Legislating safety--a contentious claim: Bill C-45 is redefining the criminal liability of organizations of all descriptions, but will it really make a dent in solving past problems?

On May 9, 1992, 26 miners were killed in a mine that had documented safety problems. That event is now known as the Westray mine disaster and Bill C-45 is a response to it. The Bill's stated purpose is to ensure health and safety standards are met and that negligent individuals--and associations--are held legally liable. It was passed on March 31, 2004, but its potential usefulness continues to be hotly debated.

Bill C-45 basics

The new Bill amends the Criminal Code, setting in place rules to ensure that organizations, including corporations, are held criminally liable for the acts of their representatives. All individuals who direct work have a legal duty to take reasonable steps to ensure the safety of employees and the public. The Act gives the courts new parameters to consider when sentencing an organization, and it allows the courts latitude in the punishment brought to bear upon a negligent organization. No limit is set on the fines corporations can receive and jail terms can be given to negligent parties.

The Bill doesn't just affect corporations but organizations generally. According to the Bill, organizations include a wide range of entities, such as volunteer associations, unions and societies. It means that if the actions of a person within that association acted within his or her authority when acting negligently, and acted that way to at least partially benefit that association, then the association is also negligent.

The Bill includes in its definition of a representative of the corporation virtually anyone who works for, or is affiliated with, an organization. Under the law, senior officers of a corporation were already legally liable for their own misconduct or misconduct by others to which they are a party. The new law now sets out that corporations can be criminally liable in their own right, and that a wider pool of personnel could be legally liable. Thus directors, partners, employees, members, agents, and contractors could be included. The Bill defines a senior officer as anyone who makes policy or controls an important aspect of the corporation's activities. This would include directors, CEOs and CFOs. Of course, under the Bill, the criminal liability of corporations and associations will no longer depend on a senior officer of the company with "policy-making authority" (aka the "directing mind") to have committed the offence--as noted by the list above.

For negligence, the "mental element of the offence" can be attributed to the corporation through what the Bill calls "aggregate fault." This means that a corporation's upper level management and managers with operational and policy-making authority can be held liable for negligence. The Bill establishes an explicit legal duty on those members of the corporation who have management responsibility to ensure they take reasonable steps to prevent bodily harm that might occur due to work conditions.

If the criminal negligence of a corporation is seen by the court to have been done with intent or recklessness, and if a senior officer had knowledge of the offence and didn't act to prevent the negligence, then the corporation will be seen as negligent. The Bill also includes active negligence and negligence by omission.

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Government's perspective

The Bill brings to existing legislation a modernized definition of an organization, according to Pascale Boulay, spokesperson for the Department of Justice. It now encompasses a "public body or society" as well as standard corporate models.

The Bill broadens the legal duty of employers and managers. The duty is now extended to:

* individuals who oversee day-to-day operations, such as a project manager;

* individuals who see negligence but don't act to stop it; and

* executive officers with operational authority who become aware of offences but don't take action.

The courts will decide if a contractor acted independently in actions that involved negligence or not and whether they had operational authority as a representative of the corporation. If the independent contractor did act as a representative then he or she can be considered a party to the corporation. Such decisions will be made on a case-by-case basis. "A well-run company won't fear the changes in the law," Boulay asserts. "Those affected by the law are those who wilfully ignore it.

"Officers and directors can already be held responsible in their personal capacity for negligence," she continues. "The Bill is not an attack on industry as it applies only to [those] who wilfully disregard employee and public safety." She observes that the Bill allows the corporation to remain "viable" after a charge.

Industry response

Ethel Archard of the Canada Safety Council opposes the government's interpretation of the change. She believes that the Bill is part of a trend to "criminalize more and more people, that it is not a wise direction for policy and is counterproductive." What is more productive, she believes, is preventing deaths and injuries. "What is the purpose of justice," she asks. "Is it to prevent or punish?"

Andrew King, national health, safety and environment coordinator and department leader for the United Steelworkers of America-Canadian National Office, doesn't think the Bill will have much impact. As he sees it, the only significant amendment is the duty clause. Meanwhile, the government wasn't prepared to extend personal liability.

King's union is concerned that all responsibility will be placed on workers and managers, creating a "resurgence of behavioural-based safety." By this he means a blame-the-victim mentality. Instead, he'd like to see a concentration on creating safe and healthy work environments.

King adds that a lot of what is in health and safety programmes relies on what amounts to "folk wisdom." Managers should be sure that what is in a health and safety programme actually works and that it's not just based on statistics, but on actual claims reductions.

He also warned that those "who authorize or undertake to direct work have to be aware [of whether there is] support from the corporation or they could be on the hook." He even suggested that supervisors should get their own union.

Practically speaking, what the Bill may do is convince managers of the need for very detailed job descriptions. King notes that managers should "double check what they are responsible for" and understand the scope of their authority.

Carol Hopkins, national president (Canada) of the International Public Management Association for Human Resources, an association with 1,000 members in Canada, worries about the impact on associations like hers. She notes that since the events of September 11, 2001, the association's insurance has doubled. "There might be an unanticipated impact on insurance fees as well as an effect on the desirability of sitting on boards," she notes.

If nothing else, the Bill will change job descriptions, which will now stress health and safety. The due diligence that companies will have to put into health and safety will cost them money. Hopkins fears that the bottom line will still be considered more important than taking care of people but hopes that "more energy and effort will be put into decisions and that they protect individuals on the job."

At the same time, she doesn't believe that the legislation will prevent another Westray. "There will always be accidents," she accepts. "No legislation can prevent human error."

"If companies even under (previous) requirements chose not to adequately put in place the standards and systems to protect their workers, then they would leave themselves open to prosecution both provincially and federally," says Vince Borg, vice-president of corporate communications for Barrick Gold Corp.

"Companies should be clear on defining areas of responsibility," he continues. "This provides clarity both for the company, individuals and contractors. Providing this may actually assist with due diligence."

Borg also notes that companies were either committed to the previous requirements or they weren't. "Will the potential of a criminal charge change the attitudes of some companies? Maybe," he says. "Safety measures that are implemented strictly to meet compliance requirements will be only marginally successful. What needs to occur is that current practices need to be reviewed to ensure that supervisory and management people are fully aware of the impending legislation and the potential consequences."

John Boerefyn, CRSP, president of the Canadian Society of Safety Engineering, believes that the implications of the Bill won't be felt for some time, though there's now an onus on companies to look at safety management processes and evaluate if they have any potential for criminal liability.

"We have learned during the past 10 years that due diligence is the best defence," he notes. "But under C-45, due diligence may not be enough."

Boerefyn advises managers to do an audit of their safety management system. They must examine their procedures to see if they are complete and if they meet company standards. For their job descriptions, operational managers and forepersons should be given a clear set of expectations and, at the same time, should educate themselves. "Operational policies should be more transparent so that people know what the standards are and how they operate," he notes.

Due diligence costs money but it's work that organizations need to do anyway to realize excellence in safety performance. Disagreeing with Hopkins, Boerefyn believes it is possible to avert another Westray-type incident.

No clear future

The government is confident that only the guilty need worry about the Bill, but the reservations among those affected remain. How much good behaviour can the government legislate? Will additional due diligence be required of corporations and will it cost money? Will insurance increase or will it decrease if proper health and safety standards are in place? How will the relationship between contractors and corporations be affected? If certain facts about chemicals, metal stress, pharmaceutical side effects or environmental impacts take years or decades to surface, what is the time limit on what a corporation or its officers and managers should have known? It may take years for these questions to be answered.

J. Lynn Fraser is a Toronto-based freelance writer.