ELECTRICAL CONTRACTORCorporate Criminal Liabilityfor Unsafe Workplace PracticesThe FederalGovernment’sProposed Changes tothe Criminal CodeIn 1992, twenty-six miners were killedat the Westray mine in Nova Scotia. Theprovince appointed Justice Peter K.Richard to conduct an inquiry. From theinquiry, Justice Richard concluded that failuresin safety in the corporation’s miningpractices led to these deaths.Though Justice Richard did not make anyrecommendations to amend or change thecriminal law with respect to the criminalliability <strong>of</strong> corporations,their directors and<strong>of</strong>ficers, frustration grew out <strong>of</strong> the apparentinability <strong>of</strong> the law to address whatwas perceived to be flagrant disregard forsafety in the workplace.Bill C-284Following the inquiry, in February 2001Bill C-284, An Act to amend the CriminalCode (<strong>of</strong>fences by corporations, directorsand <strong>of</strong>ficers), a Private Member’s Billwas introduced into the House <strong>of</strong>Commons. The Bill was sent by theGovernment for review by the StandingCommittee on Justice and Human Rights.The Standing Committee has recommendedchanges to the criminal law andthe Government has responded byproposing to introduce legislation intothe House <strong>of</strong> Commons which will effectthis reform. This proposed legislation hasnot yet been introduced.Bill C-284 proposes to extend criminalliability to a corporation in some circumstanceswhere a member <strong>of</strong> the corporation’sstaff commits a criminal <strong>of</strong>fence.Criminal liability would flow to the corporationwhere management <strong>of</strong> the corporationauthorized, tolerated, condoned,or encouraged an act or omissionwhich is an <strong>of</strong>fence. Similarly, liabilitywould flow where management allowedthe development <strong>of</strong> a corporate culturethat encouraged employees to believethat the <strong>of</strong>fence would be tolerated, condonedor ignored by the corporation.Further, if the corporation failed to takesteps to put in place measures to communicateto employees that such acts areunlawful and forbidden by the corporationor failed to put in place practicesthat would ensure that such acts wouldcome to the attention <strong>of</strong> management,criminal liability for the <strong>of</strong>fence wouldflow to the corporation.Proposed corporate fines extend as highas $10 million for <strong>of</strong>fences such as murderor manslaughter.Criminal liability for directors and <strong>of</strong>ficersis also proposed in the legislation,where any director or <strong>of</strong>ficer knew orought to have known that the <strong>of</strong>fencewas being committed, would be or waslikely to be committed, and who als<strong>of</strong>ailed to take all reasonable steps to preventthe <strong>of</strong>fence from being committed.The Bill proposes the same penalty fordirector or <strong>of</strong>ficer for the <strong>of</strong>fence asthough that person committed the<strong>of</strong>fence himself or herself.Criminal Liability for UnsafeWorking ConditionsBill C-284 also specifically addresses<strong>of</strong>fences relating to "unsafe working conditions".It is important to note that theterm "unsafe working conditions" has notbeen defined in the Bill. As a result, theamendments proposed in this Bill leave awide scope for interpretation.If a corporation permits "unsafe workingconditions" to exist or fails to take all reasonablesteps to provide safe workingconditions for its employees, it would beguilty <strong>of</strong> an indictable <strong>of</strong>fence with possibleliability on fine <strong>of</strong> up to $100,000.Every director or <strong>of</strong>ficer <strong>of</strong> corporationfound guilty <strong>of</strong> the above noted <strong>of</strong>fence, isalso guilty <strong>of</strong> an <strong>of</strong>fence is he or she knewor ought to have known <strong>of</strong> the unsafeworking conditions. Fines proposed are$10,000 for each day that the director or<strong>of</strong>ficer permitted the unsafe working conditionsto persist without the director or<strong>of</strong>ficer taking all reasonable steps to eliminatethe conditions. It also proposesprison terms <strong>of</strong> up to seven years for conditionsthat do not result in death, and upto life for conditions resulting in death.Response <strong>of</strong> the Federal GovernmentIn its response to the Standing Committeereport, the Federal Government noted inNovember 2002 that the proposedchanges are not intended to replace orinterfere with the existing health and safetylegislation found in the Canada LabourCode (for federally regulated employers)and in provincial occupational health andsafety legislation, but rather as an importantadditional level <strong>of</strong> deterrence if effectivelytargeted at – and enforced against –companies and individuals that show areckless disregard for the safety <strong>of</strong> workersand the public.Concerns raised during StandingCommittee meetings include the vagueness<strong>of</strong> some <strong>of</strong> the proposed scope <strong>of</strong>Bill C-284. Included in this is concernover liability for a "corporate culture".The Government responded by notingthat it would be necessary to determinewhether the directors and <strong>of</strong>ficers <strong>of</strong> corporationtolerated "lax procedures".Having noted that, the Governmentacknowledged that "corporate culture"remained too vague a concept.The Government has also indicated thatit accepts that the criminal law shouldnot place an unfairly high standard <strong>of</strong>care on directors and <strong>of</strong>ficers, but at thesame time should not allow them to turna blind eye to potentially criminal activity.<strong>Ontario</strong> <strong>Electrical</strong> Contractor8
ELECTRICAL CONTRACTORAs a result, it proposes that directors and<strong>of</strong>ficers should be held liable for "the waythat they carry out their responsibilities"and not simply because they are directorsor <strong>of</strong>ficers.Proposals <strong>of</strong> the Federal GovernmentAs a result <strong>of</strong> completing its StandingCommittee meetings, the FederalGovernment has made several proposalsfor reforming the Criminal Code.Amendments to Bill C-284 have not yetbeen made. The Government’s proposalsare as follows:1. The class <strong>of</strong> persons capable <strong>of</strong> engagingthe liability <strong>of</strong> the corporationshould be expanded to include individualswho exercise delegated, operationalauthority.2. Where crime is one <strong>of</strong> negligence, corporatecriminal liability should bebased on the actions and moral fault <strong>of</strong>the corporation as a whole.3. Where the crime is one where subjectiveintent is required, it should beproven that a "directing mind" or personexercising operational controlformed the intent <strong>of</strong> committing thecrime and, with at least some intent,that the commission <strong>of</strong> the crime wouldbenefit the corporation. In such a case,both the individual and the corporationshould be criminally responsible.4. The same approach should apply wherea person with operational authority failsto take remedial action when aware thatan employee or employees are committinga criminal <strong>of</strong>fence on behalf <strong>of</strong> or forthe benefit <strong>of</strong> the corporation.5. Everyone who employs others to performwork or has a power to direct howwork should be done should be under aduty to take reasonable steps to ensuresafety <strong>of</strong> workers and the public.This last proposal suggests that responsibility,including criminal responsibility,may lie with every supervisor, manager,director and <strong>of</strong>ficer,to ensure the safety <strong>of</strong>workers and the public when they havesome authority for the way in which workis performed.Whether or not legislation is introducedor passed into law, contractors should continueto place workplace safety as theirhighest priority. Aside from the obviousimportance behind ensuring that workersand members <strong>of</strong> the public are safe, liabilityalready exists for unsafe working conditionsin <strong>Ontario</strong>, including significant liabilityunder the <strong>Ontario</strong> Occupational Healthand Safety Act and under the <strong>Ontario</strong>Workplace Safety and Insurance Act.Rob Boswell is with the law firm HicksMorley Hamilton Stewart Storie LLP. Thefocus <strong>of</strong> his practice is workplace safetyand insurance and occupational healthand safety. He is also the co-author (withJason Mandlowitz) <strong>of</strong> the "Contractor’sGuide to Workplace Safety andInsurance", ECAO’s companion manualto its WSIB Seminars.Build on asolid foundation.Our Construction Law Group is regularly retained to act on a variety <strong>of</strong> constructionrelated matters. From drafting complex design build agreements to litigating multi-party disputesincluding tendering, breach <strong>of</strong> contract, negligence and construction lien claims, Goodmans hasthe clarity <strong>of</strong> vision and depth <strong>of</strong> experience that ensures results. To deal directly with Goodmans’Construction Law Group, contact Howard Wise at 416.597.4281.GOODMANS LLP / BARRISTERS & SOLICITORS / TORONTO / VANCOUVER / HONG KONG<strong>Ontario</strong> <strong>Electrical</strong> Contractor9