With the advent of the Construction Regulations, 2014 (the "regulations"), which are binding in terms of the Occupational Health and Safety Act, 1993 ("OHASA"), additional duties are now placed on the "client" that did not exist under the previous regulatory regime. For example, the client now assumes the duty to prepare a baseline risk assessment for a construction work project and, depending on the factual circumstances, to apply for a construction work permit.
The regulations define a client as any person for whom
construction work is being performed. For a client who is not
involved in the construction industry or who does not possess the
expertise and experience required for a construction work project,
compliance with these obligations may be impractical. Further, it
is evident from the wording of the regulations that these
obligations may not be "delegated" to any appointed
"principal contractor" or "contractor".
Sub-regulations 5(6) and (7) of the regulations provide for the written appointment of a competent person to act as an agent on behalf of the client. Clients would be astute, however, to consider if a written appointment and the terms of an underlying agreement of mandate are sufficient to protect themselves from any potential liability that may ensue as a result of an offence in terms of OHASA.
The purpose of the so-called "delegation" agreements contemplated in terms of section 37(2) of OHASA
In terms of the common law of agency, the agent must act in accordance with, and within the limits of, the authority conferred by its principal. If the agent fails to perform the mandate or performs it improperly, thereby causing loss to the principal, the agent may be liable to the principal in damages.
In relation to criminal liability as a result of the conduct of the agent, section 37(1) of OHASA provides for the potential liability for the principal by means of the legal principle "vicarious liability". Section 37(1) of OHASA provides that conduct of an employee that constitutes an offence in terms of OHASA may, in certain circumstances, be imputed to an employer, who in turn may be held liable for such conduct.
In general terms, an employer may escape liability if it can prove that the employee acted without permission and outside the scope of authority, and that the employer took all reasonable steps to prevent the conduct in question. By virtue of section 37(2) of OHASA, this section also applies to a "mandatary" of any employer or user ("mandatary" is defined in section 1 of OHASA as including an "agent"). However, section 37(2) of OHASA provides that an employer may escape liability for the conduct of a mandatary by concluding a written agreement for the arrangements and procedures for compliance with the provisions of OHASA.
A practice exists in the construction industry in terms of which an agreement contemplated in terms of section 37(2) of OHASA is concluded between the so-called "employer" and a "contractor" (who would also be an "employer" for the purposes of OHASA) in circumstances where the employees of the contractor perform work at a workplace. By means of such an agreement, the contractor as "mandatary" of the employer agrees that it shall be responsible for the duties and obligations in terms of OHASA, and the regulations binding in terms thereof, as far as such duties and obligations relate to the work that is to be performed at the workplace. The employer may therefore escape liability, provided that it has agreed in writing to the arrangements and procedures with the contractor to ensure the contractor's compliance with the provisions of OHASA.
Given the potential liability that may be imputed to the client in relation to the conduct of its agent, it would be prudent that a similar agreement is concluded to regulate the relationship between the client and the agent. In circumstances where the client may not possess the expertise and experience required for a construction work project, such an agreement would be essential to protect the interests of the client.
What should be included in an agreement contemplated in terms of section 37(2) of OHASA?
An agreement with the agent should, among others, deal with the following:
- the health and safety obligations of the agent as the client, as provided in the regulations. The agreement should also provide for the specific and/or other administrative duties that the client may require the agent to fulfil for the construction work project.
- the agreement should set out the obligations of the agent in relation to the principal contractor and any other contractors at the workplace.
- the agreement should contain an acknowledgment by the agent that it possesses the necessary qualifications, competency, expertise and experience in relation to the construction work project to be undertaken. In addition, the agent should acknowledge its proficiency with the provisions of OHASA and the regulations binding in terms thereof.
- the agreement should provide for the interaction between, and reporting by, the agent (at periods stipulated in the agreement and as required) to the client on any health and safety issues relating to the construction work project. This is important to ensure that the client has systems in place to follow up on the performance of the mandate by the agent, such as monthly or ad hoc meetings, external audits and inspections.
- to the extent that it is not dealt with in the underlying agreement of mandate, the agreement should provide for appropriate indemnities or warranties by the agent in relation to compliance with the provisions of OHASA and the regulations binding in terms thereof.
Failure to conclude an agreement with an agent as contemplated in terms of section 37(2) of OHASA may lead to potential liability. Ensuring that a clear and unambiguous agreement is prepared in this regard will provide a higher degree of certainty and a means by which the parties can regulate their relationship for the duration of the construction work project.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.