Transcript
Cynthia: Welcome everyone. As most of the attendees have now joined, with a few still coming on line, we will get started. Thank you all for joining us and we hope everyone is staying safe and welcome back to those of you who joined our webinars last week. This is the third presentation in Gowling WLG's webinar series, addressing various issues arising from the COVID-19 pandemic. Things are changing daily as governments all over the globe continue to take action to mitigate its spread. Major projects and business operations have been impacted by the various bans and restrictions imposed on us. For our webinar today we have a panel of construction and health and safety experts joining us from across the country. Mark, Kerry, Ted, Guy, Sahil, Jordan and Olivier have prepared a jam packed presentation to address a challenging contract and health and safety issues that have arise for owners, contractors and trades in the construction industry. They will first present a summary of what our governments are doing across the country, will next discuss delay claims, force majeure and frustration in both common law jurisdictions and in Quebec, and lastly, will address occupational health and safety issues in both common law jurisdictions and in Quebec.
Before I turn things over to our speakers, we have a few legal disclaimers and notes. We remind you of the following. Today's presentation is not intended as legal advice. Because this is a high level overview it is impossible to cover all relevant details and your available rights and remedies will depend on the unique facts of your situation, your contract, or your subcontract, and the nature of your project. For specific advice please contact your qualified legal counsel before making any decisions or taking any action. This is of particular importance as every Province and Territory has its own legal regime. As you know, the situation is extremely fluid and is changing on a daily basis. As things evolve your best course of action could also evolve. Please follow up to date and reliable sources for your information.
At the end of the presentations we will host a brief Q&A sessions. Throughout the webinar if you have any questions please use the button on your screen that is labeled Q&A. We will do our very best to answer these questions at the end. Please note that we do plan to offer more webinars, specific to the construction industry, to address topics such as essential services, the shut down of various courts and limitation periods for claims. These topics will not be dealt with in any detail today. With these preliminaries out of the way I now introduce my Vancouver partner, Mark Ferbers, who will start us off with the BC segment of our cross country roundup. We will go West to East. Over to you, Mark.
Mark: Good morning and good afternoon everyone, in the Eastern half of the country. My name is Mark Ferbers and I'm a partner in the Gowling WLG Vancouver office. I practice in the areas of real estate development, construction and finance, with a background in real estate and commercial litigation, builders liens and commercial foreclosure. I'm a bit of a jack of all trades in everything real estate development. My task today is to give you a brief high level picture of what Province of BC construction sector response to the COVID-19 epidemic. Next slide please. You'll see from the slide the first case of COVID-19 was diagnosed in BC on January 28. On March 17 the Province declared a public health emergency and on March 23 both the Province and the City of Vancouver declared states of emergency. To date, the BC COVID response to business continuation has been to allow businesses to remain open unless ordered closed by Provincial health officer. Therefore if a business can adapt their services in the work place, to the orders and recommendations of the Provincial health officer, they can remain open. On March 26, the BC government, in consultation with the Provincial health officer, designated the construction industry an essential service that should, and is encouraged, to remain open. I provided a link in the materials to the BC COVID-19 essential service list which you can review. It includes specific reference to those services essential to the construction sector, including architects, engineers, safety and building inspectors, and the like. As an essential service, owners and contractors in the construction industry must follow the orders and guidance provided by the Provincial health officer to ensure safe operations and reduce the risk of transmission of COVID-19. The Provincial health office in British Columbia has published a guide to construction sites operating during the COVID-19, the link to which I've provided in the material on the slide, updated to March 30. The guide includes reference to the exemption for construction sites from an earlier order of the Provincial health officer in BC that prohibited the gathering of an excess of 50 people in one place. The guide contains other guidelines which I encourage those of you constructing in BC to review and to watch for updates.
Concerning enforcement, WorkSafeBC will enforce virus transmission prevention measures at construction sites, and these sites are subject to decease work orders for lack of compliance and other sanctions under BC's Work Place Health and Safety regime. By and large, BC has taken a pragmatic approach to COVID-19 prevention to allow the construction industry to adapt. That said, practice on reports I'm receiving is that the adaptations are creating challenges, but that said I've only heard of one site that was temporarily shut down, due largely to a quarantine issue that arose as a consequence of an ill worker. That's it for my synopsis. Kerry to give you the Alberta update. Kerry?
Kerry: Thanks, Mark, very much. The Alberta situation is somewhat similar to BC. We have about 10% of the countries COVID diagnosis here, with 8 deaths. I think the primary thing to understand about Alberta is that I believe we're far more volatile than other Provinces in the country given that prior to COVID we had some serious economic issues, particularly the construction area, where there were not a lot of projects given the deflated price of oil and gas. A lot of the major oil and gas projects were put on hold. The government was proceeding with caution because of their budgetary constraints. We had a crisis here even before COVID hit us. You can imagine how volatile the industry, and so many other industries, are right now. That's, I think, going to have some major impacts as people try to cope, even in the short term, with COVID. I know there's lots of companies, mid-size and smaller trades in particular, who were living paycheque to paycheque to start with. I think if COVID lasts longer, as a lot of people are thinking, I think there's going to be some serious volatility here. There were lots of mortgage foreclosures. Lots of insolvencies. Calgary had the highest unemployment rate of any major city in Canada, over 10%. In the budget that the government brought down in the spring, prior to COVID, they had a large infrastructure stimulus package, over 2 billion dollars, which is basically on hold right now. We're all waiting for it to come out. But even if it does come out, with all of the occupational health and safety requirements on project sites, because the government has declared construction as an essential service, thankfully, but with all the occupational health and safety requirements, and the focus being on the health of workers on site, site productivity is a real problem. Particularly in the private sector. I know a lot of my clients, private owners and developers, are looking very closely at the performance, which were tight before, as productivity affects both schedule and budget. They are looking at the viability of their projects to go forward. I think Alberta has a real difficult month, 2 or 3 months, coming up. I think we're going to see a lot more, unfortunately, insolvencies. We're seeing the surety industry tighten up their willingness to provide bid bonds. Whatever there is out to tender, a lot of the smaller trades, mid-size trades, are having troubles getting bonding so they can actually get work. We're seeing a lot of new subcontract conditions and general contractor conditions to deal with force majeure on projects that are coming out. In the meantime, my information is that the government is continuing to proceed with their projects. The only projects in the Province that I heard that have stalled are Alberta Health Services because they're taking renovation projects, putting them on hold, and converting those to be renovated sites into hospital beds to be ready in case the crisis continues to go at the rate that it does.
Two things. The Alberta Construction Association has been very proactive and I want to put a shout out to them. They've produced some really good online materials about how to manage a project site during the pandemic crisis. The materials are really good. Secondly, I want to quote from Charles Darwin who said, "It's the survival of the fittest." When he meant fittest, he didn't mean the strongest or the smartest, he meant those that could adapt. I think we all have to look at how we're going to be able to adapt to this pressing crisis that's upon us in the construction industry. Thanks a lot. Ted, over to you.
Ted: Thanks, Kerry. My name's Ted Betts. I'm a partner in the Toronto office of Gowlings. I'm a construction practitioner, certified specialist by the Law Society, I am the head of our construction and infrastructure group and the former Chair of the Ontario Bar Association Construction and Infrastructure Sector group. Alberta and BC have taken a lot of measures. Ontario started down that same path, taking proactive measures to curtail large group gatherings, encourage social distancing, best practices in hygiene and safety and health on work sites, including construction work sites. But last week, on Monday, they took an extra step and declared a shut down of all non-essential work places. That followed the next day with a list, a long list, of what the Province considers to be essential work places. And, to be frank, it's hard to find many work places in the construction industry that don't fit in one of the categories. One of the things they've done, so everybody realizes, they've listed 74 different categories of essential work places. Some of those are quite narrow and a lot of those overlap. The purpose for that, from what I understand is, is for the government to then later on, as the pandemic evolves, to start cutting back on what is considered an essential work place. We're already hearing some rumors that some bigger changes are coming fairly soon. The encouraging news for the construction industry in Ontario is that all construction work, in pretty much all sectors, has been considered and treated as essential services, including supply chain and including any regulatory permitting and licencing authority. So the work that permitting authorities and inspectors need to do in order for work to be certified and completed is not considered non-essential, in other words, its permitted to carry on work. However, many different municipalities have taken a varied approach in their building departments about what kind of work they're going to permit to proceed. That does need to be checked out on a local level. Most building departments, from what I'm hearing, are shutting down new permit applications but they are allowing their inspectors and permit authorities to go out and certify work, or inspect work, and provide occupancy permits, and other permits, in order to confirm the work is proceeded appropriately. But that does need to be checked out carefully. The essential services list does need to be checked regularly. Gowlings is holding a specific webinar on Thursday on that essential services list, both in Ontario and Quebec, and across the country which you may be interested in. We will be also hosting, at some point, a construction specific webinar on that point as well.
The other interesting and important thing to note in Ontario is that the government lifted limitation periods and suspended the courts for non-emergency hearings. That has an impact on lien periods and the ability to release holdback because lien period are considered a limitation period that has been lifted, or at least suspended, for the duration of this pandemic. So it is important to understand, very carefully and closely, what that means for your project. Up on the screen right now is a list of some of the key essential work places, descriptions and categories, that apply to the construction space. At the moment the government is not saying that construction needs to hold up but it is insisting, still, on all of the earlier health and safety best practices, hygiene, social distancing to the extent needed, and so forth. That's Ontario. I'll pass it over to Guy to talk about Quebec. Thank you.
Guy: Thank you, Ted. Bonjour a tous. This is Guy Poitras, the senior commercial litigator and head of the advocacy group in the Montreal office. The situation in Quebec is very similar to that of Ontario that was just described by Ted. Indeed, since March 24 all activities in the work environment has been shut down, except for what is considered essential service, or in Quebec we also say a priority service. As a result all construction projects are on hold except for very limited projects such as construction, maintenance or upkeep of essential activities in connection with public and private infrastructures. In essence this means that the construction industry, especially in the residential and commercial levels, is on hold here in Quebec. Next slide, if there's a next slide. The list of priority services was issued last week but it has been constantly modified by the government so we have to look at the list on a daily basis. Someone wishes to be added to the list has to prepare and file a form online with the government and it usually takes about 24 hours for a response to be provided by the government. So the system is rather quick. The Montreal office has been extremely busy as a result of this situation. We have had to assist several clients to determine whether or not they fall within the definition of priority provider, as per the latest government order. We have also any number of requests for these clients to be added to the list. Recently some of the Quebec regions have been closed to normal travelling. This has led us to prepare several, what we call safe passage letters, to facilitate and protect employees while they go to work or commute for the purpose of their work. That's about it for Quebec. Right now there's a stronghold on the construction industry.
Cynthia: Thank you, Guy. We're back over to Ted to talk about the rest of Canada update.
Ted: Yeah, thanks. Just to give a quick synopsis, we don't have offices in the other parts of the country, but we do have some tracking on them. Every other Province, and the Territories, have all declared some level of state of emergency or state of public health emergency, enacting their emergency legislation that gives governments the authority to take extra special powers and actions to protect the public. We've got the dates up on the slide. None, as far as I'm aware, have taken the steps that Ontario and Quebec have taken to order the shutdown of work unless it's an essential service, but we are monitoring that. The Federal government has also not issued any kind of stop work order or anything like that for either Federal projects or across the country. They are monitoring, they've provided a number of Federal aid packages to assist businesses and individuals. They've also imposed a number of travel restrictions which may impact construction projects using consultants or any other work force that needs to travel. As well as clarified that most trade is carrying on as per normal so that should not be impacting supply chain terribly. At least as far as customs and trade restrictions are concerned. That's what we have to say across the country. I think we'll now turn it over to Sahil who's going to talk about force majeure in your contracts and frustration.
Sahil: Hi. Thank you, Ted, and good afternoon everyone. I'm Sahil Shoor. I'm an associate and my practice is devoted primarily to construction and infrastructure disputes, on the back end in litigation arbitration and adjudication, in all sectors who welcome construction. I'm going to be spending time with you today talking about the force majeure clauses that you see in the CCDC documents and/or in your supplementary conditions and what happens if you do not have a force majeure clause, how do you then, depending on where you are, in the chain in the project.
Firstly, force majeure clause is a common clause that you will typically see in your construction contract. Whether it is CCDC document or in your supplementary conditions. What a force majeure clause does it gives a party protection from an impairment caused by any extraordinary event. Typically it's defined as an Act of God and depending on your supplementary conditions you will probably see the definition of force majeure further extended to include things, as pointed out to as hurricanes, flood, war, labour disruption, epidemic, etcetera. Typical force majeure clauses do not include things like pandemic and the directions that we are seeing from the government now. So you will have to look at your supplementary conditions very closely. What the force majeure clause does it provides the party a relief from some, or all of, the obligations and liability if then that is taking place falls within the definition of force majeure clause. Next slide please.
Looking from a Canadian case law in the common law jurisdictions, everywhere except Quebec, what the case law has told us is that the courts look at several elements when they consider applicability of a force majeure clause. Firstly, they look at the qualification. Whether or not the event qualify as a force majeure under the contract in question. That would be your contract and associated supplementary conditions. Secondly, the standard that the courts have advised us is the standard of an impossible performance standard. Whether the performance is or was truly impossible. Alberta Court of Appeal has set a different standard but the direction for a Supreme Court, from a case back in 1975 that has been followed by the courts across the country, except Quebec, has been impossible performance standard.
Next element that the courts look at very clearly is whether the risk of non-performance was foreseeable and able to be mitigated. That's the stage where if you have an ongoing project in Ontario or somewhere else in the country, how are you dealing with the notices, depending on where you are in the chain. Either your preparing and delivering a notice to the other side or receiving and/or responding to a notice of COVID-19 and a prospective force majeure clause and the result and delay that may now arise from that event. How are you working together in terms of forcibility and mitigating the damages? Lastly, the courts look at, again in your contract, what happens if this is a qualifying force majeure event. What remedy is the remedy that the parties agreed to at the time of the contract negotiation? So your contract is your starting point as to where you want to look at in order to get an understanding as to how to prepare a correct notice and the directives and others using the definition of the force majeure to your advantage. Next slide, please.
The question that you're going to ask yourself is does the clause that you see in your contract qualify as a force majeure under your contract. Because the force majeure clause is occasionally include terms such as plague, epidemic or pandemic, which is often unclear. Post SARS some reference has been made depending on how the supplementary conditions are drafted to public health emergencies and communicable disease outbreaks. Please have a look at that. The words such as pandemic, plague, epidemic have not been tested fully by the courts in Canada. We expect, given the current circumstances and the prospective disputes that may arise from that, that some new case law will develop as a result of COVID-19. If disease is not covered in your contract, as your clause captured terms such as government action, restrictions, regulations. And lastly, we expect that new clause wording given the parties who are currently in negotiation of the contract to include things such as national health emergency, pandemic, a declaration by World Health Organization, etcetera. Next slide, please.
The next question, once you've characterized whether or not it qualifies as a force majeure event, as to what happens in the event for the failure of, firstly, the force majeure clauses are very difficult to rely upon. The courts in the country, so far in the common law jurisdictions, have interpreted the clauses very narrowly. If a qualifying force majeure has occurred you need to ask a question to yourself as to whether or not the force majeure event is the cause of the non-performance and/or delay. I've given some examples here as to whether or not the product or the part originate in an affected region. You have alternative sources even if they're more costly. Was the disruption actually due to the virus? In other words, you have an ill worker on the project site or was it simply the disruption really due to the choices made, that the workers are not prepared to come work even though we have directions from authorities in Ontario, construction is an essential service, and directives and direction provided by occupational health and safety, with branches of the government as to how to better mitigate some of the issues on the site. Lastly, do the circumstances meet the impossible performance standards? That is the standard that has been put on by the courts in the common law jurisdictions. Next slide, please.
Time is not your friend and the reason I say that is because the window of enforceability argument is closing and it is closing very, very fast and it may become increasingly difficult for you to argue that the COVID-19 disruptions were not foreseeable, given what we are hearing by both the Federal and Provincial governments. If you are taking a step in order to delivering a notice you should do that as soon as possible. And if you have received a notice, make sure you promptly respond to such notice, and clarify for the record that you can later rely on, that the notice is prepared correctly in compliance with the contract. You're taking the advantages from the definitions of force majeure and other clauses that may assist you in drafting and/or responding to a notice that you can certainly rely on if there is a dispute between the parties at a later time. Take steps to mitigate your risk and damage in advance even if those steps do not ultimately mitigate a force majeure event because, in my view from litigation perspective, these mitigation risk and/or damages mitigation are going to play a key role in terms of advancing submissions to the court, saying what steps you undertook in good faith, on good faith basis, to really mitigate the impact of what the situation, by either responding to the notice of a force majeure or a likelihood of notice that you may receive. Next slide, please.
Be proactive. I have repeated that a couple of times. How are you going to respond if other parties cannot meet their obligations to perform? If a notice of force majeure is given to you by another party, respond properly to create, clarify or correct their written record. Next slide, please. What force majeure relief is available? Again, look at your contract and look at it very, very carefully. Does the force majeure clause specify the form or timing of the relief? Is it only schedule extension or is it schedule extension plus cost to bring matters up to speed then the work can be done? The CCDC ... ... met earlier today, for example, when we look at the schedule extension it doesn't look at the cost that the other side may also have incurred because of the prices going up. So you better look at those very carefully and the supplementary conditions. Is this relief limited to a period of time? Your contract should outline that. Does the clause specify liquidated damages and if so, for how much, how long? Are there any other provisions relating to the contract cancellation or damages more generally? You need to look at the contract as a whole, not just look at the force majeure clause and draft and/or respond to the notice that you may receive. You've got to look at the contract very carefully in order to either prepare or respond to the notice. Next slide, please.
Lastly, the governing law. The jurisdiction matters a lot. Again, Alberta, Vancouver, Ontario, Quebec, and also, largely, if you have other international projects they're significant differences between Canadian, English, American and European case law on this topic. The jurisdiction matters a lot. For the purposes of this presentation we've only considered the Canadian law, that I'm covering for common law, and my colleague, Guy, will be covering for Quebec. Next slide, please. What happens if your contract does not have a force majeure clause? You identified a few relevant clauses from the contract that you may want to consider. It could be the delay clause, excusable conditions clause, rights in events of unforeseen conditions, relief in circumstances outside the parties control and, if your contract provides relief, if any local regional or Federal government exercise statutory powers which directly affect the execution of your works. Lastly, if you do not have a force majeure clause you consider other defenses that you would have in a contract law defending a case. In particular, courts may still consider defenses based on the forcibility of the impairing event. Impairing event being COVID-19. Next slide, please.
Doctrine of frustration is a doctrine that applies when you do not have a force majeure clause in your construction contract. What the premise of this doctrine to apply is provided the actions of a contractual provisions that the parties did not think about at the time of the negotiation of the contract. This is different then if the current circumstances do not fall within your force majeure definition there's an argument that can be made on both sides as to whether or not you limited your rights and ability to advance those arguments now. In other words bringing frustration into play, or, how can you intelligently and strategically advance arguments and say what discussions took place at the time of negotiation did not take this event into play therefore frustration applies. I've broken down the doctrine of frustration into three. The first being the impairing event. COVID-19 will be the supervening event which caused you to stop and think, there's no force majeure provision in your contract and the lastly, the radically different performance of the contract. This can be interpreted as a situation or a trend or sub performance of the contract substantially different than the parties had bargained for. Again, just because a contract has become expected to perform it's not, in my view, lead a slam dunk doctrine of frustration or force majeure. I recommend you've got to think more when you're drafting the notices or responding to them at the same time. Next slide, please.
What is the result of a successful frustration claim? The contract is deemed frustrated and all of the obligations are extinguished. It has the date of the supervening event which is different than if you have a force majeure clause in your agreement and you rely on them. Usually a force majeure clause runs for a period of time and then you come back on the project and do the work. I've given an example of Ontario here where you have Ontario's frustrated contract side that deals with the contracts which were ... Ontario then you frustrate it and consequently complete this job. So that's where I'm going to leave you and give it over to my colleague in Montreal to talk about force majeure and the frustration in Quebec. Thank you.
Guy: Thank you Sahil. I'm Guy Poitras, still in Montreal. So in Quebec we have two sources of force majeure. We have the contract itself which may contain force majeure provisions but we also have the civil code. Indeed, unlike common law Provinces, force majeure is implicitly included in all contracts, therefore entered under Quebec law. This means that a party in Quebec may invoke force majeure even it's not provided for in the contract. There are two main categories of differences between codified force majeure that you find in the civil code and contractual force majeure. First, there are the elements that need to be proven to be exempted from liability and then there are the situations that may constitute force majeure. It can be contractually pre-determined and it can also be broadened if you have a force majeure clause in your contract. Next slide, please.
If you have no force majeure clause in you're contract and you wish to rely the provisions of the civil code, you have to establish the following three criteria. First of all, you have to prove that the event is irresistible. Then you have to prove that the event is exterior which means that it's an event outside of your organization, and lastly, you have to prove that the event is unforeseeable. Most of the time the criteria is disputed between parties is the forcibility of the event. What is important to understand is that it's a very objective test that needs to be undertaken. It's not what you foresaw. It's what a reasonable person under similar circumstances would have foreseen. It's not now. It has to be considered at the time the contract was entered into. If you are asking yourself the question today should I have foreseen COVID-19 back in December, November, October of 2019? The answer would be different whereas if you entered into a contract in February, 2020. These are factual elements that are very important when you consider the forcibility of a situation.
The other key element that needs to be proven is the irresistible nature of the event. Irresistible means that the performance of the obligation is actually impossible. That means that if the obligation can be performed but at a higher cost it's not impossible. Having to pay extra cost does not constitute force majeure as per the civil code. The best example is if you have to go to another supplier because the Chinese border is closed, then you have to pay more for a US supplier, then based on Quebec law force majeure, or the codified force majeure, this would not be something that would protect you and extra costs would be supported by the debtor of the obligation, which means a contractor. Yes, that's the next slide, thank you.
There is a specific provision governing force majeure with respect to contractors. It's section 2100. Essentially it says that where contractor and provider of services are bound to an obligation or result, they may not be relieved from their liability except by proving force majeure. What does that mean in plain English? It means if your contract does not specifically exclude the codified force majeure protection, and you do prove force majeure, you will be granted additional time to perform your work. Next slide, please.
Now if you do have force majeure clause in your contract you will have to establish two things. First, you have to establish that the clause was negotiated and then you have to establish that the event in question meets the criteria or definition of force majeure in the contract. While there are several advantages of including a force majeure clause in your contract, nowadays we're going to find out, very soon, that the advantages, of course it makes the burden of proof less rigorous. You can predetermine the effect of liability to support, this is where Sahil referred to, so you can predetermine your contract the impact of force majeure. But it especially allows you to broaden the scope of force majeure. The best example is situations where the obligation would not be impossible but you could lessen the criteria of impossibility and make sure that certain situations fall under the criteria or definition of force majeure under a contract. This was a very quick overview of force majeure under Quebec law. We're short on time. We better move now to our colleagues in the employment group. Thank you.
Jordan: Thank you, Guy. My name is Jordan Smith. I am a partner in our Waterloo office and I practice in the areas of health and safety and labour relations. I want to first start by echoing some of the comments that have been made regarding the rapidly changing nature of the work environment that we find ourselves in. We've seen that pressure is mounting on Premier Ford here in Ontario to continue to take a more restrictive approach to construction projects, in particular. You may have seen recently a viral video which circulated on CBC's The National, as well as the CTV News regarding a LIUNA 183 business rep on site addressing workers, and in addition, we've seen increased rhetoric from the Premier, himself. This is in light of pressure being put on him, both by academic worker advocate groups which are calling for a pause on all construction within the Province, as well as from union leadership, which not surprisingly in my view, has stopped short of calling for a complete pause but is trying to walk that line between keeping projects open, keeping wages flowing, keeping remittances and pension contributions flowing, while also advocating for health and safety measures onsite. In response, as I've said, we've seen increased rhetoric by Premier Ford. Recently he advised that he's putting the construction industry "on notice". At his press conference he said, "Last week, on Wednesday, there are a 125 inspectors in the Toronto area alone." The Ministry of Labour spokesperson, yesterday advised, that there had been 268 construction related events as the spokesperson for the Ministry referred to them. Since March 23, and including 122 site visits on construction sites, there have been 67 orders issued including the shut down of a construction project in the GTA recently, for poor sanitation. The quote from the Ministry of Labour spokesperson was as follows, "The Premier has been clear that every option is on the table and our government is prepared to take further action as required."
In that context, nonetheless, as has been explained construction remains an essential service and work remains ongoing. While that work remains ongoing employers have an obligation to reconsider how they meet their legal obligation under the Occupational Health and Safety Act to take all reasonable precautions for the protection of workers. We've seen from case law, from the SARS epidemic, to assessing whether an employer has met this standard is going to be done with reference to the public health guidelines. Important to stay on top of public health guidelines with respect to personal hygiene as well as public health guidelines with respect to physical distancing. In addition, just yesterday the Minister of Labour released an updated guidance document for health and safety on construction projects during COVID-19 and I encourage everyone, if you have not already, to refer to that document which I'll post a link to in the message board. Your policies and practices onsite should be done with reference to the guidance in this document, to the extent feasible. This is, I think, really the standard upon which inspectors are going to be judging work sites and to run through some of the examples onsite. Creating and posting policies on what steps you're taking to address the specific hazard of COVID-19 on the construction site. The Ministry suggests staggering start times, staggering breaks, staggering lunches, restricting the number of people onsite and where they are assigned to work. While we are facing the potential of a closing window to conduct operations and get work done becomes, and as well that the Ministry may be expecting standards of employers that may slow work done in order to comply with these physical distancing standards, is going to be more difficult to achieve productivity levels with implementing these standards. But that's, with all health and safety measures, that's the expectation and expediency in getting work done is not going to be an excuse not to follow these measures. In fact, will likely be an aggravating factor if charges are brought against an employer down the road. Meeting a target or a deadline is never justification for not complying with these standard on a work site, in the Ministry's view and in the court's view.
Again, I encourage everyone to look at the link that I'll post. There's also reference to onsite sanitation. We're hearing, consistently, that accessing supplies is getting more and more difficult, if not already impossible. There's going to be difficult decisions needing to be made about continued operations in the absence of the ability to source handwash stations, proper washroom facilities. If you have a lunch trailer, sign in trailer, anything of that nature, obviously you want to be cognizant of limiting the number of people and I question whether you in fact need to use those facilities anymore. At your shift start up meetings in the morning you want to be emphasizing the policies that you've put in place. You want to make sure that your minutes of those meetings emphasize that you're constant recommitment to the employees and recommunication to the employees about the steps that you've put in place and that you expect them to be following. Appropriate discipline can be considered if employees aren't following these standards and appropriate supervision, obviously, at all times to ensure that employees in fact are putting the policies up. Telling people is, as always, never going to be enough. The Ministry's going to expect that we're monitoring, supervising and enforcing the measures that we're putting in place to protect workers.
Actions to be taken in the event of a positive COVID-19 test or diagnosis, I think this is pretty self-explanatory. If someone has symptoms, even if there has not been a diagnosis, if there has been a diagnosis, if they've been in contact with someone with a diagnosis, if they've travelled abroad, or if they're a vulnerable person, within the meaning of the public health guidelines, they should not be at your work place. That's obviously primarily for the health and safety of your workers and everyone onsite, but as a very secondary issue as well, if there is spread within your work force the Ministry of Labour's going to shut your project down. Typically we're dealing with absenteeism as something we want to be cracking down on. Contradictory to that in these circumstances, we probably want to take a more cautious approach. And, yes, there will be abuse of the system and, no, there's no good way of really policing that at this time, although you certainly want to get legal advice in that regard. I think the common refrain which we're hearing from clients is that 70% productivity is better than 0%.
Finally, work refusals. Refresher on the process. If there's a valid work refusal, step one of the process is to investigate internally, communicate the results of your investigation to your union if there is one, through the joint health and safety committee or the worker rep, as applicable, and try to resolve it internally. If that does not work the Ministry has to be called and an investigation conducted, investigator brought in. In my view, given that the government has advised that construction is an essential service, if you've taken proactive steps to follow the guidelines that they've established, if you have policies and procedures in place, it's clear that you're not treating this as business as usual, your implementing these measures, it's highly unlikely that the inspector is going to validate the work refusal in those circumstances and that's consistent with what we've seen so far in reported cases, anecdotally, in dealings with inspectors. But conversely, for those sites who are not taking these steps, there's a high likelihood that of the work refusal being accepted and your site being shut down. So with that I'll turn it over to my colleague, Olivier, for a Quebec perspective.
Olivier: Hello everyone. My name is Olivier Lamoureux. I'm an associate in employment and labour law based in Montreal, Quebec. Today I want to talk about some health and safety issues in the Province regarding construction sites. As Guy mentioned earlier, the Province right now is pretty much on pause regarding construction sites because of the decree that was issued last week. Most of the construction work is on hold right now for the 3 next weeks. So until April 13. This might be continued over time. That said, despite decree and the list of priority services, you might qualify as a priority services, your construction site might qualify. So if this is the case what I'm about to say will apply to you. Next slide, please.
Generally speaking, the employers obligation on a construction site relate to section 51 of the Occupational Health and Safety Act, which I'll refer to simply as the Act. Basically, the employer must take all necessary measures to ensure the health and safety and physical wellbeing of its workers. That's the general idea. There's a list of specific things that needs to be done in this view. It should be noted that potential fines are possible for non-compliance with the Act and in the case where a person, this does not need to be solely on corporate, it can be any person who does, or does not something, that apparently and seriously compromises the health and safety of whatever worker on a construction site. Those fines, I must say, they're quite substantial from a corporate point of view. You might want to pay close attention to this. Next slide, please.
In terms of the employer's obligation on a construction site I will underline that an employer must ensure that the organization of the work, and as Jordan mentioned, working procedures, technique and policies do not adversely affect the health and safety of the workers. It is really important to mention also that an employer must supervise the maintenance of the work place and provide sanitary installations and ensure that the meals are eaten in sanitary quarters. And again, as Jordan mentioned, it's definitely a good idea to limit the number of people who are eating together and working together, in that way. I would like to underline that these obligations apply not only to the employer, but also to the principal contractor, if there is one on the construction site. Under Quebec law a principal contractor will be the person responsible for the execution of all the work. If there's one, everything that applies to the employer will apply to the principal contractor. Next slide, please.
Employers have obligations under the Act but employees too. They must, themselves, take all necessary measures to make sure that the health and safety is protected. They must not do anything to endanger the health and safety of other workers. Most importantly, they have to be familiar with the prevention program that must be implemented by the employers. I want to talk to you a bit about the prevention program. Next slide, please.
Prevention program here is crucial in my view because normally an employer must prepare and implement a prevention plan for it's construction site. In certain circumstances, especially now with the construction sites, the plan must be transmitted to the CNESST, which is the governmental body in charge of implementing the Act. The prevention plan is an excellent tool to include specific standards of sanitation and safety for the establishment. Next slide, please.
In the case of COVID-19 pandemic I would definitely recommend that employers incorporate all safety measures identified by the Department of Public Health in Quebec. So we're talking basically about social distancing standards. Keeping a distance of 2 meters between each worker at all times and in all place. A reminder of basic hygiene rules for workers so that they must wash hands thoroughly, cough in elbow and things like, and again very important, that the employees must monitor their symptoms and self-isolate if required. Again, the prevention program should include a mention that anybody that has been in contact with somebody who has been diagnosed with COVID be isolated or self-isolates and that person should not be on the construction site. That has to be real clear and, that said, having a prevention program is one thing. Implement the program is another thing. It's really at the employers obligation to make sure that all workers are not only aware of the plan, that they do respect it and this is something that might be problematic on construction sites. There it is. In the present context, employers need to be particularly diligent, again, to ensure that water, soap, alcohol based disinfectants and other hygiene products are being made available to all workers. I would say, considering the context, they definitely have to go the extra mile in that regard. That's the prevention program. Next slide, please.
Same thing as in Ontario, there is a right of refusal for the employee. A worker has the right to refuse to perform particular work if he has reasonable grounds to believe that the performance of that work would expose him to a danger. We're not talking about a risk here. We're really talking about a danger, something that would put the employee under am immediate threat in its work. Reasonable grounds, in my view for a refusal to work, could include the obvious disregard by the employer with regard to implementation of hygiene measures on the side. Negligence of the employer to address the situation where workers know manifestly infected by COVID, or has been in contact with somebody who is infected by COVID, and that person is not being removed from the construction site. Again, as Jordan mentioned earlier, a good thing would be to implement your prevention program. Make sure that everybody is aware of its content and make sure you have minutes of every discussion held concerning that program. So you can prevent a right of refusal on the construction site. Last slide, please.
Just a quick word concerning easing measure that has been put in place recently. The employers in Quebec, for every statement of account that has been issued after March 18 relating to their annual CNESST contribution, they now have until August 31, 2020 to pay for that contribution. That's pretty good. No penalty nor interest will be charged during that extension period. Finally, the deadline for filing the 2019 payroll return will be extended to June 1, 2020. Normally you would have done that before March 15. I will pass on to Cynthia for the completion.
Cynthia: Thank you very much everyone and all of our speakers. We have been answering your questions as we have been going through this seminar. Currently we have no unopened questions. They were very good questions. Mostly pertaining to the application of the relief of the limitation periods to the lien periods under the Construction Lien Acts in various jurisdictions as well as whether or not owners should release holdbacks. All the questions have been answered. I am finding out whether or not the Q&A portion will also be posted to the website. We will let you know that when we send out the copy of the presentation. We thank you very much for your informative information and your questions today. Our time is up. Thank you for your patience as we got through quite a hefty agenda. I know it was a high level summary and as we indicated we will be providing more webinars specific to the construction industry so stay tuned. We encourage your feedback as well as your suggestions for webinar topics. We thank you for joining today and we look forward to you joining our future webinars and we are now closing off the webinar. Thanks again.
Global supply chains have been significantly impacted by COVID-19 and by efforts to stop and contain its spread – raising challenging questions and complex contractual and healthy & safety issues for owners, contractors and trades in the construction industry across the Country. Therefore, to assess your risk and develop a strategic plan you will need an assessment of your contract or subcontract during and following this pandemic. To help our clients navigate this challenging time, Gowling WLG invites you to a webinar designed to give a quick summary of what some provincial governments are doing, how force majeure clauses work in the pandemic, and relevant occupational health & safety issues.
Our discussion will include the subjects below:
- Cross-country round-up: what each Province is doing in the construction sector
- Delay Claims/Force Majeure/Frustration in Common Law provinces
- Delay Claims/Force Majeure/Frustration in Quebec
- Occupational Health & Safety issues in Common Law provinces
- Occupational Health & Safety issues in Quebec
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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.
