WFM appealed that decision to the Workers’ Compensation Appeal Tribunal (“Tribunal”). The Tribunal reduced the penalty by 30%, noting WFM’s general history of compliance with safety standards.

The Argument

WFM  made a statutory interpretation argument about why it should not be subject to the administrative penalty. It argued that the administrative penalty could be levied only against an entity acting as an “employer”, not one acting as an “owner”.

This argument comes from the wording of ss. 196(1) of the WCB Act, which states that the Board may “impose on an employer an administrative penalty,”[3] if the Board is satisfied that: (i) the “employer” has failed to take sufficient precautions for the prevention of work-related injuries; (ii) the “employer” has not complied with Part 3 of the Act or the Regulation; or (iii) the “employer’s workplace or working conditions are not safe.”

As WFM was the “owner” of the workplace, not the “employer” of the tree faller,  WFM argued that it could not be subject to an administrative penalty in this case.

The Tribunal rejected WFM’s argument. It held that ss. 196(1) of the Act allowed the Board to issue an administrative penalty against an entity that is an “employer” under the Act, even if the entity’s conduct could also lead to consequences for the entity as the “owner” of the worksite.

The Tribunal found that WFM was both an “owner” and an “employer” at this worksite.

The Tribunal found that, as an “owner”, WFM had sufficient knowledge and control over the workplace to enable it to ensure the health and safety of the workers at the worksite location. The Tribunal held that this obligation was not limited to the health and safety of WFM’s own employees. WFM’s duty extended to ensure the health and safety of all workers at the worksite.

The SCC’s Decision

The SCC upheld the Tribunal’s decision.

The majority decision canvassed the statutory interpretation arguments made by WFM and concluded that WFM’s proposed interpretation of ss. 196(1) of the Act was “a plausible but narrow way” of interpreting that section.

There were two competing interpretations available to the Tribunal: the narrow interpretation proposed by WFM (limiting the employment relationship to the relationship with the person who was injured) and the broader interpretation in which the entity’s obligations extend “to employment with respect to the worksite that led to the accident and injury.”[4]

The Tribunal had chosen the second, broader interpretation.

The SCC majority concluded that in choosing the second interpretation, the Tribunal recognized the “complexity of overlapping and interacting roles on the actual worksite”[5]; and chose an interpretation that would further the goals of the Act and the scheme built upon the Act. The Tribunal’s decision was not “patently unreasonable” so its interpretation was upheld by the SCC.

Administrative Law Principles and the Dissent

Although our article focuses on the statutory interpretation arguments and the language found in s. 196 of the Act, we note that this case also provides important commentary on the principles of administrative law, particularly on the standard of review framework established in the older SCC case,  Dunsmuir v. New Brunswick (2008 SCC 9).

We also note that Justice Côté’s dissenting opinion in the present case addresses the difficulties that arise when one conflates “employer” and “owner” responsibilities under the Act and Regulation.  In her view, that interpretation was not supported by the text of the legislation.

Her dissenting opinion found that s. 26.2(1) of the Regulation was ultra vires for the following reason:

[I]t impermissibly conflates the duties of owners and employers in the context of a statutory scheme that sets out separate and defined obligations for the relevant workplace entities. Therefore, it does not accord with the Board’s enabling legislation and falls beyond the scope of the Board’s delegated powers.[6]

Tari’s Take-Away: Choose your Contractors and Supervisors Carefully

If you are the “owner” of a worksite where a worker is injured, you cannot assume that you can avoid the application of an administrative penalty just because the injured worker was not your own employee.

Every case will have a unique set of facts, but the SCC, at least in this case, supported the Tribunal’s broad interpretation of the Board’s powers to impose an administrative penalty on an entity that was not the injured worker’s employer.

From our perspective, there are a number of important facts that may have affected the determination that WFM was liable for an administrative penalty.

One is that WFM was an “employer” of its own employees at the worksite (not just an absentee “owner”). WFM employed its own supervisor at the worksite, and that supervisor’s specific duties included overseeing the worksite in a manner that was consistent with WFM’s duties under the Act and the Regulation.

The Tribunal found that WFM had sufficient knowledge and control over the worksite, such that it could ensure the health and safety of workers at the worksite. Therefore, the SCC agreed with the Tribunal’s finding that WFM’s “relationship to the safety of the worksite was not solely that of an owner.”[7]

The supervisor’s shortcomings were detailed by the Tribunal, which found that WFM’s supervisor failed to ensure that the faller possessed a valid certification to fell trees and failed to ensure that the faller had demonstrated the “necessary skills to perform the work.”[8]

Practically speaking, this case highlights the importance of choosing one’s subcontractors and one’s supervisors very carefully.

The critical questions for an “owner” will be these: (1) do you have sufficient knowledge and control over the worksite, such that you may be expected to ensure the health and safety of workers at the worksite; and (2) are your contractors and your supervisors capable of meeting the safety requirements and duties in Part 3 of the Act and the Regulation.


[1] British Columbia Workers’ Compensation Appeal Tribunal decision, WCAT 2013-01952 at para 1 (“WCAT 2013-01952”). See also paragraphs 14 – 23 of the Tribunal’s decision for additional factual details that were not elaborated upon in the Supreme Court of Canada’s decision.

[2] Emphasis added.

[3] Emphasis added.

[4] 2018 SCC 22 at para. 39 [emphasis in original].

[5] Ibid. at para 40.

[6] Ibid. at para 75.

[7] Ibid. at para 48.

[8] WCAT 2013-01952, supra, at para 21.

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