Canada: Company Directors Jailed After Employee Death

Last Updated: February 18 2015
Article by Catrina Webster

There is a rising trend towards holding supervisors and managers legally responsible for accidents in the workplace. On January 13, 2015, New Mex Canada Inc., an Ontario importer and retailer of furniture and accessories, was fined $250,000 and two of its directors have been jailed for 25 days, after each pleaded guilty to safety violations which led to the death of one of their employees.

An employee was moving merchandise in the company's warehouse on January 18, 2013, using a combination forklift/operator-up platform called an order picker. According to the Ministry of Labour press release, the order picker "had been modified and had an additional platform supported by the forks that was tack-welded to the manufacturer-equipped operator platform. The added platform did not have a guardrail around it and the worker using it was not wearing fall protection or safety shoes." The worker, who fell from the platform, was pronounced dead at the scene and the cause of death was determined to be blunt force trauma to the head.

Directors Must Ensure Compliance with Safety Laws – Employer Must Provide Information and Equipment

The employer violated section 25(2)(a) of the Occupational Health and Safety Act, RSO 1990, c O.1 ("OHSA"), which requires an employer to provide information, instruction and supervision to a worker to protect the health and safety of the worker.

There was also a violation of section 85(a) of the Industrial Establishments Regulation, RRO 1990, Reg 851 (OHSA) which requires workers to use a safety belt or harness if the worker is at risk of falling more than three metres. The OHSA requires employers to ensure the safety measures prescribed by the regulation are carried out in the workplace.

The Ontario Ministry of Labour's investigation found that the warehouse workers were not given health and safety training and were not provided with any of the required fall protection equipment. The Ministry of Labour inspectors also found more health and safety hazards in the workplace after the fatality occurred.

The two directors plead guilty and were charged with failing as directors to take reasonable care that the corporation complied with the OHSA and Regulation 851. The company pleaded guilty to failing to provide information, instruction and supervision to the employee in this incident regarding fall protection and working from a height. The company also plead guilty to failing as an employer to ensure the safety measures required by law were carried out.

Overview of Penalties

The Provincial Offences Court imposed the following sentences:

  • The directors were sentenced to 25 days in jail to be served on weekends
  • The directors were required to take a health and safety course within 60 days of the decision
  • The company was fined $250,000
  • In addition to the fine, the court required the company to pay a 25 percent victim fine surcharge as required under the Provincial Offences Act, RSO 1990, c P.33, to be credited to a provincial government fund to assist victims of crime.

Serious Penalties for Violations of Occupational Health and Safety Laws

The Ontario Ministry of Labour states that their mission is to advance safe, fair and harmonious workplace practices and worker safety is integral to that goal. Rarely are directors sentenced to jail time for occupational health and safety violations in Canada. The use of this harsh punishment is an indication that if employers don't take their occupational health and safety obligations seriously, similar harsh punishments will likely follow.

Although jail time is the most severe penalty, the fines prescribed can be very serious. The factors to be taken into account in determining the quantum of fines under health and safety laws include: the size of the company, the economic scope of the activity in issue, the extent of actual or potential harm to the public, the maximum fine prescribed, the previous record of the company, the financial health of the company, the safety measures taken by the company to reduce and prevent future accidents, and most important, the need to enforce regulatory standards by deterrence. In order to have a deterrent effect, as stated by the Court of Appeal in R v Terroco Industries Limited, 2005 ABCA 141, "the penalty must be more than a slap on the wrist but less than a fatal blow."

It is also important to note that serious workplace accidents may result in criminal convictions under the Criminal Code, RSC 1985, c C-46. There is a duty imposed on employers in section 217.1 which states that those who undertake, or have authority, "to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task." This provision was introduced in response to the 1992 coal mine explosion that killed 26 people in Westray, Nova Scotia. It attributes criminal liability to corporations for health and safety violations that result in injuries and death. Failure to take these reasonable steps may result in criminal prosecutions and penalties.

Complying with employment standards laws will not only save lives, increase workplace safety, and reduce the risk of incurring fines and jail time, it will also assist with retention of employees and improve the reputation of your business.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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