THE OCCUPATIONAL HEALTH AND SAFETY ACT: THE HIDDEN LEGAL RISKS IN ENGAGING WITH THIRD PARTIES. Kate Collier Partner Webber Wentzel

Transcription

1 THE OCCUPATIONAL HEALTH AND SAFETY ACT: THE HIDDEN LEGAL RISKS IN ENGAGING WITH THIRD PARTIES Kate Collier Partner Webber Wentzel May 2015 Webber Wentzel 2014

2 Legal risk exposure in terms of the ohsa Managing legal risk exposure in terms of the OHSA is an important business imperative for a number of reasons including: the risk of criminal sanction; reputational risk; the need to follow principles of good corporate governance; risk to business in the event of prohibition notices; and increased costs and lower production associated with unsafe workplaces, high incident rates and absenteeism. Focus is often (and probably correctly) on ensuring compliance with the OHSA within an organisation, its people, its places. There are legal risks in terms of OHSA compliance in engaging with, or operating near, third parties which should be considered in the implementation of compliance strategies, risk management protocols and legal risk management systems: "non-employees" section 9 of the OHSA; "users" especially in the context of hiring plant and machinery ; suppliers, manufacturers, designers etc; lessors of buildings ; and mandataries. 2

3 managing risks to "non - employees" - section 9 ohsa "Every employer shall conduct his undertaking in such a manner as to ensure, as far as reasonably practicable, that persons other than those in his employment who may be directly affected by his activities are not thereby exposed to hazards to their health or safety". Who is deemed to be "in employment"? persons to whom work is given and payment made; and persons working under direct supervision of an employer important inclusion given the exclusion of Labour Brokers from the definition of "Employer". This means that practically, for purposes of occupational health and safety, persons engaged through the services of a labour broker are deemed as employees. Who are "persons other than in his employment"? Other employers' employees contractor personnel for example; Consultants / visitors ; and Neighbours and the public who may be affected by the undertaking (the work being performed). This distinction is important from a legal perspective determines what obligations an employer owes to whom. Inclusion in risk assessment process and ensure implementation of adequate controls. Reasonably practicable measures. If there is a breach exposure to criminal sanction under OHSA, civil risk also exists. 3

4 being a "user" and hidden legal risks A "user" in relation to plant or machinery means "the person who uses plant or machinery for his own benefit or who has the right of control over the use of plant or machinery, but does not include a lessor of, or any person employed in connection with, that plant or machinery" : interpretation based on underlying intent? is it clear which party would then be responsible in the event of an incident? is it clear who the user actually is? General view?: this does not blur any employment lines and the lessor remains responsible for compliance with the OHSA in respect of his own employees but that the lessee (who is the user: benefit and control over the use of the machine? ) must discharge the regulatory obligations. Case law doesn t necessarily (currently) reflect this view. Interpreted in the context of a delictual claim for damages and possibly not, in my view, with a view to the underlying intentions of the OHSA and how these arrangements practically work: Castle Crane Hire v B&E Quarries 1999 case in South Eastern Cape Local Division High Court where a lessor of equipment (a crane in this case) provides an operator to operate his machinery, he (the lessor) is the user; cannot expect lessees to know about machinery leased from specialists question of "control over operator": referred to the judgment in RH Johnson Crane Hire v Grotto Steel Construction (1992); 4

5 being a "user" and hidden legal risks In RH Johnson Crane Hire v Grotto Steel Construction (1992) the court held that: "in the case of a skilled worker, such as a crane driver, who is hired out with his crane, it is not easy to prove that the control over the manner in which he operates his crane has been transferred to the hirer of the crane".» although the lessee controlled the operation by giving instructions to the operator he does not have the right to control the manner in which the operator controls the machine.» The court held that this may be different if "in the contract entered into between the parties the power of supervision over the manner in which the servant does his work is transferred from the master (i.e the general employer of the operator) to the hirer".» However, the contract in Castle Crane Hire said that the lessee had "sole and absolute control". The Court however stated that: the operator had a duty to his "general employer" to ensure that the crane was operated properly and that the "temporary employer", although he had full control over operator in the sense of being able to instruct him did not have the right of control over the manner in which the work was performed; in this case the supervisor was qualified but "this will not always be the case" (which seems to go against a "case by case" determination); and the lessee cannot be liable for the negligence of the operator even though the contract gives the lessee "sole and absolute control".» Importantly for purposes of the OHSA who must then ensure that all necessary safety measures have been implemented in respect of machinery? 5 the lessor argued that the lessee was the "user" and therefore had to ensure compliance with the OHSA. However, the court, while accepting that the lessee uses the equipment for its own benefit, rules that where the operator is also supplied, the lessor is included as a user;

6 being a "user" and hidden legal risks It seems the courts believe that "control over the use" means the same thing as "control over the manner equipment is operated"; Seems that even where a contract provides for "sole and absolute control" the courts do not believe that this can be practically effected if the operator is employed by the lessor; Seems that the courts believe that the "user" may "include" parties does this mean that both entities are the user? Does this mean that the "user" may change depending on circumstances of each case? What this DOES mean is: there may be a level of uncertainty as to who the user is. there may be an interpretation that the hired operator becomes a "temporary employee" although this complicates the application of the judgment even further given the reason for the "control" ruling is that the operator was the lessor's employee. the manner in which supervision is arranged and by whom such supervision is provided must be carefully considered. standard "t&c's" may no longer assist in regulating these contracts each scenario may require careful consideration. the lessor may remain legally exposed for the use of equipment despite not having control over the machinery while at a site or over the instructions given for its use. 6

7 Legally limiting liability - undertakings as contemplated in the ohsa Section 10: duties of manufacturers, designers, importers, sellers, suppliers or articles or substances for use at work have additional obligations in respect of the article or substance supplied: ensure that it is safe and without risks to health when properly used; if erected or installed, that nothing about the manner in which this is done renders it unsafe or creates a risk to health when properly used; and substances provision of information. The OHSA includes the ability of manufacturers, designers, importers, sellers, suppliers or articles or substances for use at work to limit liability and relieve them of the duties imposed by section 10. Not used as often or as effectively as it could be: the purchaser to provide the "supplier" with an undertaking in writing that specified steps will be taken, sufficient to ensure that as far as reasonably practicable the "item" will comply with all requirements and be safe and without risk to health when properly used; the undertaking "shall have the effect of relieving the first mentioned person from the duty imposed upon him by this section to such an extent as may be reasonably having regard to the terms of the undertaking". The steps set out are therefore important as may remain responsible if any aspects omitted. Leasing of buildings lessor is not the employer therefore not necessarily obliged to provide a safe workplace (although would have commercial obligation to assist lessee in providing such a safe workplace): 7 Electrical Installation Regulations "the user or lessor of an electrical installation shall be responsible for the safety, use, maintenance of the electrical installation he or she uses or leases" however: "where there is a written undertaking between a user or lessor and a lessee whereby the responsibility for an electrical installation has been transferred to the lessee, the lessee shall be responsible for that installation as if he or she were the user or the lessor".

8 Engaging with mandataries An employer may be held vicariously criminally liable for the acts or omissions of its own employees: Whenever an employee does or omits to do any act which it would be an offence in terms of this Act for the employer of such employee or a user to do or omit to do, then, unless it is proved that- in doing or omitting to do that act the employee was acting without the connivance or permission of the employer or any such user; it was not under any condition or in any circumstance within the scope of the authority of the employee to do or omit to do an act, whether lawful or unlawful, of the character of the act or omission charged; and all reasonable steps were taken by the employer or any such user to prevent any act or omission of the kind in question. the employer or any such user himself shall be presumed to have done or omitted to do that act, and shall be liable to be convicted and sentenced in respect thereof; and the fact that he issued instructions forbidding any act or omission of the kind in question shall not, in itself, be accepted as sufficient proof that he took all reasonable steps to prevent the act or omission. 8

9 engaging with mandataries Any such charges can of course be defended, but any such defence will be based on a) proving the specific aspects as listed in section 37(1) OHSA and b) demonstrating that the employer had complied with all of its duties. An employer may also be held criminally vicariously liable for the acts or omissions of the employees of any of its Mandataries. However, this risk can be managed in far more concrete terms than in respect of an employer's own employees. The provisions of section 37(1) shall mutatis mutandis apply in the case of a Mandatary of any employer or user, except if the parties have agreed in writing to the arrangements and procedures between them to ensure compliance by the Mandatary with the provisions of this Act. The important considerations in this regard are ensuring that the agreement meeting the legal requirements of "agreed arrangements and procedures". Common errors: "construction focused"; set of rules handed over; signed by unauthorized persons / individuals rather than on behalf of the mandatary; and not being aware of when a company is a mandatary - NB labour brokers are NOT mandataries and personnel so engaged are deemed as employees. 9

10 conclusion Employees and organisation key and primary focus. Engagements with third parties also need to be managed as part of the health and safety management process and not only as a commercial arrangement: contracts to reflect the requirements of the OHSA and to take into account the practical considerations of the regulator and the courts; use undertakings and agreements to limit liability as much as possible; and ensure agreements are properly worded and considered too often "health and safety documents" are left to be handled "at shop floor level" when the legal implications require greater corporate and legal input. 10

11 Kate Collier

12 JOHANNESBURG CAPE TOWN 10, 16 & 18 Fricker Road, 15 th Floor, Convention Tower Illovo Boulevard, Heerengracht, Foreshore Johannesburg, 2196, South Africa Cape Town, 8001, South Africa T T Legal Notice: these materials are for training purposes only and do not constitute legal or other professional advice