By Jacob Foster and Scott Lamb

On November 10, 2023, the Supreme Court of Canada released its decision in R v. Greater Sudbury (City), 2023 SCC 28. This case concerned construction safety – one of the most, if not the most, important issues for any construction project.

We have previously posted an article about the Ontario Court of Appeal’s decision that was the subject of this recent appeal. In that article, we noted concerns arising from the Court of Appeal’s decision, which unfortunately are not resolved following the Supreme Court of Canada’s decision.

The facts of this case are relatively straight forward. The City of Sudbury, the owner of a paving project, had been charged with violations of applicable health and safety legislation at the project site arising from the death of a pedestrian passing by the construction project. The relevant health and safety legislation was the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (the “OHSA”) and its Construction Projects regulation (O Reg 213/91). The OHSA regulates various health and safety matters for workplaces in Ontario and is similar to the B.C. Workers Compensation Act, R.S.B.C. 2019, c. 1 and its related regulations.

The City had retained a general contractor for the project, which was also responsible to fulfill the obligations of the “constructor” under OHSA. As is common for many owners, the City had inspectors that would regularly attend the project site for purposes of monitoring the progress of the work and confirming that the City was receiving the work it was paying for.

During construction a pedestrian was killed while machinery was being operated without the safety measures required by OHSA being followed.

The issue was whether the City was an “employer” at the workplace where the violations occurred. If it was, then it was guilty, unless it could establish a due diligence defence. In other words, the City had to establish that it took every precaution reasonable in the circumstances to avoid the violation. The Ministry took the position that the City was an “employer” both because its own inspectors attended the site, but also because OHSA made it the “employer” of the general contractor.

The trial judge and provincial offences appeal court judge found that the City was not an “employer” in the workplace. The trial judge found that if she was wrong on that point, the City had also established the due diligence defence. The provincial offences appeal court judge did not find it necessary to answer whether the City had established the due diligence defence.

The Court of Appeal unanimously found that the City was an “employer” in the workplace because its own inspectors attended the site. The Court found that it did not need to address whether the City was an “employer” of the general contractor or its subcontractors, or any of their employees.

The appeal to the Supreme Court of Canada was dismissed in a rare equal division, with three sets of reasons. Therefore, the Ontario Court of Appeal’s decision stands. However, the significant disagreement between the judges at the Supreme Court of Canada leaves unresolved issues and confusion over the application of OHSA and similar legislation in other provinces which will need to be determined in future cases.

Three judges of the Supreme Court of Canada found that the City was an “employer” at the workplace because it employed its inspectors, but that it was not the “employer” of the general contractor (the “constructor” under the OHSA). However, these judges held that even though the City met the definition of “employer” under OHSA, that did not mean that the regulatory measures that had been violated applied to the City. These judges found that a regulatory measure “applies to an employer where it relates to the work that the employer controlled and performed through their workers”. They found that accepting the Ministry’s position would obligate every employer at a construction project to ensure compliance with all regulatory measures by everyone on the construction project, even if there was no connection between the parties or the work they were each performing. These judges would have remitted the case to the trial judge to consider whether the City violated regulatory measures as an “employer” of the inspectors.

One judge of the Supreme Court of Canada agreed with the trial judge that the City was not an “employer” and that, in the alternative, it had established a due diligence defence. She held that the City’s employment of inspectors did not make it an “employer” on the construction project itself and that a project owner is not the “employer” of its general contractor, which would render the statutory role of a “constructor” under the OHSA redundant. She held that OHSA does not make each “employer” responsible for the health and safety of all workers on the project (that is the role of the “constructor” as defined by the OHSA). She would have allowed the appeal and restored the trial judge’s acquittal of the City.

Four judges of the Supreme Court of Canada found that the City was an “employer” both because its own inspectors attended the site and because it retained the general contractor and, pursuant to OHSA, was its employer. This means that the City would be guilty of an offence under OHSA unless it could establish the due diligence defence. These judges held that every “employer” was obligated to ensure that all regulatory measures under OHSA were complied with, by all workplace participants. They further held that whether any “employer” had any actual connection to the parties or work that was the subject of the OHSA violation was an issue consideration of a due diligence defence. These four judges would have remitted the case to the provincial offences appeal court for a hearing before a different judge to consider the Ministry’s appeal of the City’s due diligence defence.

Significance for Owners in BC

Although this case is not binding in B.C., and B.C. has its own health and safety legislation, these sets of reasons from the Supreme Court of Canada may influence enforcement of health and safety regulations in B.C. going forward, and will undoubtedly be cited in a case of similar circumstances. In addition, and despite the confusion as to the scope of responsibility of owners and other parties for health and safety issues, the decision does provide some guidance about what might be considered in establishing a due diligence defence.

If an owner is found to be an “employer”, a court will likely look to the following non-exhaustive list of considerations when determining whether a due diligence defence is established: (1) the owner’s degree of control over the workplace or the workers; (2) whether the owner delegated control to the general contractor in an effort to overcome its own lack of skill, knowledge, or expertise to complete the project in accordance with health and safety regulations; (3) whether the owner took steps to evaluate the general contractor’s ability to ensure compliance with health and safety regulations before deciding to contract for its services; and (4) whether the owner effectively monitored and supervised the general contractor’s work on the project to ensure that the requirements of the regulations were carried out in the workplace.

If either the Ontario Court of Appeal’s decision, or the reasons of the four Supreme Court of Canada judges who found the City violated OHSA were followed in B.C., it would be problematic for owners who may or may not be able to establish a due diligence defence.

Owners should conduct due diligence when engaging a contractor to evaluate that contractor’s ability to ensure compliance with health and safety regulations. Further, owners in B.C. should consider adding in further protection to their construction contracts to ensure that health and safety regulations are complied with, and to clarify that even if an owner does engage in a form of monitoring or quality control, the contractor agrees that such monitoring will not make the owner responsible for health and safety requirements.

It is recommended that owners and contractors pay specific attention to the health and safety requirements of their contracts.