An increasing number of small firms unintentionally fall foul of these rules when engaging third-party contractors, exposing themselves to fines and reputational damage. However, with practical and proactive measures, SMEs can demonstrate due diligence and manage known risks to avoid potential prosecution or enforcement action. Here’s what SMEs need to know:

The legal reality: What the law says about client duties
Contractors are self-employed professionals who usually work for set periods or carry out specific tasks. Examples can include builders, roofers, security guards, caterers and IT technicians, to name a few. They can be engaged directly or the SME may have a contract with the company which employs them. Under the Health and Safety at Work Act 1974, employers have a duty to ensure the health and safety of their employees and others affected by the work that they do, so far as is reasonably practicable. This includes managing risks to contractors. This means that, with the contractor, businesses which engage them are jointly responsible for their health and safety, and they should be treated the same way as employees.

Common mistakes that put SMEs at risk
A lot of the work we do in the Business Crime and Regulation team at rradar is around educating businesses about their liabilities. We often see SMEs failing to assess competence or monitor contractors’ safety procedures correctly, and additionally, overlooking documentation such as risk assessments or assuming insurance or contracts transfer liability.

How to demonstrate due diligence and stay compliant
There are practical and proactive steps SMEs can take to ensure they remain compliant. Before starting work with contractors, SMEs should complete due diligence on the contractors they plan to work with. This includes (but is not limited to):

● Experience: Ensure their expertise aligns with your specific work area. Dig deeper into whether they are a new start-up with no experience, or whether they have been in the industry for many years, and whether they have good reviews.

● Training: Specific areas require specific training. For example, construction, manual handling, working at height, lifting operations, plant and equipment, confined spaces, asbestos etc. You should check that all mandatory health and safety training is up to date, as well as any specialised training.

● Qualifications and Accreditations: Ask for evidence for your records. For example, in the construction setting, SMEs should ensure that all relevant contractors have Construction Skills Certification Scheme (CSCS) cards, which verify training and qualifications. Additionally, Asbestos Awareness Qualifications, National Vocational Qualifications (NVQs), Construction Industry Training Board (CITB) Health and Safety Awareness.

● Health and Safety History: SMEs should review the contractor's track record. This information is available online through public registers and will tell you whether a company has been prosecuted for health and safety offences or served with enforcement notices in the past.

● Safety Standards: Contractors’ health and safety standards must be reviewed, including their performance, any relevant policies, and their overall health and safety culture.

● Maintenance of records: The due diligence pack should be detailed and recorded appropriately. If an incident occurs, you will seek to rely on it. You need to be certain the contractors are competent to do the particular job you are engaging them to do.

● Risk assessments: Contractors should be covered, both in general risk assessments and in specific assessments.

Taking ownership of safety, even when outsourcing
Compliance starts with awareness, and SMEs have a duty and legal responsibility to ensure they take ownership of safety when outsourcing work to contractors. By taking a proactive approach to risk management and education, SMEs can minimise the risk of falling foul of the law and work collaboratively and safely with contractors to meet their business objectives.