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Presented by Andrea Raso Amer at FMC's Employment and Labour Seminar on Occupational Health and Safety, this presentation looks at orders and financial penalties that employers could face for non-compliance. Addressing what types of administrative penalties can be imposed, "high risk" scenerios, as well as what you can do if you are faced with a penalty.
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Orders and Financial Penalties for Non‐Compliance
Presented by Andrea Raso AmerWednesday October 26, 2011
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• $14,859,311,940,3381
1 As at Friday, October 21, 2011, 3:57 p.m.
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Orders
• “Inspection Report”– Officer’s observations– Steps to achieve compliance– Stoppage of any unsafe activity– Stop work order– Any further orders arising from compliance report
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Penalties
• Purpose: Motivate Compliance
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What types of administrative penalties can be imposed?
1. A special rate of assessment (for failure to maintain first aid equipment or service);
2. A levy and collection of a “contribution” from an employer for an injury or illness in which compensation is payable to a worker;
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What types of administrative penalties can be imposed? Cont’d
3. A penalty pursuant to s. 196 of the Workers Compensation Act.
Maximum: $579,648.26
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When will an administration penalty be imposed?
• Section 196(1) of the Workers Compensation Act:1. Employer has failed to take sufficient precautions for the prevention
of injuries or illness;2. Employer has not complied with orders; or3. Employer’s workplace or working conditions are not safe.
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When will an administration penalty be imposed? Cont’d
• Policy:1. Violation resulting in high risk or serious injury, serious illness or
death;2. One or more violations of the same section;3. One or more different violations which show a lack of commitment to
compliance;4. Failure to comply with a previous order; or5. Employer violation either knowingly or with reckless disregard.
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When will an administration penalty be imposed?Cont’d
• Policy (cont’d):If yes to any of the above, then consider:1. Employer’s overall H & S program;
2. Employer exercised due diligence;
3. Independent action of workers;
4. Compliance history;
5. Need for an incentive to motivate compliance; and
6. “Other relevant circumstances”.
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1. Examples of “high risk”
• Working on equipment that is not locked out
• Unprotected exposure to conditions that are likely to cause a chronic health effect
• Failure to have roll over protective structures or working seat belts
• Working within specified minimum distances from electrical conductors
• Working on a travelled roadway with no traffic controls
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2. “Same Section”
• Includes violations that are essentially the same even where different sections are cited.
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How is the amount of penalty determined?
• Category A:– Serious injury, illness or death or a high risk of serious injury, illness or
death or reckless disregard
• Category B:– All other violations
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How is the amount of penalty determined? Cont’d
• Basic amount is based on payroll
Example:Category A
‐ Payroll 1,500,001 – 2,000,000
‐ $33,750 + 1.75% of payroll over 1.5 m
Category B
‐ Payroll 1,500,001 – 2,000,000
‐ $8,400 + .28% of payroll over 1.5 m
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How is the amount of penalty determined? Cont’d
• Basic amount may be varied – up or down – by 30%, taking into account:1. Nature of violation;2. Nature of hazard;3. Degree of actual risk;4. Measures taken to comply;5. Employer history;6. Whether the financial impact would be unduly harsh;7. Any other relevant factors.
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How is the amount of penalty determined? Cont’d
• Repeat penalties for:– Same or substantially similar violation(s) within a 3‐year time frame
and notice of a potential penalty had been given for a prior violation.
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What can you do when faced with an administrative penalty?
1. Formally review order(s) before warned of a potential penalty – compliance order is no guarantee of avoiding penalty.
2. Pay the penalty – public record.
3. Formally review the administrative penalty.
4. Seek an oral hearing.
5. Appeal to WCAT.
6. Seek reconsideration (limited).
7. Judicial review in the BC Supreme Court.
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Number of administrative penalties have been increasing
• 2010: 256 penalties
• 2009: 211 penalties
• 2002: 136 penalties
• 1999 to present: 1,900 penalties totalling over $26.7 m
• 19 penalties over $100,000
Gail Johnson, “Fatal Consequences”, WorkSafe Magazine (September/October 2011) 24.
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Good News
• Unlike other provinces, prosecution pursuant to the OffenceAct are rare. If a prosecution is commenced, an administrative penalty cannot be imposed, even if the prosecution does not proceed or is unsuccessful.
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Take Aways
1. Keep track of orders.
2. Review orders where reviewable.
3. Due diligence must be exercised from top to bottom.
4. Re‐assess and reinforce your health and safety programs.
5. The US national debt is really really really high …
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Questions?
Andrea Raso Amer
Tel.: (604) 622‐5152
Email: Andrea.RasoAmer@fmc‐law.com
The preceding presentation contains examples of the kinds of issues companies dealing with orders and financial penaltiesfor non-compliance face. If you are faced with one of these issues, please retain professional assistance as each situation is unique.
