The Insider’s 6th Annual Due Diligence Scorecard, Part 2: What You Can Learn from Recent Due Diligence Cases

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Is your company’s OHS program doing what it needs to do to comply with the law? The last thing you want to do is learn the answer to this question in a courtroom during a prosecution for a safety violation. A better (and cheaper) alternative is to review how courts and tribunals have ruled on the due diligence defence in prosecutions involving other companies and use the lessons from those cases to evaluate your company’s OHS program. The Insider developed the Due Diligence Scorecard to help you with that evaluation.

Last month, Part 1 of the Insider’s sixth annual Due Diligence Scorecard gave you an overview of 18 reported cases decided since August 2009 in which a company or individual argued due diligence in defence of a safety violation. As has been the trend, proving due diligence was difficult. In fact, only three defendants were successful this time around. Here in Part 2, we’ll give you the lessons you can learn from these cases and apply to your own OHS program.

14 KEY DUE DILIGENCE LESSONS

After reviewing this year’s Scorecard, the Insider has compiled 14 lessons that safety coordinators can learn from the courts’ analyses in these cases.

Lesson #1: You Can’t Ignore Safety Requirements You Don’t Like

There may be certain requirements under the OHS laws that you don’t like because, say, you think they’re excessive or are too expensive to implement. Your company might be able to apply for a variance to an OHS requirement that excuses it from compliance provided that workers are adequately protected using other means. But it can’t just ignore or defy such requirements.

Example: After a plant worker’s leg was caught in a “brick squeezer,” a safety inspector ordered the company to install guarding on the machinery compliant with a CSA standard. It installed some safeguards but they didn’t adequately protect workers or comply with the CSA standard. The company was convicted of several safety violations. It had decided not to comply with the order to use CSA-compliant guards because it didn’t think the required guards were necessary to protect workers. Although it could’ve applied for a variance to this requirement, it couldn’t just ignore the order. “Due diligence is not exercised by disagreeing with a particular regulatory requirement. Due diligence is demonstrated by an employer making all reasonable efforts to understand and comply with its safety obligations,” explained the BC Workers’ Compensation Appeals Tribunal [WCAT-2009-02656].

Lesson #2: Financial Problems ≠ Excuse for Non-Compliance

The fact that complying with an OHS requirement is going to cost the company a lot of money isn’t an excuse for non-compliance. Again, the company may be able to apply for a variance to the requirement due to financial hardship. But it can’t unilaterally opt out of complying with a particular requirement because compliance is too expensive or it has financial problems.

Example: A boiler manufacturer was charged with violating the OHS Regulation by failing to have effective local exhaust ventilation at fixed workstations where workers weld, burn or solder. The BC Workers’ Compensation Appeals Tribunal ruled that the manufacturer didn’t exercise due diligence. The measures the manufacturer chose to use weren’t adequate to comply with the ventilation requirements. The manufacturer simply didn’t give installing a proper ventilation system priority because of financial problems and its belief that there wasn’t sufficient danger to workers to justify such a large expenditure. But due diligence required the manufacturer to take all reasonable care to find the most cost effective way of complying with mandated requirements, explained the Tribunal [WCAT-2010-00566].

Lesson #3: An OHS Program Is a Basic Necessity

In Canada, all employers are required to implement some form of an OHS program. Most jurisdictions specifically include this requirement in their OHS laws. And in the famous Sault Ste. Marie case, the Supreme Court of Canada said that having a “proper system to prevent commission of the offence” is a key factor in proving due diligence. Cases decided since Sault Ste. Marie suggest that a “proper system” is a formal OHS program that contains policies and procedures to identify and control hazards in the workplace. Thus, having an OHS program is essential to compliance—and due diligence.

Example: While inspecting a cleaning company’s operations, safety officers learned that the company lacked, among other things, an OHS program. Although the company had a chance to fix its omissions, it didn’t. The BC Workers’ Compensation Appeals Tribunal convicted the company of safety violations, ruling that it didn’t exercise due diligence. The company was “certainly negligent in its efforts to comply” with these requirements, said the Tribunal. These violations were systemic and cut to the heart of an employer’s duties under the OHS laws. In particular, the failure to have an OHS program and incident investigation and reporting procedures were significant failings at an organizational level [WCAT-2010-00890].

Lesson #4: Due Diligence Requires Standardized Rules & Procedures

An effective OHS program must contain safety rules and procedures for workers to follow when performing their jobs. These rules and procedures should be standardized so that everyone in the company is following the same protocols. In other words, you can’t let workers wing it and develop their own safety procedures on the fly.

Example: A worker using an excavator to dump tree stumps into a grinder indicated to a co-worker with hand signals that he was going to put a log into the grinder. Thinking the co-worker had understood his hand signals, he picked up the log and moved the excavator toward the grinder. The worker suddenly heard a scream and saw that he’d run over the co-worker, who later died. An Ontario court convicted the construction company of two OHS violations. An adequate standardized system of hand signals would have protected workers who routinely worked alongside excavators without a signaller. But the company didn’t have a uniform system of hand signals or provide training on the use of such signals. And this lack of adequate standardized signals resulted in a miscommunication between workers and caused the incident, concluded the court [R. v. Cox Construction Ltd.].

Lesson #5:  You Must Discipline Workers for Violating Safety Rules

If the company knows that workers aren’t following its safety procedures and doesn’t discipline those workers, it can expect to be held liable for tolerating a lax attitude toward safety because such an attitude will likely result in an injury or violation.

Example: During a construction site inspection, a safety officer observed a young worker, who was the owner’s son, on a roof without fall protection, in addition to other violations. The company was convicted of several OHS violations. The BC Workers’ Compensation Appeals Tribunal noted that the company had properly trained the worker on using fall protection but he refused to comply. The owner didn’t discipline his son for violating safety rules or assign him to duties that didn’t require the use of fall protection. Instead, he tried to get the Board to discipline his son. And even worse, the owner let his son supervise a crew of framers. The Tribunal said it was clear that the company knew that the son posed a serious safety hazard but it didn’t take reasonable steps to address the situation, such as by properly disciplining him [WCAT-2009-03148].

Lesson #6: Make Sure Workers Use Safety Equipment

As part of an effective OHS program, your company should make the appropriate safety equipment available to workers. But simply having such equipment in the workplace is useless if workers don’t actually use it.

Example #1: A safety officer spotted workers for a houseboat building company welding without using proper respiratory PPE or local exhaust ventilation. The company was convicted of safety offences. The company argued that it provided the necessary ventilation equipment and respiratory PPE but had trouble ensuring workers were using this equipment at all times. The BC Workers’ Compensation Appeal Tribunal wasn’t impressed with that argument. It would have taken little effort to ensure that workers used the required equipment appropriately, scolded the Tribunal [WCAT-2010-00146].

Example #2: While inspecting a roofing project, a safety officer saw the company’s owner and a worker on a roof over 10 feet high without fall protection. The company was convicted of violating the fall protection requirements. The BC Workers’ Compensation Appeals Tribunal pointed out that the company knew that because of the roof’s height, fall protection was required. And the appropriate equipment was available on-site. But although the company had both the knowledge and the equipment necessary to comply with the fall protection requirements, it failed to do so. Therefore, it didn’t exercise due diligence [WCAT-2010-01595].

Lesson #7: Make Safety Information Readily Available to Workers

Workers and supervisors may occasionally need to refer to various kinds of safety materials, such as company safety manuals, manufacturer’s guidelines for equipment, etc., to do their jobs safely. Workers shouldn’t have to hunt for this information, especially in an emergency when time is of the essence. So make sure that such safety information is readily available in the workplace.

Example: An inspection of a construction site revealed that technical information about the various kinds of scaffolding used on the site weren’t available for reference as required by OHS law. The BC Workers’ Compensation Appeals Tribunal convicted the company. The company had engineer-drafted scaffold erection procedures and clarifying instructions. But these documents weren’t available at the workplace for reference as required. One set wasn’t at the worksite at all; the other was somewhere onsite, but the company couldn’t produce it when requested. Because this safety information wasn’t readily available, the company didn’t exercise due diligence [WCAT-2010-01636].

Lesson #8: The Right Safety Training Is Essential

Developing well-written, general and specific safety procedures is only half the battle. Workers also need to be adequately trained on those procedures. And this requirement applies to all workers—whether they’re experienced or new, young or old, full-time or part-time.

Example #1: A supervisor sent a worker to retrieve an excavator bucket from the work yard and bring it to the site. As the worker was using a forklift to lift the bucket, its front wheels went over the edge of the road and got stuck. One of the company’s owners tried to move the forklift using a small truck and tow chain. But it flipped over and crushed the worker to death. The BC Workers’ Compensation Appeals Tribunal convicted the company of several safety violations. When the worker was sent to get the excavator bucket, he didn’t know how to safely operate the forklift or how to deal with it when it got stuck. Why? He hadn’t been properly instructed or trained in the use and operation of a forklift, the very equipment he was required to use to retrieve the bucket. And having an untrained worker operate a forklift in this difficult situation was highly dangerous, said the Tribunal [WCAT-2010-00541].

Example #2: A worker was cleaning the inside of a boiler while wearing a fully encapsulating suit and respirator when the air control slide was switched to the wrong position, cutting off his air supply. Although a co-worker was eventually able to get him out, he died from asphyxiation. The company was convicted of failing to ensure that workers were made aware of all known or reasonably foreseeable hazards to which they were likely to be exposed. Because there had been two prior incidents in which workers wearing the same kind of suit had their air supply cut off because of the position of the control slide, the company was on notice that the slide posed a safety hazard. But it didn’t adequately warn workers of the implications of the slide’s settings and train them on the risks of using the equipment or the signs of oxygen deficiency that would indicate an improper setting, said the BC Workers’ Compensation Appeal Tribunal [WCAT-2009-03258].

Lesson #9: The Right Supervision Is Also Essential

All workers must also get adequate supervision to ensure that they’re following their training and complying with the company’s safety rules and procedures. Inadequate supervision of workers is likely to undermine a due diligence defence.

Example #1: A safety officer saw two workers in an excavation more than eight feet deep without shoring, sloping or a geotechnical report certifying the excavation’s safety. In convicting the company of a safety offence, the BC Workers’ Compensation Appeals Tribunal noted that the supervisor in charge of the excavation work had demonstrated a poor commitment to safety. The company had formally disciplined him four times—at least once because of specific safety concerns. It was his duty as supervisor to not only ensure that workers followed safe work practices but also set a positive safety tone. But the company took no steps to ensure that the supervisor was doing his job properly. And a reasonable employer in these circumstances would have taken steps to address this supervisor’s safety shortcomings, such as relieving him of his supervisory duties as to safety or conducting frequent inspections to verify that he was fulfilling his safety duties, concluded the Tribunal [WCAT-2010-00856].

Example #2: At a forestry work site where two workers were clearing a right-of-way, a safety officer saw several “high risk” safety violations that were the result of one worker’s actions. The BC Workers’ Compensation Appeals Tribunal convicted the company of failing to provide workers with adequate instruction, training and supervision. The worker responsible for the violations was new to the company. After inspecting the worker’s work twice and finding it satisfactory, the supervisor thought there was no reason to continue checking up on him. But that day, the supervisor had walked through his work area and knew or should have known that his work was unacceptable. However, the supervisor didn’t take reasonable steps to address the fact that the worker had ignored many sound falling practices that day. Thus, the company didn’t exercise due diligence as to its supervisory duties under OHS law, concluded the Tribunal [WCAT-2009-02802].

Lesson #10: Supervisors Can’t Delegate Compliance to Workers

Employers aren’t the only ones with safety duties under OHS law; supervisors also have safety duties. And supervisors can’t delegate those duties to workers or simply expect workers to comply with safety rules. In short, supervisors must actually supervise or they—and the company—can be found liable.

Example: A mason securing the “block line” to level a row of bricks put one foot on a scaffolding’s plank and the other on the edge of a false ceiling. Because the scaffolding didn’t have guardrails, he fell to the sidewalk when the ceiling gave way and died. The Nova Scotia Provincial Court convicted the foreman of several safety violations. The foreman was responsible for supervising the workers under his direction and for inspecting their work to make certain that the guardrails were installed as required by the regulations. But he neither ensured that the guardrails were properly installed before work on the scaffolding began nor told the masons to stay off the scaffolding until the guardrails were installed and he’d inspected them. And although his workers were very experienced, he couldn’t completely delegate his health and safety duties to them, ruled the court [R. v. Eagles].

Lesson #11: Duty to Protect Workers Covers All Foreseeable Hazards

A company must protect its workers from only reasonably foreseeable hazards. A hazard is considered foreseeable if a “reasonably prudent person” in the same situation as the company would have foreseen it. So the company doesn’t have a duty to take steps to guard against totally unexpected hazards that no reasonable person would have seen coming. But if a hazard was foreseeable or actually known to the company, failing to address that hazard will undermine its due diligence defence.

Example: Workers loaded a disabled rock truck onto a trailer so it could be transported for servicing. Once the truck was on the trailer, a worker used a dozer to remove gravel they’d placed in front of the trailer ramps. The dozer skidded on ice and pinned a worker’s leg against the trailer, causing serious injuries. The company was convicted of two safety offences. The Ontario Court of Justice rejected the argument that the incident was unforeseeable. The workers—and their supervisor—knew the road was icy and posed a slipping hazard. They should’ve waited until the ice was removed or treated the road surface with sand or something similar to provide traction. But there was no evidence that anyone considered such steps or that the company had made sand or similar material available to them. Bottom line: The hazard was not only easily foreseeable but also easily remedied, said the court [R. v. B. Gottardo Site Servicing Ltd.].

Lesson #12: Workers’ Violations and Mistakes Aren’t Always Foreseeable

Even if you ensure that workers are properly trained on the company’s safety rules and procedures, you can’t assume that they’ll always do what they’ve been taught; you must expect that workers may occasionally violate safety rules. However, companies aren’t always liable when their workers violate safety rules or act in unexpected ways. Instead, the courts will consider whether the worker’s actions were foreseeable and only hold the company responsible if it should have know or anticipated that a worker would or might act in a certain way. In fact, in all three of the cases in the Scorecard in which companies won, the courts found that the workers’ actions weren’t foreseeable.

Example #1: A mine worker asked two supervisors where a “scrap stope” (a stope designated for the dumping of scrap material) was located and was directed to the nearest one. But he dumped the scrap on a non-scrap stope, fell into an open hole and died. The Ontario Court of Justice ruled that the mine had exercised due diligence. The mine had appropriate safety rules and had given the worker extensive training, including training on the dangers of dumping scrap on non-scrap stopes. There was a fence at the opening of the hole with a warning sign. And because the worker had asked two supervisors for the location of a scrap stope and had always been attentive to safety in the past, neither supervisor could reasonably have foreseen that he would endanger himself by opting to dump on a non-scrap stope instead [R. v. Xstrata Canada Corp.].

Example #2: Two ski resort workers assigned to do maintenance work on towers on a ski lift moved between towers on a work chair attached to the lift cable controlled by a third worker. As the chair entered the final tower, the access stairs, which were up, hit the tower and broke, striking the worker sitting on the top part of the chair in the head. His head also hit the tower. The worker later died. The ski resort was convicted of one safety violation but the Alberta Court of Queen’s Bench overturned the conviction, ruling that the ski resort had exercised due diligence.

The ski resort had reasonable safety procedures and a proper safety system in place and took steps to ensure it worked correctly. The three workers involved in the incident had all gotten appropriate safety training and knew the danger of leaving the access stairs up on the chair and of riding on the chair’s upper work platform. All three had, in fact, followed all of the applicable safety rules as they worked that day—right up until the incident, that is. The two surviving workers couldn’t explain why they hadn’t followed safety protocol in the last move. The court concluded that, the fact that “these otherwise conscientious and respected employees should be careless and absent minded at the same time is simply not foreseeable” [R. v. Sunshine Village Corp.].

Example #3: A worker tried to remove a steel rod that had gotten wrapped around the head of a drill with a sledge hammer and then a pipe wrench (not the tools he was trained to use to remove obstructions). His leg was injured when his coat got caught and he was spun around the still-running drill. The Ontario Court of Justice ruled that the company had exercised due diligence. The company had foreseen the hazard of items getting entangled on the drill head and had appropriate procedures in place and equipment available to address this hazard. It had also properly trained the workers involved. In short, the incident was caused by the carelessness of the worker trying to remove the rod, said the court [R. v. Aecon Utilities].

Lesson #13: Senior Management Must Monitor Safety Compliance

On a day-to-day basis, it’s typically up to the safety coordinator and supervisors to ensure that the company and its workers are complying with the OHS laws and the company’s safety policies. But the ultimate responsibility for ensuring the company’s compliance lays at the feet of senior management. No, CEOs, directors and other senior managers don’t have to conduct hazard assessments or inspect the workplace. However, they do have to have systems in place to monitor safety compliance and address safety issues when they arise.

Example: In WCAT-2010-00146 discussed under Lesson #6, the company argued that senior management didn’t know there were issues regarding its compliance with respiratory protection requirements. The Tribunal said this argument wasn’t a defence. Due diligence requires senior management to “remain active and informed in relation to safety matters.” The fact that the compliance issues went unresolved for so long can be attributed to senior management’s failure to effectively monitor the workers and their supervisors, concluded the Tribunal.

Lesson #14: Duty to Protect under OHS Laws Extends to the Public

The main purpose of the OHS laws is to protect workers from injuries and illnesses on the job. But employers don’t have licence to engage in conduct that, while safe for workers, endangers the general public. For example, construction companies must ensure that materials and tools don’t blow or fall off of projects and hit passersby. Failing to take reasonable steps to protect members of the general public who could be affected by conduct in the workplace is likely to lead to a conviction for a safety offence.

Example: During blasting for a road construction project, an especially large blast showered a nearby trailer court with debris, including pieces as heavy as 22 kg. The debris destroyed property and caused a tenant who was outside to run for cover. Although no one was hurt, the court convicted the government department, contractor and a supervisor of OHS violations, ruling that they didn’t exercise due diligence.

In addition, the court rejected the argument that the OHS law requires employers to safeguard only their workers—not the general public. Although the primary purpose of the OHS laws is to safeguard workers, its secondary purpose is to safeguard members of the public who may be impacted by what goes on in the workplace, explained the court. For example, the OHS laws refer to “hazards to workers and any other person” (emphasis added). In addition, some protections specifically apply to the general public, such as regulations pertaining to sidewalks near construction sites, the transport of explosives on public roads and minimum distances between blasts and roads or buildings. Simply saying that “my activities didn’t endanger my workers; they only endangered the general public” isn’t a defence to an OHS violation, the court concluded [Director of Occupational Health and Safety v. Government of Yukon].

THE BOTTOM LINE

We’d love to be able to give you a list of, say, 10 things and say that if your company did all of them, it would be guaranteed to be able to prove it exercised due diligence. But it’s just not that simple. The only way to know for certain that your company’s OHS program is adequate is to test it in court in a prosecution for a safety violation. However, you can still learn a lot from other companies’ mistakes and successes. Due diligence cases have patterns because courts typically look at the same factors and analyze them in similar ways. If you understand these factors and analyses, you can evaluate your company’s OHS program and get a sense of how a court would rule on its sufficiency. And if you conclude that a court might find that your program isn’t up to snuff, then you can take steps to correct the problems now and before they result on an injury or fatality or a safety violation.

SHOW YOUR LAWYER

Director of Occupational Health and Safety v. Government of Yukon, [2010] YKTC 42 (CanLII), May 11, 2010

R. v. Aecon Utilities, [2009] ONCJ 706 (CanLII), Dec. 4, 2009

R. v. B. Gottardo Site Servicing Ltd., [2010] ONCJ 239 (CanLII), May 21, 2010

R. v. Cox Construction Ltd., [2009] ONCJ 695 (CanLII), Nov. 13, 2009

R. v. Eagles, [2009] NSPC 49 (CanLII), Nov. 6, 2009

R. v. Sunshine Village Corp., [2010] ABQB 493 (CanLII), July 23, 2010

R. v. Xstrata Canada Corp., [2010] ONCJ 42 (CanLII), Feb. 10, 2010

WCAT-2009-02656, [2009] CanLII 77574 (BC W.C.A.T.), Oct. 13, 2009

WCAT-2009-02802, [2009] CanLII 77723 (BC W.C.A.T.), Oct. 28, 2009

WCAT-2009-03148, [2009] CanLII 77470 (BC W.C.A.T.), Nov. 30, 2009

WCAT-2009-03258, [2009] CanLII 82311 (BC W.C.A.T), Dec. 17, 2009

WCAT-2010-00146, [2010] CanLII 23379 (BC W.C.A.T), Jan. 18, 2010

WCAT-2010-00541, [2010] CanLII 22538 (BC W.C.A.T.), Feb. 22, 2010

WCAT-2010-00566, [2010] CanLII 22561 (BC W.C.A.T.), Feb. 24, 2010

WCAT-2010-00856, [2010] CanLII 22850 (BC W.C.A.T.), March 25, 2010

WCAT-2010-00890, [2010] CanLII 22882 (BC W.C.A.T.), March 29, 2010

WCAT-2010-01595, [2010] CanLII 42071 (BC W.C.A.T.), June 9, 2010

WCAT-2010-01636, [2010] CanLII 41677 (BC W.C.A.T.), June 14, 2010