Federally regulated employer fined $250K following fatality

Representing justice, the Statue Ivstitia rests in front of the Supreme Court of Canada in Ottawa. (mbruxelle/Adobe Stock)

A North Vancouver employer has been fined $250,000 following its conviction for failing to ensure the health and safety of an employee at its bulk terminal facility — one of the largest fines levied against a federally regulated employer in Canadian history.

In October of 2018, an employee of Neptune Terminals was performing maintenance at the worksite when a metal grate beneath his feet came loose from its clips, causing the worker to fall 17 metres to his death.

Following an investigation, the employer was charged with 10 counts under the Canada Labour Code and Regulations. The investigation had determined that in the years prior to the accident, Neptune had been warned multiple times by engineers and other employees about the safety of the clips; specifically, had been told that the clips would need to be replaced by a new design, but the work was never done.

After negotiations with the Crown, Neptune pled guilty to one charge of failing to ensure the health and safety of an employee under the Code, with a recommendation of a fine in the amount of $250,000.

On May 7, 2021, Neptune was sentenced in North Vancouver Provincial Court. The Court accepted the penalty submission of $250,000, which represents one of the few Canadian penalties reaching this level under the Code for safety offences.

The largest remains a total penalty of $550,000 levied against the RCMP after a lengthy trial in 2018, where the fine was $100,000 plus $450,000 in required donations in honour of three deceased RCMP officers.

In determining the size of the fine, several factors, including the company’s blameworthiness, their size and ability to pay, their safety record and actions taken to prevent further deaths, were taken into consideration.

While this case involved a prosecution under the Code, federally regulated employers should take note of recent changes to the Code which have made it easier for companies to be fined substantial amounts for safety violations, rather than requiring a prosecution under the Code.

On January 1, 2021, Administrative Monetary Penalties (AMPs) became an enforcement mechanism under the Code. The maximum AMP is $250,000.00: the more serious the violation, the higher the penalty.  The amount of an AMP may also escalate if the recipient has a history of non-compliance.

Easier to commence than a prosecution, this penalty can be issued by notice from a federal occupational health and safety officer to an individual or corporation.

The penalty may be appealed, but a defence of “due diligence,” or taking all reasonable care to prevent the contravention, is unavailable on appeal.

The new AMP regime does not detract from the ability of the Crown to prosecute offences under the Code. Penalties for corporations and individuals upon prosecution are significant — up to a maximum penalty of $1 million per contravention for a violation, plus surcharge.

For an individual officer, director, agent or mandatory, or senior official, supervisor or manager of the corporation, who may be prosecuted only if they acquiesce in or participate in an offence, up to the same amount plus surcharge, and/ or two years imprisonment may be imposed upon CLC prosecution.

Paul D. McLean and Cheryl A. Edwards are partners with Mathews Dinsdale, a national labour and employment law firm. Eric Kroshus is an associate with the firm.