What are the potential challenges when the owner of a work site contractually designates another company as the prime contractor, in order to comply with Alberta’s occupational health and safety laws, but that company subsequently attempts to transfer its prime contractor safety responsibilities to a subcontractor, without clearly defining the project’s boundaries or ensuring physical separation? This question was addressed in Chemtrade Fort McMurray Limited Partnership v. Occupational Health and Safety.[1]
In this case, Chemtrade Fort McMurray Limited Partnership (Chemtrade) appealed a stop work order issued to it by an Alberta Occupational Health and Safety Officer (OHS Officer), following the death of a worker employed by its contractor, Pacific Rim Industrial Insulation Ltd. (Pacific Rim). Chemtrade filed its appeal with the Alberta Labour Relations Board (ALRB), as required by Alberta’s Occupational Health and Safety Act (the Act).[2]
The ALRB considered whether Chemtrade’s prime contractor duties had been contractually reassigned to Pacific Rim, despite the absence of defined boundaries or physical separation within a multi-employer work site where, in some areas of the work site, construction work was taking place.
This appeal raised important questions about what types of Alberta work sites are considered “construction” work sites, as defined in the Act, as well as factors that OHS will analyze when there are multiple prime contractor agreements affecting one work site.
Background
Chemtrade controlled a chemical plant located on a site owned by Syncrude Canada Ltd. (Syncrude). Chemtrade’s contract with Syncrude contained terms and conditions regarding the construction of Chemtrade’s plant on Syncrude’s site, including that Syncrude would be the Prime Contractor for the purposes of the Act, “for activities occurring outside the battery limits of the Fertilizer Plant,” but that Chemtrade would be the Prime Contractor, “for activities within the battery limits.”[3]
Chemtrade contracted with Pacific Rim to perform replacement roofing and wall cladding construction at the plant. In the Master Services Agreement between Chemtrade and Pacific Rim, Pacific Rim agreed to fulfill “all the duties and obligations of the … “prime contractor” … at the Project site for the purposes of the Occupational Health and Safety Legislation, and shall ensure compliance by all contractors, suppliers, consultants of any tier, and for all laborers, materialmen, mechanics, and other similar persons performing work at the Project site with the Occupational Health and Safety Legislation.” These are typical clauses used in agreements to assign health and safety obligations to a separate contractor.
The Master Services Agreement was entered into on February 28, 2022. The Master Services Agreement stated that it was the intent of the parties (Chemtrade and Pacific Rim) to prepare and execute separate, written service agreements for the Master Services Agreement, for each project that Chemtrade authorized.
On March 6, 2023, Pacific Rim submitted a bid to Chemtrade for cladding replacement. The site plan drawing that was attached to the bid identified 13 zones in which roof and wall cladding would be removed and replaced. These zones were located across the work site, and, in at least one instance, a wall was identified as a zone. Pacific Rim’s bid was successful and the work commenced on May 9, 2023.
On June 8, 2023, an employee of Pacific Rim, who was removing screws from metal roofing sheets, fell through the roof of a maintenance building. The building was used by Chemtrade as part of the plant’s operations. Chemtrade had workers executing functions below the roof area while Pacific Rim crews were working above.
Following the fatality, the investigating OHS Officer concluded that Chemtrade was the prime contractor for the entire chemical plant and that it had not met its obligations as a prime contractor under the Act. The OHS Officer issued a stop work order to Chemtrade regarding work at heights, which would remain in effect until various corrective measures were taken (the Stop Work Order).
Chemtrade disputed the OHS Officer’s conclusion, arguing that the OHS Officer was wrong to find that Chemtrade was the prime contractor for the entire work site, including the area where Pacific Rim was performing work. Chemtrade highlighted that it would be reasonable for Pacific Rim to be the prime contractor for the roofing work, not Chemtrade, because Pacific Rim had specialized experience in roofing that Chemtrade did not have.
Chemtrade also argued that this was not a multi-employer work site. Chemtrade’s position was that it had contractually designated Pacific Rim as prime contractor for the roofing construction and that this work constituted a separate work site: that this was not a multi-employer work site. Accordingly, Chemtrade’s position was that it should not be held responsible for ensuring that the duties of a prime contractor were met in the areas where Pacific Rim’s personnel were working.
The decision
The ALRB denied Chemtrade’s appeal of the Stop Work Order.
The ALRB noted that section 10(2) of the Act requires the person in control of the work site to designate a single prime contractor for a “work site,” not for work. The ALRB reasoned that prime contractor status must be tied to a defined work site, not merely to the work performed. In short, the prime contractor designation is site-specific, not task specific.
The ALRB concluded that, although the Master Services Agreement between Chemtrade and Pacific Rim designated Pacific Rim as prime contractor, this designation was insufficient, because there was no separate work site for which Pacific Rim had been designated as the prime contractor. In this respect, the ALRB found the following facts to be significant:
- Workers from Chemtrade and Pacific Rim operated in overlapping and undifferentiated spaces without clear or effective boundaries separating their respective activities.
- Chemtrade’s own workers were present directly below Pacific Rim’s roofing activities, exposing Chemtrade’s workers to potential hazards from unsecured roofing materials and falling objects.
- This proximity underscored the lack of segregation between the construction site and other operational areas.
- The site lacked physical barriers to delineate Pacific Rim’s roofing project as a distinct work site.
- Finally, the contract between Chemtrade and Pacific Rim failed to specify the boundaries of the project site or provide a framework for its physical separation from Chemtrade’s chemical plant and associated operations.
The ALRB decision also addressed the definition of a “construction work site” under section 1(e) of the Act, which applies to multi-employer work sites. The Act defines a “construction work site” as “a work site where any of the following activities are conducted: the building, demolition, repair, alteration, extension, or renovation of a structure” (among other, specific types of construction).[4] The ALRB emphasized that this classification is not based on the employer’s perception of the activities. Even activities perceived by an employer as routine, such as maintenance or minor repairs, can render the entire facility a “construction work site.” Under the Act, the existence of a construction work site depends on the nature and context of the activities, not the employer’s characterization of the work.
Conclusion and takeaways
The Chemtrade decision establishes that employers may not be able to rely exclusively on contractual agreements to delegate prime contractor obligations in a multi-employer construction environment. Employers should also ensure that the designated work area is sufficiently and physically distinct to constitute a separate work site. When a work site is the site of multiple types of activities: operations, maintenance and construction, the entire work site could be characterized as a “construction work site,” thereby triggering the prime contractor role and responsibilities that are required by the Act.
For advice and practical solutions on navigating the complexities of multi-employer construction work sites, including appropriate contractual language, agreements and compliance with occupational health and safety laws, please contact the authors, Tari Hiebert and Daniel Stachnik.
The authors would like to thank Thomas Bank, Articling Student, for his contributions to this article.
[1] Alberta Labour Relations Board (Occupational Health and Safety Appeals): Chemtrade Fort McMurray Limited Partnership v Occupational Health and Safety, 2024 ABOHSAB 22 (“Chemtrade”).
[2] Occupational Health and Safety Act, S.A. 2020, c. O-2.2.
[3] Emphasis added. See paragraph 6 of Chemtrade, supra. We note that the original signatory to the contract with Syncrude was not Chemtrade, but rather Chemtrade’s corporate predecessor. However, it is clear from the decision that the OHS Officer was satisfied, as was the Alberta Labour Relations Board, that the contractual obligations of Chemtrade’s predecessor had been taken on by Chemtrade by the time of the events in this case. For ease of reference, we have only referred to Chemtrade.
[4] Occupational Health and Safety Act, S.A. 2020, c. O-2.2 at s. 1(e)(i).
