Canadian employers hit with record-setting occupational health and safety fines

October 06, 2013 - by: Norm Keith 0 COMMENTS

By Norm Keith

With the introduction of the Bill C-45 amendments to the Criminal Code of Canada, occupational health and safety regulation, prosecution and conviction have been on the rise across the country. Recently, Vale Canada Limited and Metron Construction were given record fines in occupational health and safety and criminal negligence convictions, respectively.

In Vale’s case, the company entered a plea of guilty and agreed to pay a fine of $1,050,000 for a double fatality resulting from an uncontrolled release of broke rock, or muck, buried one worker and struck and killed another in a Sudbury area mine.

In Metron Construction’s case, the company pleaded guilty to one count of criminal negligence causing death under the Criminal Code in relation to the death of four workers who fell when a swing stage scaffold collapsed. In its decision on a sentence appeal, the Court of Appeal for Ontario increased the fine against Metron Construction from $200,000 to $750,000, describing the higher fine as a “fit fine in the circumstances.”

Occupational health and safety conviction – the Vale case

In the Vale case, the Ministry of Labour press release announced the fine as the highest fine levied by a court in Ontario for contraventions of the Occupational Health and Safety Act. Vale’s size, the double fatality, and the prior record of convictions were all considered aggravating factors that increased the size of the fine to set the new record.

Criminal negligence conviction – the Metron case

In the Metron case, the crown appeal resulted in the increased fine of $750,000. Ironically, this fine for four deaths and a critical injury was still lower than the regulatory fine against Vale. Metron was a very small construction company with no prior record and in a financially vulnerable condition. Those factors, along with a president who also pleaded guilty, were all considered mitigating factors by the court in the sentencing.

In the Metron case, the corporation admitted that the supervisor, Fayzullo Fazilov, was a “senior officer” of Metron. The new formula for criminal guilt of an organization requires that a senior officer departed markedly from the standard of care that reasonably would have been expected to ensure that representatives were safe at the worksite. In other words, without the admission that Fazilov was a senior officer, the crown couldn’t have secured a conviction under the Bill C-45 amendments to the Criminal Code.

The Court of Appeal criticized the trial judge on the assessment of a $200,000 fine, calling it “manifestly unfit.” Then the court came back to the responsibility of Fazilov, the supervisor who was in our opinion questionably determined to be a senior officer of Metron. Calling the criminal negligence of Fazilov extreme, the court increased the fine from $200,000 to $750,000. The court seemed to ignore the fact that Fazilov and several other workers all tested positive for measurable amounts of THC, the active ingredient in marijuana and hashish.

The tragedy of the four deaths of employees of Metron Construction has resulted in much controversy, consternation, and change in occupational health and safety regulation and enforcement in Ontario and across Canada.

Although the fine against the small corporation may never be fully recovered (if the company is driven into bankruptcy by this new, higher fine), the Court of Appeal has clearly sent a message to employers that when they are convicted of offenses of occupational health and safety criminal negligence, under the Bill C-45 amendments to the Criminal Code, punishment may be severe. The other sobering fact is that there is no upper limit to fines that may be imposed on a corporation when they are prosecuted under a Bill C-45 offense.

Implications for employers

The fine against Vale was likely higher than that against Metron because of Vale’s size and prior record of convictions. However, since a criminal charge requires proof of intent, the question may be asked if the Vale decision will result in more occupational health and safety regulatory charges, which are easier to prove, than criminal charges.

In either case, Canadian employers should be more aware and more committed to occupational health and safety compliance than ever before. Steps such as an occupational health and safety policy, a legal compliance audit, rigorous training, and supervision of workers and ongoing review and improvement of occupational health and safety practices are all required to prevent accidents and to establish the defense of due diligence.

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