ON Court Uses Broad Definition to Decide Which Company Is ‘Employer’ under OHS Law

Employers have specific duties under the OHS laws. In a typical workplace, it’s easy to determine who the “employer” is. But in a workplace in which multiple companies are operating—such as a construction site—figuring out which company is the employer can be complicated. Although this question might sound like a technicality, it has enormous practical significance given that the company found to be the “employer” will ultimately be held responsible for any safety violations committed during the work. This issue arose in a recent Ontario case, in which the court had to determine whether two companies involved in a fatal explosion qualified as “employers” under the OHS Act. Although the case is from Ontario, it’s still relevant in other parts of Canada. THE CASE What Happened: The City of Toronto hired a construction company for excavation work. As required by the construction regulations, the company contacted the gas company to have it locate and mark the underground pipes in the area of the excavation. The gas company, in turn, hired a subcontractor to do the “locate” work. A construction worker operating a backhoe struck a gas pipe, causing a leak and explosion. Seven people died, more were injured and numerous properties were damaged or destroyed. The MOL charged the construction company, gas company and subcontractor with safety violations. The construction company pleaded guilty and was fined $225,000. The trial judge ruled that the gas company and subcontractor weren’t “employers” for OHS purposes and that they had no legal duty to ensure the locates were done accurately. So it dismissed the charges. What the Court Decided: The Ontario Superior Court of Justice reinstated the charges against both companies and ordered a new trial. How the Court Justified the Decision: The court explained that public welfare laws, such as the OHS laws, should be interpreted liberally to ensure that their objectives aren’t frustrated. Here, the OHS Act’s definition of “employer” is intentionally broad and should be interpreted that way. It also specifically includes contractors and subcontractors. The gas company and subcontractor in this case fit the definition. The court rejected the argument that because the function of the gas company and subcontractor on the worksite was so discrete, they should be exempt from the “employer” definition. After all, it wasn’t unusual on a large project for the subcontractors to each perform one specific function. And excluding them as employers on that basis would undercut the goals of the OHS laws, reasoned the court. In addition to ruling that the gas company and subcontractor were employers, the court found that the construction regulations clearly imposed duties on them as to the locates. The regulations required the employer in charge of the excavation—in this case, the construction company—to request that the owner of the utility—the gas company—accurately locate and mark the gas, electrical or other services. So the construction company had no control over or duty regarding the locates once it had contacted the gas company. The gas company in turn hired the subcontractor to do the locates. To rule that neither had a legal duty as to the locates would leave no one responsible for ensuring they were done accurately, which is “contrary to the entire philosophy” of the OHS laws, concluded the court [R. v. Enbridge Gas Distribution Inc., [2010] ONSC 2013 (CanLII), April 14, 2010]. ANALYSIS The Enbridge case is a good example of the “belt and braces” approach to workplace safety  that’s epitomized in Canadian OHS laws. As the court in this case explained, these laws create overlapping responsibilities to “leave little to chance” when it comes to protecting workers. The idea is that if the “belt” doesn’t work to safeguard a worker, the backup system of the “braces” will and vice versa. In safety terms, if one workplace stakeholder fails to exercise due diligence, that failure might be compensated for by the due diligence of one of the other stakeholders. The construction company in the Enbridge case, which was clearly an employer, acknowledged that it had failed to fulfill its OHS duties when it pleaded guilty. In contrast, the gas company and subcontractor tried to escape liability by pointing the finger at the construction company and claiming that because they were only there to do one discrete job, they essentially weren’t responsible for workplace safety at all. Although the trial court bought this argument, the appeals court set things straight by ordering a new trial. Perhaps the gas company and subcontractor will ultimately escape liability for their role in this tragedy. But at least to do so, they’ll first have to prove that they took all reasonable steps to ensure that the locates were done accurately.