A tragic worksite incident in Sudbury, Ont. and the resultant Supreme Court of Canada decision have created the most significant legal story of 2023 for the construction industry.
A road grader operated by a paving firm contracted by the City of Sudbury struck and killed a pedestrian during watermain repairs. Both the city and contractor were charged with violations of the Occupational Health and Safety Act (OHSA) as the “employers” on the project.
The case moved up through the court system. In a split decision this past November, the Supreme Court of Canada (SCC) made a ruling expanding the definition of employer to include a project owner. That leaves Sudbury potentially liable.
In the meantime, the city’s case has been referred back to Ontario’s Superior Court of Justice to consider the original trial court’s finding that the city had been duly diligent. Proof of due diligence in OHSA cases will be a key issue going forward, should similar charges and cases arise elsewhere.
Legal experts in construction and occupational safety have been circling their wagons ever since.
“To say the decision has caused a stir in industry is no small understatement. It will take some time to digest the full implications and ongoing best practices for construction projects,” Ted Betts, head of Gowling WLG’s Infrastructure and Construction Group, told the audience during a recent webinar hosted by the firm.
As explained by Gowling associate Cristina Borbely, the practical outcome of the SCC decision was that, because the city hired the paving firm and employed its own quality assurance inspectors to oversee the work, the city, as an owner, took on broad compliance duties on the project, despite having delegated the assurance of compliance to the paving firm.
“As a result, owners and employers would be responsible for ensuring overall compliance on construction projects that had previously been the role of the constructor.”
“The split decision reflects significant disagreement in Canada’s highest court on the scope of the duties and responsibilities of an owner or an employer on a construction project,” Gowling associate Tushar Anandasagar said. “Future cases will likely have to be argued, or legislative changes made, in order for definitive answers to be given on the scope of an owner’s occupational health and safety duties.”
Jordan Smith, a Gowling partner specializing in employment, labour and equalities, said, “The constructor is the party with the greatest degree of control over health and safety at the entire project, and is ultimately responsible for the health and safety of all workers.”
However, by deeming an owner as an employer, there are fears the design of the OHSA scheme, as contemplated by the legislation, will be undermined.
As Anandasagar explained, “The impact of this would be to assign project owner responsibilities that would require them to play an active role across the project, a role that the act has actually sought to avoid by enabling them to contract with a constructor in the first place and divest that control and daily responsibility.”
It’s what Smith called “a new area of concern.” Although the city was clearly the employer of its quality assurance inspectors sent to the site periodically, it was also deemed the employer of the paving firm with whom it had contracted work on the project.
Gowling partner Sahil Shoor said deeming an owner as an employer simply because it hired a constructor places that owner in a very challenging position. It means, in turn, that if the owner then takes no steps to ensure day-to-day occupational health and safety compliance, they could face significant risk in terms of demonstrating their due diligence.
“What do we do now to protect ourselves?” asked Betts.
He offered several suggestions.
“The most important thing we can take away from this is we have to know the rules,” he said. “There’s an opportunity and a need to re-educate or educate for the first time. Turning a blind eye, or expecting that you’ve done all that you need to do as an owner simply by selecting a constructor to take care of health and safety on the site, is clearly no longer sufficient, if it ever was.”
It will also be critical to demonstrate due diligence even before the project begins, he continued. That means checking contractor references and conducting internal staff training. Oversight during the project must be maintained to ensure health and safety issues are reported, properly documented and followed up. It’s also an opportunity for those contractors with strong health and safety compliance processes to step forward and identify themselves.
As for owners staying away from the site entirely to avoid the risk of any oversight implications, forget it, said Betts.
“I think that would be a grave mistake.”
The same goes for trying to use indemnity clauses to escape health and safety obligations.
“It looks like you’re trying to avoid your responsibilities as an employer and that’s not a good look on you if there is an incident.”
Instead, Betts advocates a “culture change or culture enhancement” from the board level up, focussed on keeping workers safe.
John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.
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