Labour leaders want WSIB chair fired over
Published: April 11, 2008
The Ontario Federation of Labour (OFL) and other groups are demanding
that Steve Mahoney be fired as chair of the Workplace Safety and
Insurance Board (WSIB) over revelations that the province has paid
safety rebates to companies prosecuted for the death of workers on the
The Toronto Star has reported that "safety rebates" have been paid out
by one provincial program to some of the same companies that had been
prosecuted by another arm of the government as a result of workplace
fatalities. In many cases the rebates were higher than penalties imposed
for the deaths.
OFL president Wayne Samuelson says he was stunned to hear Mahoney say he
was unaware of the problem with the rebate program.
"This is an issue we have been raising with the board for over a
decade," he wrote in the letter to Premier Dalton McGuinty. "Surely the
chair and the entire board of directors were aware of the serious
deficiencies ... and the resulting injuries and deaths that have been
sustained by workers while rewarding employers with lavish rebates."
The letter was also signed by Steve Mantis of the Ontario Network of
Injured Workers Groups and Marion Endicott from the Injured Workers'
Consultants Legal Clinic. The leaders are calling for an end to the
rebate program and the appointment of an new WSIB board of directors.
On March 10, after the newspaper first raised questions about the
rebates, Mahoney announced a review of the program, and declared a
moratorium on payouts.
"I was absolutely not aware that at the same time as the ministry was
levelling fines against companies, that they were receiving rebates from
us. It is very recent that I was made aware of that," he said this week.
He expressed disappointment at the calls for his resignation but the
labour groups were not swayed.
"In scores of meetings we have raised this issue ..." the labour leaders
said in their letter to McGuinty. "The chair of the board has been
aggressively defending the experience rating system since being
appointed. For him to suggest at any time that he did not know this was
going on does not ring true."
companies get rewarded for mistakes
Flaw in worksite safety system allows big rebates even when a
Apr 05, 2008 04:30 AM
Toronto Star Staff Reporters
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 Gordie worked.
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 pure oxygen.
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, Gordie died.
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 sense."
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 even paid."
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
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
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 fiancιe 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
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 children.
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 paramount."
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
"My brother's dead. You can't replace that."