A principal's guide to contracting to meet the Health and Safety in Employment Act 1992
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1. Scoping the work
Steps taken before work starts are often crucial. But thinking about health and safety from the beginning of a project and building considerations into design and planning is regularly overlooked.
Prosecution statistics suggest that principals are more likely to be found in breach of section 18 in relation to pre-site behaviour than afterwards. Case law has set a high standard for principals to include health and safety issues in the negotiation of contracts. A Court of Appeal judgment has stated:
“.... in contract negotiations between principal and contractor or subcontractor – no matter how informal – safety is as critical factor as the contract price or duration. As between principal and employer who will supply and maintain safety equipment; who will bear any losses if that equipment fails or is unavailable, who will negotiate directly with the employees to ensure the safest working methods and conditions in the circumstances of the contract. If a principal lets a contract to an employer which does not incorporate and allocate responsibility for such features, the principal may well assume the burden of assuring that workers are not harmed. When negotiating any contract covered by the duty of section 18, the principal must turn their mind to the question of, and be satisfied that, the contractor is competent to perform the work being contracted for in a safe and healthy manner.” (Central Cranes Ltd v Department of Labour [1997] 3 NZLR 694).
In that case, the Court of Appeal also approved a statement made in the original judgment that a principal cannot relieve itself of responsibility for the safety of workers on site by being physically absent from the site, or lacking specialised knowledge. For example, in this case a principal was held to be liable under section 18 for a sub-contractor’s failure to observe safety precautions in the rigging of a tower crane, and was given general responsibility for supervising the site. The principal had a duty to ensure the contract terms included clearly defined duties for providing safety equipment and generally supervising safe practices.
It needs to be reiterated that simply employing a competent contractor will not usually satisfy the principal’s duties under section 18, although it is a practicable step that’s required to be taken. The principal may decide the contractor is able to perform the work in a safe and healthy manner by determining:
- whether or not they are a well-established and competent firm or person with a good safety record
- that the contractor and/or its employees is qualified to do the work (e.g. is the holder of the appropriate certificate of competence, such as a registered electrician).
As part of this process, the principal should consider evaluations from earlier contracts, references provided by the contractor from previous clients, or other evaluative material as appropriate.
There may be some circumstances where it is practicable for the principal to prescribe safety requirements in advance without subsequent monitoring, but this is dependent on the particular facts of any case. Clearly, if the principal is aware of an intention to adopt questionable safety standards, it is reasonably practicable to ensure proper standards are observed.
Example
High and Dry Ltd had a health and safety policy which required, among other things, the use of safety harnesses. However, there was no requirement for supervision, or that High and Dry Ltd provide the recommended safety equipment. Mike had indicated to Brian that he did not support the use of harnesses when installing the long-run roofing. While standing on purlins and working with an employee laying building paper in preparation for the sheets of long-run roofing, Mike suffered a heart attack and fell through the wire netting to concrete 10 metres below. He died soon after from injuries suffered from the fall. High and Dry Ltd was convicted and fined under section 18 for failing as a principal to ensure the safety of a self-employed contractor
A brief discussion of some of the issues to be considered at each stage of the tendering process follows.
1.1A process for dealing with health and safety issues in tendering
Contractor selection is particularly important in any tendering process. Principals and contractors need to share information and agree what has to be done, how it is to be done and who should do what.
Contract types include:
- projects, notably construction, installation or upgrade work (and sometimes within a segregated area for the duration of the contract)
- regular maintenance and repair activities (e.g. during off-season shutdown, painting contracts, or when contractors' and principal's employees may be working in the same area)
- routine service and/or cleaning contracts, where the contracted work is almost intrinsic to the work of the principal.
The nature of the contract (and the significance of the hazards) will affect procedures and precautions required. Some tasks involve little risk, while others could lead to serious, even fatal accidents or major health effects to either the contractors' or principal's employees, or others.
The broad health and safety implications will need to be considered by the principal as they assess work to be carried out. The principal is responsible for advising on appropriate safety standards to be observed. Depending on the work being undertaken, where a principal is required to take all practicable steps to avoid harm to contractors and their employees, this should involve an awareness of the required standards. For example, thedegree of prescription expected is high in cases such as the operators of a major electrical substation, or an oil depot, engaging contractors to carry out service work. It would be lower, on the other hand, in the case of a self-employed potter engaging an electrical contractor to install a pottery kiln. But even in the latter case, the principal cannot avoid taking the practicable steps necessary to ensure health and safety standards are met.
Example
Exco installed a large new skinning machine, which was used to remove membrane from meat. Meat was fed into it through rollers, the machine would grip the meat and a fixed blade would remove the membrane. The new machine became part of the cleaning contract, and Graham's job came to include the thorough cleaning of the new machine.
Cleaning the machine involved hosing it down with hot water, then opening an in-feed guard to expose a toothed roller and blade while the machine was still running. One day, four weeks after the machine was installed, Graham was completing this cleaning when his glove was caught by the machine – but he avoided injury. He told his supervisor, Jed. A week later, his hand was caught in the machine and he lost the tips of two fingers.
Exco, as the owner of the machine and principal to the cleaning contract, was convicted under section 18(1)(a) for failing to take all practicable steps to ensure the safety of a contractor's employee. It had not adequately informed the contractor of the nature of the hazards involved in the newly installed machinery.
The Perfect Cleaning Company was also convicted under section 13 for failing to train Graham.
1.2 Pre-tendering steps
- At the pre-tender stage of a contract, principals should identify the work covered by the contract, and hazards likely to occur.
- Development of the tender documentation begins with consideration given to how health and safety issues will be included in the tender documents.
- At this early stage, any significant health and safety information available should also be provided to potential tenderers.
Where health and safety is determined to be a critical component of the tender and contract
- Potential tenderers might be expected to submit a health and safety plan.
- Principals may then ask potential tenderers questions to help assess their health and safety capability and competence for that work, and how they would manage health and safety.
Benefits of looking at the health and safety management of potential tenderers at the pre-tender stage are that it:
- emphasises from the beginning that health and safety is an important issue
- limits the number of tenderers, so that only contractors who have appropriate health and safety practices in place are invited to tender
- allows more time for assessing and negotiating the health and safety performance of tenderers.