OHS Canada Magazine

Municipal owners are also ’employers’ under OHS law: Breaking down the Sudbury Supreme Court ruling

November 15, 2023
By Norm Keith and Matthew Stanton/KPMG Law LLP
Health & Safety contractors editor pick Norm Keith Subcontractor Management Sudbury Supreme Court of Canada

Norm Keith (left) and Matthew Stanton of KPMG Law LLP.

The Supreme Court of Canada’s recent 4-4 split decision in R. v. Greater Sudbury (City) [2] has affirmed the legal responsibility, and potential liability, of an owner of a construction project to comply with the legal duties of an employer as defined in Ontario’s occupational health and safety (OHS) legislation.

The country’s highest court affirmed the decision of the Court of Appeal for Ontario to place legal responsibility on owners to comply with the duties of an employer, even where no common law employment relationship exists between the owner and the work involved in the construction project.

The decision puts owners at substantial legal risk if there is an incident and the investigation by the OHS regulator determines there was noncompliance with the legislation.[3]

The Supreme Court’s decision has broad implications for all owners who engage in construction activities across Ontario, particularly municipalities who are the owners of a project.

Although the case is uniquely complex in issues of statutory interpretation and procedural history, it is of limited precedential value outside of Ontario due to the 4-4 split between the Supreme Court justices.


Therefore, this article will set out the facts, judicial history, and implications of the case for construction projects in the province of Ontario. It will then deal with the complexity and confusion that has been unnecessarily generated by this decision of the Supreme Court. Lastly, the authors offer some guidance on the importance of establishing the defence of due diligence for owner-employers.

Factual background

The City of Sudbury, the municipal owner, contracted with a local paving contractor to conduct road repairs in the downtown core. The contractor accepted the role of constructor under its contract with the municipality, as defined under the Occupational Health and Safety Act (OHSA) [4], and was responsible for the overall safety of workers on the project. [5]

The constructor directly employed various employees, including a qualified grader operator and a supervisor to oversee the construction work. There was ostensibly no direct contractual relationship between the City and the grader operator or supervisor.

The case against the City arose after a pedestrian was struck and killed by the equipment that was being used by the grader operator. On the day of the incident, at least two quality control employees of the City attended the project to perform their usual duties; however, they were not involved in giving direction to the grader operator or his supervisor on how to conduct the paving work.

The two main safety standards at issue in this case required the project to have adequate fencing to keep out pedestrians and a signaler to safely guide the reversing grader in an area where pedestrians were at risk. The OHS regulator’s investigation into the pedestrian fatality determined that both requirements had not been followed on the day of the accident.

The paving contractor was charged under the OHSA both as a constructor and as an employer. [6] The City was also charged as a constructor and as an employer. The contractor accepted legal responsibility for the incident and pled guilty as the constructor to failing to have a signaller. All remaining charges against the contractor were withdrawn by the prosecutor for the OHS regulator.

The OHS regulator then prosecuted the City, both as a constructor and an employer, for noncompliance with the OHS standards referenced above. At trial, all charges were dismissed on the basis that the City had contracted control of project to the paving contractor. On appeal to the Superior Court, the trial judgment was upheld. The OHS regulator obtained leave to appeal to the Court of Appeal for Ontario, where the trial decision on the status of the municipality as an employer was reversed.

The Court of Appeal held that the City was also an employer under the OHSA, in addition to the contractor, since it employed and deployed quality control inspectors at the project on the day of the incident. The remedy was to send the matter back to the first appeal court to deal with the question of whether there was sufficient evidence for the City to establish the defence of due diligence. The City appealed the Court of Appeal’s decision to the Supreme Court.

The Supreme Court decision

On Nov. 10, 2023, the Supreme Court rendered three separate reasons for judgment in a rare 4-4 split decision that resulted in the Court of Appeal decision being affirmed.

All 9 judges of the Supreme Court heard oral argument, including former Justice Russell Brown. However, on June 12, 2023, and prior to the issuance of the Supreme Court’s decision, Justice Brown resigned from the Court. As a result of Justice Brown’s resignation, the Supreme Court was left with 8 members to render a decision on the City’s appeal. Although the Supreme Court can render a decision with a reduced number of judges, and has done so in the past, in the event of a tie the appeal of the lower court decision will be dismissed ‘on equal division’. Unfortunately for the City, that is exactly what happened in this case.

Wagner C.J. and Martin, Kasirer, and Jamal JJ. Reasons for Judgment

According to the justices who dismissed the appeal, Martin J. (Wagner C.J., Kasirer and Jamal JJ. concurring), while control over workers and the workplace may bear on a due diligence defence, nothing in the text, context, or purpose of the OHSA required the OHS regulator to establish control over the workers or workplace. The justices also relied on the “belt and braces” approach to occupational health and safety to find that the duties under the OHSA are often concurrent and overlapping, and that workplace parties cannot point to others’ failures as an excuse for their own. [7]

In response to the City’s arguments, Martin J. emphasized that the definition of employer in the OHSA contains no reference to control. [8] However, the definition does refer to a contract for services, which the justices interpreted as the legislature signaling its intent to capture employer-independent contractor relationships under the employer definition. According to Martin J., reading a control requirement into the definition of employer would narrow the employer’s duties and would be inconsistent with the purpose of the OHSA as a public welfare statute. [9]

Martin J. agreed, though, that it was open to an accused to prove that its lack of control was relevant for a due diligence defence.

Martin J. ultimately found that the City was an employer of the quality control inspectors, whom it employed directly, and of the paving contractor, whom it contracted to undertake the construction project. Martin J. summarized the 4 justices’ reasons for judgment in the form of answering 3 questions, as follows:

In summary, a court must consider three questions where an owner who contracts for the services of a constructor on a construction project is prosecuted for a breach of s. 25(1)(c):  

  1. First, has the Ministry proven beyond a reasonable doubt that the Act applied to the accused because the accused was an employer under s. 1(1) of the Act? An owner is an employer if it (i) employed workers at a workplace where an alleged breach of s. 25(1)(c) occurred; or (ii) contracted for the services of a worker at that workplace (including for the services of a constructor). The Ministry is not required to prove that the owner had control over the workplace or the workers there.
  1. Second, has the Ministry proven beyond a reasonable doubt that the accused breached s. 25(1)(c) of the Act? There is a breach of s. 25(1)(c) if the safety measures prescribed by the Regulation are not carried out in the workplace to which the owner/employer is connected by a contractual relationship with employees or an independent contractor. Further, the Ministry is not required to prove that the owner had control over the workplace or the workers there.
  2. Third, if the Ministry proves the above, has the accused proven on a balance of probabilities that it should avoid liability because it exercised due diligence under s. 66(3)(b) of the Act? Relevant considerations may include, but are not limited to, (i) the accused’s degree of control over the workplace or the workers there; (ii) whether the accused delegated control to the constructor in an effort to overcome its own lack of skill, knowledge or expertise to complete the project in compliance with the Regulation; (iii) whether the accused took steps to evaluate the constructor’s ability to ensure compliance with the Regulation before deciding to contract for its services; and (iv) whether the accused effectively monitored and supervised the constructor’s work on the project to ensure that the prescriptions in the Regulation were carried out in the workplace. [10]

Based on the foregoing analysis, Martin J. concluded that the City was required to comply with the duties of an employer and failed to do so in this case. The 4 concurring justices dismissed the appeal, affirmed the decision of the Court of Appeal, and remitted the matter to the provincial offences appeal court to consider the OHS regulator’s appeal of the City’s due diligence defence. [11]

Karakatsanis, Rowe, and O’Bonsawin JJ. Reasons for Judgment (dissenting)

The dissenting reasons of Karakatsanis, Rowe, and O’Bonsawin JJ. found that the City’s appeal should be allowed and focused on a closer examination of the term employer under the OHSA in the context of the construction industry.

In reasons delivered by Rowe and O’Bonsawin JJ., the dissenting justices acknowledged that the definition of employer covers two broad relationships. The first branch is satisfied if the person employs one or more workers, the traditional conception of a direct employer-employee relationship. The second branch involves a person who contracts for the services of one or more workers, which ensures that the substance of the employer-worker relationship is not determined by the manner in which it is described in the contract. [12]

However, Rowe and O’Bonsawin JJ. recognized that when an owner contracts with a constructor, “they are asking an entity to assume plenary oversight and authority to undertake the entire project.” [13] This relationship reflects the practical reality of the construction industry, where owners promote safety by transferring responsibility to constructors with relevant expertise. Rowe and O’Bonsawin JJ. further recognized that the owner-constructor relationship does not generally fall within the second branch of the employer definition. Instead, the OHSA is specifically designed so that an owner can take a ‘hands off approach’ to overseeing the project relative to the constructor. While recognizing that the second branch of the employer definition is broad, these justices found that it does not turn an owner into the employer of workers hired or contracted for by a constructor.

According to Rowe and O’Bonsawin JJ., the 4 concurring justices had conflated the definition of employer with the determination of the scope of an employer’s duties. In other words, even if the City was an employer at the time of the accident, it was critical to determine whether the City had an obligation to comply with certain duties under the OHSA and the Construction regulation. [14] Rowe and O’Bonsawin JJ. held that the regulatory measures only apply when they present a nexus to the work which is under the employer’s control and performed through their workers:

Establishing this nexus between the measure and the employer is a binary, threshold question: either the measure applies because it is related to work which the employer has undertaken, or the measure does not apply because such a link is absent. [15]

Expanding on their analysis in rather strong language, Rowe and O’Bonsawin JJ. further held that “it would be absurd” to interpret the OHSA as obligating every employer at a construction project to ensure compliance with all measures contained within the Construction regulation.

To do so would effectively mean “that everyone who employs anyone is responsible for everything that anyone does” [emphasis in original]. [16] Instead, the dissenting justices argued for a measured and practical approach, which would give effect to the concept of overlapping responsibilities and fully operationalize the “belt and braces” approach. The justices noted that if there was no relationship between the protective measure and the employer’s work, the employer cannot serve as an effective brace. [17]

Rowe and O’Bonsawin JJ. expressed serious concern that imposing measures contained in the OHSA and regulations onto employers bearing no relationship to the work at hand would add an indefinite number of illusory braces: “they provide a false sense of added safety but, in reality, only increase the legal jeopardy of unrelated workplace parties who could not have ensured compliance with those measures.” [18] Additionally, limitless responsibilities could lead to confusion and a lack of coordination on a construction project. [19]

Rowe and O’Bonsawin JJ. rejected outright the OHS regulator’s argument that ‘prosecutorial discretion’ will limit the potential for absurdity to occur. The dissenting justices noted that this would effectively give prosecutors unbounded discretion to define the proper scope of each employer’s duties by deciding who to charge, rendering the ultimate delineation of duties in the OHSA unpredictable and uneven from the accused’s perspective. [20]

Similarly, the dissenting justices noted the multiple flaws with adopting an approach that pushed most of the analysis concerning an employer’s responsibility to the due diligence stage. Notably, they held that the “the offence and the defence should not be conflated.” [21] The justices opined that if most of the employer’s obligations are outside of their control, they have no ability to even know whether the measures are being complied with or what they could be charged with by the OHS regulator. [22]

Rowe and O’Bonsawin JJ. concluded their decision by agreeing that the City was an employer to the quality control inspectors it had hired through a contract of employment. However, by contracting with the paving contractor, the City did not become the employer of the workers that the constructor retained. The owner-constructor contract reflected a distinct relationship contemplated in the OHSA that does not generally fall within the second branch of the employer definition. In light of this conclusion, the applicability of the regulatory measures depended on whether the City controlled the work that was being performed at the time of the accident. [23]

Since the lower courts did not consider the applicability of the regulatory measures at issue, Rowe and O’Bonsawin JJ. held that the proper approach was to remit the matter to the provincial offences court to determine whether the relevant provisions of the Construction regulation related to the City fell within its duties under the OHSA. [24]

Côté J. Reasons for Judgment (dissenting)

Finally, Côté J. agreed that the City’s appeal should be allowed but provided her own compelling reasons for judgment. Côté J was in agreement with the dissenting justices that the definition of employer in the OHSA does not capture the construction specific relationship between a project owner and its general contractor. [25]

She was also in substantial agreement that it would be absurd to interpret the duties of employers as requiring each employer on a construction project to ensure compliance with all applicable provisions in the Construction regulation. [26] She reasoned that on a construction project the constructor is responsible for health and safety across the project.

The authors note that this has been the longstanding, traditional interpretation of the Internal Responsibility System in Ontario and other jurisdictions across Canada.

Côté J. commented on the “belt and braces” approach and found that to impose duties on employers that they cannot possibly fulfil does not further the aim and purpose of the OHSA. [27]

She also highlighted that holding every project owner strictly liable for all safety hazards it encountered in its quality control efforts would render the quality control exception under subsection 1(3) in the OHSA meaningless. [28]

It would no longer matter that owners do not become constructors by hiring quality control personnel. Instead, they would become employers who, in addition to constructors, have a strict duty to ensure compliance across the construction project. [29] With respect to the due diligence defence, Côté J held that it was irrelevant to the proper interpretation of who is an employer on a construction site and to the scope of a party’s corresponding statutory duties. [30]

Based on the decision of the trial judge, Côté J. rejected the OHS regulator’s position that the City or its quality control inspectors exercised control over any construction work at the project. She found that these findings of fact by the lower court deserved deference, as well as the trial judge’s conclusion that the City took every precaution reasonable in the circumstances to ensure safety at the project. [31]

Côté J ultimately concluded that it would be “an extravagant proposition” to find that a municipal project owner becomes an employer of every person on a project by attending the project for the limited purpose of quality assurance, and “a regrettable departure from the established scheme of the Act.” [32] Côté J. would have allowed the appeal and restored the acquittals entered by the trial judge on all charges.

Lessons for Ontario owners/Employers

The Supreme Court’s decision in R. v. Greater Sudbury (City) divided the 8 justices into two conceptual camps. It is therefore unclear whether a majority of the Supreme Court agrees that a project owner who hires a constructor is the employer of all workers at the project for the purposes of the OHSA.

It is also unclear whether control is or is not a factor when determining the scope of an employer’s duties under the OHSA and the regulations. In any event, the authors agree with the dissenting justices of the Supreme Court that this decision confuses and conflates the roles and responsibilities of the workplace parties at a construction project.

For now, Ontario municipalities and other owners of construction projects need to comply with the Court of Appeal decision and accept their dual role as an owner and employer on the project. In particular, it is important that project owners act in compliance with sections 25 and 26 of the OHSA, which outline the duties of employers.

Owners should also note that the extent to which these employer duties have been delegated to the project constructor is an issue for consideration in the defence of due diligence. Thus, the key takeaway for owners is to ensure they have an effective OHS management system in place to be in a position to advance a strong due diligence defence in the event of a work refusal, worker complaint, or incident at the project.

In order to demonstrate due diligence as an owner-employer under the OHSA, municipalities and other owners ought to consider several key steps to reduce their risk of legal liability.

First, owner-employers should have a rigorous pre-qualification procedure to ensure the constructors they hire are fully competent in managing workplace safety at construction projects properly.

Second, since an owner-employer cannot contract out of their statutory duties, they need to develop a comprehensive safety management system, likely with the assistance of their own, independent safety consultant and have it legally reviewed and approved.

Third, as the project continues, the owner-employer must have ongoing engagement, supervision, and scrutiny of the work and safety performance of the constructor and its sub-trades.

Fourth, the owner-employer must not only monitor but also respond immediately to any occupational health and safety issues that they observe or that are brought to their attention at their projects.

Fifth, as with all good safety management systems, there must be strict safety accountability of the constructor and sub-trades by the owner-employer including but not limited to warnings, remediation, costs penalties, indemnities, and even removal from site for safety violations.

These steps taken by owner-employers must all be delineated in the contract documents between the owner-employer and the constructor.

Norm Keith and Matthew Stanton of KPMG Law LLP are available for training, advice, and representation in all aspects of compliance with the OHSA and its regulations, and may be contacted at nkeith@kpmg.ca or 416-540-3435.


[2] R. v. Greater Sudbury (City), 2023 SCC 28 [“Greater Sudbury”].

[3] The maximum penalty of a corporation convicted of a contravention of the OHS legislation has recently been increased to $2,000,000 per offence.

[4] Occupational Health and Safety Act, R.S.O. 1990, c. O.1 [the “OHSA“].

[5] Under the OHSA, “constructor” means a person who undertakes a project for an owner and includes an owner who undertakes all or part of a project by himself or by more than one employer.

[6] Under the OHSA, “employer” 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.

[7] Greater Sudbury, supra note 2, at paras. 4-5, 11.

[8] Ibid., at para. 17.

[9] Ibid., at paras. 93-94.

[10] Ibid., at para. 61.

[11] Ibid., at para. 62.

[12] Ibid., at paras. 90, 95.

[13] Ibid., at para. 99.


[15] Greater Sudbury, supra note 2, at para. 155.

[16] Ibid., at para. 105.

[17] Ibid., at para. 130.

[18] Ibid., at para. 130.

[19] Ibid., at para. 132.

[20] Ibid., at para. 141.

[21] Ibid., at para. 143.

[22] Ibid., at para. 146.

[23] Ibid., at paras. 158-161.

[24] Ibid., at para. 162.

[25] Ibid., at para. 166.

[26] Ibid., at paras. 170-172.

[27] Ibid., at paras. 175-176.

[28] Under subsection 1(3) of the OHSA, [a]n owner does not become a constructor by virtue only of the fact that the owner has engaged an architect, engineer or other person solely to oversee quality control at a project.

[29] Greater Sudbury, supra note 2, at para. 181.

[30] Ibid., at paras. 184-187.

[31] Ibid., at para. 191.

[32] Ibid., at para. 200.


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