• Fiona J Jones
    1
    As a Contractor, can you have in your contract agreement with a Subcontractor a clause saying that should you be fined for a breach of the HASWA that results from an omission or breach of one of your subcontractors, you can recover the full amount of the fine/s or penalties from the subcontractor including deducting them from outstanding payments? We are being asked to sign such an agreement and I'm curious if this is permissible.
  • Peter Bateman
    161
    I would hope such a clause would be laughed out of court.
  • MattD2
    115
    My opinion - at best it would come under S28 "No contracting out" and that part of the contract would be invalid, at worst it could fall under S29 "Insurance against fines unlawful" and the company that is trying to get you to sign (and your own company) could be prosecuted and fined up to $250k...

    Realistically they should not need a clause like this in their contract - all they need to do is make sure they employ suitably qualified and competent contractors, agree the scope and methodology (utilising the knowledge of both the subcontractor and themselves as best fits) and monitor that the work is being done as per that scope... simple :wink:
  • Andrew
    284
    Sounds to me like the good old Hold Harmless clause.

    You can put any clause you like into a contract. Whether it is enforceable or not is an entirely different matter.

    I'd be looking twice at the party who is asking you to agree to such a clause - its not really within the spirit of our legislation (legal arguments aside).

    I guess it depends on how desperate you are to swallow a dead rat.
  • MattD2
    115
    Sounds to me like the good old Hold Harmless clause.Andrew

    I was thinking that at first, but the OP is not "if you screw up on my job and get fined, don't come begging to me", but more "if you screw up and I get fined, I'm going to take it out of your pay"
  • SafetylawyerNZ
    63
    I see lots of contracts with this type of clause, and routinely tell clients to refuse to agree it. As MattD2 says, a clause like that is unenforceable so even if it remains in a contract, the risk of needing to pay another party's fine after a later event is negligible. Section 29(2) of the Health and Safety at Work Act applies, and states that a person "must not...(d) pay to another person, or receive from another person, an indemnity for a fine".

    It's worth noting that the Health and Safety at Work Act only prohibits indemnity for fines, and not for legal costs, reparations, or any other costs a party can incur.
  • Chris Peace
    36
    See section 29(2)(b) and (c) of the Health and Safety at Work Act. What you're describing is illegal, WorkSafe could prosecute the two parties and no court would uphold a claim by one against the other.
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