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Read this before you contract your next contractor!

by , 01 July 2013
If you don't know already, you're liable for the health and safety of contractors who work on your premises.

Read the questions and answers from our Helpdesk because they could apply to YOU!

Can a contractor indemnify my company against injuries or death?


I'm responsible for maintenance at our offices (we're a medium sized engineering firm). We outsource maintenance, repairs and renovation work to a number of contractors. My concern lies with the smaller contractors that carry out routine work for us. Many of these contractors aren't registered with the Compensation Commissioner. 

No. If your contractor is not registered with the Compensation Fund then your company will be liable for the claim. See Section 89 of Compensation for Occupational Injuries and Diseases )(COID) Act. The Contractor can also be prosecuted if they aren't registered with COID and will have to pay the full amount of compensation due to an employee ( Section 89).

Do you have all 29 essential health and safety inspection checklists?
Your inspection checklist is your first step towards full compliance. Without it, your health and safety policy won't be legally compliant.
You have your health and safety policy drawn up, but how often do you check that your employees comply? The easiest way is to have a set of inspection checklists you can use each time you need to check that your safety measures meet the requirements of your risk assessment.
Find out more here

Insurance that covers injuries and death on or around your property

Other than a valid COID certificate, is there any other similar insurance that the contractor may take out to indemnify us?
The contractor can take out Public Liability Insurance. This is basically insurance which covers injury or death to anyone on or around your property.

Will our own 3rd Party Insurance cover us in case of an incident or death where a contractor is not COID registered?

If you have Public Liability Insurance it'll pay out to a person who wasn't your employee but was injured or killed on your premises. This may not happen if the person works for you. In this instance the claim would go against your COID number.

What is the section 37(2) appointment?


Do we require a Section 37(2) appointment of the Occupational Health and Safety Act for small work, e.g. to unblock a drain?

A section 37(2) appointment covers your company and makes sure the contractor takes responsibility for his workers and work as far as health and safety is concerned. If you think the risk is very small, you can choose not to have this appointment in place. If you use the same contractors all the time it's a good idea to get put it in place.

Attention! You could be risking 1-2 years in prison for health and safety non-compliance!

If the Department of Labour (DoL) Inspectors had to show up at your door today, can you be 100% certain your SHE file is in order and up-to-date with all relevant documents?

To make it easier for you we have 106 electronic templates to start your Health and Safety System from scratch.


Do I need a letter of good standing?

Why is it mandatory to obtain a letter of good standing and where in the Act do I find this reference?

It isn't a legal requirement to obtain a letter of good standing from Compensation for Occupational Injuries and Diseases (COID). However more and more companies that contract services demand a letter of good standing before a contractor can start work on their premises i.e. it's mandatory for any contractor who wants to work at XYZ corporation to produce a letter of good standing before they are awarded a contract.

The reason for this is that many smaller companies don't register with Compensation for Occupational Injuries and Diseases (COID) and don't pay contributions toward the compensation fund. If you have a contract worker on your premises and his / her legal employer hasn't registered with COID or they haven't paid up their annual contribution according to the assessed returns, then your company will have the Compensation for Occupational Injuries and Diseases (COID) claim of their employee lodged against your company number.

This becomes significant for your company if you have high claims and are then penalised and have to pay an increased contribution.

Note that the DoL can escalate your premium up to 200% of the industry class rating.
If your claims are low, you can obtain a rebate calculated over a 3 year cycle. If you pay for contractor claims it can jeopardise your chances of a refund.

Injury to contractor employee on your company property


If I have contractors that work for my company and an injury occurred to an employee of the contractor which resulted in a lost time injury (LTI), should my company record this as a LTI on our records or only as an injury on duty (IOD)?

This will depend on your company structure and the processes you have in place to report incidents and use incident data.

If you have a lot of permanent contractors you may want to run your LTI statistics in two groups i.e. 1 set for employees and 1 set for contractors. Bear in mind that you may want each contracting company to run their own stats and report to you on a monthly basis.

You could also run one set of data and get all incidents reported to a central database.

Your incident information should be able to give you the following:

  • Type and number of incidents per department and section;
  • Category e.g. permanent employee or contractor. If a contractor – which company are they employed by;
  • Severity of incident;
  • Loss i.e. near miss, property damage, first aid case, medical treatment case, disabling or lost time injury, fatality;
  • Cost of the incident.
The purpose of incident data and incident investigations is to uncover where the high risk areas or activities are, to determine the root causes of the incident and make sure that corrective and preventive actions are taken to ensure that the frequency and severity of incidents are reduced.

Remember the Health and Safety Advisor covers Contractors in the workplace in more detail under chapter C01.

Until next time,

Take care

FSP Business


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