Contractors Abroad

Why not read our latest blog post, Long-term absence dismissal not always unfair?

Construction_WorkersThe sad death at the hands of Islamist militants of Gary Barlow is a shocking reminder that people working as contractors abroad must recognise the dangers.

Gary Barlow was an contractor working at the Armenas gas plant in Algeria. The BBC reported in late May that Gary Barlow’s widow was still seeking further information from BP, one of the co-owners of the plant, about how he died.

BP seemed to be avoiding the issue, pointing out that her husband was actually employed by a sub-contractor.

This case highlights the problems that exist when workers, employed by one firm, deliver services to others.  There are both contractual and moral issues here.

Contractually, who is responsible for the well-being of workers?  Is it the organisation for whom the services are being performed?  Or is it the company to whom the contractor is contracted?  Or indeed, is it the contractor themselves?  Most likely, contractors will form a limited liability company with themselves as the sole employee.  They will then enter a business-to-business contract with others in order to facilitate payment (whilst maintaining compliance with the UK’s tax regime). And part of their fees will surely include an overhead for support for the well-being of their workforce posted abroad – albeit a workforce of one.

So in Gary Barlow’s case, it seems likely that his company was contracted to IOTA, a Swiss company, that in turn entered a contract with BP to supply services to a joint-venture concern. Under such an arrangement, it’s not clear contractually who is liable for the contractor’s well-being.

It all depends of course on what is written in the various contracts and under which country’s laws the contracts are made.  Under business-to-business contracts, liability is normally expressed along with details of the facilities that the head company (or even end client) will supply such as living accommodation, ground transportation and close protection. The terms of any insurance cover would also be expressed. For the head company to be liable for the well-being of sub-contract workers, (and indeed for sole traders or directors of their own micro-firms), there would need to be terms covering responsibilities in each of the contracts down the chain.

Whether the micro-firm could expect support under local statutes covering duty-of-care would depend on the laws governing the contract and possibly the laws of the country in which the services are to be delivered. In the UK we have very strong laws covering duty-of-care.

And morally who is responsible for a contractor’s well-being? Most reputable companies would accept that they have a duty of care to protect the well-being of all those who enter their facilities, regardless of their contractual relationship with it, its partners or subcontractors. The one thing a company cherishes is its reputation and most companies will act to protect that reputation in order to protect their market position. But this feeling of obligation depends much on local cultures and direction from firms’ management. Not something to be relied on perhaps when in a jam. If there is a strong feeling of duty of care in society and in the lead firm, this may be transmitted into the way all workers might be supported, regardless of contractual commitments.

Whether from a contractual or moral view, nothing in this scenario is clear. It is for the contractor wishing to sell their services to check who will be responsible for their well-being during that service delivery. Will it be the contractor’s micro-company, the sub-contractor or agency, the head or lead contractor or the end client?

So by way of example, consider a micro-firm (one man) which contracts with a consulting firm. This intermediary consulting firm contacts in turn with a major firm that leads a bid and wins a contract with a local firm or organisation in a relatively hostile country such as Afghanistan, Iraq or Somalia. In one extreme, the micro-firm, the contractor themselves, takes full responsibility, taking out hostage insurance, and paying for local protection and support. In the other, most likely the head firm will have established local support and the micro-firm will be brought under this support. But whether this is possible depends entirely on what is negotiated in the contracts. In either case it is for the contractor to check before signing.

So the moral here is simple. Contractors working abroad need to establish their status. And from this they need to establish the contractual responsibilities of all parties. If they view that the risks they run are not mitigated, they must re-negotiate. Many firms of course expect to reduce their responsibilities towards sub-contractors and micro-firms by paying high daily rates, expecting those further down the chain to look after their own workers.

Whilst we might morally expect local organisations and lead contractors to take overarching responsibilities for workers, this will not necessarily be the case and anyway, norms in the UK suggest that it is for all companies to heed the duty-of-care and that includes those who are employing themselves.

Managing people is complex. Get specialist help.

Call Us Today