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Furniture company directors get jail time, $250,000 fine in death of worker

|Written By Jennifer Brown
Furniture company directors get jail time, $250,000 fine in death of worker
‘There are still companies out there who are not changing their habits,’ says Kevin MacNeill.

Two directors of a company in Ontario have received jail time and a $250,000 fine for violations that led to the death of a warehouse worker.

NewMex Canada Inc., a Brampton, Ont.-based importer and retailer of furniture and accessories, received the fine and two of its directors, Baldev Purba and Rajinder Saini, were each ordered to serve 25 days in jail after pleading guilty to safety violations that resulted in the death of a forklift operator.

“I think they went to jail because they did something really quite reckless, disregarded safety laws, and there was a terrible consequence,” says Norm Keith, a partner with Fasken Martineau DuMoulin LLP.

“They were fully knowledgeable of a shortcut that ignored safety laws and a worker died. It’s a worst-case scenario.”

On Jan. 18, 2013, a worker was moving merchandise at a warehouse in Brampton using a combination forklift/operator-up platform called an order picker. The order picker had been modified and had an additional platform supported by the forks that was tack-welded to the manufacturer-equipped operator platform. The added platform did not have a guardrail around it and the worker using it was not wearing fall protection or safety shoes.

The worker was found on the floor and pronounced dead. The cause of death was later determined to be blunt-force trauma to the head.

A Ministry of Labour investigation found multiple violations of Ontario's Occupational Health and Safety Act and Ontario Regulation 851, which covers industrial workplaces. There had been no health and safety training of the workers in the warehouse and workers indicated they were not provided with fall protection equipment. Ministry inspectors saw other health and safety hazards in the workplace after the fatality occurred.

Purba and Saini were both charged with failing as directors of the company to take reasonable care that the corporation complied with the act and Regulation 851. Both pleaded guilty. NewMex Canada pleaded guilty to failing to provide information, instruction, and supervision to a worker regarding fall protection and working from a height. The company also pleaded guilty to failing as an employer to ensure the safety measures required by law were carried out.

Last Tuesday they were ordered by justice of the peace Jill Fletcher to serve the jail time on weekends. It is likely, however, they will only serve the equivalent of four weekends.

The Ontario Federation of Labour is now calling for criminal consequences.

“We’re definitely in a context where, when you look back over the last couple of decades, the trend has been towards higher fines and greater sensitivity in these types of situations with a growing feeling that where there’s criminal negligence there should be punishment for that,” says Kevin MacNeill, a lawyer with Emond Harnden LLP in Ottawa.

MacNeill says he’s seeing an increasing number of cases where individuals receiving jail time is “not out of the realm of possibility.”

“We’ve also seen in the R. v. Metron Construction case the penalty being upped by the Ontario Court of Appeal,” he says.

MacNeill is referring to the 2013 case in which Metron Construction Corp. pleaded guilty to criminal negligence causing death and received a fine of $200,000 that was then bumped to $750,000 by the Court of Appeal.

The NewMex Canada directors are not the first in Ontario to receive jail time for an offence under the Occupational Health and Safety Act. In R. v. C.M. Midway Ltd., a 2001 case, an officer of a company was convicted in the death of a 13-year-old boy. The director was ordered to serve jail time of 45 days and the company was fined $75,000.

Madeleine Loewenberg, a partner and chairwoman of the occupational health and safety group at Norton Rose Fulbright Canada LLP in Toronto, says she’s seeing an increased willingness by the courts to impose jail time for health and safety offences.

“I’m not shocked, in the abstract. Before 2008, I don’t think there were a dozen jail terms imposed. In 2014, I can think of two and we already have two more if you count these two in early 2015. I think that’s consistent with the increased likelihood of the courts to impose jail time,” she says.

“Where it is a little surprising is that it appears to be a company with no prior convictions.”

However, MacNeill notes each case is decided on the facts. “It is absolutely not the case that just because a worker suffers a workplace fatality that someone is going to jail,” he says.

So will this case influence how companies view health and safety in their organizations?

“You would hope those at the highest levels of corporations would take the safety of their workers seriously and make sure the company has a functional due-diligence system in place to ensure safety. There are still companies out there who are not changing their habits,” says MacNeill.

Some say the ministry is feeling the pressure to not only use its own legislation for jail terms but also to look at working with Crown attorneys and police to lay more criminal charges.

“Things are going to get tougher,” says Keith.

Loewenberg says that in light of the ruling, officers and directors should know what the organization’s policies are and where the gaps might be and, if it’s deficient, should make sure they are corrected.

“The more hands-on officers and directors may be scrutinized more closely, criticized more severely, and called upon to explain why deficiencies exist,” she says. “But even significantly removed officers and directors have obligations under the legislation.”

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