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Court of Appeal says that Compliance with an Inspector’s Order Should Not Mean a Smaller Fine

The Ontario Court of Appeal, in Ontario (Labour) v. Flex-N-Gate Canada Company, has overturned a lower Court finding found that an employer should be “rewarded” with a lower fine if it complied with an Order from a Ministry of Labour Inspector to make safety improvements after an accident.

An Order is a statutory direction from the Inspector to comply with the OHSA and numerous orders are routinely issued in the immediate aftermath of accidents and during the course routine inspections.  An employer has the right to appeal an Inspector’s Order to the Ontario Labour Relations Board.  The vast majority of Orders are not appealed.  It is important to appreciate that failing to comply with an Order is an offence which can be prosecuted by the Ministry of Labour.

The case in question involved two Orders issued after an accident where a worker was injured.  The first Order required the employer to comply with the regulatory provision for the safe movement of material.  The second Order prohibited the employer from using the equipment involved in the accident until it complied with the first Order.  The employer complied with the Orders by introducing a new procedure.  There was no evidence which suggested that compliance was onerous or costly.

The employer appealed the sentence imposed by the trial justice to the Ontario Court of Justice which allowed the appeal on the basis that the sentence imposed did not reflect the “corrective action” taken by the employer.  The Ministry of Labour appealed this decision to the Court of Appeal.  The Court of Appeal granted the Ministry’s appeal and found that an employer should not get a lighter sentence for merely complying with the OHSA.  The Court of Appeal determined that imposing a lighter sentence for complying with an Inspector’s Order effectively rewards the employer for violating the OHSA.

We do not take issue with the Court of Appeal’s finding on the facts of this particular case.  It does not appear that the employer engaged in any costly or complex compliance and we would have not have expected that a Court would find that the post –accident steps taken by the employer in question justified a reduced sentence.

The Court of Appeal went on to find that where an employer implements corrective action that goes beyond what was required by the OHSA, than a court consider a lower fine.  The challenges for Courts in the future will be the reality that what is required by the OHSA or even an Inspector’s Order is not always “crystal clear”.  The OHSA contains a general duty clause which requires an employer to take all reasonable precautions to protect worker safety.  It is ultimately up to a Court to determine what is “reasonable” in any particular case.

This case raises the troubling question of whether it is now open to the Ministry of Labour to argue that virtually any post-accident improvement is a “reasonable precaution” and thus ought not to result in a lower fine.  We are hopeful that Courts do not take that approach and continue the well- established practice of considering post-accident improvements as a factor which permits the Court to impose a lower fine.   It is clear from this case that employers will now be required to prove that post accident improvements go beyond what is strictly required to by the OHSA before a Court will consider a lower fine.

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