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Metron decision reveals employers can be bankrupted by criminal penalties

On Sept. 4, 2013, the Court of Appeal for Ontario released its decision in the sentence appeal in R. v. Metron Construction Corporation. The court overturned the $200,000 fine imposed on Metron for a charge of criminal negligence causing death and imposed a fine of $750,000.  

On Christmas Eve 2009, six workers were on a swing stage 13 stories above the ground in Toronto. 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.

Investigations revealed the swing stages did not have serial numbers or anything to describe their maximum capacity. They were also delivered
without manuals, instructions or design drawings. Additionally, 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:

• directing or permitting six workers on the swing stage when he knew, or should have known, that it was unsafe to do so
directing or permitting six workers to board the swing stage knowing that only two lifelines were available
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
co-operating with the Ministry of Labour during inspections.

The $200,000 fine was imposed in July 2012. The Crown appealed, asserting 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. Here are some key points of the decision:

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.”

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. The court also held that the site supervisor’s position within Metron could not diminish the gravity of the offence. 

 Employers can be bankrupted by criminal penalties: 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 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. 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. This case suggests the criminally negligent behaviour of a single, low-level official could lead to a sentence that sends a company into bankruptcy. 

Practical tips for employers

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 work site, are abiding by all expected workplace safety standards. Steps that could be taken include:

ensuring supervisors 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
ensuring ongoing monitoring of job sites 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 followup 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
• taking immediate action to address any supervisor’s substandard health and safety practices.

Cheryl A. Edwards is a former Ontario Ministry of Labour OHS prosecutor and now leads Heenan Blaikie's national OHS and workers' compensation practice. She can be reached at cedwards@heenan.ca or (416) 360-2897.

This article was co-authored by Jeremy Warning, a partner in Heenan Blaikie’s labour and employment group and a member of its national OHS and workers’ compensation practice group. He can be reached at jwarning@heenan.ca

Sepcial thanks to Daniel Mayer, an associate in the labour and employment group in Heenan Blaikie’s Toronto office, for his assistance.

 

Cheryl A. Edwards

Cheryl Edwards is a former occupational health and safety prosecutor with almost 30 years of experience. She can be reached at (647) 777-8283 or cedwards@mathewsdinsdale.com, or visit www.mathewsdinsdale.com for more information.
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