Canada: Workplace Safety – Serious Fines And Consequences For Unsafe Dealerships

Last Updated: March 14 2017
Article by Justin M. Jakubiak

Accidents are one of the main reasons people and companies hire lawyers. While no one likes to envision a serious accident occurring at their dealership, life is unpredictable and sometimes 'stuff' happens. It is therefore important that dealer principals and dealership managers are confident that the appropriate systems are in place to ensure that the employees will return home safe and sound at the end of each day. Adequate preparation and safety protocols can prevent both accidents and serious fines (and sometimes jail!) in the event that an accident occurs and it is determined the dealership or its management did not do all that was necessary to prevent the accident in the first place.

Given the very nature of a typical dealership (vehicles driven around the lot and in an out of the showroom by busy and sometimes distracted employees - sometimes in very tight quarters – and scores of heavy equipment, power-tools, chemicals and even noxious fumes like exhaust), the risks of work related accidents are real and substantial. Dealerships suffer an increased risk given the business model depends on inviting as many strangers as possible to the property and into the showroom, and encouraging these strangers to test drive your product.

Ensuring that the necessary precautions are in place, and that everyone knows what to do in the event of a workplace accident, are crucial conversations that need to be had in every dealership and repair facility. There are legal requirements placed upon both employers and employees by the Ontario Occupational Health and Safety Act (OHSA), which can result in serious consequences if not complied with, such as substantial fines and/or potential imprisonment.

One of the main functions of the OHSA is to facilitate the creation of a strong Internal Responsibility System in the workplace. The OHSA has created duties that are incumbent upon employers, supervisors, and employees. The employer, which can include senior management (i.e. the officers and directors of a corporation), has the greatest responsibility with respect to workplace health and safety. Employers have an obligation to take every precaution reasonable in the circumstances for the protection of a worker, including the proper training and supervision of employees. Based on the OHSA, employers can be held responsible for the safety of the workplace and the equipment used by the employees. In addition, there are specific regulatory requirements with regards to how particular materials, such as hazardous substances, are to be handled and managed, which an employer needs to be aware of.

Senior employees, such as supervisors and managers, also have an obligation to make sure all other workers are fully cognizant of the potential dangers that they may face in the workplace. As well, supervisors are required to ensure that all workers are working in the prescribed manner and following the established safety protocols. In the event that a workplace hazard is brought to the attention of a supervisor, it is the supervisor that is responsible to respond and take every precaution reasonable to ensure the protection of a worker.

It is important to note that employees cannot rely solely on their employers and/or supervisors to keep the workplace safe. The employees or 'boots on the ground', have their own set of duties and responsibilities. These include the obligation to work in compliance with the established safe work practises of the dealership, reporting any hazard to the prescribed people, and ensuring that they use the proper protective equipment. Essentially, employees have a duty to take reasonable care for their own health and safety at work and to avoid endangering the health and safety of any other person at the workplace.

The OHSA gives workers three important rights:

  1. The right to know about any hazards they could be exposed to in their workplace;
  2. The right to participate in identifying and solving workplace health and safety concerns; and
  3. The right to refuse work that they believe is dangerous to their own health and safety or that of any other worker in the workplace.

Employees should not be afraid to speak up if they have any concerns over their health and need to be proactive in ensuring their own safety.

The Ministry of Labour was established to set, communicate, and enforce workplace health and safety standards. The Ministry will conduct workplace inspections to enforce a workplace's compliance with the OHSA and its regulations. Where workplaces are found to be in violation, the Ministry can utilize its broad enforcement powers.

For minor violations, the Ministry may just act as a resource and provide assistance to a workplace with how they can remain fully compliant with the OHSA regime. However, for more severe violations, the Ministry provides inspectors with the power to issue orders to comply, which may give the workplace a limited period of time to become compliant with the OHSA; or, depending on the nature of the hazard, can even require a business to cease operations entirely until compliance with the OHSA is met.

In addition to orders to comply, the Ministry has the power to pursue prosecution against employers, supervisors, and workers for failing to comply with the OHSA or an inspector's order. The penalties for a conviction can be quite severe – for individuals a maximum penalty of a $25,000 fine and/or a 1 year prison sentence, and in the case of a corporation, a maximum fine of $500,000.

By way of example, in the 2001 case of Her Majesty the Queen v. C.M. Midway Ltd., a car, which was hoisted on a hydraulic lift that malfunctioned, fell and landed on a worker, who, tragically, became paralysed from the waist down. The corporation and its corporate officer were convicted of being in contravention of 25(2)(a), (h), and (f) of the OHSA. The corporation was fined $75,000.00 while the corporate officer was ordered to serve 45 days in jail.

I have represented several clients with respect to a variety of workplace accidents. When the client is well prepared, with a robust safety regime and training program in place, even the most serious of accidents can be dealt with without fear of prosecution and minimal workplace disruption. In one case in which there was a death at a job site, my client and I were able to convince the Ministry of Labour that there was no need to lay charges as my client had a comprehensive safety program and the death would have occurred regardless of the safety measures in place. While extremely stressful and emotionally draining, my client was comforted by the fact that it was well prepared in the face of a workplace tragedy.

In closing, it is critically important that all parties working in dealerships and/or repair facilities are aware of their obligations and have a plan in the event that the worst happens.

Aside from the obvious value of keeping everyone safe, being vigilant in complying with the OHSA will ensure that dealerships are able to keep their doors open and limit their exposure to the potential liability that inevitably arises when workplace accidents do occur.

If there is even a question of whether this is something that your business needs to address, I urge you to seek guidance from a qualified professional.


1. Justin is a Partner with Fogler, Rubinoff LLP and a member of the firm's dispute resolution and automotive law groups. A big thank you is extended to Noam Edell, an articling student with FR LLP, for his assistance in researching and writing this article with me.

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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