When Is an “Owner” an “Employer”? SCC Grants Leave in Corporation of the City of Greater Sudbury v Ministry of the Attorney General

It has been common practice in Ontario for an owner of a construction project to pass off most or all of the responsibility of following workplace health and safety requirements to a third party hired to direct the project (R v Greater Sudbury (City), 2019 ONSC 3285 [Greater Sudbury], para 34). However, the Ontario Court of Appeal (“ONCA”)’s decision in Ontario (Labour) v Sudbury (City), 2021 ONCA 252 [Sudbury] may have instigated a change to this common practice. The Ontario Superior Court of Justice (“ONSC”) in Greater Sudbury and the ONCA in Sudbury had to determine whether the City of Greater Sudbury (“City”), the owner of the construction project at issue, was an employer that was responsible for regulating health and safety measures at the construction site. After the ONCA reversed the ONSC’s decision and ruled that the City was an employer, the City appealed to the Supreme Court of Canada (“SCC”), and on December 9, 2021, the SCC granted the City’s leave to appeal. After exploring the facts and the procedural history, this case comment will compare and contrast the decisions of the ONSC and the ONCA, discuss the implications of the ONCA decision for both workers and owners, and reflect on the future SCC decision. 

Facts

The City hired Interpaving Limited (“Interpaving”) to repair a water main in the centre of the City (Greater Sudbury, para 6). The contract between the City and Interpaving stipulated that the company would control the entire project, including taking on the role of “constructor” under the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 [OHSA] and ensuring that the project met requirements under this legislation (Greater Sudbury, para 7). The construction project began in May 2015 (Greater Sudbury, para 8). During repairs, the City employed inspectors at the project site for quality assurance purposes, including ensuring contract compliance (Sudbury, para 1).

On September 30, 2015, a road grader employed by Interpaving struck Cécile Paquette, a pedestrian, while she crossed an intersection within the construction zone. Ms. Paquette died as a result of the accident (Greater Sudbury, para 9). At the construction zone, there was no presence of signallers to assist the road grader operator and no 1.8 metre fence between the public right of way and the street, both of which were required safety measures (Greater Sudbury, paras 11-12). 

The Ministry of Labour (“Ministry”) charged the City and Interpaving with violations of Construction Projects, O. Reg. 213/91, contrary to section 25(1)(c) of the OHSA. The Ministry charged the City on the basis that the City was a “constructor” and an “employer” under the OHSA (Sudbury, para 2). 

Procedural History

Ontario Court of Justice

At the Ontario Court of Justice, Interpaving pleaded guilty before trial, but the City pleaded not guilty (Greater Sudbury, para 2). At trial, Justice Lische found that although safety measures were missing at the construction site, the City was not liable as it did not act as a constructor or as an employer on the project, even while performing its supervisory role on the project (Greater Sudbury, para 20; Sudbury, para 3). She further found that if the City was an employer, she was satisfied on a balance of probabilities that the City exercised due diligence (Greater Sudbury, para 15; Sudbury, para 3). As a result of these findings, Justice Lische acquitted the City of all charges (Greater Sudbury, para 4).

Ontario Superior Court of Justice

The Crown appealed Justice Lische’s decision to the ONSC, arguing that the City exercised enough control over the project to be considered a “constructor.” Among other examples, the Crown pointed out that the City retained some authority to direct the work if desired and had the power to suspend work on the project if it had reasons for doing so (Greater Sudbury, para 28).

Justice Poupore of the ONSC agreed with Justice Lische’s conclusion that although the City exercised some control over the construction project, it did not act as a constructor based on its level of control (Greater Sudbury, para 29). The agreement between the City and Interpaving was a typical contract issued by a municipality to have maintenance work done within its jurisdiction (Greater Sudbury, para 30). Viewing the situation as a whole, the City had not taken over the project as a constructor (Greater Sudbury, para 31). Furthermore, although the City reserved the right to inspect Interpaving’s work for quality assurance purposes, section 1(3) of the OHSA provides that “an owner does not become a constructor by virtue only of the fact that the owner has engaged an architect, professional engineer or other person solely to oversee quality control at a project” (Emphasis added).

Section 1(3) of the OHSA does not stipulate that the limitation of the definition of “constructor” also applies to the definition of “employer.” Therefore, the Crown further argued that the City was an employer because it undertook quality control over the project, making it responsible for not only its employees’ safety but the safety of all workers on the project (Greater Sudbury, para 33). Justice Poupore again agreed with Justice Lische and rejected the Crown’s argument, pointing out that the parties did not contemplate that the City was an employer in their contractual relations (Greater Sudbury, para 34). Accepting the Crown’s argument would have also “change[d] substantially what has been the practice in Ontario on construction projects” (Greater Sudbury, para 34).  In conclusion, Justice Poupoure held that the trial judge correctly applied the facts of this case to the definitions of “employer” and “constructor” and dismissed the Crown’s appeal (Greater Sudbury, para 37).

Ontario Court of Appeal

The ONCA granted leave to appeal to the Crown to “determine whether the appeal judge erred in concluding that the City was not an employer under the [OHSA]” (Sudbury, para 5). Because Justice Poupore’s judgement that the City was not a constructor was an issue of mixed fact and law, it was not subject to appeal under section 131 of the Provincial Offences Act, R.S.O. 1990, c. P.33 (Sudbury, para 5).

To determine whether the City was an employer, the Court of Appeal explored the definition of “employer” in section 1(1) of the OHSA, which states:

“[E]mployer” means a person who employs one or more workers or contracts for the services of one or more workers and includes a contractor or subcontractor who performs work or supplies services and a contractor or subcontractor who undertakes with an owner, constructor, contractor or subcontractor to perform work or supply services (Emphasis added).

The ONCA focused on the first branch of the definition: a party that “employs one or more workers” is an employer under the OHSA (Sudbury, para 10). The ONCA noted that the OHSA “establishes overlapping responsibility for health and safety” and allows multiple employers for a single workspace (Sudbury, para 11). In other words, the duties of various parties related to the workplace can overlap. In addition, the ONCA reasoned that a single person or entity could assume multiple positions if that person or entity met the definition of each position (Sudbury, para 12).

In applying the definition of “employer” to this case, the ONCA found that the City was an employer. The City directly employed inspectors to perform various tasks at the construction site, including performing quality assurance and ensuring contract compliance (Sudbury, para 13). Therefore, the City was an employer under section 1(1) of the OHSA as it undeniably “employed one or more workers” at the project site (Sudbury, para 14). The ONCA declined to explore the issue of whether having “control” is a requirement for a municipality that contracts work to a third party, as it was “not necessary to resolve this question in order to decide this appeal” (Sudbury, para 15). The ONCA was content to unanimously hold the City an employer simply on the basis that it employed one or more workers at the project site. Lastly, the ONCA remitted the issue of the City’s possible due diligence defence to the ONSC (Sudbury, para 23).

Analysis, Implications, & Future SCC Decision

In these cases, both the ONSC and the ONCA agreed that the OHSA is a “public welfare” legislation that should be interpreted “generously,” rather than “narrowly or technically,” for the purpose of protecting employees’ “health and safety” (Greater Sudbury, para 16; Sudbury, para 8). While agreeing on this point, the two courts came to opposite conclusions about whether the City was an employer. Interestingly, the two courts arrived at their respective conclusions using different methods of reasoning. In holding that the City was not an employer, the ONSC did not rely on the definition of “employer” found in section 1(1) of the OHSA. Instead, it based its ruling on relevant context and background, considering the contemplation of the parties in their contractual relation, the traditional practice in Ontario on construction projects, and the finding that the City only exercised a minimal degree of control over the project.

In contrast, the ONCA relied heavily on the definition of employer found in section 1(1) of the OHSA. Because the City clearly employed “one or more workers” for the project, the ONCA found that the City was an employer under the OHSA regardless of any context and background that may have suggested differently. The ONCA employed a straightforward, literal approach in interpreting the OHSA to justify their conclusion. 

Perhaps the ONCA interpreted the OHSA word-for-word literally so that it could interpret the Act “liberally and broadly” and “generously” to “achieve the purpose of protecting employee’s health and safety” (Sudbury, para 8). If the SCC affirms the ONCA decision, owners of construction projects would be considered employers if they employ “one or more workers.” An affirmation of the ONCA decision would be a welcome change for workers, who would then be able to rely on owners, in addition to any other existing employers such as a third-party employer, to regulate and ensure health and safety measures at their workplaces. If there are multiple parties that qualify as employers, workers would have added layers of protection as they could look to more than one party to address health and safety issues. The ONCA’s holding is also appropriate as it is consistent with the OHSA, which “establishes overlapping responsibility for health and safety and contemplates the possibility of multiple employers in a workplace” (Sudbury, para 11).

Although the ONCA decided that owners, such as municipalities, would be considered employers if they employ one or more workers, the issue of due diligence is still left open. At this time, it is still unclear what kind of steps owners must take to meet their due diligence requirements if they qualify as employers. While this uncertainty may be frustrating for owners, the ONCA decision is still a positive development as owners may now be forced to plan actively and comprehensively regulate and ensure health and safety measures in accordance with the OHSA. Going forward, future court decisions and/or legislative changes will most likely answer any questions that owners may have about meeting their due diligence requirements.

The SCC’s future decision on this case will be significant because it may change the way the law has traditionally viewed owners. What the SCC decides may largely depend on its approach to reasoning. We will wait and see if the SCC decides to overturn the ONCA’s holding based on the context between the parties and the traditional practice surrounding construction projects in Ontario, or whether the SCC follows the wording of section 1(1) of the OHSA (or whether it takes a different route). As the ONCA’s interpretation is consistent with the wording of the legislation and serves the legislation’s purpose, I hope that the SCC upholds the ONCA’s decision and contributes to protecting workers’ health and safety in workplaces.