January 2016

Board of Directors Liability

HEALTH & SAFETY

No matter if you are a Board member for a for-profit or non-profit organization it makes very little difference when it comes to personal liability.  Directors and Officers can be held personally liable under a number of different laws some of which include the Income Tax, Criminal Act and of course the Occupational Health Safety Act.   Most Board members only learn of their responsibilities during orientation or throughout their term after they have committed to serve a term on the Board.

The Occupational Health & Safety Act, [Sec. 32] it states that: “Every director and every officer of a corporation shall take all reasonable care to ensure that the corporation complies with the:

  • Act and the regulations
  • Orders and requirements of inspectors and Directors
  • Orders of the Minister

LIABILITY

Under the Occupational Health & Safety Act (OHSA), the Board of Directors and Officers have a legal obligation and responsibility for compliance with the OHSA by ensuring that accident prevention programmes are implemented in the workplace.  Not only is due diligence to be demonstrated (OHSA S.32) by ensuring safety programs are in place, but it is also critical to demonstrate that steps have been taken to ensure that an effective health & safety program has been implemented.

Often, Board meetings are taken up with financial reports, projects initiatives or the CEO is required to update Board members on the management or operations of the business, but few organizations monitor health & safety in the workplace to protect the well-being of their most valuable assets, their employees.

Employee injuries should be a sign that there is a lack of emphasis being placed on employee safety and Board members should be concerned.  Every injury can negatively impact not only the injured employee and their family, but others within the organization and, ultimately, the organization’s overall ability to provide the highest quality of service to its clients.   It is the Board of Directors who heightens the importance of this aspect of the business through the monitoring reports provided by the CEO.

At the end of the day, it is the Board of Directors who sets the direction of the organization, states the values the organization should embrace, and monitor outcomes on behalf of owners or stakeholders. Board members not only have the ability but they also have a legal obligation to ensure that employees work in a safe environment, have the right equipment to perform their duties safely, and receive ongoing training appropriate for the duties they perform in the workplace.

Depending upon the severity of the violations, Directors or Officers can be personally fined and in some cases where intentional negligence of the health & safety of workers is found, even jailed to a maximum of 12 months.  Following are the penalties and fines that can be imposed under the Occupational Health & Safety Act:

  • Corporations – maximum $500,000 per violation
  • Individuals maximum – $25,000 and or up to
  • 12 months in jail: Bill C-45 (Criminal Code)

 

The CEO and the organization as a whole require support and commitment to provide a safe workplace. As a Board member, by profiling health and safety in the workplace, it will reduce the liability and increase effectiveness because what gets measured gets done!

MONITORING HEALTH & SAFETY

Below are some of the key measurements which can be used at Board meetings to demonstrate due diligence through a formal occupational Health & Safety program:

Does the CEO attend at least one JHSC meeting per year?

Review the minutes of the JHSC meetings

Summaries of relevant education events

Percentage reduction in the number of lost time days per injury

Percentage reduction in the frequency of lost time injuries

Has the organization been free from critical injuries and fatalities?

MOL inspection orders

Percentage reduction in WSIB surcharge

Comparative benchmarking reports with similar organizations

Number of managers trained in health and safety annually

Number of staff who have attended health and safety training during the year

Ministry of Labour industry reports or news

Resources and Budget set aside for Health & Safety Programs and initiatives

Board member feedback and support for health & safety initiatives

The above are only a few of the measurements but every organization should prepare reports specific to their business/industry and always maintain documentation of Board meetings to demonstrate the Board has taken every reasonable care to ensure compliance with the Occupational Health & Safety Act.

Performance Appraisals

Most Executive Directors or Managers are tasked with the annual event of completing a performance appraisal for employees.   Not only must Executive Directors or Managers rate an employee usually on multiple competencies, but more importantly, they must communicate this rating to their employee.

Perhaps the two most important words that help communicate where an employee stands throughout the year and during the appraisal process are, “For example.”

A recent survey revealed that 72 percent of companies that held performance appraisals were not satisfied with the process. While there are many reasons for a company to be unsatisfied with its process, there usually is only one reason that employees are generally unsatisfied, the supervisor’s rating is not as high as the employee believes it should be.

As a supervisor, it is important to paint a picture for an employee that he or she can relate to and that will clearly reflect a particular attitude or behavior. When you review the rating for an employee’s competency level, be sure to ask yourself the following questions:

 

  • ·      Are you able to support that decision with two to three specific examples?
  • Are you able to adjust those examples to convey how achieving a point or two higher rating would have been exhibited? 

Often supervisors don’t spend as much time and effort in communicating the results of a performance appraisal review with an employee as they do in preparing it.  However, communication is key to a successful relationship with an employee.

Communication does not begin at the end of the review process, but rather at the beginning.  Clear expectations should be set from the first day of the supervisor/employee relationship.  Expectations should include not only what the standards for the position are and the level of performance required, but should also include how to reach beyond the standard.

Communicating these expectations on an on-going basis provides an opportunity to:

  1. Clarify
  2. Redirect
  3. Collaborate

Adhering to these actions throughout the year will ultimately shape the outcome of the performance appraisal review.

While every performance appraisal form may be different and rating scales may use a variety of terms to distinguish average performers from superior performers, eventually the words will have little meaning to an employee because they will know which bucket they fall into.  However, including the phrase “for example” in your supporting comments provides more depth to the employee’s understanding of their current status and how to achieve a higher standing.

The phrase “for example” emphasizes to the employee that your explanation is a well-thought-out remark, concern or rating.  It reinforces to the employee that this is not simply an arbitrary number that has been selected or a subjective manager’s opinion.  As a supervisor, these words provide a way for you to validate and structure your assessment and put your conclusions into action.

With the use of these two simple words, employees will have a clear understanding of the rating that you have assigned to the competency as well as how to improve, which instills in the employee that the rating is fair, objective and constructive.

Personal Protective Equipment

What is personal protective equipment (PPE)?

Personal protective equipment is any device worn by a worker to protect against hazards. Some examples are respirators, gloves, masks, safety shoes and protective clothing.

 What the law says:

Section 25(1) under the Occupational Health and Safety Act (OHSA) requires employers to:

  • Provide equipment, materials and protective devices
  • Make sure they are used as prescribed
  • Maintain them in good condition

The OHSA also requires workers to use or wear the equipment, protective devices or clothing that has been prescribed.

How personal protective equipment affects your business:

The best way to manage hazards in the workplace is to find ways to eliminate them. Sometimes however, the use of personal protective equipment becomes the only option to prevent injury or illness and to protect workers from those hazards.  Those injuries and illness can affect your employee morale, your production and quality, and also your company’s bottom line.

  • An average WSIB claim is $11,771
  • Factor in other costs like lost productivity and staff replacement, and the cost can be as much as four times or more, approximately $59,000 per injury
    • With a profit margin of 5%, sales/services required to cover the total cost of one injury equals about $1.2 million

(Source: WSIB “Preventing Slips, Trips and Falls in the Workplace”)

What you can do?

Personal Protective Equipment is considered the last line of defense against a workplace hazard, and is to be used only if the hazard cannot be eliminated or controlled in other ways. Establish a program that will consider the hazards which require PPE, include procedures for selection and fitting, maintenance and storage, monitoring use and training.

 

 

Listed below are general responsibilities taken directly from the Ministry of Labour website:

  • The employer shall ensure that PPE is used where appropriate
  • The employer shall provide information, instruction and supervision to workers on the proper use and maintenance of PPE.  Instructions should include, but not be limited to:

How to properly fit and wear PPE

  • When PPE should be worn
  • How to care for PPE and identify when it requires repair, cleaning or disposal
  • How PPE provides protection and the consequences of not wearing it
  • The employer should assess each work process and job task and determine where PPE may be needed to protect workers. PPE should be used as a last resort if the hazard cannot be controlled by other means such as engineering controls, (for example, ventilation), redesign of work processes, or using less toxic substances.
  • The worker shall use PPE provided by, and as required by the employer
  • Where a chemical or other hazardous product endangers the health or safety of a worker, PPE should be worn according to the product manufacturer’s instructions on either a warning label or Material Safety Data Sheets (MSDS).
  • The employer should monitor the use of PPE to ensure that it provides adequate protection for the worker and does not cause undue discomfort or create new hazards while being used
  • The worker shall inform the employer of any defects in the PPE, which the worker is aware of and which could endanger the worker