The Ontario Court of Appeal has raised a fine against a Dairy Queen franchisee from $7,500 to $40,000, highlighting the necessity for courts to consider a corporation’s overall size and economic activity when sentencing under the Occupational Health and Safety Act (OHSA).
In September 2017, a 16-year-old high school student, identified as A.B., suffered a significant spinal injury while working at a Dairy Queen restaurant owned by 1222149 Ontario Ltd. The injury occurred when A.B.’s hair became entangled in the rotating spindle of a Blizzard machine. At the time, the machine’s safety guard had been removed by the shift leader, a common practice among some employees to expedite service during rush periods.
A.B. had not received training on machine guarding or occupational health and safety awareness. Although Dairy Queen had an employee handbook addressing these issues, A.B. had neither seen it nor the operator’s manual for the machine. During an early shift, when A.B. inquired about the inconsistent use of the safety guard, she was told by a shift leader that its use was not required.
The incident left A.B. with a C1-C2 subluxation injury. She was hospitalized for two weeks, wore a neck brace, and endured extended bed rest. The injury forced her to miss a semester of school, completing courses online instead. Even two years later, after 18 months of physiotherapy, A.B. continued to experience numbness, pain, headaches, and activity limitations.
The franchisee was charged with two counts under the OHSA:
- Failing to ensure that A.B.’s long hair was suitably confined to prevent entanglement, as prescribed by s. 83(1) of R.R.O. 1990, Reg. 851, contrary to s. 25(1)(c) of the OHSA.
- Failing to ensure that the machine was guarded to prevent access to the exposed spindle, as prescribed by s. 24 of R.R.O. 1990, Reg. 851, contrary to s. 25(1)(c) of the OHSA.
The trial proceeded with an agreed statement of facts. On August 15, 2019, Justice of the Peace Francois J. Pilon acquitted the company on the first count but found it guilty on the second. The Crown sought a $75,000 fine, while the defence argued for a range between $5,000 and $10,000. The sentencing justice imposed a $7,500 fine.
The Crown appealed the sentence, arguing that it was disproportionately low given the severity of the offence and the size of the corporation. The appeal was initially dismissed by Justice Marc D’Amours of the Ontario Court of Justice. However, upon further appeal, the Ontario Court of Appeal examined two critical legal errors:
- Whether the lower courts erred by considering only the local operation’s size and economic activity rather than the corporation as a whole.
- Whether the courts improperly treated individual and corporate defendants as “similar offenders” when applying the sentencing principle of parity.
The Court of Appeal agreed with the Crown on both points. It emphasized that in sentencing corporate defendants under the OHSA, courts must assess the corporation’s overall size and economic scope to determine a fine that achieves specific and general deterrence.
“In determining what quantum of fine is appropriate for a corporate defendant for an OHSA offence, a sentencing judge must consider the size of the company and the scope of its economic activity,” the court stated. “A fine imposed on a corporation must take into consideration the economic means of the corporation in order to achieve both specific and general deterrence.”
The court noted that 1222149 Ontario Ltd. operates seven Dairy Queen locations, employing a total of 84 full-time equivalent employees. By focusing solely on the local store, the lower courts underestimated the company’s economic capacity, resulting in a fine that did not adequately serve as a deterrent.
Additionally, the Court of Appeal found fault with the lower courts for comparing the corporation’s sentence to that of an individual defendant in a similar case, R. v. Scott. In Scott, an individual was fined $3,000 for an offence under the OHSA. The sentencing justice had considered this case “very comparable” and set the corporation’s fine at $7,500.
The Court of Appeal clarified that sentencing precedents involving individuals are not directly applicable to corporations due to differences in maximum fines and economic means. “Sentencing ranges for individuals for provincial offences cannot be unthinkingly applied to sentencing of corporate defendants,” the court explained. “A fine of $7,500 is well below the range commonly imposed on corporate defendants of the respondent’s size for similar offences.”
For more information, see R. v. 1222149 Ontario Ltd. (Dairy Queen and/or Embrun DQ Grill & Chill), 2024 ONCA 543 (CanLII).
