Is an employer liable for the conduct of its contractor?

HKSAR v The Hong Kong and China Gas Company Limited

Court of First Instance
HCMA 125/2013
The Honourable Justice Ian McWalters
Date of hearing: 15 and 23 August 2013
Date of judgment: 21 February 2014

Summary

This was a magistracy appeal to decide whether The Hong Kong and China Gas Company (the appellant) had breached its obligations under the Occupational Safety and Health Ordinance (the Ordinance) with respect to the safety and health of its employee.

Facts

The appellant engaged a registered electrical contractor, Easytech, to carry out an inspection of its electricity installation. Easytech sent an employee (Chi) to carry out the inspection, and the appellant also sent an employee (Tse) to be present during the inspection. During the inspection, Chi failed to ensure that the electricity was cut off before reconnecting one of the cables and this resulted in an explosion which caused injury to both Chi and Tse.

The appellant was subsequently charged for failing to ensure the safety and health of Tse by failing to provide and maintain a safe system of work and by not providing the necessary information to ensure the safety and health of Tse, in breach of its obligations under the Ordinance.

In the Magistrates’ Court, the appellant (who was then the defendant in the Magistrates’ Court case) argued that it should not be held liable for a hazard which was created by a contractor through the contractor’s own fault. The appellant claimed that it had engaged Easytech as a professional independent contractor and that it was up to Easytech to ensure the inspection would be carried out in such a way that would be safe to itself and its clients. As such, the appellant should not be expected to have supervised Easytech in the inspection.

However, on the contrary, the Magistrates’ Court found that Tse had a monitoring role with respect to the inspection. The appellant had intended for Tse to be present to ensure that, for example, there was no unauthorised tampering of the appellant’s property, and there were clear hazards and risks associated with this role. However, Tse was left to determine for himself whether or not Easytech was acting unsafely, upon which he should step in. The Magistrates’ Court therefore convicted the appellant of the charges and ordered the appellant to pay a fine of HK$10,000, against which it appealed.

Decision

The Court of First Instance upheld the Magistrates’ Court’s decision. The Court of First Instance observed that the reason for having Tse present during the inspection was to protect the interests of the appellant. Such a duty put an obligation on the appellant to ensure the safety and health of Tse. However, the appellant neither defined the interests to be protected nor provided Tse with any guidance on how he should set about protecting its interests (ie, what he should do in a given situation and what not to do in response to certain dangers that may arise). Everything was left to Tse’s own discretion.

When an employer sends an employee to attend potentially dangerous work being performed by others, the employer must define the employee’s responsibilities and provide the employee with "whatever the circumstances might practicably require" to protect the employee from the risk of harm.

Failure to do so may place the employee in a situation where he/she sees something being done by the contractor which is detrimental to his/her employer’s interests but does not know how he/she should respond because his/her authority has not been spelled out. Such a situation may, in turn, create dangers to the employee.

Take away points for HR professionals

1. The fact that an employer has outsourced work to be done by an independent contractor does not absolve the employer from its obligation under the Ordinance to ensure the safety of its employee if the employee is sent to be present at such work for the purpose of observing what is being done and stepping in if the employer’s interests become endangered. This obligation requires the employer to consider the environment in which it is placing the employee and the duties being imposed on the employee. The employer has to take steps to protect the employee within those parameters.
2. What an employer will be liable for is not the conduct of its contractor, but rather the risks that the contractor’s conduct poses to the safety of its employee.
3. Some suggestions for employers:
1. Define the duties and responsibilities of the employee. This would require determining what interests the employer wishes to protect and the potential threats to those interests, in light of the work to be performed by the contractor. Employers should also take into consideration the employee’s special skills and/or expertise.
2. Establish guidelines on how the employee should act in the event of a dangerous situation, including what the employee should and should not do. Give the employee the authority to act immediately and decisively. This information should be clearly documented in a handbook or manual, which should then be given to the employee before assigning the task to him/her.
3. Regular training should also be given to employees. This could include conducting drills that simulate different situations as well as arranging for veteran employees to share their experience or to accompany less-experienced employees so they can provide feedback.
4. If possible, provide employees with safety or protective equipment, such as goggles, rubber gloves, etc.
5. Ensure that there is a clear understanding between the contractor and the employer as to the duties and responsibilities of their respective employees in relation to the work to be done and put this in writing.

Note: The information contained herein is intended to be a general guide only and is not intended to provide legal advice.

This journal, its publisher and the HKIHRM do not assume any legal responsibility in respect of any of the comments provided in this article, which do not constitute legal advice and should not be taken or construed as such. Independent professional legal advice should be sought as necessary in respect of legal matters and issues raised in this article.

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