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April 5, 2008
WSIB Rewarded Workplace Deaths For Years
When companies get rewarded for mistakes
Flaw in worksite safety system allows big rebates even when
a death occurs
" . . .the Star found that the insurance agency (the WSIB)
has given at least tens of millions of dollars in rebates to companies that
have been prosecuted by the provincial government and found guilty of safety
violations leading to deaths, amputations and other gruesome injuries. . .
.While the WSIB has known about the practice for years labour groups
have repeatedly complained about it it is now searching for solutions
after the Star started investigating. . . . The Star found the WSIB issued
payouts that were often double, sometimes quadruple the penalties levied after
the province took companies to court, allowing businesses to recoup their
financial losses." David Bruser
Bonnie Heffern worked near the hospital in downtown Sudbury,
so she was already in the emergency room when they brought in her husband.
There had been an accident at the nickel refinery where
The 46-year-old shift foreman had shut off an oxygen line
valve and reopened it without equalizing the pressure on both sides of the
valve. Gas was moving fast through the pipes.
A provincial investigation would later find that Inco Ltd.
had not properly trained its workers to operate the valves at the refinery. But
also, the valve contained hydrocarbon grease, which is highly flammable near
The valve exploded.
Gordie looked like a spent fire log. Bonnie stood close by
and watched his charred body stiffen, his blue and uncomprehending eyes wide
and darting. He slipped into unconsciousness. The next day, on July 28, 2001,
What happened after his death reveals a serious flaw in
Ontario's workplace safety system. Inco was prosecuted and fined by the
province, while another arm of government rewarded the company with a safety
rebate many times the value of the fine.
In the intervening years, Bonnie mourned, sat through a
coroner's inquest and made plans to remarry. With clarity and a steady voice,
she recently recited the details of the day Gordie got hurt on the job.
What she cannot understand is how Inco's mistake could cost
her so much yet the company so little.
In 2004, after a Ministry of Labour prosecution, Inco
pleaded guilty in court for its role in Gordie's death, and paid a $375,000
fine. But Bonnie recently learned that after the accident, the Workplace Safety
& Insurance Board awarded the company $5 million in rebates.
"They shouldn't be rebated. It should not happen," Bonnie
said when told about the payouts. "Gordie was a big advocate for safety at
Inco. Any dangerous job that had to be done he would do. He was always the
dirtiest man walking out of the refinery. If there was something wrong and it
could be made right, he would be the one talking now."
Most companies in Ontario are required by law to buy
insurance from the Workplace Safety & Insurance Board (WSIB). Their
premiums finance the program, spreading each company's costs among all
employers. The WSIB should then be using rebates to reward those that have made
workplaces safer and surcharges to goad unsafe workplaces into improving.
But the Star found that the insurance agency has
given at least tens of millions of dollars in rebates to companies that have
been prosecuted by the provincial government and found guilty of safety
violations leading to deaths, amputations and other gruesome injuries.
The Star looked at whether rebates were issued in
the year following the accident and the year of the guilty finding; that
analysis led to 75 cases that most dramatically illustrate the problem. These
offending companies were fined a total of $14 million yet received payouts
totalling $42 million from the WSIB.
While the WSIB has known about the practice for years
labour groups have repeatedly complained about it it is now searching
for solutions after the Star started investigating.
WSIB chair Steve Mahoney said he wants to address the issue
promptly and get in step with his agency's graphic "Road to Zero" TV ad
campaign that warns of fatal risks in the workplace.
"When you see people are getting rebates when they have
obviously fallen down through fatalities or (safety) convictions, that doesn't
jive," Mahoney said. "The good (companies) wind up paying rebates to people who
are not performing well."
The Star found the WSIB issued payouts that were
often double, sometimes quadruple the penalties levied after the province took
companies to court, allowing businesses to recoup their financial losses.
"What's wrong with this picture? That means we're paying
their fines," lamented Mahoney, who began his tenure as WSIB chair in 2006,
long after the incentive program was created. "It doesn't make any kind of
While Mahoney says he wants "more money for the good guys
and no money for the bad guys," some critics question the very existence of the
incentive program. They want it scrapped. In 2002, the year after Gordie
Heffern's death, Inco now called Vale Inco after a takeover
received a rebate of $2.5 million from the WSIB. Then, in 2004, the year of the
guilty plea and fine, the mining giant was awarded another $2.5 million.
At the time, a lawyer for the ministry told the sentencing
judge that the fine "must be substantial enough to serve as a deterrent value
to the accused company."
But labour groups say the WSIB system gives companies little
incentive to enhance workers' safety.
"I was shocked at the extent to which the board of directors
at the (WSIB) had been allowing this to go on for years and years," said Wayne
Samuelson, head of the Ontario Federation of Labour. "It's an insult to those
families and workers who have been injured or killed, to think that money was
At Vale Inco, spokesperson Cory McPhee said the employer of
12,000 is committed to safety and reviewed its oxygen piping system after
"I don't want to start trying to speak to, defend, or
otherwise explain the WSIB's programs. We pay our premiums and we participate
in their programs," he said. "Our record has been improving but we have a ways
to go. A single fatality is one too many."
The incentive program known in WSIB circles as the
"experience rating system" began in 1985 to make companies safer by
using a penalty-rebate ("carrot-stick") approach. The system looks at the
"experience" of each company.
Premiums are based largely on the expected cost of a
company's claims for the year. If lower than projected, the company gets a
rebate. How much lower determines the amount of the rebate. If a firm's
insurance costs exceed expectations, it is hit with a surcharge.
In this system, a death is treated the same as a minor
injury: Both cost money, whether the claim pays out for lost work time or a
casket. For medium and large companies, the program does not add any extra
penalty when there is a death. "The cost of a fatality can actually
be lower than the cost of an injury, particularly if there are no dependants
just pay for the funeral, and it's over," said WSIB chief Mahoney.
In addition, this widely used insurance system is no-fault
while workers are guaranteed compensation for accepted claims, they
cannot sue their employers for work-related injuries.
As early as 2000, the WSIB was concerned at how cheap death
had become in the incentive program.
"For a significant number of cases, the seriousness of a
traumatic fatality is not always reflected in the actual costs," the agency
said in a review. "The effects of these costs ... are insignificant when
compared to the loss of human life." Here are some of our findings (rebates
represent a total of amounts issued the year after the accident and the year of
the guilty plea):
Semple-Gooder Roofing. The Toronto-based
firm pleaded guilty after one of its trucks, which was operating without a
proper signalling system, hit a temporary worker and dragged him 10 metres.
Cristobal Montoya de Vacas was killed July 28, 2001.
Semple-Gooder president Francis Baxter said his
company has a full-time safety consultant. He suggested, however, that the
accident was partly the employee's fault and said the company paid the fine
because "it wasn't worth fighting."
"He was in the country three days under false ID. He was
from Ecuador. He wasn't even an employee of ours. We had subcontracted," Baxter
said. "The unfortunate thing in this case is they sent someone who's working
under false ID and who knows what type of person. This guy had a few different
Priestly Demolition. When the company botched the
demolition of the Uptown Theatre on Balmuto St. in 2003, bricks and masonry
crashed on the Yorkville English Academy next door. One student at the academy
died and 14 others were hurt. Priestly pleaded guilty to failing to ensure the
protection of a worker by not properly inspecting the roof before demolition.
Ultimately, it was a bystander, not a worker, who was killed, but the Ministry
of Labour still prosecuted and secured a guilty plea.
One hundred mourners attended the open-casket visitation for
27-year-old Augusto Cesar Mejia Solis, who was crushed to death and found lying
in a fetal position, shielding a sobbing 10-year-old boy from the rubble. It
was supposed to be Solis's last full day in Canada before returning home to his
fiancée in Costa Rica.
Priestly boasts on its website "that each year we receive
substantial rebates" from the WSIB. The company claims: "Our safety record is
second to none."
At Priestly, office manager Robin Savage said the incentive
program is "probably" flawed. But she noted the victim in the theatre collapse
was not a Priestly worker. While the cost of the death may not have been
reflected in her firm's WSIB costs, it increased Priestly's general liability
insurance costs, she said.
"I don't think our company can be used as an example (in the
Star story). WSIB is worker insurance. Unfortunately, the gentleman
that was killed was a person of the public," she said. Savage defended her
company's claim of having a safety record "second to none," saying that the
lightly regulated demolition industry is dangerous.
Parmalat. Worker James Dann, 31, was killed Nov. 15,
1999 by an assembly-line machine at the company's Mitchell, Ont. location.
Dann, a new hire, was working on a machine that loaded
containers of cream cheese from a conveyor belt into cartons. When the machine
stopped working, Dann moved in to fix it. The machine's mechanical arm trapped
him. Dann suffocated as his colleagues tried to stop the arm from crushing his
neck. He had only been on staff for a few months when he died and left two
Parmalat, a multinational dairy company based in Italy,
pleaded guilty in 2001 to failing to provide machine guarding. The company said
it would not discuss the matter.
Woodbridge Foam Corporation. The company pleaded
guilty for failing to ensure a shredder had been properly maintained. So Lieu,
52, had worked at the company for 20 years. He died March 4, 2003.
At the time of the guilty plea, Woodbridge maintained many
locations, some of which received surcharges under the WSIB incentive program.
But at the facility where Lieu died, the company received a rebate. The company
did not respond to interview requests.
Kim Warner collapsed Aug. 6, 2001 while working the ovens at
a Weston Bakeries facility in Barrie that made breads and rolls. Fifteen
minutes shy of ending a 12-hour shift, Warner, 44, slumped to the floor. He was
working in the middle of a record-setting heat wave. Just before his death,
Warner's insides were cooking at a temperature of 42.5 degrees Celsius,
according to transcripts from the prosecution against Weston.
When his sister Brenda Bamford gave a victim impact
statement in a Barrie courthouse in 2004, she made it clear she wanted Weston
Bakeries to be punished for its role in Kim's death.
"I just want everyone here to understand that my brother ...
He was a man. He had a life and that was wiped out in a very short time, and
his death devastated my family," she told the court before Weston was fined
$215,000 for not implementing a heat stress management plan at the facility.
The year after Warner's death, Weston received a rebate of $133,000, and in the
year of the guilty plea, the WSIB paid Weston a rebate of $605,000, bringing
the total for those two years to $738,000.
Weston spokesperson Geoff Wilson said the incentive program
generally succeeds in pushing companies to address safety concerns, and that
Weston's rebates reflect such efforts and investments.
Speaking specifically about Kim Warner, Wilson said, "There
may have been a lapse in terms of this individual and his adherence to the
policies and the training he and all our employees had. We've now enhanced our
training and now are policing it in a greater fashion to make sure in a
high-heat environment they are taking frequent breaks. The company took very
quick actions to remedy any lapses. It was a very unfortunate circumstance for
our employee and his family. The safety and health of our employee is
Bamford has placed no pictures of Kim around her home. She
has not been to visit his headstone in Newmarket. She is too afraid of reliving
the grief that consumed her then, when she crocheted into the early morning
But now, sitting in her Wiarton home, Bamford when
told Weston received enough rebates to pay the safety violation fine three
times over said she feels grief anew.
"I'm so upset they could get such a payoff for my brother's
death," she said.
"My brother's dead. You can't replace that."
The reporters can be reached at (416) 869-4282 or
email@example.comSEE 'WORKPLACE VICTIMS'
(WORKING WOUNDED The
Star is investigating workplace injuries, death and illnesses in
Ontario. Information in the series comes from interviews, court documents and
various data sources, including Workplace Safety and Insurance Board data
obtained after a lengthy freedom of information request. The Stars Andrew
Bailey analyzed the data. Previous stories have highlighted loopholes that
allow unsafe job sites to escape penalties, and the high rate of post-traumatic
stress disorder among Toronto Transit Commission drivers.
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