In today’s economy, many businesses rely on contractors to perform various tasks that are critical to their operations. This need to use contractors is a routine part of the working day. They provide a service and/or level of competence that can sometimes be impossible to provide internally, given the financial restraints all businesses have to work under.
While bringing valuable skills and expertise, managing them effectively can pose significant challenges. With the use of contractors comes legal duties that must be met. Failure to meet those duties can result in both criminal and civil consequences that further impact the public image of the company and its bottom line.
Since a legal precedent was set following a serious accident at Associated Octel in Ellesmere Port in 1990 relating to the Health and Safety at Work, Etc. Act 1974 Section 3 duty of care towards contractors, businesses have been grappling with the issue of the suitable control of contractors.
The judgment made by Lord Hoffman in 1996 relating to this case made it clear that the requirements imposed by Section 3 of said Act extend to the ‘client’ a legal duty of care to ensure that any contractor they appoint is working in such a way as to protect themselves, as well as others during that work activity.
Controlling Contractors Following The Octel Ruling
Since this ruling, prosecutions are still happening, such as this one: Property Management Company fined following a gas explosion
In the world of facilities management, this situation can be more complex. When work is required within the landlord-controlled areas of a multi-tenanted building, the landlord or owner is legally deemed to be the client by default.
To meet their legal duties and to ensure the effective ongoing management of the building, many landlords appoint a facilities management company to manage that work on their behalf. As such, the facilities management company, through their Facilities Managers, appoint and control contractors on a regular basis.
However, the landlord remains ultimately accountable for any breach of Section 3 that may occur, although it is possible for the facilities management company to also fall foul of the law simultaneously. In that respect, the landlord’s legal compliance is in the hands of the facilities management company.
Poor contractor management can result in increased risks, costs, and potential legal and reputational issues. Therefore, it is essential that appropriate controls are in place.
5 Steps of Contractor Management
To address these challenges, a common approach taken by businesses for the control of contractors is referred to as the ‘5 Steps of Contractor Management.’ This approach aims to ensure that contractors follow established procedures and comply with all relevant laws and regulations. By following these five steps, businesses can maintain a high level of control over their contractors and minimise potential risks, ensuring that the work is completed safely, efficiently, and effectively.
Step 1 – Planning For Effective Contractor Management
Step 1 for effective contractor management is planning. The first task is to clearly identify what needs to be done. The client or their facilities management company, on behalf of the client, should determine the scope of work and the criteria to be applied when selecting the contractor for the job. This sets the foundation for the work and ensures that everyone involved is on the same page.
But more than this, you need to identify what information you will need to provide to the contractor so they can effectively plan their work and undertake the required risk assessments. Without the right information, how can you expect them to effectively risk assess the task you expect them to undertake?
If the work required is non-routine, you should assess if the work will fall under the requirements of the Construction (Design and Management) Regulations 2015. If this is the case, then a whole ream of extra considerations come into play, particularly if multiple contractors are involved, like the potential need for a pre-construction phase plan and the need to appoint a principal designer and principal contractor.
Step 2 – Selection Of Contractors
The selection of contractors is another key step in the contractor management process. It is essential to choose the right contractor to ensure that the work is completed to a high standard and in a timely manner. Conversely, selecting the wrong contractor can lead to significant issues, including delays, increased costs, and even legal disputes.
The importance of getting the right contractor cannot be overstated. The right contractor will have the necessary skills, experience, and resources to complete the work to the required standard.
Reasonable steps should be in place to vet potential contractors to ensure they have suitable Health and Safety management arrangements in place. This can either be done internally or outsourced to a large degree. There are a number of contractor approval or accreditation schemes in place that can assist clients in identifying suitable contractors.
Naturally, you will not want to overlook a thorough evaluation of their qualifications and credentials, including their licenses, certifications (see above), and insurance. It is also important to assess the contractor’s financial stability and reputation within the industry. Checking the contractor’s references and past performance can provide valuable insights into their reliability, work quality, and health and safety performance.
The next stage is to provide all potential contractors with the information identified in the ‘Step 1 – Planning’ stage. This allows them to quote for the work and effectively risk assess the work and develop a suitable safe system of work. This assessment is then documented to produce the risk assessment and method statement (RAMS) for the work and allows for the client to select the most suitable contractor.
The final stage is then for the facilities management company, on behalf of the landlord, to assess the RAMS provided by the contractor/s for the work in terms of its general compliance with health and safety good practices. To achieve this, the assessor must have a reasonable understanding of the hazards and risks associated with undertaking the work. This stage is critical in demonstrating how the client’s legal duty of care under Section 3 HSWA is to be met.
The client, through their facilities management company, must ensure that the way the work is intended to be undertaken has been suitably risk assessed and the work method is in line with good practice. Simply accepting the RAMS without a suitable level of assessment fails to meet the client’s duty of care to the contractor.
Step 3 – Working Onsite
The facilities management company will need to ensure that work only starts once basic checks have been undertaken. This can be simple things like checking the contractors intend to work to the agreed RAMS, the required equipment and safeguards, as detailed within the RAMs, have been brought by the contractor.
There may also be a need to provide some level of site or building induction, for example, providing details relating to the emergency arrangements for the area.
The importance of checking that contractors have brought everything they need to undertake the work in line with the agreed RAMS cannot be overstated. Without the proper equipment and safeguards, contractors cannot work to the agreed RAMS and can therefore pose health and safety risks to themselves and others.
If this is the case, then not only has the client and/or the facilities management company failed to meet their duty of care towards the contractors, but they may also have failed in their duty of care to others affected by the work.
Suitable levels of oversight on how contractors are actually working should be in place. Effective oversight can help businesses identify potential issues before they become significant problems, allowing for timely corrective action and risk mitigation.
Step 4 – Checking On Contractors
This step is key to ensuring that contractors operate safely, efficiently, and effectively.
However, it is important to recognise that the client or Facilities Manager does not provide supervision for contractors. If supervision is required, the contractor must provide their own supervision for the job. The need to provide a supervisor as part of a contractor’s team of workers for any particular work activity should be identified within the risk assessment for the work and be reflected in the method statement.
The main purpose of the ‘clients’ oversight is to ensure the work is being completed as detailed within the agreed RAMS.
There are other benefits to having effective oversight when working with contractors. For example, effective oversight can also help identify unexpected health and safety hazards and other risks associated with the contractor’s work. By proactively identifying and addressing these issues, businesses can minimise the risk of accidents, injuries, and other negative outcomes.
This final stage is often missed. Within this stage, the client or facilities management company should review how well the contractor performed and identify any areas of concern or opportunities for improvement. Typical questions to ask are; Were you happy with the work done?; Was the work completed as agreed in RAMS?; Did the contractor leave the area suitably clean?; Did they remove the waste?; and Would you want to use the same contractor again?
Step 5 – Contractor Review
The level of review should be proportional to the trust you have in the contractor.
There are several reasons why the review process is essential. First, it provides an opportunity to assess the contractor’s performance and identify any issues or concerns that may need to be addressed. This helps to ensure that the contractor meets the agreed-upon performance standards and that the work is completed in a satisfactory manner.
Another important reason why the review process is important is that it helps to ensure that the contractor is demonstrating the required level of overall competence and they are effectively implementing their own health and safety requirements.
An annual review may be suitable if you have an ongoing arrangement with a trusted contractor you use frequently. But you may want to review the first job done by a new contractor and then frequently whilst you build up that level of trust.
In conclusion
So, in closing. Facilities Management companies have a key role in protecting their clients and themselves by ensuring the legal duty of care toward all contractors is achieved. To achieve this, all that is really needed is good planning and the active monitoring of contractors as a matter of routine.
This will minimise risks to their client and themselves and enhance both their reputations. By investing in good planning, clear communication, and active monitoring, FM companies can ensure that the work is completed safely, efficiently, and effectively while minimising potential legal and reputational issues.
