Contracting Out Construction Projects On Your Business's Property

Businesses that hire contractors to perform work are liable for the health and safety of their contractors' workers, even if the contractor was hired precisely because it has a particular expertise that the business doesn't have. This has been the law in Ontario for nearly three decades now, and it all started with the release of the seminal decision of R. v. Wyssen.1

However, that law has begun to develop in a nuanced way. A recent decision of the Ontario Court of Justice, upheld on appeal, held that a business that hires a contractor to perform construction work on land or premises that the business owns or occupies may be able to subcontract construction work out without attracting liability for the health and safety of the contractor's workers. The decision is R. v. Greater Sudbury (City).2

What happened:

The City of Greater Sudbury (the "City") awarded a road repair contract to Interpaving Limited ("Interpaving"). Under the contract, Interpaving was designated the Constructor and it agreed to comply with all applicable OHSA requirements. At the same time, the City retained the authority, if it chose to exercise it, to direct how Interpaving's work was to be performed.

When work started on the project, the City sent out quality assurance inspectors to monitor the work. On one occasion, these inspectors found that Interpaving was working in a lit intersection without a paid duty officer. This was contrary to safety regulations. The inspectors raised this, and other points, with Interpaving and the problems were addressed. Unfortunately, the same thing happened again weeks later. This time the City inspectors were not there and, tragically, a pedestrian was run over and died.

The Ministry of Labour (the "MOL") laid charges against Interpaving and the City under the Occupational Health & Safety Act (the "Act"). Interpaving pleaded guilty and was fined $195,000 plus the 25% Victim Fine Surcharge. The City pleaded not guilty and went to trial.

At trial, the MOL argued that the City was liable for Interpaving's contraventions as the Constructor on the project because: the City had retained ultimate authority over the work under the contract; it had exercised control over the work through its inspectors; and it had paid for some services on the project directly (i.e. paid duty officers).

The MOL also argued that the City was liable for Interpaving's breaches, as an Employer on the project, because the City had contracted for Interpaving's...