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Nova Scotia proposes new OHS administrative penalty system

In January, 2010, Nova Scotia introduced an administrative penalties regime through regulations made pursuant to the Occupational Health and Safety Act. This system has been controversial since its inception and the Nova Scotia Government has recently proposed significant changes.

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Current administrative penalties regime

Under the Occupational Health and Safety Administrative Penalties Regulations, an Administrator is empowered to impose penalties on employers for violations of the Occupational Health and Safety Act. These penalties are meant to promote worker safety by punishing violations of the Act without the need for a full prosecution.

The Administrator may impose a penalty on an employer, worker or supervisor, but the vast majority of penalties have been imposed on employers. The base employer penalty ranges from $500 to $2,000, but the Administrator has discretion to increase or decrease it depending on the circumstances of the contravention. Further, if the employer had a previous administrative penalty or conviction under the Act, the administrative penalty is doubled.

In practice, the Regulations often operated as follows:

  1. An Occupational Health and Safety Officer attended an employer’s work site;
  2. The Officer issued a Compliance Order requiring the employer to comply with the Act;
  3. The Compliance Order was forwarded to the Administrator;
  4. The employer complied with the Compliance Order;
  5. The Administrator imposed an administrative penalty.

This system led to controversy and confusion amongst many employers who were surprised to receive a penalty after complying with the Compliance Order, or who believed that the penalties were inconsistently and unfairly imposed.

The administrative penalties regime has also generated a significant amount of litigation due to uncertainties regarding the effect of the Regulations. For example, initial decisions of the Nova Scotia Labour Board held that if an employer appealed the administrative penalty and not the Compliance Order, the employer could only challenge the amount of the penalty and not the factual basis for the imposition of the penalty. This was problematic because under the Regulations, there was no time limit for the imposition of an administrative penalty. As a result, the administrative penalty could be imposed after the deadline for the appeal of a Compliance Order had expired. This led some employers who would not have otherwise challenged a Compliance Order to appeal the order as a precautionary measure. It also generated appeals from the Labour Board to the Nova Scotia Court of Appeal. In May 2012, the Nova Scotia Court of Appeal provided some clarity on the administrative penalties regime when it held that the failure to appeal the Compliance Order did not preclude an employer from challenging the legal and factual basis for an administrative penalty.

Proposed changes

Recently, the Nova Scotia Provincial Government announced a proposed overhaul of the administrative penalties regime. The Province acknowledged that some employers believed that the system was unfair and that some aspects should be improved. The Government’s Discussion Paper highlights the following key changes:

  1. Increased focus on education – Education is to be the foundation of the proposed system. Occupational Health and Safety Officers will be able to provide training during inspections and online resources will be updated.
  2. The removal of the Administrator – rather than a central administrator imposing administrative penalties, Occupational Health and Safety Officers will be empowered to impose the penalties.
  3. A deadline for the imposition of administrative penalties – In most circumstances, Officers will only have 14 days after the issuance of a Compliance Order to impose an administrative penalty.
  4. A streamlined appeal process – Employers will be able to appeal both the administrative penalty and the Compliance Order at the same time, even if the deadline for appealing the Compliance Order has expired. Further, the members of the Labour Board who hear the appeals must have experience and knowledge in matters of Occupational Health and Safety.

Some other key changes of interest to employers are:

  1. The proposed Regulations include a set formula for the amount of an administrative penalty rather than conferring discretion to increase or decrease a base penalty depending on the circumstances of the contravention. The first penalty imposed on an employer is $500. If the employer receives a second penalty within three years, it will be $1,000. Third and subsequent penalties within three years will be $2,000 each.
  2. The Regulations include a provision that an administrative penalty must not be revoked by the Board due to a defect in form or a technical irregularity, including a defect in the information required to be included in a Notice of Administrative Penalty, unless the appellant establishes that they were prejudiced by the defect or technical irregularity. This is likely in response to two test cases from the Labour Board which revoked administrative penalties on the basis that there was a discrepancy between the contravention date on the Notice of Administrative Penalty and date on the Compliance Order. (One of these test cases is currently on appeal to the Nova Scotia Court of Appeal.)

The consultation process is scheduled to end on September 26, 2013. Anyone interested in providing their views may do so by email to LAEpolicy@gov.ns.ca or by providing a written submission to the following address:

Administrative Penalties Review
Department of Labour and Advanced Education
PO Box 697
5151 Terminal Road
Halifax, Nova Scotia
B3J 2T8

Alison Bird
Cox & Palmer

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Alison J. Bird

Employment Lawyer at Cox & Palmer
Alison Bird is a lawyer practicing in Halifax with the Atlantic regional law firm, Cox & Palmer. Alison is growing her practice in the areas of labour & employment law and litigation. Alison is a frequent presenter on employment law topics and recently presented on the challenges being faced by employers dealing with changing demographics in the workplace. Read more
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