By Ben Snyman, Cofounder and CEO, AuditSoft
Ben holds a B.Comm, LLB, and MBA. He is a qualified attorney and is trained as an ISO 45001 Internal and Lead Auditor. With over 30 years of experience, Ben is recognized as an expert in operational, legal, and regulatory risk management. Connect with Ben on LinkedIn.
The City of Greater Sudbury case, which involved a Ministry of Labour prosecution against the city, has significantly impacted how municipalities must approach contracting out construction projects.
While the case went to the Supreme Court of Canada, the ultimate result is that municipalities are considered employers under the Ontario Health and Safety Act (OHSA) when they contract out work. This means they bear a responsibility for worker safety that goes beyond simply hiring a contractor and hoping for the best.
Prior to the Sudbury case, owners often assumed that as long as they didn’t directly control a project, they had limited liability. However, the legal landscape has changed. Now, municipalities are seen as employers.
The Sudbury case clarified that municipalities have employer obligations under the OHSA, even when a contractor is designated as the constructor. This makes prequalification a critical component of any municipality’s due diligence strategy.
Prequalification is the process of carefully evaluating potential contractors before hiring them. It’s not just about choosing the lowest bid; it’s about ensuring that the contractor has the necessary expertise, experience, and safety record to perform the work safely and in compliance with the law.
Prequalification is arguably the most important step an owner can take to reduce their liability.
“Prequalifying contractors by checking their safety record, [among other factors], is the one proactive step I think a court will expect in every case,” says Ryan Conlin, the lawyer who represented the city in the R. v. Greater Sudbury (City) case (Back to the Future: Owner Due Diligence, Stringer LLP’s 38th Annual Employers’ Conference, December 2024)
Mitigating liability as the Sudbury case shows, simply having a contract stating the contractor is responsible for safety is not enough. The courts expect owners to be proactive in ensuring worker safety through due diligence, and prequalification is a key part of that due diligence. Without prequalification, municipalities are exposed to a greater risk of being held liable in the event of an incident.
Further reading:
In his presentation, attorney Ryan Conlin discusses several examples that illustrate how prequalification can effectively mitigate liability, drawing on the rulings in the Sudbury case:
The City of Greater Sudbury case has redefined the legal obligations of municipalities in Ontario when contracting out construction projects. Prequalification is not just a good practice; it is now a necessity.
By implementing a thorough prequalification process, municipalities can demonstrate due diligence, mitigate their liability risks, and most importantly, create a healthier and safer working environment for everyone involved in their projects. The cost of failing to do so can be extremely high, in terms of financial liability, reputational damage and in the tragic loss of life.
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