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| Archit Gupta |
A young worker, performing her duties near a machine, had her hair caught in the equipment, resulting in severe injuries. This case raises pivotal issues regarding the Occupational Health and Safety Act (OHSA) and clarifies the extent to which workplace safety obligations are applied to franchises. Additionally, it provides insight into sentencing considerations and clarifies whether penalties should be based on the size and scope of the individual Dairy Queen franchise or the broader Dairy Queen corporate entity.
Procedural background
Given the severity of the employee’s injuries, the Dairy Queen franchise was charged with two counts under the OHSA:
- failing to ensure that the employee’s long hair was suitably confined to prevent entanglement with the rotating spindle; and
- failing to ensure that the machine was guarded to prevent access to the spindle.
The justice of the peace found the respondent guilty of failing to guard the machine but acquitted it of the first charge. The Crown sought a fine of $75,000. The justice of the peace sentenced the Dairy Queen franchise to a $7,500.00 fine, considering the franchise’s local size and operations.
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Court of Appeal key issue: Corporate size and sentencing
This case foregrounded an important question: How should a franchise’s size and economic scope affect sentencing under OHSA? Dairy Queen, as a small, locally operated franchise, argued that the OCJ applied the law correctly in relation to sentencing and that the fine should not be as high as that sought by the Crown.
However, the ministry emphasized that health and safety obligations apply universally and that the economic scope of a respondent should not be limited to its local operations. The court had to consider whether a smaller franchise should face significant financial penalties to serve as a deterrent, or if a lenient approach might better suit its financial capacity and limited economic reach.
Verdict and rationale
The Court of Appeal held where a corporate defendant’s operations involve more than one location, this consideration of size and economic means will be assessed on the corporation as a whole and not just the mere location where the offence occurred. Thus, when sentencing a franchise, considerations of size and economic reach are based on the entire corporate entity as opposed to just the franchise.
The ruling serves as a reminder that the size of a corporation and the scope of its economic activity continue to remain highly relevant when assessing a fit deterrent sentence. The Court of Appeal held that in order to achieve specific and general deterrence, the amount of fine imposed on a corporate defendant must be sufficient and that the fine will be “felt” and will not merely be a “slap on the wrist” for the defendant.
Here, by limiting sentencing to the mere local operations of a franchise as opposed to the global corporate entity, Dairy Queen, the principle of deterrence is not being met. The court’s analysis underlines that sentencing must be fair yet sufficient to deter non-compliance, establishing that the judiciary will uphold OHSA requirements robustly even for smaller enterprises.
Conclusion
Compliance with OHSA remains essential across all business models, signalling that, in Ontario, occupational health and safety is paramount — whether a business is a large corporate entity or a modest franchise operation. When determining sentencing for deterrence courts consider the corporate defendant’s entity’s size and financial situation wholly, ensuring worker safety is non-negotiable, notwithstanding a franchise’s local operations.
Archit Gupta is an employment lawyer and an associate at Monkhouse Law. He can be reached at archit.gupta@monkhouselaw.com.
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