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The contractor conundrum

Many businesses still regard occupational health and safety risk management for contractors as being as simple as signing a contract in which the other party agrees to “undertake the work safely” and “ensure complete compliance with OHS laws,” or words to that effect. Tragically, the same scenarios — contractors accessing work sites with hidden dangers, undisclosed hazardous substances, moving vehicles and equipment, or where contractors themselves create dangers — repeat themselves daily in Canada. 

Misconceptions

“This work is really hazardous and too dangerous for our own employees, so let’s contract it out and make the contractor responsible.” 

This somewhat understandable sentiment, motivated by a desire to protect your own workforce, entirely ignores the web of detailed, specific OHS obligations that exist when contracting. Generally, within the complex web of Canadian OHS laws relating to contracting, a business cannot contract out of its OHS responsibilities. This may include responsibilities as owner, employer, constructor or prime contractor, and individual responsibilities as supervisors, directors and officers. 

Our contractors are the experts. We have no knowledge of the hazards of this work, that’s exactly why we are retaining them, why are we responsible?” 

Once again, an understandable reaction that is motivated by a desire to ensure the safety of the workplace. However, part of the contracting conundrum is that OHS obligations are strict and non-delegable, meaning they apply if a worker accesses a work site or an employer contracts for services of another employer. 

“We can ask a contractor to be a constructor or prime contractor, and as long as the contract says so, and a posted government notice declares this, and they sort of control the site, they are responsible.” 

Yes, in many jurisdictions, though sometimes just for a construction project, an owner can contract with another party to undertake the responsibilities as constructor or prime contractor. In some OHS regimes, the contract must specifically state they are the prime contractor. In others, a clear government notice must be filed and posted. But, generally, the constructor or prime contractor is expected to oversee, control and manage all aspects of the work — including safety on the job site. If it is unclear who is in charge, the owner may be regarded as the constructor or prime contractor with the attendant OHS legal responsibility and liability. 

Owner responsibilities 

An owner can contract all or at least part of the responsibility for either a construction project or significant job to a third-party constructor or prime contractor. Often contractor management systems create parallel strategies for both services and these types of more complex jobs controlled by a single contractor (one strategy involving reasonable care and due diligence for maintenance service contractors, and a “hands-off” approach where a constructor or prime contractor has been retained). These are generally seen as hallmarks of a strong contractor management system. 

[span style="letter-spacing: -0.1px;"]However, one aspect that seems to have slipped through the cracks in many contractor management systems is identifying and ensuring compliance with owner obligations. In many jurisdictions, an owner is obligated to ensure the work site is assessed for any and all hazardous substances before work is performed and, in particular, before a constructor or prime contractor is appointed. In some areas, very specific and detailed legislative obligations exist.

One of the most extensive statutory regimes exists in Ontario under the regulation respecting Asbestos on Construction Projects and in Buildings and Repair Operations. This regulation complements the Occupational Health and Safety Act obligations for owners of construction projects, who were already obligated to assess the project for any hazardous substances and inform contractors, by placing extensive obligations upon the owner to inspect and create records of asbestos containing materials and notify all contractors and workers.[/span]

Provincial contractors at federal workplaces

The Canada Labour Code requires that, at a workplace controlled by a federally regulated employer, the employer must ensure such matters as providing to “persons who access the work site” all necessary materials, equipment, devices and clothing; ensure those accessing the site do not endanger health and safety at the workplace; and require the federal employer to take reasonable care to inform persons granted access to the workplace of any known or foreseeable health or safety risks. These obligations apply to workers, visitors, members of the public and to contractors who may access work sites.

We are sometimes asked whether this means that, at a federally regulated workplace, the federal employer must take reasonable precautions to ensure that the provincially regulated contractor (say a construction or maintenance contractor who is provincially regulated) follows federal law or whether the federally regulated employer must ensure compliance with provincial law. This is a question that is decided based upon constitutional principles related to division of powers between the provinces and the federal government. In very simple terms, a federally regulated entity can exist and be required to apply federal law to its workers and the activities of provincial contractors who may access its work site.  

At the same time, a provincial entity can exist and be obligated to ensure compliance by its own workers with provincial law, even when it steps onto a federal site. Just because federal and provincial business are operating at the same place at the same time, does not mean that one set of OHS laws applies to both of them if they are separate operating entities.

Sometimes, as a best practice, where a federally regulated business has provincially regulated contractors entering and accessing the site on an ongoing basis, it makes sense to create a program that sets one standard for everyone accessing the site. The program that is developed would be one that meets the highest standards from both provincial and federal regimes.

Best practices 

Key best practices for contractor management programs involve the development of legally sound, clearly written processes for the management of service and construction contractors. Each process must meet the appropriate OHS laws for the jurisdiction in which the contracted work will be performed. In addition, contractor management programs should include processes for:

• pre-qualifying contractors and creating pre-qualified contractor lists

• determining whether the work and most OHS responsibilities can be undertaken by a constructor or prime contractor 

• assessing and communicating processes for pre-construction site risks to contractors  

• either monitoring contractors and enforcing all safety requirements (applicable where the organization is acting as constructor or prime contractor or employer) or ensuring control by the constructor or prime contractor and a “hands off” approach by the owner (where the owner has selected a constructor or prime contractor)

• documenting steps taken to select contractors, inform contractors of risks, monitor contractors and remove or terminate a non-compliant contractor, as appropriate to the situation. 

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Cheryl A. Edwards is a former Ontario Ministry of Labour OHS prosecutor and is a senior partner in Mathews Dinsdale & Clark LLP's OHS and workers' compensation practice. She has close to 30 years of experience in providing strategic, focused, practical advice and in-house training for public and private sector organizations. Edwards also has extensive experience representing clients at trials, complaints, inquests and appeals. She can be reached at (416) 777-8283 or [/span]cedwards@mathewsdinsdale.com.


This article was co-authored by Jeremy Warning, also a former OHS prosecutors who is now a partner at Mathews Dinsdale & Clark LLP in Toronto. He 

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can be reached at (416) 777-8284 or

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jwarning@mathewsdinsdale.com

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Cheryl A. Edwards

Cheryl Edwards is a former occupational health and safety prosecutor with almost 30 years of experience. She can be reached at (647) 777-8283 or cedwards@mathewsdinsdale.com, or visit www.mathewsdinsdale.com for more information.
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