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May 2014 15 CHERYL EDWARDS AND JEREMY WARNING LEGAL LANDSCAPE M any 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 compli- ance with OHS laws," or words to that effect. Tragically, the same scenarios — contractors accessing work sites with hidden dangers, undisclosed hazard- ous 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 con- tractor responsible." This somewhat understandable sen- timent, motivated by a desire to protect your own workforce, entirely ignores the web of detailed, specifi c OHS obli- gations that exist when contracting. Generally, within the complex web of Canadian OHS laws relating to con- tracting, a business cannot contract out of its OHS responsibilities. This may include responsibilities as owner, employer, constructor or prime con- tractor, and individual responsibilities as supervisors, directors and offi cers. "Our contractors are the experts. We have no knowledge of the haz- ards 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 ser- vices 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 respon- sibilities as constructor or prime contractor. In some OHS regimes, the contract must specifi cally state they are the prime contractor. In others, a clear government notice must be fi led and posted. But, generally, the construc- tor 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 respon- sibility and liability. OWNER RESPONSIBILITIES An owner can contract all or at least part of the responsibility for either a construction project or signifi cant job to a third-party constructor or prime contractor. Often contractor manage- ment systems create parallel strategies for both services and these types of more complex jobs controlled by a single contractor (one strategy involv- ing 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 contrac- tor management system. However, one aspect that seems to have slipped through the cracks in many contractor management systems is identifying and ensuring compli- ance 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 contrac- tor is appointed. In some areas, very specifi c and detailed legislative obliga- tions exist. One of the most extensive statutory regimes exists in Ontario under the regulation respecting Asbes- tos 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. 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 contrac- tor (say a construction or maintenance contractor who is provincially regu- lated) 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 regu- lated 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 pro- gram 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 manage- ment of service and construction contractors. Each process must meet the appropriate OHS laws for the juris- diction in which the contracted work will be performed. In addition, con- tractor management programs should include processes for: • pre-qualifying contractors and creat- ing pre-qualifi ed contractor lists • determining whether the work and most OHS responsibilities can be undertaken by a constructor or prime contractor • assessing and communicating pro- cesses 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 ensur- ing 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-compli- ant contractor, as appropriate to the situation. Cheryl A. Edwards and Jeremy Warning are both former OHS prosecutors who are now partners at Mathews Dinsdale & Clark LLP in Toronto. Edwards can be reached at (416) 777-8283 or cedwards@mathewsdinsdale.com, and Warning can be reached at (416) 777-8284 or jwarning@ mathewsdinsdale.com. The contractor conundrum Many misconceptions exist around contracting and OHS responsibilities