Protect your business from contractor liability

Feb 18, 2020

Protect your business from contractor liabilityWhen a business hires a contractor to undertake a construction project, who is the employer under the Occupational Health and Safety Act - the business or the contractor? Until now, the answer would depend on whether the employer or the contractor is considered the "constructor." However, an appeal of a recent court decision, to be heard this year, may upend our understanding of who in this situation is considered the constructor, and consequently has ultimate responsibility for health and safety.

When undertaking any construction project in your facility, it's essential to be clear on who is assuming the role of constructor - the facility or the contractor hired to do the work. A government Constructor Guideline describes a constructor as "the party with the greatest degree of control over health and safety at the entire project." This party is responsible for ensuring compliance with the Act and regulations - and liable for compliance failures.

Read more about the case and steps you can take to promote safety and protect your business from liability.

The case in brief

In R v Greater Sudbury (City), the municipality hired a contractor to conduct water main repairs. The contractor agreed to act as the "constructor" for the project.

While making water main repairs, an employee of the contractor reversed a road grader, and struck and killed a pedestrian. After an investigation identified several violations under the Act, the municipality was charged as "constructor" and "employer." The contractor was also charged as an "employer" but not as a constructor.

During the trial, the Crown argued that the municipality had acted as constructor by virtue of the amount of control it exercised.

In her decision, the trial judge reviewed the role played by the municipality and its contract with the contractor, concluded the municipality had not exercised control over the site to the point where it became the constructor, and acquitted the municipality of all charges. In effect, this decision appears to be adding "degree of control" as a factor in determining whether an employer who hires a contractor retains any liability under the Act.

The Crown has since filed an appeal, which is expected to be heard this spring.

8 steps for protecting your business

In the interim, protect your business from liability by demonstrating due diligence. WSPS Senior Consultant Elizabeth Lofthouse suggests the following steps when hiring a contractor or constructor.

  1. Understand the difference between constructor and contractor, as described in the government Constructor Guideline. If a business owner hires a contractor to act as constructor, the owner must hand over care and control of the project to the contractor. Failing to do so could be seen as retaining control - and liability - for health and safety.
  2. Ensure the contractor and its workers are qualified and competent to do the job. "For instance," says Elizabeth, "is it their core business? Do they know how to do the work?" Ask for references.
  3. Check out the contractor's safety record. Use the WSIB's Check on Safety tool. Just enter a company name and you can see their accident performance.
  4. Ensure the contractor has a health and safety policy and program in place. Ask for copies.
  5. Confirm that the contractor's workers have received health and safety training. "Some businesses will request copies of contract workers' training certificates," says Elizabeth.
  6. Understand who's responsible for what. Have a plan that both parties agree to before work starts. "The stronger the plan, the more likely the work will be conducted safely."
  7. Ensure everyone in your workplace understands the scope and limitations of their responsibilities, contractors' employees included.
  8. Ensure the contractor has sufficient liability insurance.

How we can help

From comprehensive course offerings to consulting expertise, WSPS can help you create and sustain a safe, healthy and productive workplace for all workers in your workplace: