Confusion can arise with respect to the OHS roles available when contracting
Contracting for work can be a minefield for the unwary. All too often, it’s assumed the contracting party’s occupational health and safety obligations end once a contractor has been engaged.
Unfortunately, that is not always the case and those who make this assumption may inadvertently increase the risk of health and safety liability they face by:
•not taking positive steps to ensure that work is carried out in accordance with legislated and industry standards
•by exercising too much control and, thereby, attracting liability where it might not otherwise have been incurred
Confusion is understandable. First, it is not unreasonable to believe engaging a contractor, with specialized knowledge and skills, to perform the work, is a reasonable means of ensuring the work is performed safely.
Second, there are jurisdictional variations in the OHS laws applicable to contracting making the rules different from province to province (and federally). Finally, in some jurisdictions, the OHS laws governing contracting are not well publicized and are applied technically rather than intuitively.
Unfortunately, the reality is innocently misunderstanding the obligations is not a defence to any prosecution or penalty that may be pursued by the OHS regulator. What follows is a discussion of some of the key issues in contracting which, if addressed, should minimize risk.
Understand the nature of the contracted work
In some jurisdictions, Ontario for example, there are significant differences in the obligations of a contracting party when contracting for a construction project versus contracting for other work. Notably, when contracting for a construction project, one party becomes the “constructor” and assumes overall responsibility for health and safety on the job site. This role is equivalent to that of a “prime contractor” in jurisdictions such as British Columbia, Alberta and Manitoba, or the “principal contractor” in Quebec and Newfoundland and Labrador. The party engaging the constructor or prime/principal contractor would assume the role of an owner with more limited OHS obligations. An owner can, generally speaking, take a “hands off” approach to OHS as the law makes the contractor principally responsible.
Though this appears straight forward, where confusion can arise and where the law can be quite technical, is in determining whether the contracted work is a construction project.
In Ontario, a two-step test has been developed to make this determination.
Step one is to ascertain whether the work involves an activity falling within the definition of “construction” in the Occupational Health and Safety Act (OHSA). Such activities include alteration, repair, erection, demolition and digging, among other things. The second step is to determine whether the activity is being performed on a “thing” listed within the definition of “project” in the OHSA.
That definition includes such things as bridges, buildings, trenches and highways. Taken together, the test operates such that, if an activity within the definition of construction is being performed on any “thing” listed under the definition of “project,” the work will be a construction project. If one of those two elements is not satisfied, the work will not be a construction project and the contracting party cannot assume a diminished role with respect to health and safety by having a contractor be principally responsible for safety.
Understand the available OHS roles
Confusion can also arise with respect to the OHS roles available when contracting. There are jurisdictional variations exemplified by considering Ontario and Manitoba, on the one hand, and Alberta and British Columbia on the other. In the latter, the role of “prime contractor” is available, and one must be designated, whenever more than one employer is involved in performing the work —regardless of the nature of the work. In contrast, in the former, the constructor or prime contractor role is only available in respect of a construction project.
The upshot is that where the constructor or prime/principal contractor role is not available, the contracting party will be considered an “employer” for OHS purposes.
This means the contracting party will be expected to discharge the very broad and detailed duties assigned to employers, such as ensuring compliance with the legislated standards and that adequate information and instruction are provided, and will have to carry them out not only for its own workers but also for workers employed by the contractor.
Best practices for managing contracting risks
In large measure, managing the OHS risks involved in contracting can be accomplished with thoughtful pre-planning designed to avoid the confusion that can result in unintended liability.
To that end, those contracting for work could manage the risks by:
Understanding the rules of the jurisdiction: Given the legislative variation across Canada, those contracting for work should become familiar with the OHS provisions applicable to contracting in the jurisdiction in which the work will be performed and tailor practices accordingly.
Keeping to the contracted role: If the intention is to have the contractor be the constructor or prime/principal contractor, ensure that is detailed in a written contract or agreement. Also, the contracting party should ensure it operates in a manner consistent with the agreement. Principally this means that, if control and responsibility for OHS is to be relinquished to the contractor, then the contracting party should ensure that is what actually happens.
If the contracting party exercises control or responsibility, along with the constructor or prime/principal contractor, there is a risk the contracting party could retain the liability its contractual arrangements intended to assign to the contractor.
Implementing a contractor safety/management program: A contractor management program would include elements such as: a process to determine the contracting party’s OHS role and whether a “hands on”/“hands off” approach is permitted:
•ensuring the contractual language accurately reflects the intended and permitted approach
•a process to determine the nature of the work (is it a construction project?)
•a prequalification process for contractors; implementation of safe work procedures where a “hands on” approach is required
•and ensuring contractors have workers’ compensation and other insurance coverages.
Keeping detailed documentation: Keeping detailed records of all aspects of the Contractor Safety Program (including, exercising a “hands on” approach where required) will allow the contracting party to demonstrate the measures taken to ensure safety in the workplace from the selection of the contractor through to the completion of the work should that be necessary.
Jeremy Warning is a partner and Julie-Anne Cardinal is an associate in the Toronto office Heenan Blaikie LLP. They are members of Heenan Blaikie’s National OHS & Workers’ Compensation Practice Group specializing in occupational health and safety law. They can be contacted by telephone at (416) 360-6336 or by email at [email protected] or [email protected].
Unfortunately, that is not always the case and those who make this assumption may inadvertently increase the risk of health and safety liability they face by:
•not taking positive steps to ensure that work is carried out in accordance with legislated and industry standards
•by exercising too much control and, thereby, attracting liability where it might not otherwise have been incurred
Confusion is understandable. First, it is not unreasonable to believe engaging a contractor, with specialized knowledge and skills, to perform the work, is a reasonable means of ensuring the work is performed safely.
Second, there are jurisdictional variations in the OHS laws applicable to contracting making the rules different from province to province (and federally). Finally, in some jurisdictions, the OHS laws governing contracting are not well publicized and are applied technically rather than intuitively.
Unfortunately, the reality is innocently misunderstanding the obligations is not a defence to any prosecution or penalty that may be pursued by the OHS regulator. What follows is a discussion of some of the key issues in contracting which, if addressed, should minimize risk.
Understand the nature of the contracted work
In some jurisdictions, Ontario for example, there are significant differences in the obligations of a contracting party when contracting for a construction project versus contracting for other work. Notably, when contracting for a construction project, one party becomes the “constructor” and assumes overall responsibility for health and safety on the job site. This role is equivalent to that of a “prime contractor” in jurisdictions such as British Columbia, Alberta and Manitoba, or the “principal contractor” in Quebec and Newfoundland and Labrador. The party engaging the constructor or prime/principal contractor would assume the role of an owner with more limited OHS obligations. An owner can, generally speaking, take a “hands off” approach to OHS as the law makes the contractor principally responsible.
Though this appears straight forward, where confusion can arise and where the law can be quite technical, is in determining whether the contracted work is a construction project.
In Ontario, a two-step test has been developed to make this determination.
Step one is to ascertain whether the work involves an activity falling within the definition of “construction” in the Occupational Health and Safety Act (OHSA). Such activities include alteration, repair, erection, demolition and digging, among other things. The second step is to determine whether the activity is being performed on a “thing” listed within the definition of “project” in the OHSA.
That definition includes such things as bridges, buildings, trenches and highways. Taken together, the test operates such that, if an activity within the definition of construction is being performed on any “thing” listed under the definition of “project,” the work will be a construction project. If one of those two elements is not satisfied, the work will not be a construction project and the contracting party cannot assume a diminished role with respect to health and safety by having a contractor be principally responsible for safety.
Understand the available OHS roles
Confusion can also arise with respect to the OHS roles available when contracting. There are jurisdictional variations exemplified by considering Ontario and Manitoba, on the one hand, and Alberta and British Columbia on the other. In the latter, the role of “prime contractor” is available, and one must be designated, whenever more than one employer is involved in performing the work —regardless of the nature of the work. In contrast, in the former, the constructor or prime contractor role is only available in respect of a construction project.
The upshot is that where the constructor or prime/principal contractor role is not available, the contracting party will be considered an “employer” for OHS purposes.
This means the contracting party will be expected to discharge the very broad and detailed duties assigned to employers, such as ensuring compliance with the legislated standards and that adequate information and instruction are provided, and will have to carry them out not only for its own workers but also for workers employed by the contractor.
Best practices for managing contracting risks
In large measure, managing the OHS risks involved in contracting can be accomplished with thoughtful pre-planning designed to avoid the confusion that can result in unintended liability.
To that end, those contracting for work could manage the risks by:
Understanding the rules of the jurisdiction: Given the legislative variation across Canada, those contracting for work should become familiar with the OHS provisions applicable to contracting in the jurisdiction in which the work will be performed and tailor practices accordingly.
Keeping to the contracted role: If the intention is to have the contractor be the constructor or prime/principal contractor, ensure that is detailed in a written contract or agreement. Also, the contracting party should ensure it operates in a manner consistent with the agreement. Principally this means that, if control and responsibility for OHS is to be relinquished to the contractor, then the contracting party should ensure that is what actually happens.
If the contracting party exercises control or responsibility, along with the constructor or prime/principal contractor, there is a risk the contracting party could retain the liability its contractual arrangements intended to assign to the contractor.
Implementing a contractor safety/management program: A contractor management program would include elements such as: a process to determine the contracting party’s OHS role and whether a “hands on”/“hands off” approach is permitted:
•ensuring the contractual language accurately reflects the intended and permitted approach
•a process to determine the nature of the work (is it a construction project?)
•a prequalification process for contractors; implementation of safe work procedures where a “hands on” approach is required
•and ensuring contractors have workers’ compensation and other insurance coverages.
Keeping detailed documentation: Keeping detailed records of all aspects of the Contractor Safety Program (including, exercising a “hands on” approach where required) will allow the contracting party to demonstrate the measures taken to ensure safety in the workplace from the selection of the contractor through to the completion of the work should that be necessary.
Jeremy Warning is a partner and Julie-Anne Cardinal is an associate in the Toronto office Heenan Blaikie LLP. They are members of Heenan Blaikie’s National OHS & Workers’ Compensation Practice Group specializing in occupational health and safety law. They can be contacted by telephone at (416) 360-6336 or by email at [email protected] or [email protected].
