Legal: Health and safety obligations and liabilities

Victor Kim (left) and Patrick Pinho (right). Photos courtesy McMillan.

Many professionals in the construction industry have heard about the recent Supreme Court of Canada (SCC) decision in R. v. Greater Sudbury, but are left asking what it means for their operations, as the decision fell short of providing clear guidance.

In short, the city of Sudbury retained a contractor to repair a watermain. The city did not undertake any construction work itself, but sent its employees to perform inspections. The contractor assumed control over the project and the health and safety obligations of the “constructor” under Ontario’s Occupational Health and Safety Act (OSHA).

Tragically, a road grading machine operated by an employee of the contractor struck and killed a pedestrian. There was no fencing between the roadway and project and no flag person, which are required by OSHA. As a result, Ontario’s ministry of labour charged both the contractor and the city in their capacity as “employers” under OSHA.

Notably, before the accident occurred, the city had raised a number of safety concerns relating to the site with the contractor.

The decision

A trial court initially ruled the city was not the employer, as it did not have direct control over the employees and site—and even if the city had been an employer, it had satisfied its due diligence obligations by raising its concerns about site safety.

This decision was appealed to the Ontario Superior Court of Justice (SCJ) and then to the Court of Appeal for Ontario (ONCA), which concluded the city was an employer because it had its own employees on-site and breached its corresponding duties. The ONCA did not discuss due diligence, but directed the SCJ to revisit this issue.

The city appealed this conclusion to the SCC, which issued a 4-4 split decision, ultimately dismissing the appeal. The first decision upheld the ONCA findings relating to the city as an employer, divorcing them from the city’s actual degree over control. The remaining judges agreed with the trial judge, stating the city lacked requisite control to be considered an employer.

Since the SCC was split, the ONCA decision—stating control is not determinative—stands, with persuasive commentary on what can come into the determination of due diligence. The issue of whether or not the city met its due diligence obligations was remitted to the SCJ. While this decision does not set precedent outside Ontario, stakeholders in other provinces will want to keep up-to-date on the determination of due diligence.

Addressing uncertainty

Thrust into a new level of uncertainty, owners, contractors and consultants alike must assume they are all “employers” under OSHA by virtue of having employees on-site, including self-proprietors.

Not much has changed for contractors assuming the role of constructor, as the obligations remain the same. As owners are often not experts on construction safety, a primary consideration will be to ensure a properly qualified constructor is retained, which may require additional health and safety pre-qualifications.

Owners will also need to ensure they are familiar with their constructor’s health and safety plan and understand their obligations to indicate identifiable hazards to the constructor and follow the plan.

Consultants with employees on-site also have an obligation to ensure they are properly trained and the health and safety plan is adhered to. As with owners, it is important for consultants to report visible hazards to the constructor immediately, as simply doing so can help consultants establish they have met their due diligence obligations.

A consultant’s responsibilities to its regulatory body may be a helpful way to introduce any health and safety concerns, while maintaining its relationship with the contractor.

Impact on operations

Consultants and contractors are both likely to see changes in their contracts with owner-clients and between themselves.

Owners may seek further clarity on safety obligations, as well as additional indemnities relating to safety incidences, particularly when engaging a contractor as the constructor. Owners may also include more contractual requirements for the provision of information upon request regarding compliance with the health and safety plan and training records.

Contractors, in turn, may attempt to ‘flow through’ these requirements in their contracts with consultants and subcontractors, who will need to diligently review to ensure such responsibilities and liabilities are appropriate for their respective scopes.

To ensure they retain a properly qualified health and safety expert, owners are likely to introduce additional pre-qualifications for contractors bidding on work, to ensure the party they select to act as the constructor has appropriate certification. Once a project is underway, they may also call the ministry of labour to ensure they are engaging in safe practices and strengthening their due diligence position.

Consultants should adequately review construction contracts and identify any language that will need to be qualified in bids or where further clarity is required. In their own contracts with contractor-clients, they will also need to ensure expectations relating to construction health and safety and the scope of their review are clearly identified.

Beyond contract terms, consultants should also implement more robust documentation procedures to ensure they have adequate records in the event they need to bring forward a due diligence defence.

Where consultants find themselves being relied upon in a project advisory role, they need to ensure they do not overstep their expertise. While they may be involved in reviewing contractor pre-qualifications, certifications and safety records, consultants should avoid recommending the award of a bid, advising if a bid is compliant or doing anything else that could expose them to uninsurable risk.

See something, say something

It is important for all stakeholders to report any identifiable hazards and carefully document them, even those outside their direct work area. Before R. v. Greater Sudbury, such parties took comfort in clearly defining their work areas and who was responsible for site safety. Today, however, the broad application of “employer” means even consultants working in a clearly defined area should take care to document and report any potential hazards or incidences outside that area for due diligence purposes.

It is still important for all stakeholders not to overstep their areas of expertise. Parties should take care to identify and report a hazard, but stop short of providing suggestions on how to address it, as this may be beyond their expertise and expose them to additional liability.

The road forward

This case’s uncertainty affects stakeholders at all levels. While some of them, including the City of Sudbury itself, have made formal submissions to the provincial government requesting legislative amendments to clarify the rules and responsibilities relating to owners and employers, no formal guidance has followed yet.

For the time being, the emphasis remains on ensuring all stakeholders focus on documenting their safety practices as due diligence.

Victor Kim is a partner and Patrick Pinho is an associate at McMillan LLP, based in Toronto. For more information, contact them at victor.kim@mcmillan.ca and patrick.pinho@mcmillan.ca, respectively.

This column originally appeared in the May/June 2024 issue of Canadian Consulting Engineer.