The OHS laws of Canada are based on a theory called the Internal Responsibility System (IRS) in which all stakeholders in the workplace have duties to ensure its health and safety. The most onerous responsibilities fall on the “employer,” who has primary responsibility over workers’ safety. In many provinces, the definition of “employer” is elastic and extends beyond the mere existence of an employment relationship and encompasses control over the workplace. Thus, a company can be held responsible for the safety of workers who aren’t in its employment, such as the workers of a contractor who works at the company’s site. But a recent case illustrates that there are limits to this elasticity. Although the ruling comes from BC, it’s relevant in any part of Canada where a company can be held liable as an “employer” for the safety of workers it doesn’t actually employ.
THE CASE
What Happened: A petroleum company sells or consigns its products to retail outlets called “service stations.” The company’s agreements with the service stations specify that the workers at the stations are the employees of the operators of the stations—not of the petroleum company. A worker at one service station was hit by a car during a “gas and dash incident.” Another worker at a different service station was held at knife point during a robbery. After these incidents, the WCB issued inspection reports concluding that the company had violated its duty as an “employer” (under Sec. 115(1)(a)(ii) of the Workers’ Compensation Act) to ensure the health and safety of the workers. The company asked for a review of the reports on the grounds that it wasn’t the workers’ employer. The Review Officer concluded that the company was the employer. So the company appealed.
What the Court Decided: The BC Supreme Court ruled that the company wasn’t the employer of the service station workers under the Act.
How the Court Justified the Decision: The issue: Was the Review Officer’s interpretation of “employer” reasonable? The Section 1 of the Act defines “employer” as “including” every person having in their service under a contract of hiring a person engaged in work. The Review Officer concluded that because this definition used the word “including,” the example provided wasn’t “exhaustive.” In other words, it didn’t list all of the types of parties that could be considered employers. Thus, the definition was “flexible and expansive” for the purposes of workplace safety. But the court found this conclusion to be unreasonable. When interpreting a statute, words should be read “in their grammatical and ordinary sense,” explained the court. The dictionary defines “employer” as a person or organization that employs people and defines “employ” as giving work to someone and paying him for it. The court noted that no such arrangement existed in this case. It agreed with the company that “absent a form of contract of service, evidence of payment in exchange for services, or something of that ilk,” a party shouldn’t be considered an “employer” under the Act.
The court also criticized the Review Officer for completely discounting the clear language in the agreements between the company and the operators of the service stations that stated that the service station workers were the operators’ employees. Lastly, the court noted that the Act didn’t contain language deeming a franchisor, lessor, licensor, landlord or fuel producer to be the employer of the workers of a franchisee, lessee, licensee, tenant or retailer. Bottom line: it was unreasonable for the Review Officer to essentially create a category of “indirect employer,” concluded the court [Petro-Canada v. BC (Workers’ Compensation Board), [2008] BCSC 841 (CanLII), July 18, 2008].
ANALYSIS
BC is one of the provinces where a company doesn’t have to be in an employment relationship with a worker to be considered his “employer” for OHS purposes. The Petro-Canada ruling is significant because it demonstrates that although the definition of “employer” under the OHS laws of such provinces is elastic, there are limits to how far it can be stretched. The Review Officer extended the principle too far by interpreting “employer” to mean “anyone with the ability to affect the occupational health and safety of the worker.” Under this interpretation, just about every company that franchises, leases, licenses or subcontracts with another party could be held ultimately responsible as an employer for the safety of workers who conduct the operation. Luckily—and wisely—the court in Petro-Canada ruled that there was “no convincing rationale” to support this interpretation.
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