The new health and safety crime

Criminal Code changes impact employers


Health and safety issues have become more prominent for businesses. New legislation came into force on March 31, 2004, that established for the first time a duty to ensure workplace health and safety under the Criminal Code.

Bill C-45, also known as the “corporate killing bill,” compels all employers across Canada to prepare how to demonstrate that they have met legal obligations relating to workplace health and safety. The Criminal Code applies to all “organizations” whether they are federally or provincially regulated and it will be in addition to existing occupational health and safety (OHS) legislation.

New legal duty under the Criminal Code

“Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task.”

This duty will apply to individuals and to organizations. Some of the key elements:

•The duty applies to everyone who undertakes or has the authority to direct how work is performed. This duty goes beyond the title of supervisor or senior manager and could even potentially involve a lead hand or a co-worker.

•A “representative” of an organization includes a contractor. Therefore the actions of a contractor could result in criminal liability for an organization.

•An organization’s liability will also be impacted by the actions of the “senior officer.” A senior officer is broadly defined to be either a person who plays an important role in the establishment of an organization’s policies or is responsible for managing an important aspect of the organization’s activities. This could include not only the chief executive officer, chief financial officer or a director, but potentially someone in the role of plant manager or site superintendent.

•The term “corporation” has been replaced by “organization” so as to deliberately capture the complex structure of businesses.

The Criminal Code does not establish specific criteria that must be in place or regulations that must be followed. Instead it merely requires that “reasonable steps” be taken, and the penalties that would follow if it were determined the duty was not met. One of the key drafters of the legislation from the Department of Justice has publicly stated that, in his opinion, taking reasonable steps would imply following occupational health and safety legislation.

What must also be considered and included in an occupational healthy and safety management system is incorporating best practices and industry standards to demonstrate an organization is taking all reasonable steps. It is unclear if industry standards and best practices will now be established nationally, or if the police investigating offences under the Criminal Code will be influenced by health and safety requirements from a particular jurisdiction.

High fines are currently not uncommon for health and safety regulatory prosecutions — but life imprisonment, a criminal record and the newly created public shaming aspects of probation are far reaching to individuals and organizations.

Bill C-45 makes full awareness of the rights under the Charter of Rights and Freedoms more important than ever. Pre-charge rights under the charter include the right to be free from unreasonable search and seizure and the right to retain and instruct legal counsel. Documents cannot be seized by the police or other authorities for the purpose of use in a criminal investigation without proper authorization, likely in the form of a search warrant. The right to direct a lawyer and obtain legal advice is critical with the new risks and criminal liabilities of Bill C-45.

Also, once charges are laid, the accused is presumed under the charter to be innocent and therefore is to receive the proper protection of his rights under the charter. The importance of obtaining and relying upon legal advice from an expert in the area of occupational health and safety and criminal law is one of the most important rights an accused will have under the charter if charged with a criminal offence.

Recommended steps at this point are to become familiar with how the organization has been structured, and identify who meets the new definitions as listed under the Criminal Code with particular focus on who has the authority to direct work within the organization and its relationship with contractors.

Consider consulting a lawyer to develop a legal-response protocol to ensure rights are protected during a regulatory or criminal investigation. It is also worth considering how individuals and the organization would currently demonstrate the reasonable steps being taken to protect workers and the general public.

The Public Inquiry Report from the 1992 Westray Mine disaster in Nova Scotia recommended the Criminal Code be amended to enhance the accountability of organizations.

One positive legacy from the Westray disaster will be the increased attention paid to workplace health and safety issues as a result of the increased liability now in place.

Norm Keith is a partner at Gowling Lafleur Henderson LLP and leads the National Occupational Health and Safety Training, Consulting and Legal Services practice. He can be contacted at (866) 862-5787 ext. 5699 or at [email protected]. Yvonne O’Reilly is the senior OHS consultant within the team and can be contacted at (866) 862-5787 ext. 3580 or [email protected].

Sentencing an organization under Bill C-45

How are organizations punished for committing a crime? Corporations cannot be imprisoned so the Criminal Code provides for fines when corporations are convicted of crimes. In the case of a summary conviction offence (less serious offences that are punishable for individuals by up to six months in jail and/or a $2,000 fine), the code provides for a fine up to $25,000 for corporations.

Bill C-45 increases the maximum fine on an organization for a summary conviction offence to $100,000. For the more serious, indictable offences, the code already provides no limit on the fine that can be imposed on an organization.

At what level should the fine be set? Canadian law does not provide a mechanical process where the punishment is predetermined. There are few minimum sentences and judges have a great deal of latitude to craft the appropriate sentence. Bill C-45 contains factors that a court should consider in fining an organization, which are in addition to those factors already in the code that are applicable to both individuals and corporations such as an abuse of a position of trust.

The gravity of the crime, including the extent of the injury caused or whether death results, is already considered when determining sentencing. Under Bill C-45, new factors would reflect for organizations the considerations that govern sentencing individuals. Judges already apply many of these factors but it is expected that providing a list will result in judges having a more complete picture of the organization. The factors are:

Moral blameworthiness

•The economic advantage gained by committing the crime — the more money the organization made, the higher the fine should be.

•The degree of planning involved. Careful planning shows a deliberate breaking of the law and should be punished more than a case where the senior officers took advantage of an unexpected opportunity to make a quick, illegal profit.

Public interest

•The need to keep the organization running and preserve employment. Just as individuals should not be fined so heavily that they will not be able to provide for their families, so an organization should not normally be so heavily fined that bankruptcy results and, as a result, employees are left without work.

•The cost of investigation and prosecution. Many corporate fraud offences require lengthy investigations and the cost to the public of detecting the crime and building the case should be considered by the judge.

•Any regulatory penalties, which are distinct from those under the Criminal Code, imposed on the organizations for the offence. Courts consider whether individuals have been punished in other ways, for example, by losing their jobs. Similarly, a court would consider whether the public interest is served by adding a large fine to the penalties that may have already been imposed by a body such as a securities commission.

Prospects of rehabilitations

•Penalties imposed on managers and employees for their roles in the crime. An organization shows how seriously it responds to criminal activity if, for example, it disciplines or fires employees who participated in the offence.

•Previous convictions or regulatory offences. Just as the criminal record of an individual is very important to determining the appropriate penalty, so it is important for a judge to consider whether the organization and its workers had been sanctioned for similar activities in the past, not just in the criminal courts but by regulators like occupational health and safety departments.

•Restitution. Compensating victims shows that the organization is trying to make up for the harm it caused.

•Attempts to hide assets to avoid paying a fine. An organization that tries to pretend it is poor, rather than being open with the court about its financial situation, is showing that it has not changed its ways.

•Measures taken to reduce the likelihood of further criminal activity. New policies and practices, like spot audits or changes in personnel, could indicate that the organization has learned its lesson.

Source: Department of Justice. For more information, visit

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