Corporate death sentences

Oct 30, 2013

The criminalization of workplace accidents

By Jeremy Warning

On Sept. 4, 2013, the Court of Appeal for Ontario released its decision in the sentence appeal in R. v. Metron Construction Corporation. Government prosecutors had appealed against the $200,000 fine imposed on Metron for a charge of criminal negligence causing death. The Court rejected the lower penalty as unfit and increased the fine to $750,000. The decision addresses a number of key points and should interest all Canadian employers.

Metron was contracted to restore concrete balconies. The work would be done from swing stages. Two of the swing stages were secured from an Ottawa-based supplier. These swing stages did not have serial numbers or anything to describe their maximum capacity. They were also delivered without manuals, instructions or design drawings. On Christmas Eve of 2009, six workers were on a swing stage approximately 13 storeys above the ground. The swing stage collapsed and five of the workers fell to the ground. Four workers were killed and a fifth suffered serious injuries. The sixth worker, the only one connected to a fall arrest system, was not injured.

Criminal charges

The investigation into the accident determined that, shortly before the accident, three of the four deceased, including the site supervisor, had consumed marijuana. The investigation also determined that a significant cause of the collapse of the swing stage was its defective design and inability to withstand the combined weight of the men and their equipment. Criminal negligence charges were laid.

In June, 2012, Metron pleaded guilty to a charge of criminal negligence causing death. As part of the guilty plea, it was agreed that Metron’s site supervisor had been criminally negligent by:

1. Directing or permitting six workers on the swing stage when he knew, or should have, that it was unsafe to do so;

2. Directing or permitting six workers to board the swing stage knowing that only two lifelines were available; and

3. Permitting workers under the influence of drugs to work on the project.

It was agreed that Metron had taken a number of positive safety-related steps prior to the accident. These included requiring an engineering inspection before commencing work, arranging for swing stage and fall protection training for the project manager, site supervisor and workers, periodically reviewing safety requirements, including the use of swing stages, with workers, performing weekly job site inspections, providing workers with a comprehensive safety manual; and cooperating with the Ministry of Labour during inspections.

The $200,000 fine was imposed in July, 2012, after a sentencing hearing in which the Crown sought a fine of $1 million. Metron argued that the appropriate penalty was a fine of $100,000. The Crown appealed.

The Crown appeal of the $200,000 fine asserted that the sentencing court had committed legal errors and imposed a sentence that was manifestly unfit. The Court of Appeal agreed and allowed the appeal. Key points of the decision are discussed below.

(a) Criminal offences are more serious

The Court distinguished between regulatory health and safety violations and criminal negligence causing death. It held that health and safety legislation is to establish and enforce standards of health and safety in the workplace, whereas criminal negligence provides “additional deterrence for morally blameworthy conduct.” The Court also noted that criminal negligence causing death is “one of the most serious offences in the Criminal Code” and is “at the high end of moral blameworthiness.” The Court determined that the $200,000 fine resulted from error because it did not reflect the seriousness of the offence committed.

(b) Corporation bound by conduct of supervisor

The decision also confirms the expanded scope of corporate liability under the 2004 Bill C-45 amendments to the Criminal Code. Based on his position and responsibilities, the site supervisor met the Criminal Code test to attract liability for criminal negligence to Metron. The Court of Appeal commented that the “intent of Bill C-45 is to trigger responsibility by the corporation for the conduct and supervision of its representative.” This reaffirms that the behaviour of a person with a high degree of localized responsibility can attract criminal liability for an entire organization. Importantly, such localized responsibility is not unique to construction. It seems that the conduct of virtually any branch, store, area or plant manager, or others in similar positions, attracts the same risks of corporate liability.

The Court also held that the site supervisor’s position within Metron could not diminish the gravity of the offence. This should be seen as troubling by organizations as sentences imposed on corporations for criminal negligence will not distinguish between the conduct of a relatively low level representative and one in the upper echelons of the management structure.

When sentencing an organization, the Criminal Code requires the courts to consider “the impact that the sentence would have on the economic viability of the organization and the continued employment of its employees”. The Court of Appeal found that the sentencing court placed too much emphasis on ability to pay because it thought it was precluded from imposing a sentence that might result in Metron’s bankruptcy.

The Court of appeal held that a corporation’s financial viability is a factor to consider but it is not determinative. The Court suggested that consideration be given to “the importance of a corporation to a community or its value as a source of supply or as an industry participant.” However, in appropriate circumstances, fining a company into bankruptcy may be appropriate.

This is a chilling development because Metron’s criminal liability was based solely on the actions of the site supervisor – actions that displaced a fairly significant number of positive steps taken by Metron. Therefore, this case suggests that the criminally negligent behaviour of a single, low-level official could lead to a sentence that sends a company into bankruptcy. It is all the more chilling because there is no due diligence defence to a criminal negligence charge.

(d) Sentence manifestly unfit

In weighing the circumstances, the Court of Appeal considered mitigating aspects of the case including:

Metron realized no advantage by the offence;
There was no evidence of planning or complicity; and
The guilty plea saved the time and resources that a trial would have consumed.

The Court also considered the aggravating aspects of the case, which included:

Six workers were involved – four of whom were killed and one who was seriously and permanently injured;
The victims were young and some had families with young children;
Metron had operated the faulty swing-stage scaffold for more than two months; and
The criminal negligence of the site supervisor was extreme.

On balance, the Court determined that the $200,000 fine failed to send the requisite deterrent message about the paramountcy of worker safety. Indeed, the Court noted that a fine in that amount could even be seen by some companies as a “cost of doing business.” When coupled with the Court’s finding that criminal negligence represents greater moral blameworthiness, employers can expect that sentences imposed for criminal negligence are likely to be substantial, with the individual circumstances of a company playing a lesser role in determining sentence.

The case presents a stark reminder to employers that, where appropriate, criminal prosecutors and the courts will use the criminal law to severely punish egregious workplace behaviour of company representatives. The case should also remind employers to vigilantly ensure that all those in positions of authority at its work sites, regardless of the kind of worksite, are abiding by all expected workplace safety standards. Steps that could be taken in this regard align closely with certain court-developed due diligence principles and would include:

Ensuring that supervisory personnel are trained in and fully understand applicable company policies and procedures addressing the health and safety risks at the workplace;
Reviewing and qualifying the safety-related background and experience of anyone who will hold a position of authority within the company before the person is hired and starts work;
Ensuring ongoing monitoring of jobsites by supervision and reporting of that monitoring to designated management personnel;
Ensuring that all visits to the workplace by more senior management or another party (such as safety personnel or a consultant) are thoroughly documented and include any discussions or concerns about health and safety and corrective action;
Ensuring follow-up to achieve prompt corrective action respecting noted safety deficiencies;
Incorporating the monitoring of job or site health and safety compliance into the performance standard, measure and review for all supervisors; and
Taking immediate action to address any supervisor’s substandard health and safety practices.

Technically, such steps would not provide the corporation with a full defence to a charge of criminal negligence constituted solely by the actions of a supervisor. The defence of due diligence does not apply to crimes of intent. However, a strong record of positive corporate compliance and monitoring behaviour will, in our experience, prove influential when the police or prosecutors are considering criminal negligence charges and whether the circumstances warrant pursuing them against the corporation.

Jeremy Warning practices occupational health and safety law at Heenan Blaikie LLP in Toronto.

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