SUMMARY. Negligence (duty of care) (occupational health and safety); Negligence (worker); Transfer of costs.

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1 SUMMARY DECISION NO. 710/94 Negligence (duty of care) (occupational health and safety); Negligence (worker); Transfer of costs. The accident employer appealed a decision which refused the accident employer's request that the costs associated with its worker's claim be transferred to a second employer, under s. 10(9) of the Workers' Compensation Act. The second employer leased premises on which it had arranged for power lines to be erected. When the lease expired, the second employer contracted with the accident employer for the removal of those lines. The accident employer was an electrical construction company. The worker suffered serious injuries when the pole he had climbed fell over after he cut the connecting wires. Soil around the pole had eroded to the extent that the pole was unable to stand without other support. A Ministry of Labour report cited improper practices in the form of failure to use safety devices or equipment, and the absence of guards or protection. It recommended that the accident employer immediately implement means of workers removing poles without climbing them. The second employer failed to notify the Ministry of Labour that it intended to commence some work on the project, as it was required to do under the Occupational Health and Safety Act. The Panel was of the view that the Occupational Health and Safety Act was not a codification of the reasonable standard of care in occupational accidents. Rather, breaches of that Act should be treated only as evidence of negligence. There was no basis for transferring the costs associated with the worker's claim. The second employer recognized the dangers associated with pole removal and entered into the contract with the accident employer, relying on the latter's expertise in performing that task. The second employer's duty of care to the accident employer did not include a requirement that the environment be hazard-free because it relied on the accident employer to detect and avoid such hazards. The second employer was entitled to expect that the accident employer's workers would anticipate erosion of the soil around the pole. In fact, the accident employer's foreman advised the worker's crew that the poles should not be climbed because their setting depths were unknown. Workers with the expertise of the accident employer's workers would have, or should have, recognized that the gravel base around the pole had diminished. None the less, they disregarded their foreman's warning and removed the poles in an inherently unsafe manner, contrary to industry practice. The second employer was not responsible for the negligence of the accident employer's workers. The appeal was dismissed. [10 pages] PANEL: Moore; Crocker; Chapman

2 DATE: 12/12/95 WCAT DECISIONS CONSIDERED: Decision No. 17/89I2 (1990), 13 W.C.A.T.R. 118 refd to; Decision Nos. 301/91 not folld, 276/92 consd, 59/94 apld BOARD DIRECTIVES AND GUIDELINES: Operational Policy Manual, Document No OTHER STATUTES CONSIDERED: Occupational Health and Safety Act, R.S.O. 1990, c. O.1

3 WORKERS COMPENSATION APPEALS TRIBUNAL DECISION NO. 710/94 This appeal was heard in London on September 16, 1994, and October 4, 1995, by a Tribunal Panel consisting of: J.P. Moore : Vice-Chair, S.L. Chapman: Member representative of employers, J.A. Crocker : Member representative of workers. THE APPEAL PROCEEDINGS The employer appeals the decision of Hearings Officer G. Harrison, dated April 6, The employer appeared and was represented by W. Mahoney, a workers compensation consultant. A second Schedule 1 employer appeared and was represented by A. Brown, the workers compensation coordinator for that employer. There was no worker participation in this appeal. THE EVIDENCE The following materials were marked as exhibits: Exhibit #1: Case Description materials prepared by the Tribunal Counsel Office; Exhibit #2: Case Description Addendum #1; Exhibit #3: Case Description Addendum #2; Exhibit #4: a letter from the Ontario Ministry of Labour, dated March 24, 1995, covering a copy of a Ministry investigation of a workplace accident. The Panel heard testimony under oath from Mr. B. Weber, a field investigator for the Electrical Utilities Safety Association of Ontario. Submissions were made at the hearing by Mr. Mahoney and Ms. Brown. THE NATURE OF THE CASE On July 2, 1986, a worker employed with the accident employer was injured in an accident during the course of his employment. At the time, the worker was performing work on the premises of the second employer, pursuant to a contract between that employer and the accident employer. As a result of his accident, the worker suffered serious injuries and significant disabilities. In February 1991, the accident employer requested that the Board transfer some or all of the costs associated with the injured worker s claim to the second employer. The accident employer s request was denied by the Board s Litigation Services Department. The accident employer s appeal to the Hearings Officer was also denied, in the decision noted above. The accident employer now appeals to the Tribunal. 1

4 The issue before the Panel is whether some or all of the costs associated with the claim of the injured worker in this case should be transferred from the accident employer to the second employer, pursuant to subsection 10(9) of the Workers Compensation Act. THE PANEL S REASONS (i) Background The second employer is in the business of manufacturing concrete. In 1981, the second employer entered into a contract to wash and separate sand and stone at a gravel pit. The second employer arranged for the construction of overhead power lines. In 1986, the second employer s lease at the gravel pit expired. The second employer entered into a contract with the accident employer to remove the power poles from the site and move them to another site. The accident employer is an electrical construction company and a member of the Electrical Utilities Safety Association of Ontario ( EUSA ). Pursuant to its contract with the second employer, the accident employer sent a crew to the site to begin the process of pole removal. During the course of that undertaking, a worker of the accident employer was injured when one of the poles fell while he was working at the top of the pole. After the accident, the EUSA was contacted and an investigator was sent to the site. That investigator, Mr. B. Weber, interviewed a number of individuals and prepared a report concerning the incident. That report, dated August 18, 1986, was submitted to the accident employer. As we noted above, the worker sustained multiple injuries as a result of his accident and has suffered permanent disabilities as a result. In seeking a transfer of some or all of the costs associated with the injured worker s claim, the accident employer argued that the second employer was negligent because it failed to maintain the poles on its premises - in particular, the pole involved in the worker s accident. Specifically, the accident employer claimed that the gravel placed at the base of that pole to support it had gradually eroded leaving the pole with insufficient support at the bottom. As a result, in the submission of the accident employer, the pole became a hazard to anyone working on it. In the accident employer s submission, the second employer s negligence contributed directly to the accident involving the injured worker. (ii) The legal context Subsection 10(9) reads as follows: 10(9) No employer in Schedule 1 and no worker of an employer in Schedule 1 or dependant of such worker has a right of action for damages against any employer in Schedule 1 or any executive officer or any director or any worker of such employer, for an injury for which benefits are payable under this Act, where the workers of both employers were in the course of their employment at the time of the happening of the injury, but, in any case where the Board is satisfied 2

5 that the accident giving rise to the injury was caused by the negligence of some other employer or employers in Schedule 1 or their workers, the Board may direct that the benefits awarded in any such case or a proportion of them shall be charged against the class or group to which such other employer or employers belong and to the accident cost record of such individual employer or employers. [emphasis added] Subsection 10(9) has two distinct components. The first limits the right to sue. The second deals with the transfer of costs from one Schedule 1 employer to another Schedule 1 employer (see portion above in italics). It is the second of those components concerning the transfer of costs that is the subject matter of this appeal. In the present case, the accident employer seeks to have the costs of the accident in question transferred to the second employer on the ground that the negligence of the second employer caused the accident in question. The Board s policy in this area is found in Operational Policy Manual Document # That policy stipulates that the Board may direct that all or part of the costs of a claim resulting from an accident be charged to the account of a Schedule 1 employer other than the accident employer. The standard to be applied in determining the negligence of a second employer has been discussed in a number of Tribunal decisions. We note that, generally, Tribunal panels have accepted that the test for negligence in such cases is the test commonly applied by the courts (see Decisions No. 17/89I2, 13 W.C.A.T.R. 118, and 59/94 [June 2, 1994]). Decision No. 301/91 proposed a somewhat narrower test, concluding that the Occupational Health and Safety Act of Ontario largely codified what constituted a reasonable standard of care concerning occupational accidents. We note, with approval, the reasoning of the Panel in Decision No. 59/94, which concluded that a statutory formulation of duties and obligations was a useful standard for measuring reasonable conduct, and that evidence of a breach of duty owed under the Occupational Health and Safety Act should be treated as evidence of negligence. The present Panel accepts that the Legislature intended, by its use of the words caused by the negligence in subsection 10(9), that commonly accepted principles of negligence law should be invoked in determining whether costs should be transferred from an accident employer to another employer pursuant to the subsection. The Panel, therefore, applies that standard to the case before us. In our view, the elements of the civil test for negligence are well described in the Tribunal s Decision No. 276/92 (May 29, 1992): 1. a relationship exists between the parties creating a duty to exercise reasonable care; 2. there has been a breach of that duty based upon the standard of what a reasonable person would do in the circumstances; 3

6 (iii) 3. the party to whom the duty of care is owed suffers damage which is causally linked to the breach of the duty; 4. the damages suffered are not too remote or unforeseeable. The evidence The Panel was presented with two investigation reports pertaining to the accident in question. The first of these was a Ministry of Labour report that addressed the question of whether charges should be laid under the Occupational Health and Safety Act. That report, dated March 24, 1987, was prepared by A. Brady, a working environment inspector with the Ministry. The second report before us was the report prepared by Mr. Weber, on behalf of EUSA, dated August 18, Mr. Weber s report was supplemented by testimony provided by Mr. Weber to the Panel. The Ministry of Labour report contained the following summary of the accident: On July 2, 1986, [the worker and a co-worker] had been instructed to remove a de-energized hydro line located at [a gravel pit]. [The worker] had climbed a pole to cut the wires of a three phase hydro line. [The worker] had cut two of the wires without incident. When he cut the third wire, the resulting change in the strain allowed the pole to fall. [The worker] was belted to the crossarm and fell to the ground with the pole. He sustained severe internal injuries as a result of the fall. Later in the report, the investigator noted that the pole had not been secured by any secondary means when the work was being done. The investigator also noted that gravel had been removed from around the base of the pole which resulted in the pole being buried only to the depth of two feet. The investigator cited the following improper practices and conditions: (a) failure to use safety device or equipment; (b) absence of guards or protection. The investigator noted that the company had instructed its employees to ensure that poles were secure by means of a derrick truck when lines were being removed. The inspector concluded: There are no clear cut conclusions that can be drawn as to why this accident happened. Based on information obtained from witnesses and... personnel, [the worker] was a very safety conscious worker who was aware of correct procedures for pole line work. The inspector closed his report by recommending to the employer that: A means of removing poles without resorting to having workers climb poles is to be implemented immediately. The EUSA report prepared by Mr. Weber included information provided by other workers on the site. Mr. Weber noted that the site foreman instructed the crew to use the following procedure: 4

7 Because the setting depth of the poles was unknown and some of the poles were difficult to reach with the radial boom derrick, [the foreman] instructed [the crew] to climb only the switch pole at the road..., and cut the conductors going to the sand and gravel pit. Once this was done, they could either use the radial boom derrick truck to lift the poles out with the hardware and conductors intact or where the radial boom derrick would not reach, attach the winch line to the pole and have the labourer hand dig down the side of the pole and then lower it to the ground with the winch. However, because adopting this procedure resulted in the first pole breaking, the crew decided to try a different method. Consequently, the injured worker and another worker decided to climb the next several poles to sever the conductors at the top of the pole and drop them to the ground. What happened next is described in Mr. Weber s report: [The injured worker] situated himself in an appropriate position on the pole, pulled up bolt cutters, and cut the centre conductor. He then climbed up onto the lower set of cross arms. He wrapped his pole strap around one of the top cross arms and back into the same D ring on his body belt. He then reached out and cut the south side conductor. [A co-worker] noticed that the pole and cross arms moved a considerable amount after the second conductor was cut and he questioned whether [the injured worker] should cut the third conductor. [The injured worker] assured [the co-worker] that it would be all right. [The injured worker] unfastened his pole strap, moved around the pole and again stood on the lower set of cross arms and wrapped his pole strap around on of the top arms and back into the same D ring on his body belt. The injured worker then cut the last conductor and, when he did so, the pole toppled over carrying the worker with it. In his report, Mr. Weber noted that the second employer, as lessor of the site in question, had an obligation, under the Occupational Health and Safety Act, to notify the Ministry of Labour that it intended to commence some work on the project. The second employer did not do this. However, in his testimony, Mr. Weber indicated that he did not feel that this breach had any significance in terms of the occurrence of the accident. Mr. Weber s report contained a number of conclusions: 1. Because the grade had been altered considerably in the sand and gravel pit, the crew should have checked to ensure that the grade around the poles had not changed. 2. Had the crew followed the job procedures as outlined by [the crew foreman], [the injured worker] would not have been required 5

8 to climb the dead-end pole and no doubt, the accident would not have occurred. 3. Had the crew used temporary guys or supported the pole prior to altering the strain, the accident would have been prevented. 4. Had the crew checked the setting depth of the pole, no doubt, they would have ensured the pole was secure prior to changing the strain, and the accident would have been avoided. 5. Had [the injured worker] taken heed of [a co-worker s] concern regarding the movement of the pole and cross arms, he could have taken the appropriate measures to ensure the stability of the pole prior to cutting the third and final conductor, thereby preventing the accident. In his testimony, Mr. Weber elaborated on these conclusions by pointing out that to a trained eye, it would have been apparent that the level of gravel around the pole had diminished over time. Mr. Weber also stated that it was not normal industrial practice to cut the third supporting wire without some temporary support. (iv) The parties submissions Mr. Mahoney made two alternative submissions. The first was that the failure, on the part of the second employer, to maintain the gravel level around the poles in question, and to advise the accident employer of the deterioration of the gravel around the poles, amounted to sufficient negligence to warrant a transfer of costs to the second employer. Alternatively, Mr. Mahoney argued that the report of the Ministry of Labour indicated that the employer itself was not negligent in this case and that the negligence attributable to the accident employer was in fact the negligence of the accident employer s workers. Mr. Mahoney argued that the employer should not be liable for the negligent acts of its workers. He requested that the costs of the accident in question be transferred to the second employer s Rate Group. Ms. Brown submitted, on behalf of the second employer, that the preponderance of evidence established that the accident in question resulted from the negligence of the accident employer s workers and not the negligence of the second employer. Ms. Brown submitted that any duty of care the second employer had to the accident employer had to be considered in the light of the fact that the second employer retained the services of the accident employer because of the accident employer s expertise in the dangerous business of removing electrical poles. In her submission, the second employer was justified in relying on that expertise and in assuming that the accident employer s workers would be aware of possible dangers associated with the work involved in removing those poles. In Ms. Brown s submission, the second employer had acted reasonably and did not breach its duty of care to the workers of the accident employer. 6

9 (v) The Panel s conclusions In the Panel s opinion, there is no basis, in the present case, for transferring the costs associated with the claim of the injured worker in this case. In so concluding we accept the submission of Ms. Brown that there was no significant negligence on the part of the second employer, particularly given that the second employer had relied on the expertise of the accident employer. In our opinion, the duty of care owed by one party to another party depends on the circumstances of each case, and the relationship between those two parties. In the present case, the second employer was aware of the difficulties and dangers associated with pole removal and entered into a contract with the accident employer relying on that company s expertise in performing that task. In our view, the second employer s duty of care to the accident employer did not include a requirement that the environment in question be hazard-free because, in this case, the second employer relied on the accident employer to detect and avoid such hazards. In our view, the second employer did not breach its duty of care to the workers of the accident employer by not maintaining the ground around the poles because the second employer was entitled to expect that the accident employer s workers would anticipate erosion of the soil around the pole. In fact, the injured worker was apparently made aware of this by his foreman and instructed to take appropriate precautions. We note, in this regard, Mr. Weber s comment in this report that the site foreman advised his crew that the setting depths of the poles was unknown and because of this the poles should not be climbed. Nor, in our view, was the second employer under any duty to inform the workers of the accident employer of the condition of the ground around the poles. As we see it, the second employer specifically relied on the knowledge and expertise of the accident employer in this regard. It was not, in our opinion, a breach of a duty of care to so rely. In any event, the Panel is persuaded, by the evidence, that the workers of the accident employer were fully aware or should have been aware of the dangers inherent in their work at that site. We accept Mr. Weber s testimony that someone with the expertise of the accident employer s workers would have recognized that the gravel base around the poles in question had diminished. In fact, it appears from Mr. Weber s report that the crew were aware of that possibility. Notwithstanding this awareness, the crew proceeded to disregard the crew foreman and remove the poles in a way that was inherently unsafe and contrary to industry practices. Consequently, in the Panel s opinion, there is no basis for finding negligence on the part of the second employer. In so concluding, we give persuasive weight to the investigation reports of EUSA and the Ministry of Labour, neither of which containied any suggestion of negligence on the part of the second employer. Regarding Mr. Mahoney s argument that the accident employer should not be liable for costs associated with an accident caused by the negligence of its own workers. The Panel would simply note that the workers compensation system is a no-fault system and every employer in Ontario is, subject to subsection 10(9), responsible for the costs associated with injuries that occurred to the workers of that employer. Moreover, the Panel can see nothing in the wording of subsection 10(9) that would warrant transferring the costs of a claim to another employer or group of employers simply because the workers 7

10 of an employer, rather than the employer itself, were responsible for the occurrence of an accident. It appears to us from the wording of that subsection, and from the intent of the Act generally, that there is no justification for transferring costs of a claim to a second employer, or to that employer s Rate Group, in such circumstances. In our view, the Act does not allow an accident employer to distance itself from the acts of its own workers to that extent. The second employer, in the present case, is most certainly not responsible for the negligence of the workers of the accident employer in this case. Nor is its rate group. If anyone is to bear responsibility for that, it should be the accident employer. Consequently, we confirm the decision of the Hearings Officer denying the accident employer s request for a transfer of the costs associated with the claim in this case. THE DECISION The appeal is denied. DATED: December 12, 1995 SIGNED:J.P. Moore, S.L. Chapman, J.A. Crocker 8