While jail sentences for corporate executives convicted of criminal offences aren’t at all unusual anymore, it’s only in the last two years or so that courts have been incarcerating executives and managers for regulatory offences, particularly for occupational health and safety violations.
As Cheryl Edwards of Mathews Dinsdale & Clark LLP pointed out in a recent bulletin, all occupational health and safety legislation in Canada provides for imprisonment as a possible penalty for a breach.
“The potential length of a custodial term varies from jurisdiction to jurisdiction and ranges from a potential one-month term (per offence) in Prince Edward Island to possible two-year terms (per offence) in Saskatchewan, Nova Scotia, the Yukon (where sentences of up to 2.5 and 3 years are available for subsequent offences), and under the Canada Labour Code,” she wrote.
Before 2013, the courts used jail sentences very rarely, most often in cases where a defendant didn’t show up for trial and was convicted in absentia, where there was a prior history of convictions or where an agreement as to sentence existed.
But a look at more recent jurisprudence on sentencing under the Occupational Health and Safety Act, commencing with the 2013 sentence imposed in R. v. Roofing Medics Ltd., suggests that corporate executives and managers are at greater risk of landing in jail.
In Roofing Medics, Paul Markewycz, a supervisor, was charged after a worker died from injuries sustained after falling from a ladder.
After the accident, he misled the police as to the location of the accident, the circumstances under which it occurred, and the fact that it happened at a workplace. But Markewycz, who had no previous record, came clean about his lies before he was charged. Still, he was convicted of failing to ensure that his workers used a fall-arrest system and furnishing an inspector with false information.
The Crown sought 45 days in jail. Although the court acknowledged that fines were the norm in such cases, a sentence of 15 days was nonetheless imposed.
“The major reason a jail sentence is necessary for Mr. Markewycz is to deter others from ignoring the legislated fall-protection requirements,” the court wrote.
“Others in the industry must pause to consider that each and every time they embark on a roofing project, they may go to jail if one of their employees does not use fall-protection gear. It is unacceptable for any roofer to be injured or to die as a result of a fall off a roof.
These injuries and deaths can be prevented. Since the industry has not been able to accomplish prevention to date, it is appropriate for the Court to send a message that offenders will be dealt with harshly.”
But Norton Rose Fulbright Canada LLP’s Madeleine Loewenberg, who was involved in the case, says that the failings of the industry as a whole shouldn’t have been taken into account and that Markewycz should have received more consideration for pleading guilty.
Ontario (Ministry of Labour) v. J.R. Contracting Property Services also involved a supervisor, Teisha Lootawan, who had four prior convictions leading to fines and jail terms under the Environmental Protection Act. Some $50,000 in fines remained unpaid.
In 2014, a worker fell from a roof on Lootawan’s watch. She misled the Ministry of Labour regarding the circumstances and ultimately was convicted of failing to ensure that an adequate form of fall protection was in place.
The court imposed a 45-day sentence, citing her previous offences (albeit under another statute), the unpaid fines, and a continuing disregard for regulatory offences.
Interestingly, the case was the first time a court had resorted to the Regulatory Modernization Act that allows convictions for regulatory offences other than the one under which an individual is charged to be considered in sentencing.
“This case should serve as a reminder that other Provincial Offences Act convictions may be relevant in the context of [Occupational Health and Safety Act] sentencing,” says Loewenberg.
The most recent relevant case is the unreported decision in R. v. New Mex Canada Inc., Baldev Purba and Rajinder Saini. Purba and Saini were directors of the company.
After a worker fainted and fell from a modified forklift, the two directors were convicted of failing to take all reasonable care to ensure the worker had used fall arrest as required by the act’s industrial regulations. Each was sentenced to 25 days in jail and 12 months’ probation.
“The court considered a number of aggravating factors, including that neither Mr. Purba or Saini knew their obligations as directors or supervisors, neither was aware of the requirements in the fall protection regulations, they had lost their copy of the [act], workers had not been trained in health and safety or provided with fall arrest, and the deceased had fainted previously yet he was working on a forklift with a lack of safety features,” says Loewenberg.
Still, Loewenberg adds that New Mex appears to be “not that different” from many other earlier cases in which a fine, albeit a significant one, was imposed.
“What may have made a difference was the fact that the company was closely held and had already paid a significant fine [of $250,000] that would already cause financial hardship to the accused,” says Loewenberg.
“But if the ability of the accused to pay their fine influenced the court, that would have been both unusual and arguably in error.”
However that may be, it’s not as if prosecutors will be seeking incarceration for all offences in which injury or death has occurred.
“As a general rule, a Crown Prosecutor is more likely to seek a custodial sentence if a defendant has engaged in egregious conduct such that the defendant’s behaviour is closer to an intentional act than negligence,” wrote Edwards.
But she also points out that prosecutors are becoming more aggressive in placing factual records of all potentially aggravating factors before the court.
“This may indicate a more aggressive approach in which jail sentences will be sought more frequently in cases involving serious injuries or risk of harm,” wrote Edwards.