Rented location not looked after by landlord
Question: If the owner of a building, in which an employer is a tenant, doesn’t keep everything in good repair, are there health and safety implications for the employer? What can the employer do to protect both itself and its employees?
Answer: This question raises landlord and tenant concerns along with occupational health and safety issues. All provinces have occupational health and safety legislation that is aimed at protecting employees. Some statutory provisions specifically consider the physical workplace while others are so broadly drafted that they include all elements of the jobsite. Most create a duty upon employers to take every precaution reasonable in the circumstances for the protection of their workers.
Occupational health and safety legislation also includes refuse to work provisions. Section 43(3)(b) of Ontario’s act, for example, permits an employee to refuse to work if the physical condition of the workplace is dangerous. Employers who are tenants in a building that has fallen into a state of disrepair may therefore find themselves with employees who refuse to work, along with investigations and potential discipline under occupational health and safety legislation.
An employer’s first step should be to ensure that no employees are working in an unsafe environment. The employer should then draft a letter demanding that the owner fulfill its repair obligations under the lease. Generally, courts want to see that the tenant has provided the owner with a fair opportunity to rectify the situation. Next, the employer may wish to pay out-of- pocket for repairs and then demand or sue the owner for reimbursement. In extreme cases, the employer may be able to treat the lease as being fundamentally breached and vacate the premises.
In 1723718 Ontario Corp v. MacLeod, the tenant operated a medical practice in a leased building. The landlord’s negligence in effecting repairs caused pipes to burst, which resulted in flooding. The building was left without running water and the furnace also stopped working. The tenant vacated the premises and sued for moving expenses and lost billings. The court ruled in favour of the tenant, which had been deprived of “substantially the whole benefit” which it should have obtained under the lease. It was impossible for the premises to be used as a medical office.
“If, on the facts of the case, a breach of the covenant to repair constitutes a fundamental breach, then the tenant is entitled to terminate the lease,” said the court.
If faced with a situation as described above, in order to protect itself and its employees, an employer should contact legal counsel without delay and develop a strategy that ensures a satisfactory resolution to the issue. Otherwise, there is a risk that a court will find there was a failure to take adequate steps to protect the employees from harm.
For more information see:
•1723718 Ontario Corp v. MacLeod, 2010 CarswellOnt 9543 (Ont. S.C.J.).
