Research from Institute for Work and Health shows how employers react to penalty fear factor
Fear of a hefty fine may be the jolt employers need to reduce the rising number of workplace injuries and fatalities, according to a senior work and health expert.
The Ontario government announced plans last week to implement a groundbreaking mandatory minimum fine of $500,000 for employers found responsible for more than one serious workplace injury or death within a two-year period.
The question is, will that be an effective deterrent? Dr. Emile Tompa, senior scientist at the Institute for Work and Health, believes it will.
His research revealed that penalties reduce injuries, illnesses and fatalities in the workplace, while inspections without penalties had a less pronounced effect.
“What we found, in terms of inspections activity, was strong evidence based on nine studies, that specific deterrence from inspections with penalties reduced final outcomes—things like injuries, illnesses, and fatalities,” Tompa said. “When the inspections don’t result in penalties, for whatever reason, the studies found that there wasn’t as much of an impact on reducing intermediate and final outcomes.”
According to the Ministry of Labour, there were 2918 critical workplace injuries, and 47 workplace fatalities, reported to and tracked by the Ministry. Injuries have been on the rise in recent years, increasing by 43.8% since 2020.
The latest measure, part of the proposed sixth Working for Workers Act, would amend the Occupational Health and Safety Act (OHSA), which currently outlines a maximum fine for repeat offenders but lacks a minimum penalty. If enacted, the $500,000 fine would be the highest minimum penalty for workplace safety violations in Canada.
Penalties reduce workplace injuries
Last year, Ontario increased the maximum fine for corporations convicted under OHSA from $1.5 million to $2 million. However, according to the Minister of Labour David Piccini, “even in the case of egregious offences, some courts are not imposing fines anywhere near the maximum available amount.”
As a result, a minimum fine is designed to encourage compliance among employers. Besides finding strong evidence that inspections with penalties reduce work-related injuries, Tompa’s research also found strong evidence that inspections without penalties do not reduce injuries.
The distinction between general and specific deterrence emerged as another key insight. Tompa explained how the prospect of enforcement might influence organizational behaviour.
“Not everybody gets inspected, and some of them do, some of them don’t,” he said. “General deterrence is about the probability of something happening, like being compliant with regulations because of the potential repercussions. Specific deterrence is the actual experience of being inspected and, if found non-compliant, being penalized.”
According to Tompa, specific deterrence has a stronger behavioural impact because it creates immediate and tangible consequences for organizations.
“Firms may not have the capacity to really digest information about the degree of inspections activity happening in the field. They tend to react only when there’s something that actually happens to them,” he said. “For general deterrence to be effective, you need to have a full understanding of the long-run implications, and not every organization may be equipped to optimize for these probabilities.”
Safety recommendations for employers
Tompa underscored the importance of awareness and proactive measures to adapt to regulatory changes.
“Being on top of what those regulations are and what needs to be operationalized on the shop floor will be part of the homework they need to do,” he said.
Certain industries also face unique challenges for compliance, as evidenced by findings in transportation safety. Tompa highlights that enforcement approaches can vary significantly across sectors, with some requiring tailored strategies.
“For [inspections] to be effective, firms would need to be rational, long-run optimizers, and knowledgeable about the probability and the financial implications of being inspected, whereas in reality, firms may have bounded rationality and have limited capacity to process information,” Tompa’s report said.
While it remains to be seen whether Ontario’s new minimum fine will have an impact on the reduction of workplace injuries and fatalities, Tompa’s research does suggest that several legislative and regulatory policy levers are effective in reducing injuries and/or increasing compliance.
The research also noted, however, that an initial inspection was the most effective in reducing workplace injuries and fatalities, with subsequent visits having “substantially lesser impacts.” This suggests that “an intensive regime of multiple inspections to a site may not be the best use of resources.”
