Renting office space to another company

What are the employer’s responsibilities and which precautions should be taken to ensure the security and safety of employees when the employer wishes to rent office space to outsiders?

Stuart Rudner
Question: What are the employer’s responsibilities and which precautions should be taken to ensure the security and safety of employees when the employer wishes to rent office space to outsiders?

Answer: At law, every employment agreement includes an implied duty on the part of the employer to provide a safe working environment. An employer that rents office space to an outsider introduces new risks to its workplace, including potential harassment, theft, nuisance, personal injury and invasion of privacy.

Unlike its own employees, the employer has limited control over the tenant and how it conducts its business; it has even less control over the tenant’s employees. This does not, however, excuse the employer from its duty to provide a safe working environment for its employees. This duty, which evolved at common law, is now legislated in the occupational health and safety acts of all Canadian jurisdictions.

In Ontario, s. 25 of the act defines the duty of employers to ensure safe and secure working conditions. While employees also have a role to play in ensuring a safe workplace, the burden is primarily placed on the employer. Courts have held that the word “ensure” in the act “carries the connotation of a guarantee and the offence therefore is one of strict liability.”

Employers charged with breaching their duty will have to establish a defence of due diligence. They will have to demonstrate they exercised the level of judgement, care, prudence, determination and activity a person would reasonably be expected to under the relevant circumstances.

So what does this mean to the employer who is considering renting office space to an outside party? The employer must take reasonable steps to ensure the additional risks posed by the outside party are identified and controlled to the extent possible. These risks can be mitigated in the rental agreement, which could include terms such as:

•an undertaking that the tenant and its employees will abide by the landlord’s policies, including health and safety, harassment and the applicable legislation;

•an undertaking to carry insurance to protect against workplace incidents that could affect the landlord’s staff or property; and

•an indemnity against claims by the landlord’s staff for liability that may arise from negligent or deliberate acts of the tenant and/or its employees.

The landlord might also want to conduct due diligence with respect to the prospective tenant to ensure its activities and employees do not pose an undue risk to the landlord’s staff or property. The landlord should also consider, where appropriate, physically segregating the tenant’s office space (such as a separate entrance) or restricting access to the landlord’s work area. Finally, the landlord should discuss any potential issues raised by the introduction of the tenant with its employees. New policies and procedures should be developed where necessary.

Stuart Rudner practices commercial litigation and employment law with Miller Thomson LLP’s Toronto office. He can be reached at (416) 595-8672
or by e-mail at [email protected].

Latest stories