Case comment – Ontario (Labour) v. Sudbury (City)
Ontario Court of Appeal, January 2021

Construction safety is one of the most, if not the most, important issues for any construction project. Owners and contractors generally treat construction safety issues very seriously. As a result, the apportionment of liability for workplace safety on a construction site is a key term for any construction contract. Typically, owners will seek to shift the liability for ensuring workplace safety and compliance with applicable health and safety legislation to the contractor through the contract terms. Owners do so as risk is best placed where it is best managed and with respect to construction safety the contractor controls the project site and work and is best able to manage this risk.

A recent decision from the Ontario Court of Appeal, however, suggests that, at least in Ontario, the contract language may not be the only factor in determining who is responsible for compliance with applicable health and safety legislation. The owner’s actions may make the owner liable for all health and safety matters, particularly if the owner has a presence at the construction site.

In Ontario (Labour) v. Sudbury (City), the Ontario Court of Appeal was asked to consider whether the City of Sudbury, the owner of a paving project, was liable for violations of applicable health and safety legislation at the project site which lead to the death of a pedestrian passing by the project. The relevant health and safety legislation was the  Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (the “OHSA”). OHSA regulates various health and safety matters for workplaces in Ontario and is similar to the B.C. Workers Compensation Act, R.S.B.C. 2019, c. 1 and is related regulations.

Applying the regulatory structure of the OHSA to the case before it, the Ontario Court of Appeal was asked to determine if the City was an “employer” within the meaning of the OHSA and (as a result) if the City was liable for the violations of the applicable OHSA regulations. (Similar to the B.C. legislation, the definition of “employer” under the OHSA is broad and refers to “a person who employs workers”.) In this case, as is common for many owners, the City had inspectors that would regularly attend the project site for purposes of monitoring the progress of the work and confirming that the City was receiving the work it was paying for. In addition to having inspectors attend the project site for monitoring purposes, the contract in this case also gave the City rights to direct work, compel coordination of work schedules, control traffic, require the contractor to dismiss incompetent employees from the site and to suspend the work.

The trial judge found that none of these contractual obligations made the City an “employer” liable for health and safety. The Ontario Court of Appeal, however, concluded that the presence of City inspectors at the project site did make the City an “employer” and, accordingly, responsible for compliance with the health and safety requirements of OHSA.

As stated by the court, by having its workers attend at the project site, the City was found to have “assumed responsibilities as an employer” and accordingly assumed liability for the health and safety matters for the entire project. The case was remitted to the Ontario Superior Court to determine the issue of whether or not the City exercised appropriate due diligence in the circumstances to keep the project site safe.

Significance for Owners in BC

Although this decision was made in reference to Ontario legislation, the finding that an owner could, by performing typical monitoring functions, assume liability for the health and safety requirements of a project raises a great deal of uncertainty as to how courts across Canada may interpret the responsibility of owners and contractors for site safety going forward. Although B.C. has a separate health and safety regime, this decision serves as a warning for what our courts may find in trying to assess liability for construction site accidents and safety issues.

This Ontario decision, if followed in B.C., is problematic as it creates an incentive for owners to avoid inspecting their own projects, even for progress monitoring purposes, let alone for ensuring the contractor’s compliance with its contractual obligations, including construction safety. Owners in B.C. should consider adding in further protection to their construction contracts to clarify that, even if the owner does engage in a form of monitoring or quality control, the contractor agrees that such monitoring will not make the owner responsible for health and safety requirements.