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Court of Appeal Ignores Ability to Pay; Employer Fined $750,000 for Criminal Negligence of Low Level Supervisor

October-15-2013

Lawyer Jason Wadden
Area Litigation

Summary

The Ontario Court of Appeal imposed the largest fine to date in Canada for a criminally negligent workplace accident.  In R. v. Metron Construction Corporation, the Court held that: (i) an employee need not be a “directing mind” of a corporation to attract employer liability under the Criminal Code of Canada (the “Criminal Code”), and (ii) a corporation’s ability to pay is not a determining factor in sentencing an offending organization.  It is now clear that a criminal fine can be imposed even if it forces the offending organization into insolvency.

Background

Metron was an appeal from a decision of Justice Bigelow of the Ontario Court of Justice, who imposed a fine of $200,000 on Metron Construction Corporation after it pleaded guilty to a charge of criminal negligence causing death.

In December 2009, four Metron workers were killed and one seriously injured while restoring concrete balconies on two residential buildings in Toronto. Among those killed was the site supervisor, a contractor who did not work directly for Metron.  The five victims fell 13 stories after the 40-foot swing stage they were working on collapsed.  A sixth worker on the same swing stage was not injured as he was properly connected to a fall arrest system.

The Ontario Ministry of Labour and the Toronto Police identified several alarming breaches of safety regulations: (i) six workers had been on a swing stage designed for use by only two persons, (ii) insufficient lifelines were available on each swing stage, and (iii) three of the four deceased had used marijuana shortly before the accident, including the site supervisor.

In June 2012, Metron pleaded guilty to criminal charges after admitting its site supervisor demonstrated a reckless disregard for the safety of its workers in allowing these safety breaches.  Justice Bigelow acknowledged that Metron had taken several proactive measures to promote safety on the project, including site inspections, employee training and regular safety meetings.

Decision

The Court of Appeal held the $200,000 fine imposed by the lower court to be manifestly unfit and increased the fine to $750,000.  In doing so, the Court articulated the following principles to be considered in sentencing:

1. An organization may be held criminally liable for the actions of lower level supervisors and managers. Conduct need not be carried out by a “directing mind” of a corporation for employers to attract criminal sanction.  In Metron, the site supervisor was low within the organization’s corporate hierarchy and was not even a formal employee of the company.  The Court held that the site supervisor met the definitions of “representative” and “senior officer” in section 2 of the Criminal Code because the employer
delegated localized authority to him.

2. An offending organization’s ability to pay will not necessarily limit the criminal fine imposed.  Rather, consideration must be given to the totality of the circumstances, including those enumerated in section 718.21 of the Criminal Code.  Under subsection (d), a judge must consider the impact of a fine on the economic viability of an organization and the continued employment of its employees.  Relevant factors include the importance of a corporation to a community, its value as a source of supply, and its significance as an employer. A corporation’s ability to pay a criminal fine will not be an important consideration where the organization carries on limited business and has few employees.  Thus, a fine imposed under the provision could, in certain circumstances, threaten the economic viability of an offending corporation.

3. Sentences for organizations convicted of criminal negligence should not be determined by the limits in the Occupational Health and Safety Act (OHSA). Noting that regulatory and criminal offences embody different concepts of fault, the Court stated that criminal penalties should provide additional deterrence for morally blameworthy behaviour beyond that established in the OHSA.  Thus, the limits of $25,000 for individuals and $500,000 for organizations prescribed for violations of the OHSA do not apply to Criminal Code offences resulting from workplace accidents.

Key Points for Canadian Companies

Prior to Metron, little jurisprudence existed to guide the sentencing of criminal organizations in accordance with the 2004 amendments to the Criminal Code.  This decision confirms the expanded scope of liability established by the Bill C-45 amendments arising from the Westray mine disaster in 1992.  In light of this decision, companies doing business in Canada should have regard to the following issues and seek legal advice immediately if an employee has been involved in a workplace incident involving negligence:

  • Employers may be held criminally liable for the actions of any employee or contractor with supervisory authority within the organization, no matter how minimal or in what form.
  • Ability to pay is not determinative in sentencing an organization for a criminal offence.
  • In appropriate cases, a fine may force an organization into liquidation.
  • Organizations will face higher penalties for Criminal Code offences than for regulatory breaches.

For further information on Metron or the sentencing provisions for organizations in the Criminal Code, please contact any member of our Litigation Law Group.