Should non-profit operation be fined like a private company? Ontario court says yes

The Ontario Court of Justice has ruled that the same considerations which apply when fining a private company for a <i>Health and Safety Act</i> violation apply to a not-for-profit operation

The Ontario Food Terminal Board (OFTB) is a non-profit wholesale fruit and produce distribution centre in Toronto. It leases out space to various wholesalers. In 2004 it was found guilty of failing to use barriers, warning signs or other safeguards to protect workers. An employee’s leg had been severely crushed in a collision with a cube van while he was operating a power walker in an area of the terminal where pedestrian and vehicular traffic meet.

The worker died in hospital four days later of a pulmonary embolism. For purposes of sentencing, this was considered an injury case, not a fatality situation.

The Ontario Ministry of Labour asked that a $100,000 fine be imposed. This was in line with similar cases where a health and safety violation caused serious injury, it argued.

The OFTB claimed the injured worker was partly responsible for the accident, and his employer was more responsible than it was. The OFTB also argued it was a non-profit operation which does an important public service, and that the “public good” it provides would be significantly impacted if it had to pay a high fine. A more appropriate fine would be between $20,000 and $60,000, it said.

The province’s Health and Safety Act provides for a higher maximum fine for a corporation than a person. The court ruled that while the exact nature of the OFTB wasn’t specified in the act which created it, it was a corporation for the purposes of this sentencing. It reaffirmed that the primary consideration in determining sentence is deterrence.

The court rejected the OFTB’s claim that as an owner it had less responsibility for the accident than did the worker or his employer. Owners and employers share the responsibility to comply with health and safety legislation. The OFTB has the ability, via letters and infraction tickets, to sanction tenants and ensure they do so, ruled the court.

Moreover, the accident occurred in a public area where vehicles and pedestrians meet. Responsibility for workers in that area was with the OFTB, ruled the court.

The worker was not completely to blame for the accident, as a “dangerous state of affairs” had been allowed to continue where vehicles were permitted to travel the wrong way on a one-way roadway.

The court also rejected the OFTB’s argument that as a non-profit entity it shouldn’t be penalized as heavily as a private company. The OFTB does not receive its financing from the public purse. It generated revenue from its tenants, via rents and other fees. In fiscal 2004 its operations generated a surplus of more than a million dollars from revenue of almost $9.5 million.

The OFTB was not like a hospital, which if heavily fined could result in the loss of a nursing position. In that situation there was a public service component that could be relevant in determining the size of a fine.

While the OFTB provides a valuable public service, there wouldn’t be the same detrimental effect on its operations as would a fine on a publicly-funded hospital, ruled the court, in setting the fine at $65,000.

For more information see:

Ontario (Ministry of Labour) v. Ontario Food Terminal Board, 2006 CarswellOnt 7095, 2006 ONCJ 433 (Ont. C.J.).

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