March 28, 2006

How does an owner become a contractor? It’s easy if you don’t know how

PETER KENTER

correspondent

When owners engage contractors to complete a construction job, part of the expected benefits include passing on the responsibility for health and safety concerns.

But don’t rest easy with the division of responsibilities, says Ryan J. Conlin, an associate with the Toronto office of legal firm Stringer Brisbin Humphrey: owners can easily become a job’s official constuctor without knowing it.

Hiring a contractor implies a hands-off relationship from the perspective of the Ontario Health and Safety Act (OHSA).

“Having a contractor agree to be ‘fully responsible’ for compliance with all applicable OH&S legislation and standards, or having them identify themselves as constructor in a Notice of Project, isn’t enough,” says Conlin.

Owners can be identified as constructors under OHSA by taking on the constructor’s responsibilities — even minor ones. That could include such seemingly innocuous decisions as hiring a sub-contractor directly, identifying preferred sub-contractors or vetoing a hiring choice. Even a concern for safety on the project could make an owner liable for job-site safety violations, says Conlin.

“If I’m an owner who visits the construction site and sees that XYZ contractor is involved in a safety violation, should I report the deficiency to someone? Only if I want to risk becoming the constructor,” Conlin says.

“If I want to avoid that, I have to shut down the project or part of the project to deal with the problem.”

An owner might identify a problem to the contractor’s health and safety rep.

“But the more involved the owner gets, the greater the risk,” says Conlin. “We might argue that this is counter-productive to safety, but an owner might have to present that argument in court — after being identified as the constructor.”

A solid contract identifying the responsibilities of each party can go a long way to avoiding role confusion, says Conlin. “But a lot of it is up to the interpretation of the individual Ministry of Labour inspector.”

Conlin also warns owners to be vigilant in seeking independent operator opinions from the Workplace Safety and Insurance Board (WSIB).

“In the absence of an independent operator opinion, the WSIB will treat independent contractors as your employees and will hold your company responsible for any unpaid premiums,” he added. “That could add up to hundreds of thousands of dollars where a number of independent operators have been retained.”

“... the WSIB will treat independent contractors as your employees and will hold your company responsible for unpaid premiums.”

Ryan J. Conlin - Stringer Brisbin Humphrey

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