Court increases Metron safety fine to $750,000

The trial judge imposed a fine of $200,000 after reviewing all of the facts, circumstances, and legal requirements for sentencing a corporation under the Bill C-45 amendments to the Criminal Code. The Crown appealed.

The Court of Appeal heard the Crown’s appeal argument that the $200,000 fine was too low and an unfit sentence. The judgement on that appeal was released on Sept. 4. The Court of Appeal dramatically increased the fine against Metron to $750,000, describing it as a "fit fine in the circumstances."

The facts of this case go back to the beginning of the project where the incident occurred. In September 2009, Metron entered into a contract with the owner of two high-rise buildings to do restoration work on concrete balconies. There was an initial attempt to secure appropriate scaffoldings and swing stages but, due to supplier issues, the project was delayed.

Two swing stages were eventually delivered to the project site in late October 2009 without any instructions on how to assemble the various parts. There was no report prepared by a professional engineer stating the swing stage had been erected in accordance with design drawings, as required by regulation for construction projects under Ontario’s Occupational Health and Safety Act (OHSA).

As part of the plea bargain agreement with the Ministry of Labour and the Crown, the charges relating to violations of the OHSA and the regulation for construction projects were withdrawn. Metron, as a result of this plea bargain, agreed to plead guilty to one count of contravening Bill C-45 under the Criminal Code.

On the day of the accident, five workers plus a supervisor — Fayzullo Fazilov — boarded one of the swing stages to travel from the fourteenth floor to the ground. At the time, there were only two lifelines to provide workers with safety redundancy if the swing stages failed. The combined weight of the workers and the equipment caused the swing stage to collapse, opening as a drawbridge, and the workers fell to their death.

The Court of Appeal decision seemed to play down the fact three of the four deceased workers tested positive for the active ingredient in marijuana. However the court acknowledged the site supervisor, Fazilov, was one of the individuals who was apparently under the influence of marijuana. The Court of Appeal appears to have ignored that fact as relevant for the purpose of assessing a proper sentence for Metron.

One of the critical admissions Metron agreed to as part of the plea bargain agreement is that Fazilov was a "senior officer" of Metron. This was an essential admission for the corporation to make to ensure its plea bargain was accepted by the trial court.

The new formula for guilt, in a criminal negligence causing death charge under the Bill C-45 amendments, requires that a senior officer departed from the standard of care that has reasonably been expected to ensure representatives were safe at the work site.

In other words, without the admission that Fazilov was a "senior officer," even though he was a first line supervisor, the Crown could not have secured a conviction under Bill C-45.

The Court of Appeal was only dealing with a sentence appeal so the legal issue of whether or not Fazilov truly was a "senior officer" was never disputed or argued before the trial court or the Court of Appeal. This critical issue was one of the "elephants in the room" not addressed by any court in this case.

On appeal, the crown argued the trial judge had committed three legal errors relating to the following — jurisprudence from OHS regulatory prosecutions; the corporation’s ability to pay; and the general fitness of the sentence in the circumstances.

The Court of Appeal held the first ground of appeal had no merit since the Crown prosecutor, in the sentencing before the trial court, had invited and even encouraged the court to consider the range of OHS fines from a regulatory prosecution. They were in the range of $115,000 to $450,000.

The Court of Appeal made reference to the $100,000 fine given to Transpavé, a Quebec corporation criminally prosecuted in a workplace death where there was a joint submission for a fine of $100,000 and it was deemed appropriate by the Quebec court. In the sentencing appeal, the Court of Appeal failed to distinguish the Transpavé case from Metron, but did not follow it. The Court of Appeal did not criticize the trial court for considering cases under OHS regulatory statutes.

Regarding the fitness to pay ground of appeal, the Court of Appeal was scathing in its criticism of the trial court on the conclusions it drew from evidence, and submissions of both Crown and defence counsel, regarding Metron’s ability to pay. Interestingly, Bill C-45 gave the trial judge jurisdiction over the issue of economic viability of a penalty on a corporate defendant.

Section 718.21(d), of the Criminal Code — part of the Bill C-45 amendments — expressly states, "the impact that the sentence would have on the economic viability of the organization and the continued employment of its employees."

It was that provision the trial court used, together with the evidence and submissions of counsel before they met at trial, to determine a fine in the amount of $200,000 was appropriate.

However, the Court of Appeal indicated this provision should focus more on the ability of the corporate defendant to pay — provided they continue employing workers — rather than its continued economic viability generally.

"(In) the case of a corporation that carries on no or limited business and has no or few employees, the impact of a fine on a corporation’s economic viability may be of little consequence," the Court of Appeal said.

The Court of Appeal also reviewed the United Kingdom sentencing guidelines to support its conclusion that the fine against Metron was too low.

"Any public interest from the continued viability of the respondent was not manifest. The sentencing judge placed undue weight on the respondent’s ability to pay," the Court of Appeal said.

The final issue on the appeal was whether or not the sentence was "manifestly unfit."

This resulted in the Court of Appeal criticizing the trial court on the assessment of a $200,000 fine. The court did acknowledge that president and sole director Joel Schwartz had been convicted under the applicable OHSA and personally fined $90,000. The court also recognized both he and Metron had no prior record or outstanding Ministry of Labour orders at the time of the event.

The Court of Appeal then came back to reinforce the responsibility of Fazilov as the first line supervisor, who bound the corporation by his actions even though he was under the influence of illegal drugs. In my opinion, it remains an open question whether Fazilov was truly a "senior officer" of Metron and whether this was an appropriate consideration for the Court of Appeal to seize on to dramatically increase the fine.

"The criminal negligence of Fazilov, for which the respondent is criminally liable, was extreme. Three times as many workers were on the swing stage when it collapsed than was usual practice. In addition, three times as many workers were on the swing stage than there were lifelines available and even then only one of the lifelines was properly engaged," the court said.

This seems to place higher criminal liability and a higher monetary penalty on Metron due to the mistake made by a first line supervisor. This application of Bill C-45’s new definition of "senior officer" and the new formula for organization guilt, does not necessarily relate to a higher fine, but rather the basis of the conviction itself.

The Court of Appeal increased the fine from $200,000 to $750,000 because of the "nature and gravity of the events, the victims, the principle set forth in Section 718 and the specific factors described in 718.2(1) of the Criminal Code."

The appeal decision may be understood in light of its concern to emphasize general deterrence more than the trial judge did, but at the expense of the primary goal of criminal sentencing — specific deterrence in a unique set of facts that is likely to never be repeated.

The high fine against a small corporation, Metron — which may never be fully recovered if the company is driven into bankruptcy — is of questionable value for promoting prevention.

However, one thing is very clear from the Court of Appeal’s decision: If and when employers are convicted of OHS criminal negligence, their punishment may be severe beyond the point of undue hardship. One can only imagine the type of fine, in similar circumstances, a much larger corporate employer may have faced. The other sobering fact is there is no upper limit to fines that may be imposed on a corporation when they are prosecuted under a Bill C-45 offence, as a result of the Westray Mine Disaster amendments to the Criminal Code.

Norm Keith is an employment lawyer at Fasken Martineau in Toronto. He can be reached at (416) 868-7824 or [email protected].