The legal explanation why a strict contractor engagement process is a necessity … not an optional extra!

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Introduction

The principle in law that Marisco must only engage contractors who are competent to carry out their work safely and compliantly is embedded in several legislative Acts and Regulations that address the health and safety and building safety issues we must comply with.

The way we remunerate and record the financial transactions that arise in the course of doing business with contractors is governed by case law, legislation and the rules of the HMRC impose upon us.

The terms and conditions of the written contract of engagement we have in place with out contractors are subject to a range of case law, HMRC taxation regulations and employment law.

The contracts we have with our insurance underwriter impose certain conditions and restrictions we must observe in respect of engaging and working with other contractors.

The contracts we have with our clients impose certain conditions and restrictions we must observe in respect of engaging and working with other contractors. Many require we seek written approval before engaging another contractor.

Managers can unfortunately be lulled into a false sense of security by believing that because they have suffered no adverse consequences for repeatedly failing to comply with company policies and procedures, that will continue to happen. It is a fair bet that the directors of the seven companies that the Cheshire Fire Authority are currently prosecuting for corporate negligence in the Beechmere Fire incident, wished their employees and contractors had taken more care to comply with the law.

To comply with the law, every Marisco manager with the authority to appoint and work with a contractor must have sufficient knowledge of the legislation and regulations that apply to that process. If they lack that understanding, then they are not competent and should not be involved in this process.

Set out below are the key legislation that applies to the engagement and appointment of contractors.

The Health and Safety at Work etc. Act 1974 (HASAWA 1974)

This is an 'enabling act' that sets out the broad principles of health and safety practice in the UK.

Section 2(1) requires every employer must ensure, so far as is reasonably practicable, the health, safety and welfare at work of all their employees.

Section 3 sets out that every employer and self-employed person must conduct their undertakings in such a way to ensure, so far as is reasonably practicable, that persons not in their employment who may be affected are not exposed to risks to their health or safety.

Both of these sections require Marisco to manage the behavior and control of both their employees and contractors so they can work safely together.

The Management of Health And Safety at Work Regulations 1999. (Man Regs 1999)

These regulations provide more explicit guidance on what employers are required to do in managing health and safety under HASAWA 1974.

Section 2(3) requires every employer with more than 5 employees must have a written heath and safety policy. This is why we request contractors for a copy of their H&S Policy. It provides an insight into how they may approach the subject of safe working hen they on our sites.

Section 3 requires every employer and self-employed person to carry out a suitable and sufficient risk assessments. Employers with more than 5 employees must record their significant findings and the proportionate actions they will take to manage those risks. For our purposes, we require every contractor to submit a risk assessment in advance of attending a site. We need to assess how competent they are to manage their own health and safety when they are on our sites, and consider making additional arrangement to ensure their workers follow our safe working procedures. For smaller contractors, it may be necessary to plan to have the site manager or supervisor remain on site after carrying out the initial induction to ensure safe working practices continue to be observed and to stop unsafe behaviors before they become a problem.

Both of these sections require Marisco to manage the behavior and control of both their employees and contractors so they can work safely together.

CDM Regulations 2015 and the Building Safety Act 2022

The Construction (Design and Management) Regulations 2015 (CDM Regs) together with provisions in the Building Safety Act 2022 (BSA) require Marisco to carry out sufficient investigations to establish the contractor's competence and commitment to building safety standards before they begin working on our sites.

Those inquiries will seek to establish each contractor can provide credible evidence they will:

• Provide evidence they are professionally competent to carry out the work they have agreed to undertake.
• Carry out their work in accordance with all relevant Building Regulations.
• Carry out their work in accordance with the rules the Building Safety Regular is introducing.
• Comply with their duties as a contractor under the CDM Regulations.
• Cooperate with us in executing our duties as a contractor, principal contractor, or when we assume the principal designer role under the CDM Regulations.
• Provide the information we require to helps us prepare a Construction Phase Plan and comply with the provisions made within that document.
• Provide the information to be added to the health and safety file required by Section 12(5) of the CDM Regs.

A point of special interest is CDM Regs 2015 Part 3, Section 15.7 states a contractor must not employ or appoint a person to work on a construction site unless that person has, or is in the process of obtaining, the necessary skills, knowledge, training and experience to carry out the tasks allocated to that person in a manner that secures the health and safety of any person working on the construction site. We can therefore only comply with Section 15.7 if our contractors informs us in advance of the credentials of the those operatives they intend to put on site, and we assess and confirm their identities when they arrive.

The HSE publish some useful guidance on the CDM Regs.

The Regulator Reform (Fire Safety) Order 2005

These Fire Safety Regulations have undergone constant amendments since 2005, including many significant changes introduced by the passing of the Building Safety Act 2022. Many of the new provisions came into force in October 2023, and they impose new legal duties and obligations on our clients and on contractors like ourselves as we go about our work.

The most important consideration for every Marisco operative working on any of our sites is the Fire Safety Regulations will recognise them as a potential responsible person. This has significant personal implications with regards to individuals automatically assuming certain legal fire safety duties and obligations concerning the prevention of a fire and dealing with fire safety matters, which include:

• Carrying out and recording a fire safety assessment in the absence of another responsible person providing one.
• Observe all fire safety permit-to-work site rules.
• Considering what actions need to be taken and by whom to raise the alarm and evacuate the building in the event of a fire.
• Never permitting any operative to carry out any passive fire protection work within a building unless they are competent to do so.
• Completing the Fire Door Maintenance Report and send a copy to the client informing them of the details of how any work that was carried out at their request on any fire door(s).
• Gaining the written permission of the client to penetrate any fire compartment wall, floor or ceiling before doing so. Many clients are introducing new procedures for this type of work in all building that fall into scope of the Fire Safety Regulations and Building Safety Act 2022. We cannot assume that established working practices with our clients will continue to remain valid under the new Building Safety Regulator regime.
• Completing the Fire-Stopping Report and send a copy to the client informing them of the details of how any fire-compartment penetrations were carried out and detail of how we fire-stopped it.
• Completing a Fire Safety Non-Conformity Report that identifies any fire safety issue that comes to our attention as we carry out our work.

As a Marisco employee, worker, or contractor, you cannot avoid or transfer your personal legal obligations imposed on you by the Fire Safety Regulations. Claiming ignorance of the law is never accepted as a defence. Deliberately failing to comply with any of the fire safety controls we have in place, such as you not bothering to obtain a hot-works permit and/or failing to complete the fire watch, that subsequently causes a fire regardless of whether it does result in the loss of life or a serious injury, will see Marisco being prosecuted by the Local Fire Authority. It is possible you personally may be prosecuted.

CIS and VAT regulations

The Finance team own the responsibility for ensuring the financial transactions the Company enter into with third parties always conform to all relevant financial legislation and HMRC regulation.

With respect to the engagement of contractors, the financial compliance issues that must be considered include:

• The employment status of a contractor. This is normally a straightforward decision, the exception being the engagement of self-employed individuals where the frequency and nature of their engagement changes over time to compromise their self-employed status.
• Whether the work undertaken falls within the scope of the CIS rules. This can be highly contentious as one can have situations where contractors refuse to accept our opinion that the work falls within the scope of CIS and is therefore subject to a CIS deduction. To avoid the need to refer the matter to the HMRC for a decisions, it is essential this sort of issue is resolved before work begins.
• Marisco advising in advance of work commencing what VAT rate and system to apply when the contractor invoices us for work done.
• Collecting and retaining evidence why a different VAT rate is applied, such as billing VAT as zero-rate because the project is a new build, or connected with disabled adaption. Not surprisingly, the HMRC will not accept just our word that the zero or reduced rates apply. They demand we retain evidence in the form of photographs, building plans, official letters, etc. to support the VAT rate. such records must be kept for up to 7 years.

In summary

The whole built environment sector is undergoing a long overdue transformation into one that will improve its building safety track record of recent years.

One of the most significant changes Marisco will face in the coming year is a result of the Building Safety Regulator putting increasingly more pressure on our clients to tighten up on the way they go about engaging contractors.

It will no longer be acceptable to assume competency. It must be evidenced by renewable, third-party accredited qualifications at both the organisational and individual operative level.

This explains why we have been so proactive since the 2017 Grenfell Fire tragedy to secure such qualifications. We did not need a crystal ball to foresee that proving competency would become a key determinant as to whether contract property refurbishment firms like Marisco would continue to prosper under the new legislative changes that have come to pass.

The recent amendments to the Fire Safety Order make it far clearer who within our clients' organisations will be deemed to be responsible persons and therefore held to account in a fire accident. The Building Safety Act 2022 specifically requires our clients to name an accountable person who will be held to account for all subsequent failing in the safety of the buildings they are responsible for. It is inevitable that these people will demand a far higher degree of control and management over the selection and control of contractors in the future. Some housing associations have already instigated a strict work permit systems to control all contractor activities across their property portfolio.

The question of social housing contractor competency will soon be back in the headlines when The Grenfell Fire Inquiry publishes its Phase 2 Report. That report will fuel a media storm of blame-seeking recriminations that will spill over to the whole social housing sector. It is widely expected to be highly critical of the conduct of the Kensington and Chelsea Local Authority, its professional advisors, and their respective roles in the tower's refurbishment programme that created the disaster incubation conditions that led to the fire. The public debate will be further fueled by announcements of those who will prosecuted for part in the fire.

The Beechmere prosecution list has set a new legal precedent that should serve as warning to everyone working in the built environment sector. If you have the misfortune to be involved in providing any kind of professional fire safety services, or even just routine maintenance or repair services, in the event of a fire you may find yourself being prosecuted by either your acts of commission or omission.

Why is this relevant to the contractors we engage?

Simple. Introducing a contractor onto a site we are responsible for significantly increases the risk they may work to lower standard than we do. It is essential we manage those risks to avoid precipitating a disaster we will come to regret.

Marisco Group

Head Office:
Unit J5, The Fulcrum
Vantage Way, Poole, BH12 4NU

Tel: 01202 474001

Email: accounts@mariscosouth.com

Marisco South Ltd is registered with: