There’s a trend in the health and safety industry that is gaining traction and looks set to become the new norm – enhanced health and safety oversight of contractors.
Of course, guidance from the Health and Safety Executive (HSE) states that companies and the contractors they employ both have responsibility for health and safety. A key reason for this approach, and the fact there is specific guidance on it, is to ensure companies understand they can’t delegate health and safety responsibility to the contractors working for them.
That guidance has been in place for some time, however. What we are seeing over recent months is something different. Specifically, it appears, at least anecdotally, that companies are going beyond the letter of the HSE guidance when it comes to their management of contractors.
This is, obviously, a welcome change in approach among those companies it applies to. After all, the number of contractors working for companies is significant. The UK government itself spends £251.5 billion per year outsourcing and contracting various tasks, projects, and responsibilities.
In addition, self-employed people now make up 15 percent of the UK workforce. Add in all the companies who work as contractors and you start to get an understanding of the scale of contractor involvement in the workplace and the impact that can have on health and safety.
Drivers For this New Trend
So, what factors are driving this new trend of companies taking a greater interest in the health and safety policies, practices, management, and monitoring of the contractors they employ?
There are likely to be multiple factors at play, including increasing demands of clients and customers, particularly in corporate environments.
This is because companies must adapt to things like changing technologies and information dissemination in order to protect their reputations. After all, a viral story on social media can be incredibly damaging.
One effective approach to protect company reputation is to take preventative action. When it comes to health and safety, this involves more careful vetting and monitoring of contractors that companies employ.
Related to this is the increasing importance that companies place on CSR (Corporate Social Responsibility) to the future success, viability, and competitiveness of their businesses.
There are two other major factors that are probably also having a significant impact on the changing approach companies take to the way they manage contractors. Arguably, these two factors are the main drivers for this new trend.
The first is the updated UK Corporate Governance Code and the second is the introduction of ISO 45001.
The New UK Corporate Governance Code
The new UK Corporate Governance Code came into effect on 1 January 2019. The code is published by the Financial Reporting Council (FRC), an organisation that regulates accountants and auditors as well as having the responsibility of setting the UK’s Corporate Governance Code.
While the Code is not law, it does have statutory authority under other legislation. Specifically, companies must “comply or explain”. In other words, companies must comply with the UK Corporate Governance Code or provide valid reasons for their failure to do so.
So, the UK Corporate Governance Code is important. How does it relate to health and safety, though?
Board Leadership and Company Purpose
The UK Corporate Governance Code has a number of sections with the first covering Board Leadership and Company Purpose. This section includes five principles, the second of which states:
“The board should establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned. All directors must act with integrity, lead by example and promote the desired culture.”
There is still no mention of health and safety in that principle, but you also have to read a document called Guidance on Board Effectiveness. It’s a companion document to the UK Corporate Governance Code and is also published by the FRC. This guidance gives board members and company directors examples as well as more detailed direction on what they should do to ensure they comply with the Code.
The guidance on the Board Leadership and Company Purpose section of the Code includes a point on monitoring company culture. In this part of the guidance, the FRC gives specific advice to company directors on the things they should do to ensure they are properly monitoring the culture in their company.
This advice includes a list of areas where company directors can gain a deeper insight into the real culture of their organisation and whether it is in line with the board’s goals. One of those areas is “health and safety data, including near misses”.
In other words, the Code, which has statutory authority, effectively bumps ultimate responsibility for health and safety right up to board level.
ISO 45001 is a new International Standard for health and safety at work. It replaces OHSAS 18001, a British Standard that was previously used as a benchmark around the world in the absence of an international option.
ISO 45001 draws from its predecessor, but it is a distinct new standard that differs from OHSAS 18001 in several ways. It was published on 12 March 2018 but did not apply immediately. Instead, this date started a three-year migration period for companies to move from the previous standard, OHSAS 18001:2007 (a revised version of the original OHSAS 18001), to ISO 45001.
This means OHSAS 18001:2007 will no longer be valid at the end of the three-year period, which is 12 March 2021.
As a result, companies are working now to ensure their policies and procedures meet the new standard ahead of the 2021 deadline.
How does this relate to workplace health and safety for contractors, though?
ISO 45001 and Contractors
ISO 45001 offers a clarified definition of who a “worker” is in a company. In its Terms and Definitions section, it describes a worker as being a “person performing work or work-related activities that are under the control of the organisation”.
It then goes on to say this includes “workers employed by the organisation, workers of external providers, contractors, individuals, agency workers, and by other persons…”.
This means companies must apply the same policies and procedures to contractors as they do to employees. In other words, companies must monitor and manage contractor health and safety in the workplace.
Reiterating a previous point, there are likely to be a lot of factors at play causing companies to seek enhanced oversight and management of the health and safety of contractors.
However, the combined impact of the new UK Corporate Governance Code and the transition to ISO 45001 is sure to be a part of this trend, i.e. it’s now written into the Corporate Governance Code that boards are responsible for company health and safety oversight, monitoring, and management, while ISO 45001 includes contractors within that remit.
As discussed in a previous post, we don’t yet have clear statistics to measure death or serious injury rates among contractors as a distinct group of workers. That said, this change in the management and oversight of contractor health and safety is significant.