It is dangerous to think that once you contract out work to someone else, your liability towards them is at an end, says Patricia Baxter

The labour market has grown increasingly reliant on self-employed, agency, casual and subcontracted workers. Given the many duties, obligations and liabilities which attach to employment status, employers need to establish as clearly as possible whether they could be said to owe someone a duty and to ensure that they discharge that duty.

Yet establishing whether there is an employment relationship can be both complex and unclear. And it should not be forgotten that, even where there is no direct employment relationship, this does not necessarily absolve an ‘employer’ from liability under the wealth of criminal and civil statutes and regulations.


In seeking to determine the employment position, 'control' is the central issue. In Lane v Shire Roofing Co Ltd (CA)(1995), the key question was whether the defendant owed Lane a duty as an employee or whether he was, as a self- employed man, an independent contractor. LJ Henry said that ‘when it comes to the question of safety at work, there is a real public interest in recognising the employer/employee relationship when it exists, because of the responsibilities that the common law and statutes…place on the employer’. It should be noted he was also concerned with where there was employers’ liability insurance and, indeed, the issue here boiled down to who had the wherewithal to pay. Young & Woods v West (1980 IRLR 201), an employment tribunal claim, found that despite the 'employee' being self employed for inland revenue purposes, he was in fact an employee with the attendant rights.

Control is not the only issue. Other factors come into play. The HSE sensibly advises that the presence or absence of any one factor is not conclusive but that the combined effect of all the relevant information should be considered. For example:

- How much control does the employer have/exert? Generally the greater the control, the more likely the employment relationship exists.

- How far is the worker integrated into the business? Does he have his own tools and equipment? Does he arrange his own hired help? Does he have a financial investment in the work he is doing?

- Is he paid for sickness or holidays, and is he paid for the job done rather than a regular wage?

- Can the person delegate the work to someone else?

“You could be vicariously liable for an agency worker's actions

- What did the parties intend?

Agency staff

If the person is doing your business, using your equipment and under your direction, the fact that you are paying an agency rather than that individual, does not mean there is no employment relationship. In such circumstances you would owe a duty in civil law as an employer. Similarly you could be vicariously liable for the agency worker's actions.

In criminal law, an employer could also be liable under s2 of the Health and Safety at Work Act (HSWA) if he has put an agency worker at risk, and, under s3, for any actions which resulted from the agency worker's activity in the same circumstances where liability might attach in relation to a regular employee.


The position with contractors can be more difficult to determine. Applying the tests outlined above and considering the context will often establish no employment relationship. In situations, however, where on analysis you are deemed to be your contractor's employer, you risk potential criminal and civil liability. If that contractor engages his own labour to carry out your work he may be deemed to act as your quasi foreman and, while in many situations you may not be considered to be the labourer’s employer, you may still be potentially liable for the consequences of your contractor’s actions which affects them.

Where, however, you engage contractors who are not found to be your employees, you will generally not be liable for any injury they suffer, nor vicariously liable for their actions. Similarly no criminal liability should attach. However, as already mentioned, not all relevant duties only attach to an employment situation. It would be over simplistic to assume that contracting out work is sufficient to discharge your duties. For this reason you have to assume responsibility for engaging competent people, providing them with relevant health and safety information and training, and you must be satisfied with their safety procedures. If they are engaged to work on your premises it means permits to work must be issued, and risk assessments and method statements checked.

To what extent should you monitor that they have all their checks and balances in place when they take on your work? Decisions have to be made as to the level of management and supervision of the contractors required, taking into account their degree of professional skill, their knowledge of the work, and the level of risk. You must satisfy yourself that the contractors have done their own risk assessments and that their method statements are adequate. You should check that they have the necessary insurance for their own staff and others and should also consider such issues as exposure to harmful substances or possible language problems, which is a particular difficulty among migrant workers, who often undertake the most dangerous work.

The common law and statutory duties attaching to anyone employing a workforce or engaging contractors are far reaching. These can be most obviously found in a direct employment situation, but your duty extends to anyone affected by what you do. While arguably the duties which form part of an employment relationship are potentially the most difficult to avoid, the consequences of being found liable for the actions of your more remote relationships can be as significant and damaging.