There are significant differences between ‘contractors’ and ‘constructors.

During the last 10 years there has been a notable increase in the stress and harried nature of farming. Volatility in commodity markets, concerns about livestock pricing, land values, associated costs of production, carbon and property taxes… the list of intensifying stressors is unending. Approaches to farming that improve efficiency by cutting back on time and/or costs are therefore highly valued for obvious reasons. If not properly scrutinized however, they can result in the acceptance or methods that significantly cut back on steps that are critical for ensuring health and safety.

These unsafe “short cut” practices that increase the risks of physical harm and can compound in severity making farmers responsible for associated financial costs and liability issues. One example of interest involves hiring contractor(s) for construction-related work. There are several “trap doors” throughout this process that can be overlooked or altogether forgotten, in part because of the sense of trust that’s existed in the world of agriculture since the days of logging and barn-building bees. One may easily assume that because someone is good at their job, they know everything that’s associated with and expected of them in their role. For better or worse, times have changed -a handshake alone can’t safely seal a deal, and “liability” has become a more familiar term in a farmer’s vocabulary. Whether building a new barn, storage facility or a manure pit, farmers now have associated responsibility as both owners and/or employers, with each role carrying an over-arching level of risk and corresponding liability.

One of the challenges with this more recent shift to a “safety-first” farm landscape is that many producers aren’t up to date in their knowledge of these responsibilities. Rough estimates suggest 30 to 50% of farmers are unaware of many of the terms, conditions and actions for which they’re considered legally responsible. This leads to many farmers unintentionally (or worse, intentionally) choosing to carry out jobs without fully understanding the implications that could significantly affect their operations, essentially rolling the dice and hoping to get the job done without incident. For many, work that’s done haphazardly or without necessary requirements to fulfill their “due diligence” is completed without incident. In the cases where things go wrong, however, they often go horribly wrong.

Elite Agri Solutions Inc. is heavily invested in the health and safety of Canadian farmers and their operations. Though offering multiple advisory services (business planning, nutrient management planning and grant writing, etc.), its Health & Safety department is interested in and responsible for the human aspect of agriculture. As a public service to increase general knowledge, the Health & Safety team at Elite Agri Solutions is offering this Part I in a series on terms and expectations farmers should know when hiring a contractor, to help farmers understand the topic of liability and how they can best protect themselves.

Q: Describe the differences between a “contractor” and a “constructor”, and why is it important?

A: As is well known by most individuals in the industry, a “contractor” is a party (an individual or a company) that is hired to complete some element of a complete construction project. Hired contractors that are responsible for overseeing a project from start to finish or will themselves be hiring out specific jobs are also commonly referred to as “general contractors”. When there are multiple parties present on site, the general contractor is the main party with deciding authority on what happens around the work site, relays instruction from the client/site owner and ensures the work is done to the client’s specifications.

The other parties hired by the general contractor are then usually referred to as “subcontractors”. All contracted parties working on a construction project are considered “employers” under the Occupational Health and Safety Act (OHSA, “the Act”). Contractors/contracted parties must legally comply with all applicable legislation in the OHSA and its corresponding regulations. Since the vast majority usually work with their own equipment, the responsibility for safe operations of that equipment and any damage or injury resulting from its use rests with the contractors as “employers”, but also with the project “constructor”.

This term “constructor”, though relevant to the same industry, is a distinct term defined under the OHSA with very clear and important legal responsibilities associated with health and safety. Under the Act, a “constructor” is defined as “a person who undertakes a project for an owner and includes an owner who undertakes all or part of a project by himself or by more than one employer”. To put things very simply, a constructor is the individual with overall authority for all health and safety matters on an entire project.

Due to some similarities between the responsibilities of two roles, farmers/premise owners hiring “contractors” may automatically assume that they can hand over the associated health and safety (“constructor”) responsibilities as well. The nature of each construction project, however, can create complications for owners if they are not familiar with these definitions, with this latter role possibly landing on the shoulders of the farmer themselves. Therefore, it is strongly recommended both parties -farmer and contractor -agree to terms laid out in a detailed contract before any work starts indicating each party’s responsibilities, expectations, legal requirements and associated liabilities. This should also include indemnity clauses and insurance requirements to help protect both parties. Farmers should additionally engage in regular communication and oversight with contractors while they work on their premises to fulfill their baseline expectations as site owners, regardless of whether they are considered the “constructor” on a project.

More information on constructor guidelines is available here: https://www.ontario.ca/page/constructor-guideline

Q: Are there instances where a farmer becomes a “constructor”? If so, what are the implications?

A.  When there are multiple parties working on a project, whether they’re hired by the owner (the farmer) or by a contractor, defining who is the constructor can quickly become confusing. This is where clear communication comes into play, along with the need for well-defined, written agreements between all parties before work begins on the site.

To simplify the practices for defining a “constructor”:

• If a farmer is hiring one contractor, the contractor is the constructor
• If the farmer is hiring one contractor and they will or may hire subcontractors (thereby becoming a “general contractor”), the general contractor is the constructor
  • For added security, include a clause in any agreement at the start of the hiring process confirming the general contractor’s consent and understanding of their role as the constructor of the project, and ensure it’s in writing.
• If the farmer is hiring more than one party, the farmer is considered both the general contractor and the constructor (the different hired parties would be “subcontractors”)
  • This responsibility is taken on as the definition on a constructor includes “an owner who undertakes all or part of a project by themselves or by more than one employer”.

Safety on a worksite is a shared responsibility between all parties on a site, with each company hired having their own legal, health and safety responsibilities over their workers as “employers” under the OHSA. The “constructor” on the site, however (either the general contractor or the farmer), would have the overarching responsibility of ensuring the implementation of health and safety requirements and practices for the whole construction project, including overseeing all hired employers and their workers comply with applicable OHSA requirements.

Q: If a farmer does take on the role of “constructor” in hiring multiple parties for work on their farm, what are their responsibilities, and how complete is the shift in liability back to them?

A. To reiterate the above as it is extremely important and must be clearly understood by farmers: if they hire multiple parties and become the “general contractor”, and if there is no indication or agreement otherwise with a general contractor in writing, they will be legally assumed to be the constructor on the project.

The responsibilities of a “constructor” under the Act are to ensure the following.

• Every employer and worker on the project complies with the OHSA/regulations
  • All measures and procedures prescribed by the OHSA/regulations are carried out
  • The health and safety of workers on the project is protected (e.g. do they have all required training? Do they have all required personal protective equipment? What about all required emergency equipment? Etc.)
• A health & safety representative or a joint health and safety committee (JHSC) is established when/as required
• The Ministry of Labour is notified of a project (when and as required)
  • A Form 1000 is completed and available at the project site
  • A notice of project is issued to the Ministry if the project is valued at or more than $50,000
• The Ministry of Labour is notified of any accidents, fatality or major occurrences, when and as required by the Act (sections 51, 52, 53 and 53.1)
• Every subcontractor receives a list of all designated substances (DS) present at the project before they enter a binding contract for work on the project
• Written emergency procedures are established for the project and posted
  • The availability of a complete Health and Safety Board is the best place for this, and is the responsibility of the party considered the contractor/general contractor
• A supervisor is appointed for every project at which five or more workers will work at the same time.
• Safety Board requirements for posting at the designated construction location. See section OHS Act Sec. 26, as well as under the construction projects for details.

Acquiring this title of “constructor” on a project would increase the farmer’s exposure to potential risks and legal responsibilities. Should any accidents occur on the site, they would be held accountable for any issues arising due to the actions or negligence of the subcontractors they hire. This could include problems with equipment, safety violations, or failure to meet contractual obligations. For this reason, contractual agreements with clear terms and conditions outlined in writing between a farmer and general contractors/subcontractors are so important. Contracts that are well-drafted can help mitigate some of the risks by clearly defining responsibilities and liabilities before the project starts.

Q: What liability does a farmer take on when they hire a contractor to complete a construction project, even if they are not considered the “constructor” (i.e. when they are just considered the “owner” of the project)?

A. A farmer’s liability first starts when selecting a contractor. Verifying the contracted party’s qualifications, their safety track record, and the presence of WSIB and business insurance coverage is part of their due diligence towards reducing the risk of an accident occurring on site. Hiring the wrong contractor can result in immense consequences and expenses for the farmer if the contractor is unqualified or uninsured. For example, a farmer could be held “vicariously liable” for the actions of a contractor they hired if there is evidence that the contractor was not qualified to do what was asked on the farmer’s behalf, or if the farmer did not adequately oversee the contractor’s work, such as ensuring contractors are adhering to environmental regulations including proper waste disposal and handling chemicals, etc.

In order to reduce some of this liability, a farmer should ensure that any contractor they hire signs a contractual agreement where they explicitly agree to follow regulatory requirements before the start of the project. Signing this document can help increase accountability on behalf of the contractor and provide greater due diligence on behalf of the farmer (though they should still be checking in on the site to supervise what is happening on their site). Ensuring the contractor they hire also has adequate insurance coverage can provide some added safety against excessive liability on behalf of the farmer. Finally, carrying out and documenting risk management practices, such as regular safety audits, ensuring workers on site have proper training before they are allowed to work on site, and demanding regular record-keeping on behalf of the contractor can greatly reduce the likelihood of an incident or accident occurring.

Look for Part II in this series on farmer liability as it pertains to contracting work and details about insurance.