On March 31, 2025, the Ontario Court of Appeal released the sixth and final decision in R v. Greater Sudbury, a string of decisions finding that an owner of a construction project who retains a general contractor faces potential liability as an "employer" under OHSA, but has a "due diligence" defence that may shield it from liability.
R v. Greater Sudbury addressed charges stemming from a construction site fatality in 2016 which involved decisions by the Ontario Court of Justice, the Ontario Superior Court of Justice, the Ontario Court of Appeal, and the Supreme Court of Canada. In the final decision, the Ontario Court of Appeal has now denied the Crown leave to appeal the decision in R v. Greater Sudbury (City), 2024 ONSC 3959 (Sudbury), a case regarding the Crown's appeal of a decision finding the City had a valid due diligence defence as an "employer" under Ontario's Occupational Health and Safety Act (OHSA). The Sudbury decision addressed an element of the Supreme Court of Canada's split decision in R v. Greater Sudbury (City), 2023 SCC 28, discussed in our November 22, 2023 blog where the issue of due diligence was remitted to the Ontario Superior Court of Justice.
Sudbury, now itself affirmed by the recent Ontario Court of Appeal decision, affirms the 2018 trial decision finding that the City had exercised due diligence and thus avoided conviction under OHSA and, in conjunction with the Supreme Court of Canada decision, provides useful additional detail as to factors relevant for owners seeking to mitigate any exposure they may have as "employer" in connection with a construction project.
The facts
In May 2015, the City contracted with Interpaving Limited (Interpaving), as general contractor, to repair a watermain in downtown Sudbury. The contract designated Interpaving as the general contractor and "constructor," thereby assuming full control over the project and the associated health and safety responsibilities under OHSA. In September 2015, a pedestrian was killed by a road grader operated by an Interpaving employee at an intersection within the construction zone. In violation of OHSA regulations, there was no fence installed between the construction site and the public intersection, and no signaller was present to assist the Interpaving worker. Following the incident, the Ministry of Labour, Immigration, Training and Skills Development (the Ministry) charged both Interpaving and the City with violations of their alleged duties under OHSA as "constructor" and "employer."
OHSA
OHSA is Ontario's legislation for workplace health and safety. Certain offences under OHSA are strict liability offences. The burden is on the Crown to prove these offences, after which the burden shifts to the party (the City in this case) to prove that it took every precaution reasonable under the circumstances (i.e., it acted with due diligence).
OHSA articulates the various duties of parties to a construction project. Project owners may be exposed to liability under OHSA if their actions meet the definitions below
- "employer" – 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
- "constructor" – a person who undertakes a project for an owner and includes an owner who undertakes all or part of a project by himself or by more than one employer
Case history
Relying upon the contract between the parties and the respective roles of the parties on the project, the trial judge in the court of first instance found that the City was neither a "constructor" nor an "employer" within the meaning of OHSA. The trial judge further qualified the court's decision by stating that, even if the City was an employer and breached its obligations, the court was satisfied on a balance of probabilities that the City acted with due diligence by taking every precaution reasonable under the circumstances.
The Ministry then unsuccessfully appealed to the Ontario Superior Court of Justice. The provincial offences appeal court judge upheld the trial judge's decision, but did not address the issue of due diligence. On the Ministry's further appeal, the Ontario Court of Appeal set aside the decision of the Superior Court of Justice, finding the City liable under s. 25(1)(c) of OHSA as an "employer" on the project. It concluded that, because the City employed quality control inspectors as workers at the project site within the meaning of "employer" in s. 1(1) of OHSA, the City was liable for violations of OHSA regulations.
The City then appealed the Ontario Court of Appeal's decision to the Supreme Court of Canada, where an evenly split bench upheld the Ontario Court of Appeal's decision that the City was an "employer", and commented the City was both an employer by virtue of having hired a general contractor and because it employed quality control inspectors on-site, and thus breached its duty under s.25(1)(c) of OHSA. However, the Supreme Court affirmed due diligence as a legitimate defence for the offence with which the City had been charged and remitted the matter back to the Ontario Superior Court of Justice for consideration of the Ministry's appeal of the City's due diligence defence.
The due diligence defence
The Supreme Court of Canada stated that the relevant factors in the due diligence defence may include, but are not limited to:
- The accused's degree of control over the workplace or the
workers
- if an accused can prove "lack of control", it is possible that this finding suggests the accused took all reasonable steps under the circumstances.
- Whether the accused delegated control to the
"constructor" to overcome its own lack of skill,
knowledge or expertise to complete the project in compliance with
OHSA regulations
- for example, an owner may argue that, due to its relative inexperience with workplace safety, it chose to delegate control over a project to a more sophisticated constructor.
- Whether the accused took steps to evaluate the
constructor's ability to ensure compliance with OHSA
regulations before deciding to contract for its services
- relevant factors here include whether the owner pre-screened the constructor before hiring the constructor to ascertain, for example, whether the constructor has superior expertise, a track record free of prior convictions for breach of OHSA, and the capacity to ensure compliance with OHSA and its regulations.
- Whether the accused effectively monitored and supervised the
constructor's work on the project to ensure the prescriptions
in OHSA regulations were carried out in the workplace
- one consideration may be whether the owner informed the constructor of any hazards in the workplace and monitored the quality of the constructor's work. Where the owner is a municipality, in addition to the terms of its contract with the constructor, it may also supervise the activity through municipal by-laws.
From a policy perspective, the Supreme Court of Canada stated that taking a "belt and suspenders" approach with concurrent and overlapping responsibilities amongst parties, as well as shifting the burden to employers to establish a due diligence defence, incentivizes employers to take all steps within their control to achieve workplace safety and prevent future harm.
Back to the Ontario Superior Court of Justice
Following the Supreme Court's decision, the only issue on appeal was whether the trial judge erred in finding that the City exercised due diligence. Using the "palpable and overriding error" standard of review, the Superior Court of Justice affirmed the trial judge's decision and dismissed the Ministry's appeal.
In doing so, the appellate judge cited the four factors of due diligence set out by the Supreme Court of Canada and highlighted the evidence that supported the trial judge's finding, and the Superior Court of Justice's affirmation that the City had exercised due diligence.
With respect to the first factor, the City's quality control inspections were part of the Ministry's arguments with regard to the degree of control and the factor that both the Ontario Court of Appeal and the Supreme Court of Canada relied upon for their findings that the City is an employer. Nevertheless, the appellate judge decided that "such inspections did not constitute control over the workplace and the workers on it." This included consideration of a number of arguments by the Ministry including, interestingly, the existence of certain owner contractual rights (which were found not to have been exercised in this case) and owner involvement in arranging for police traffic direction, among other things.
With respect to the second, third, and fourth factors, respectively, the appellate judge found that
- paying a premium for a contractor's expertise was implicit delegation
- usage of common municipal general conditions for contracted road work, prior experience with that contractor, and completion of safety awareness training for this type of work were sufficient indicators of evaluating the contractor's abilities and compliance
- the City's collection of complaints, raising safety concerns with the contractor and attendance at periodic progress meetings were not examples of control, but instead examples of monitoring and supervising as part of due diligence
Crown's leave to appeal denied
In its motion for leave to appeal to the Ontario Court of Appeal, the Crown argued that the judge in Sudbury erred by endorsing the trial court's incorrect interpretation of the defence of due diligence by (1) finding that acts of general diligence, as opposed to acts exclusively directed toward the alleged violations, satisfied the test contrary to established jurisprudence and (2) failing to properly understand the interplay between the concept of control of the workplace and the necessary elements of the due diligence defence. In denying the motion for leave, the Court of Appeal
- agreed that determination of due diligence must be analyzed with respect to specific acts and not general actions, and found it was arguable that the trial judge had done so (and as the law is settled, there was nothing to be gained from repeating the analysis)
- found that the appellate judge's reasons did not demonstrate a lack of proper understanding regarding the interplay between the concept of control of the workplace and the necessary elements of the due diligence defence and were responsive to the Crown's arguments regarding control
- was not convinced the case raised issues beyond the application of the defence to the set of facts
Takeaways and implications
Sudbury is now being referenced in an increasing number of decisions across Canada, including through citation of the "belt and suspenders" overlapping party approach to safety.
In Ontario, it is crucial for project owners to ensure all parties understand their respective obligations under OHSA, and that no party underestimates their responsibilities or potential liabilities. For the project owner, this includes carefully considering:
- the roles of constructor and employer
- the specific factors considered in Sudbury supporting an employer's due diligence defence
- the project delivery models being used, the role, degree of activity and control of the owner in such delivery model, including the nature of the owner's monitoring, supervising and level of control in project safety (whether in the ordinary course or when issues arise). Owners must ensure they properly translate and reflect the parties' respective roles and responsibilities through the appropriate qualification, procurement, consulting, and construction documents and contract administration practices
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.
