Canada: UPDATE: Large Fines Imposed In Metron Construction OHS Criminal Negligence Case. Reasons For Judgment Released

On Friday, July 13, 2012, fines were imposed on Metron Construction and its President, Joel Swartz following guilty pleas by both parties earlier in June.  Both parties have one year to pay the $342,500 in total fines and surcharges.

Metron Construction entered a guilty plea to one charge of criminal negligence causing death under the Criminal Code as amended by Bill C-45. At the same time, its President, Mr. Joel Swartz, P.Eng.  pleaded guilty to four contraventions of the Ontario regulatory statute,  Occupational Health and Safety Act (OHSA).  The criminal and regulatory charges relate to the Christmas eve tragic death of 4 workers when a scaffold broke and workers fell since they were not using a fall protection.

Fine against Joel Swartz

The President of Metron, Joel Swartz, was fined $90,000 total for his guilty plea to four counts under the OHSA.  In order to arrive at this amount, the court accepted the joint submission by the Prosecution and the Defence for a fine of $22,500 per charge. This $90,000 fine against Metron's President sets a new high water mark for a sentence against any individual, let alone a director and officer under an OHS statute in Canada.

Mr. Swartz's charges related to a failure to ensure that:

• all workers were provided with instructions about fall arrest in their native language
• fall arrest training and instruction records were kept
• the swing stage being used was not defective or hazardous
• the swing stage in use was not overloaded

In accepting the joint submission on penalty, Justice Bigelow considered the following factors:

• Mr. Swartz is married and supports his 4 children
• His income dropped by 50% between 2010 and 2011 as a result of this matter
• He has no previous violations for health and safety matters

As a result of the fines being well over Mr. Swartz's total income, he was given 6 months to pay half of the fine, and another 6 months to pay the second half.

Fine against Metron

In addition to the fine against Mr. Swartz personally, Metron Construction was fined $200,000 for its guilty plea to one count of criminal negligence causing death.  Under the Criminal Code there is no maximum fine that may be imposed upon a convicted organization.  The Criminal Crown has sought a penalty of $1 million; the defence requested a fine of $100,000. The court settled on a fine of $200,000, plus the fine of $90,000 for Mr. Swartz for a total of $290,000 plus the 25% victim fine surcharge.

In his reasons for judgment in the guilty plea for Metron Construction, Justice Bigelow listed the facts that the parties agree support a finding of criminal negligence.

These facts are:

• The site supervisor met the definition of a senior officer of Metron, therefore, Metron, failed to take such reasonable steps to prevent bodily harm and death by:
• Directing and/or permitting six workers to work on a swing stage, when he knew or should have known that it was unsafe to do so
• Directing and/or permitting six workers to board the swing stage knowing that only two lifelines were available
• Permitting persons under the influence of drugs to work on the project.

Justice Bigelow held that Metron, through the acts and omissions of its senior officer, site superintendant Fazilov, is therefore guilty of criminal negligence under sections 22.1(b), 217.1 and 219 of the Criminal Code.

In arriving at a fine, Justice Robert Bigelow considered the principles for sentencing an organization under s. 718.21 of the Criminal Code.  He relied on the following reasons for imposing a fine much lower than the 1 million dollar fine sought by the crown:

• Metron had not realized any advantage as a result of the offence
• the offence was not planned.
• the company president has also been fined as a result of the incident
• neither Metron nor any of its representatives had been convicted or sanctioned by any regulatory body for similar conduct in the past.
• Imposing the fine sought by the Crown would likely result in Metron's bankruptcy as it is in a precarious financial situation and has substantial liabilities. 
• Metron is pleading guilty and reducing prosecution costs and therefore reducing the costs to the public.

Justice Bigelow weighed all of these factors and found that the $342,500 in fines and surcharges payable by Metron and its president was three times Metron's net earnings in its last profitable year and "would send a clear message to all businesses of the overwhelming importance of ensuring the safety or workers whom they employ".

This landmark case is the second corporate guilty plea in Ontario under the Bill C-45 amendments to the Criminal Code that took effect on March 31, 2004. The only other prior corporate criminal negligence conviction in such a matter, on a guilty plea in 2008, was Transpave, resulting in a fine of $100,000 in Quebec.

Criminal charges against the supervisors are still pending and a preliminary hearing commenced on May 7, 2012 in Toronto and is ongoing. In this hearing a judge will assess if there is sufficient evidence for the matter to proceed to a criminal trial.

Background to the Guilty Plea

Metron Construction Corporation and three individuals related to the company were charged with criminal negligence causing bodily harm and four counts of criminal negligence causing death. The charges arise from the deaths of four migrant workers and the critical injury of another, following the collapse of a swing stage scaffold on the 13th floor of a Toronto apartment building on Christmas Eve of 2009. The incident received national media coverage. The Government of Ontario appointed the University of Toronto's Tony Dean to conduct an inquiry into workplace safety prevention initiatives after this incident.

A crew of six men was working on repairing the balcony at 2757 Kipling Avenue when the incident occurred. A sixth worker escaped unharmed. The incident occurred when a seventh worker attempted to step onto the swing stage, causing it to break into two pieces, and the four workers fell to their death.

In August, 2010, 61 OHSA charges were laid against various parties as a result of the same accident. Thirty charges were laid against Metron Construction Corporation, with an additional 16 against a Metron senior manager and 8 against a supervisor.

The Ministry of Labour had never previously laid any OHSA charges against Metron in its 23 years of operation. However, in the two months leading up to the deadly incident, eight orders, including some dealing with swing stages, have been issued to Metron Construction at the job site in question.

These charges mark another instance that a corporation or an individual has been charged with contravention of the Bill C-45 amendments to the Criminal Code. To date, none of these cases have proceeded to trial. Bill C-45 was the legislative reaction of the federal government to the Westray Mine disaster. In May 1992, 26 miners died when an explosion and fire ripped through that coal mine in Pictou County in Nova Scotia. Criminal charges in that case were thrown out at trial due to prosecution misconduct.

Action Items

Gowlings recommends that all Presidents, Directors and Officers, and Corporations immediately take the following steps to mitigate risk of similar incidents, prosecutions and legal liability:

1. Have an external, experience law firm conduct an OHSLAW Gap AnalysisTM to determine the level of compliance with legal requires under the OHSA, that is protected by solicitor and client privilege;
2. Fill the Gaps in OHS law compliance by developing/improving OHS Policies, Safe Work Procedures, and Accountability through an OHS management System;
3. Conduct and document training for all operations Managers, Supervisors  and Workers to ensure that you meet or exceed all OHS training requirements in law;
4. Brief the Board of Directors of these actions and commit to an annual review of OHS Policies, Procedures and Program, as required by the OHSA and related Regulations and best practices.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.