Mary Beth Currie said this ruling confirms that a firm can be prosecuted for the aggregate acts of its employees.  Photo by Paul Lawrence Click here to see full sized version.

A Quebec paving-stone company that became the first Canadian company convicted of criminal negligence causing the death of an employee under the Criminal Code of Canada was fined $110,000 in a ruling that has sparked a legal debate over the impact it will have on Canada’s occupational health and safety landscape.

“Just the fact that this is a first is important,” said Norm Keith of Gowling Lafleur Hendersen LLP and author of Workplace Health and Safety Crimes (Bill C-45). “It is a reminder and warning to Canadian corporate executives that health and safety commitment is no longer an option. It is the law, and this bill can and will be enforced.”

Transpavé Inc., the first organization charged under Bill C-45 amendments to the Criminal Code, pleaded guilty last December to a count of criminal negligence causing the 2005 death of Steve L’Écuyer, a 23-year-old employee who was fatally injured after being crushed by heavy machinery. An investigation by Quebec’s health and safety board revealed that an optic safety device on the machine designed to prevent such accidents was “neutralized” and that L’Écuyer was not properly trained to operate the machinery.

Bill C-45, known as the Westray amendment to the Criminal Code in memory of the 26 miners who were killed in a coal mine disaster, came into effect in March 2004. Besides amending the Criminal Code to replace the term “corporation” with the much broader term “organization,” Bill C-45 establishes a positive OHS duty, with lower thresholds. Under s. 22.1 of the Criminal Code, Bill C-45 establishes a two-step formula to determine the guilt of an organization. The first step is the failure of any “representative” of the organization to take “reasonable steps to prevent bodily harm,” and the second step requires proof that a “senior officer” failed to ensure that OHS due diligence.
The ruling by Quebec Court Judge Paul Chevalier was closely watched by labour, employers and some of the country’s top law firms because it was hoped that it would shed some light on the new test for organizational proof of mens rea. It did not.

“The ruling does not provide any kind of analysis as to what conduct would result in a finding of negligence,” noted Mary Beth Currie of Bennett Jones LLP. “An analysis would have been helpful, and it would have been equally interesting to know the background facts that led to the charge and to the prosecution.”

Nevertheless, adds Currie, the case is significant because it clearly demonstrates that a corporation can be prosecuted for the aggregate acts of its employees. Prior to the introduction of Bill C-45, corporations were only liable for the acts and omissions of persons who by their position in the corporation could be considered as the “directing mind” or “alter ego” of the corporation, that is, usually the most senior two or three officials.

Currie, who practises employment law, said that this is a significant case because Transpavé was charged under the Criminal Code and individuals were not. “This is an example of a corporation that was prosecuted based on the conduct of individuals other than the ‘directing mind,’ which was the standard prior to the amendments.”

While the judgment “regrettably” excludes a summary of the facts, the ruling by Judge Chevalier is noteworthy because it spells out the essential factors that need to be assessed when meting out a sentence under Bill C-45, says Francine Legault, a partner with Heenan Blaikie.

In determining the sentence, which was in line with a joint recommendation submitted last month by the Crown and defence, Judge Chevalier took into consideration that Transpavé invested more than $750,000 to upgrade its two factories to European safety standards, which surpass North American standards. “It is more than was demanded by the Commission de santé et de la sécurité du travail (CSST) but it will ensure that such an accident never takes place again,” said Judge Chevalier in his six-page ruling.

Justice Chevalier also noted that the St-Eustache company, located northwest of Montreal, is not a multi-national but a family-run enterprise. “The fine imposed by the Court should not put into play the viability of the company and cause the loss of jobs of about a hundred employees who earn good salaries,” said Judge Chevalier.

All of which leads Legault to assert that it is very likely that Judge Chevalier would have imposed a far heavier fine if the culprit was a multinational firm. “While Judge Chevalier makes reference to a number of factors in considering the sentence, the two critical elements to be retained are the firm’s size and the fact that it followed and implemented all of the recommendations made by the CSST,” said Legault.

While acknowledging that the ruling will be helpful because it sets the standards for sentencing under Bill C-45, Currie believes that the relatively small fine may dissuade Crown prosecutors from using the Criminal Code to prosecute OHS crimes. Currie points out that some provinces such as Alberta and Ontario are cracking down on OHS infractions, imposing heavy fines on companies and supervisors deemed not to have done enough to protect their workers.

Last January the Provincial Court of Alberta ordered a construction company to pay $350,750 under its Occupational Health and Safety Act as a result of the death of a worker. The company, which pleaded guilty, was ordered to pay a $5,000 fine, a $750 victim fine surcharge and a payment of $345,000 over five years to the University of Alberta’s Faculty of Engineering for their safety and risk management program.

“It may be a heavy fine in Quebec, but outside of Quebec it is not,” said Currie. “I’m surprised at the fine, and if this is a harbinger of things to come I doubt you will see an avalanche of criminal prosecutions when it is easier to obtain a conviction under provincial health and safety legislation and where the fines well exceed the imposition of the fine imposed by Judge Chevalier.”

Keith begs to differ. He believes that the courts will take into account that Quebec is not nearly as aggressive as Alberta and Ontario when prosecuting health and safety transgressions.

Reasons: R. c. Transpavé inc., [2008] J.Q. No 1857.

All quotes except those of Norm Keith and Mary Beth Currie translated from French by author.