Canadian Mining Journal

Feature

COVID-19 workplace exposure and director and officer liability

Norm Keith of Fasken examines work exposure to COVID-19 and potential liability on the part of mining directors and officers.



COVID-19 was declared a pandemic by the World Health Organization (WHO) on March 11. Many Canadian provinces, including Ontario, declared a state of emergency under the Emergency Management and Civil Protection Act (EMCPA) on March 17. This has given rise to governance and leadership challenges, and decisions regarding the state of the workplace, and exposure to workers, as well as clients/customers/patients in many businesses, workplaces and organizations across Canada. COVID-19 has also raised a number of questions about emergency preparedness, business continuity, and pandemic planning by governance experts and boards of directors of public and private corporations and organizations.

The mining industry is no exception. Many mines were shut down by governments across Canada. While public health authorities waffled on best practices for prevention and the efficacy of masks in preventing the virus from spreading, governments ordered much of the economy to be closed for varying periods of time, including mining operations.

A central concern for many boards and CEOs has been the risk of potential legal liability for their organizations, individuals and them personally. This article will focus on the latter and, in particular, the legal exposure of directors and officers to personal legal liability arising from an employee or worker, customer, client or third parties from becoming infected by COVID-19 arising out of or in the course of employment and in connection with the business or the workplace.

Civil liability

The primary risk for directors and officers related to COVID-19 exposure in the workplace is on the unintentional tort of negligence. A civil claim for negligence must establish a duty, breach of duty and damages. There is a general legal duty of care on organizations and their directors and officers to provide a safe workplace for workers and third parties.

Directors and officers have these obligations under common law negligence duty of care, jurisprudence, public and occupational health and safety statutes and regulations. The latter generally focuses on worker safety, but by implication also applies to third parties who have visited or have other contact with the workplace.

Civil liability related to workers or visitors who suffer injury, illness or death arising out of or in the course of employment from COVID-19 is governed by either workers’ compensation legislation or the civil court system. The former provides workplace health & safety insurance for the vast majority of workers in Canada. Such legislation provides a bar to civil law suits against employers and directors and officers. The latter gives a minority of workers and most third parties the right to sue in court on the basis of the tort law theory.

The other legal risk for director and officer exposure to COVID-19 civil liability lies with workers and workplaces not covered by workers’ compensation legislation and non-worker third parties. When a customer, client, or third party is infected by the virus as a result of exposure to the business/workplace, it may be argued that directors and officers breached their duty of care towards such workers and third parties by failing to follow public or occupational health and safety legislation, regulations or standards related to COVID-19 risk management.

Regulatory liability

Occupational Health and Safety (OHS) regulatory statutes do not all identify directors and officers as having specific personal legal responsibilities under those statutes. This legal duty on directors and officers under the Ontario OHS law may also be incorporated by reference in other provincial OHS laws since diectors and officers often are included in the definition of a representative of the employer. On balance, we recommend that organizations and all directors and officers consider themselves bound by similar duties to those expressed in the Ontario statute, above, for the purpose of managing this category of regulatory legal risk.

OHS laws are legally characterized as quasi-criminal, strict liability, and regulatory statutes. OHS laws are not criminal law for several reasons, including the absence of criminal intent or mens rea. A regulatory offence, which may be used to prosecute directors and officers, does not require proof to commit the offence, required in a true crime. Directors and officers’ exposure to regulatory prosecution under the OHSA may result in a fine up to $100,000, or 12 months in jail, or both. The presumptive penalty of an individual being convicted under the OHSA is a fine rather than a jail term.

Criminal liability

The Criminal Code has three different provision that may apply to directors arising from a COVID-19 exposure at the workplace by a worker or third party. Criminal legal liability is the most serious but also the most difficult to prove. If a mining director or officer is convicted of the crime of OHS criminal negligence established under the Westray Bill, the penalties include up to life imprisonment, and a fine up to $100,000 per count. Jurisprudence with respect to the Westray Bill prosecutions has been sporadic, with individuals, rather than corporations being the primary target of such criminal investigations and prosecution.

The police may investigate a criminal complaint that a director or officer failed to take reasonable steps to prevent bodily harm in respect to and the exposure to COVID-19 in the workplace.

Recommendations

Exposure to mining directors and officers arising from COVID-19 is limited but still an important issue for organizations and their leaders to address. Boards and officers should take steps to ensure compliance with public health authority guidance and OHS law compliance for risks associated with COVID-19 that are business and workplace specific. However, some guidance at a general level is warranted and should be the beginning of such risk management consideration.

We recommend the following to mitigate against the legal risk for directors and officers arising from a potential COVID-19 exposure associated with the business or workplace:

  1. Exercising leadership of the exposure risk for workers and third parties of COVID-19 exposure in a proactive, positive and public manner;
  2. Following objective, public and occupational health and safety guidance on managing COVID-19 as a workplace hazard;
  3. Completing all recommended 12 steps of reopening the workplace after a COVID-19 shutdown;
  4. Revise and verify the director and officer insurance coverage and related employment contract indemnity for directors and officers and enhancing where appropriate;
  5. Ensuring continuous improvement approach to emergency management, business continuity, and pandemic planning now and in the future.

Norm Keith is a partner at Fasken in Toronto. He can be reached at nkeith@fasken.com or 416-868-7824.


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