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Due Diligence and Legal Risk
in the Mining Industry (2013)
By: Norm Keith, LLM
OHS Facts, Accident Costs &
Course Overview
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 3
• In Canada in 2011:
• 249,511 accepted lost time claims
• Slight decrease from 2010
• 919 fatalities
• Decrease in fatalities from 2010
(Source: Association of Workers Compensation Boards of Canada)
National Statistics
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 4
• In Ontario in 2011:
• 304 fatalities registered; that’s approximately 6
workers per week
• 56,672 accepted lost time claims (Schedule 1 & 2)
• 123,675 accepted no lost time claims
(Schedule 1 & 2)
• WSIB Costs directly impact the “bottom line”
(Source: WSIB Statistical Supplement - 2011)
Provincial Statistics
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 5
Risks and Costs
• Human: personal injury, pain &
suffering, diminished lifestyle, disability
• Economic: lost production, accident investigation
time, re-training costs, overtime payments, workers’
compensation premiums and penalties
• Legal: investigations, stop work/compliance orders,
quasi-criminal prosecution, director & officer
liability, high fines & jail terms
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 6
Presentation Overview
Due Diligence
• What does it mean?
• How does an employer demonstrate it?
• How does it relate to employers & supervisors?
• How it protects against all kinds of EHS legal risk
Introduction to Due
Diligence
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 8
Due Diligence
• Concepts
• Ensuring reasonable care was exercised regarding
worker health and safety (hazards are identified,
assessed and controlled)
• Proving there was no negligence with respect to
circumstances that caused accident
• Not ignoring workers’ concerns about health and
safety
• Due diligence requires a standard of reasonableness
NOT of perfection
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 9
Due Diligence
• Legal defence to OHSA charges
• An effective occupational health and safety
management system
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 10
Due Diligence
• Legal definition - Two Branches:
• R. v. City of Sault Ste. Marie (1978): “The defence will
be available if the accused [1] reasonably believed in a
mistaken set of facts which, if true, would render the
act or omission innocent, or [2] if he took all
reasonable steps to avoid the particular event.”
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 11
Due Diligence
• Application of the Second Branch:
• R. v. City of Sault Ste. Marie (1978): “…[T]he question
will be…whether the accused establishes all
reasonable care by [1] establishing a proper system to
prevent commission of the offence and [2] by taking
reasonable steps to ensure the effective operation of
the system.
Legal Duties and Liability
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 13
Employer: Definition
• Definition of employer - s.1 of the OHSA…
• “means a person who employs one or more workers or
contracts for the services of one or more workers and
includes a contractor or subcontractor who performs
work or supplies services and a contractor or
subcontractor who undertakes with an owner,
constructor, contractor or subcontractor to perform work
or supply services.”
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 14
Employer: Definition
• R. v. Wyssen [1992]
• “The definition of ‘employer’ in the Act covers two
relationships: firstly, that of a person who employs
workers and secondly, that of one who contracts for
the services of workers. The difference between the
two relationships is well established by authority.”
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 15
Employer: Responsibilities
• Sections 25 & 26, OHSA:
• Establish a health/safety policy and program; review annually
• Provide “competent persons” as supervisors
• Provide information, instruction, and supervision to workers
• Provide, maintain, and ensure use of protective equipment
• Monitor levels of biological, chemical and physical agents in
workplace
• Cooperate with/assist the joint health and safety committee (JHSC)
• Provide JHSC with health & safety reports
• Ensure measures and procedures are carried out as “prescribed” in
regulations
• Post copy of policy, OHSA and other health and safety information
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 16
Employer: Responsibilities
• Sections 25 & 26, OHSA:
• “Take every precaution reasonable in the
circumstances for the protection of the worker”
a.k.a. – General Duty Clause
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 17
Supervisor: Definition
• Definition of supervisor - s.1 of the OHSA…
• “means a person who has charge of
a workplace or authority over a worker.”
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 18
Who is a Competent Supervisor?
• Definition of competent person - s.1 of the OHSA…
• “means a person who,
• (a) is qualified because of knowledge, training and
experience to organize the work and its performance,
• (b) is familiar with this Act and the regulations that apply to
the work, and
• (c) has knowledge of any potential or actual danger to health
or safety in the workplace.”
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 19
Supervisor: Responsibilities
• Section 27, OHSA:
• (1) A supervisor shall ensure that a worker,
• (a) works in the manner and with the protective devices,
measures and procedures required by this Act and
regulations; and
• (b) uses or wears the equipment, protective devices or
clothing that the worker’s employer requires to be used
or worn.
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 20
Supervisor: Responsibilities
• Section 27, OHSA:
• (2) Without limiting the duty imposed by subsection (1),
a supervisor shall,
• (a) advise a worker of the existence of any potential or actual
danger to the health or safety of the worker of which the
supervisor is aware;
• (b) where so prescribed, provide a worker with written
instructions as to the measures and procedures to be taken for
protection of the worker; and
• (c) take every precaution reasonable in the circumstances of the
protection of a worker.
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 21
• Sections 32, OHSA:
• Board of Directors and Senior Management
• Take reasonable care to ensure corporation complies
with…
• OHSA and regulations
• Orders of Inspectors, Directors, and the Minister
Director & Officer: Responsibilities
Occupational Health &
Safety Management System
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 23
OHS Management System
• An OHSMS typically includes:
Hazard Identification, Assessment & Control Current and specific to the workplace
Programs, Systems & Procedures To safely carry out the work and correct any issues
Competent Workers Established duties and responsibilities to work safely
Equipment & Materials Provided and maintained in good working condition and
appropriate for the work
OHSMS
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 24
Managerial/Supervisory Functions
Organize/
Schedule/
Coordinate
Instruct/Communicate Monitor/Supervise
Management
Review
PLAN the WORK
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 25
How to Assess Risk:
• Quantitative Assessment (i.e. indoor air quality,
noise, temperature)
If you cannot measure the risk….. how can you
assess it?
• Qualitative Assessment (i.e. Risk Matrix model)
Plan
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 26
Plan
Slightly Harmful Harmful Extremely
Harmful
Unlikely Trivial Risk Tolerable Risk Moderate Risk
Likely Tolerable Risk Moderate Risk Substantial
Risk
Very
Likely Moderate Risk
Substantial
Risk
Intolerable
Risk
Risk Matrix
Probability
Consequence
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 27
• Factors to consider in assigning priority for
analysis of jobs include:
• Accident frequency and severity
• Potential for severe injuries, illnesses or property damage
• “Novelty”: newly established or modified jobs
• Infrequently performed jobs (e.g. – annual maintenance
shutdown)
• Jobs where complacency has set in
Plan
Ministry of Labour
Enforcement and Legal Risk
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 29
OHSA: External Responsibility System
• Ministry of Labour’s (MOL) role in health and
safety is to set, communicate, and enforce health
and safety laws (OHSA and regulations)
• Enforcement of the OHSA and regulations
occurs when workplace parties fail to
comply with legal responsibilities
• External responsibility system invoked where
the Internal Responsibility System fails
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 30
Workplace Parties: Legal Liability
• Workplace parties with duties in the OHSA may
be subject to charges and legal liability
• PART III: Duties of Employers and Other Parties -
sections 23 to 32: constructors, owners, employers,
supervisors, workers, directors, officers, etc.
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 31
Workplace Parties: Legal Liability
• 1 year limitation period on charges being sworn
• MOL will likely commence prosecution of a
workplace party because of:
• fatal or critical injuries
• failing to report critical injuries
• non-compliance with Orders
• obstruction of MOL inspector
• poor health and safety record
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 32
Legal Liability: Penalties
• Section 66, OHSA:
• Individuals:
• $25,000, and/or
• 12 months imprisonment
• Corporations:
• $500,000
Plus 25% victim surcharge
Bill C-45: OHS Criminal
Negligence Legal Risk
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 34
• OHS legal duty – s. 217.1:
• “Every one who undertakes, or has the authority, to
direct how another person does work or performs a
task is under a legal duty to take reasonable steps to
prevent bodily harm to that person, or any other
person, arising from that work or task”.
OHS Duty in Criminal Code
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 35
OHS Criminal Negligence for Individuals
• Penalties for criminal negligence:
•
• Injury - 10 years in prison
• Death - life imprisonment
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 36
OHS Criminal Negligence for Organizations
Penalties for criminal negligence:
• $ UNLIMITED fine
• Non-tax deductible
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 37
Implications of Bill C-45
• Increased legal risk for individuals and organizations
(from senior management to lead hand)
• No insurance for OHS criminal negligence penalties
• Increased importance of accident prevention
• Increased importance of OHS law compliance
• Implied duty to develop OHS management system
Due Diligence Checklist
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 39
STEPS to OHSLAWTM Due Diligence
1. PRIORITY by senior management to worker safety
2. RISK identification and assessment
3. ELIMINATE or control workplace hazards
4. VERIFY OHS programs and safe work procedures
5. ENGAGE managers and workers in OHS training
6. NOTE and document OHS program compliance
7. TOTAL OHS management system auditing
7
Due Diligence
© Norm Keith, B.A., J.D., LL.M., CRSP, Gowling Lafleur Henderson LLP, 2013 40
How Can Gowlings Help? Training. Consulting. Legal.
Or visit our website at www.gowlings.com/ohslaw
Contact Name 1-866-862-5787 Email
Norm Keith, B.A. J.D., LL.M.,
CRSP
Partner
ext. 85699 norm.keith@gowlings.com
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