Canadian Occupational Safety

10 Canadian Occupational Safety www.cos-mag.com LEGAL LANDSCAPE LEGAL LORETTA BOUWMEESTER AND JEREMY WARNING Injunction powers on the rise Can threaten viability of business, result in individual fi nancial ruin O HS convictions and penalties are expensive. In addition to the humanistic and moralistic aspects, the internal resources put into managing the underlying incident (including paying for external legal and other help), means that an OHS fi ne or administrative penalty can cost tens or hundreds of thousands of dollars in hard costs — and, more recently, exceeding $1 million in some jurisdictions for direct penalty amounts. These signifi cant penalties can deeply affect an organization and even threaten its viability. However, this is not as bad as it can get. OHS legislation provides stop work orders and, in many juris- dictions, injunctions: court orders that can prohibit an organization or person from carr ying on cer- tain business or activities. In some jurisdictions, the availability of an injunction is to supplement or reinforce regulatory powers to direct that work be stopped. In others, injunctions can and have been used as a tool to compel compliance or as part of the penalty imposed follow- ing an OHS conviction. Every jurisdiction in Canada gives its OHS offi cers the power to order that work be stopped. The issuance of a stop work order can cause sig- nifi cant disruptions of work at a workplace because certain activities cannot be carried out, equipment may not be available or the whole workplace may be shut down. Yet, when this is not enough, some OHS legislation provides that the courts can be called upon to address non- compliance with stop work orders or OHS legislation by issuing an injunc- tion. Others permit OHS offi cers to stop work at more than one of the organization's workplaces at the same time even though an incident only happened at one. On May 14, 2015, British Columbia amended its Workers Compensation Act to permit a stop work order to apply to more than one of an employ- er's workplaces. This can happen if the employer has failed to comply with a provision of the act or has failed to comply with an order under that pro- vision in the previous year and there is a risk of harm. These "stop opera- tions" orders can be issued if there are reasonable grounds to believe that the same or similar unsafe con- ditions exist at the other workplaces. However, British Columbia requires an OHS offi cer to get prior approval, from one of two senior Workers' Compensation Board offi cials, before issuing a stop operations order. Similarly, on May 20, 2016, Bill 165 was passed in Nova Scotia. It amends the province's Occupational Health and Safety Act. When the amended provisions become active, a "stop operations" order may be issued if the employer has previously contravened the health and safety act or regulations (no time frame is given for previous contraventions) or has failed to comply with an order and the OHS offi cer believes that the same or similar conditions exist at another workplace. The "stop opera- tions" order must fi rst be approved by the executive director of occu- pational health and safety (or their designate) and must contain the same conditions as the original stop work order. In addition to expanding the powers of OHS offi cers, health and safety legislation in Canada pro- vides for the enforcement of orders and OHS legislation through court injunctions. This process is available in jurisdictions such as Ontario, Brit- ish Columbia, Nova Scotia and under the Canada Labour Code. However, injunctions are available on a more limited basis in Ontario than in the other jurisdictions because its Occu- pational Health and Safety Act only permits an injunction to be issued by a court where a stop work order is being contravened. The power to obtain an injunction has rarely been exercised. The most recent case in this province, Dennis v. 1353837 Ontario Inc., resulted in a mixed fi nd- ing in which the respondents would be guilty of contempt for disregard- ing an injunction if they were not able to successfully appeal against the orders, including stop work orders, upon which the injunction was based. OHS legislation in Nova Scotia, B.C., and the Canada Labour Code authorizes injunctions to stop a breach by a person or a corporation. There- fore, injunctions are more broadly available in these jurisdictions in relation to health and safety matters. Injunctions and contempt proceed- ings for failing to comply with those injunctions have been dealt with most recently in B.C. In 2012, an asbestos abatement contractor was sentenced to 60 days in jail for not complying with an injunction that indefi nitely prohibited him from doing business in asbestos abatement, the demoli- tion or drywall removal business and from providing hazardous material inspections, surveys and testing and environmental assessments. More recently, in February 2016, the B.C. Workers' Compensation Board was unsuccessful in proving alleged breaches of an injunction against an asbestos contracting com- pany, Skylite Building Maintenance, and two individuals. The injunction prohibited them from contraven- ing applicable OHS legislation and from exposing people to asbestos. The court found that the injunction was not suffi ciently clear so as to be enforceable. Had it been clear, there could have been very serious conse- quences — including jail or a fi ne. It is worth noting that in B.C. and Nova Scotia (upon proclamation of Bill 165), an injunction could prohibit car- rying on a particular business or type of work. In B.C., the prohibition of work could continue for an indefi nite period, while Nova Scotia will limit the prohibition to a specifi c period or the occurrence of a specifi c event. INJUNCTIONS AS PENALTIES In an Alberta case that should give employers signifi cant pause, R. v. MacKay Construction Ltd., a company was prohibited from carr ying on business in residential construction or employing workers for a period of 18 mont hs unless cer tain requirements were met and approved by the OHS regulator. The company also had to ensure that its principal did not engage in the same prohibited activities. In addition, an $11,500 fi ne (including the applicable surcharge) was imposed on the company. Based on the comments made in court, the injunction was used to supplement the fi nancial penalty, which, alone, the Crown viewed as inadequate. Notably, MacKay Construction and its principal did not have lawyers. The company was insolvent with no prospect of paying any penalty in the foreseeable future, and the company pr incipal was also st r ug gling fi nancially. But for the prohibition order, the fi ne would likely have been in the range of $70,000 to $125,000 (plus the surcharge) since a worker, who was not using fall protection, was seriously injured after falling from height. The basis for the prohibition order was section 41.1 of the Alberta Occu- pational Health and Safety Act. This provision of the act does not spe- cifi cally contemplate or exclude a prohibition order. It is unclear from the MacKay Construction transcript how section 41.1 of the act was applied to justify the prohibition order. Neither the company nor its principal were specifi cally directed to take any action to improve health and safety. Rather, a variance of the order could be sought if certain steps were taken. Further, the company was no longer operating. The Crown's com- ments made it clear that the principal aim of the prohibition order was to prevent the company and its principal from engaging in residential construc- tion for an 18-month period. The upshot of the MacKay Construc- tion decision is that it establishes that a prohibition order — the func- tional equivalent of an injunction — can be imposed in addition to any other penalty for a conviction under Alberta's health and safety act. It doesn't take much to imagine how devastating such orders may be. They can, effectively, prohibit businesses or individuals from engaging in their chosen livelihood, thereby threat- ening the viability of a business or resulting in individual fi nancial ruin. Only time will tell whether MacKay Construction is a unique sentence crafted to account for the ver y specifi c circumstances of an individual matter, or if it signals the willingness of prosecutors and the courts to impose more severe conse- quences in the name of deterrence. What can be taken from these cases is that, currently, the use of injunc- tions in the health and safety context remains relatively rare. However, as demonstrated by the recent expan- sion of injunctive remedies in Nova Scotia, OHS legislation in Canada is being amended to not only provide a greater ability to use injunctions but to provide an expanded list of prohibitions — including prohibit- ing business activity — that may be imposed as part of an injunction. This may signal an intention to pro- vide more tools for OHS offi cers and courts to address breaches of OHS legislation — tools that can seriously affect the on-going business and fi nancial interests of an organization and the key people therein. Loretta Bouwmeester and Jeremy Warning are both partners in the national occupational health and safety and workers' compensation practice group at Mathews Dinsdale and Clark. Bouwmeester is based in Calgary and can be reached at (403) 538-5042 or lbouwmeester@mathewsdinsdale.com. Warning, a former OHS prosecutor, is based in Toronto and can be reached at (647) 777-8284 or jwarning@ mathewsdinsdale.com.

• Cover