Officers and directors aren’t automatically liable just because their companies commit a safety offence. They may be held personally liable for the company’s OHS violations under three theories: 1) as principals—that is, the people who actually committed the act or failed to act when legally required to do so; 2) as a party to the company’s offence; and 3) if the OHS law specifically holds a company’s officers and directors liable for that particular offence. Applying these theories to real-life situations can be tricky. Here are two contrasting cases that focused on a CEO’s accountability for the company’s violations. (Although one of the cases involves an environmental offence, the same principles apply to safety offences.)
FACTS
A worker for a steel fabrication company was assigned to spray paint the interior of a large truck-mounted water tank, which qualified as a confined space under the OHS law. Flammable paint fumes and vapours accumulated in the space. When the worker adjusted his light, he ignited a spark that caused an explosion. The worker was seriously injured and hospitalized for about a year. The cause of the explosion: the worker’s light wasn’t explosion-proof and thus wasn’t suitable for use in confined spaces. The company, a supervisor and a director were charged with OHS violations. The director pleaded guilty to failing, as an officer or director, to take all reasonable care to ensure compliance with the OHS laws.
DECISION
The Ontario Court of justice accepted the director’s guilty plea and fined him $10,000 based on his participation in the offence.
EXPLANATION
In sentencing the director, the court noted that the injured worker had asked the supervisor for an explosion-proof light to use in confined spaces and the director was aware of this request. But instead of providing the worker with such a light, the supervisor modified a 40-pound lamp and told the worker to use it when working in confined spaces. However, the lamp wasn’t suitable for such use. Two weeks before the explosion, the worker was using this lamp in a confined space when his respirator failed. He needed help getting out of the space because of the lamp’s size and weight. The director was aware of this incident yet he didn’t take steps to ensure that the worker was given an appropriate light that was suitable for use in confined spaces. Given the director’s knowledge of the need for a proper light for confined space use and his failure to ensure that such a light was provided, a $10,000 fine—double the one imposed on the supervisor—was appropriate.
R. v. Raglan Industries Inc., [1994] O.J. No. 3998, Feb. 28, 1994
FACTS
A company used a wet scrubber system at its asphalt plant to reduce the emission of dust into the air. Overnight, the water in the lines to the wet scrubber froze. The next morning, the plant operator used a propane torch to melt the ice. Unbeknownst to him, some ice partially blocked a filter, reducing the water flow to the scrubber system. Once the water started flowing again, he started the plant. But he noticed a plume of dust coming from the plant. Environmental inspectors who happened to be driving past the plant also spotted the plume. They ordered the plant to halt operations. The operator immediately shut down the plant and fixed the problem within 10 minutes. Still, the company and a director were convicted of an environmental offence. The director appealed.
DECISION
The NL Supreme Court dismissed the case against the director.
EXPLANATION
The director could be liable if he was “in some manner personally involved in the commission” of the offence, such as if he exercised sufficient control over the events in question, explained the court. But there was no evidence that the director had personal knowledge of the problem of ice blocking the filter. In fact, he couldn’t have had such knowledge because the problem was a one-time, unforeseeable occurrence. The court also noted that the director had a duty to appoint a responsible person to oversee the plant’s operations and ensure that a proper system was in place to remedy any problems. He had fulfilled these duties: The plant’s operator inspected the wet scrubber system on a daily basis to ensure that it was working properly before the plant started operating. A production engineer also inspected the system weekly to ensure that it was in proper working order. And the systems in place had essentially worked. Thus, the court concluded that “the only evidence against him was that he was a director” of the company.
Pennecon Ltd. v. Newfoundland, [1995] CanLII 5588 (NL S.C.T.D.), Dec. 8, 1995
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