Bill 168 and Corporate Governance in Canada – Between a Rock and a Hard Place

Bill 168, here, amended the Occupational Health and Safety Act, here, to add new workplace violence rules. As most enterprise risk management is driven by policies and procedures, many internal and outside lawyers have been creating company rules to help demonstrate compliance with the new laws.

The intent is to put the onus on management to protect worker safety, not just in their specific job function, but also from any potential hazard. These additional hazards include workplace violence and workplace harassment. Violence includes actual, attempted or threatened physical injury of a worker by anyone (including customers, clients, patients, students, workers, intimate partners, and family members). Harassment includes any vexatious comment or conduct that is known or ought reasonably to be known to be unwelcome.

Employers are responsible for proactive assessment of risks (including domestic violence) and control tools have to be created, communicated, implemented, enforced and reviewed, and, due to the nature of safety procedures, there must be immediate response.

The motivators for employers include:

1. Workers have the right to refuse to work if they have any safety concerns, while employer reprisal is prohibited,
2. The Ministry of Labour can appoint an inspector to search and seize property, and can prosecute an employer for non-compliance,
3. The employer could face the Ontario Human Rights Commission and a Human Rights Tribunal,
4. The employer could face a $500,000 fine,
5. Personal Liability for Directors and Officers if the corporation fails to take ALL reasonable steps to prevent injury, which can include fines and/or imprisonment.

The task for employers is not as easy as it sounds. Employers continue to face the risk that an attempt to enforce these new rules can also invite litigation from the offender. In Shakur v. Mitchell Plastics, the court decided that a worker who was terminated for physically assaulting a co-worker was wrongfully dismissed because the employer’s workplace violence policies and communication did not include training its employees with respect to the intent and purpose of the rules.

The loss control spin: As an employer, do your best to understand your obligations, here, take specific actions, here, and hope the court sides with you (that might be the most difficult one.)

The insurance spin: you can’t insure fines, but you can get financial help for investigation costs and legal defence. Insurance policies that should be examined for their potential response to workplace safety and employee retaliation claims could include Employment Practices Liability, Directors’ and Officers’ Liability, Accident Benefits, Business Travel Security and Medical, Kidnap and Ransom, Crime (some bonds include extortion threat coverage), Special Event Liability, Workers Compensation (especially for operations outside of Canada), General Liability (more specifically the Employers Liability coverage.)

Greg Shields is a D&O, Professional Liability, Employment Practices Liability, Fiduciary Liability and Crime insurance specialist and a Partner at the University and Dundas (Toronto) branch of Mitchell Sandham Insurance Services. He can be reached at gshields@mitchellsandham.com, 416-862-5626, or Skype at risk.first.

CAUTION: This article does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered and truly independent insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this document from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.