Construction Safety Liability is Shifting Upstream: Why Construction Employers Must Revisit their Contracts

Headnote: Construction safety obligations are no longer confined to contractors on site. Modern regulatory regimes increasingly place responsibility on those who commission and control construction projects. As safety duties expand under frameworks such as the Construction (Design and Management) regime and Malaysia’s Occupational Safety and Health Act 1994, project owners and employers must reassess whether their construction contracts adequately allocate safety responsibilities and protect them from potential regulatory and civil liability.

Introduction

Recent developments in construction safety regulation highlight a clear shift in regulatory philosophy: project owners are increasingly expected to take an active role in ensuring that construction works are carried out safely. Safety compliance is no longer viewed as a matter to be delegated solely to contractors.

In the United Kingdom (“UK“), reforms introduced under the Building Safety Act 2022 together with evolving guidance under the Construction (Design and Management) Regulations 2015 (“CDM” framework, updated guidance in 2024) emphasise that the client (project owner) must actively ensure that safety systems are embedded throughout the lifecycle of a construction project.

Although these reforms arise from the UK, the regulatory direction mirrors obligations imposed under Malaysia’s Occupational Safety and Health Act 1994 (“OSHA 1994“). In both regimes, project owners who procure and control construction works may face legal exposure where safety arrangements are inadequate. Employers should therefore review their contractual frameworks to ensure that safety obligations are clearly defined and enforceable.

The Client’s Role under Modern Construction Safety Regulation

Under the CDM framework, the client is regarded as the party best placed to influence safety outcomes at the earliest stages of a project. The law therefore places several primary obligations on the project owner.

These include the duty to:

1. ensure suitable health and safety management arrangements are established for the project;
2. appoint competent Principal Designer and Principal Contractor;
3. provide pre-construction information relating to risks and site conditions;
4. ensure adequate time and resources are allocated for the works to be carried out safely; and
5. maintain and preserve safety documentation and design risk information.

Importantly, the client cannot discharge these responsibilities simply by appointing consultants or contractors. If competent duty holders are not appointed, the law may treat the client as effectively assuming those responsibilities by default.

This approach reflects a wider policy objective: safety must be considered from the earliest design and procurement stages, rather than addressed only during construction.

Parallels with Malaysia’s OSHA 1994 

Although Malaysian legislation does not adopt the same “dutyholder” terminology used in CDM, the structure of responsibility under OSHA 1994 is conceptually similar. The OSHA 1994 imposes statutory duties on several categories of persons, including employers, occupiers of workplaces, and those who control premises where work is carried out.

Key provisions include:

1. Section 15 – Duty of employers: Employers must ensure, so far as is practicable, the safety, health and welfare of their employees.
2. Section 17 – Duty to persons other than employees: Employers must ensure that persons who may be affected by the undertaking are not exposed to safety risks.
3. Section 18 – Duties of occupiers of workplaces: Occupiers must ensure that premises and means of access are safe and without risk to health.

In the context of construction projects, project owners frequently fall within the category of occupiers or persons who control the workplace, particularly where the owner retains significant control over the site or project execution. As a result, a project owner may face regulatory investigation or prosecution following a serious accident, even where the contractor is responsible for carrying out the works. This reinforces the importance of ensuring that contractual safety responsibilities are carefully structured and enforced.

Why Existing Construction Contracts may be Inadequate 

Many standard construction contracts used in Malaysia, including Pertubuhan Akitek Malaysia (PAM) contracts, Public Works Department (PWD) forms and Fédération Internationale Des Ingénieurs-Conseils or International Federation of Consulting Engineers (FIDIC) forms were drafted before modern safety frameworks placed increased emphasis on the responsibilities of project owners.

These contracts typically assume that site safety is primarily the contractor’s responsibility, with the employer playing a more passive supervisory role. However, modern safety legislation expects project owners to demonstrate active safety oversight, including proper selection of competent contractors, provision of adequate information, and monitoring of safety systems.

Where contracts do not reflect these expectations, employers may face a situation where statutory liability arises under safety legislation but contractual rights against contractors or consultants are unclear or limited. This mismatch between statutory obligations and contractual allocation of risk can significantly increase exposure for project owners. 

Contractual Amendments Employers should Consider 

To align construction contracts with modern safety frameworks, employers should consider introducing additional provisions addressing safety compliance, competency and documentation obligations.

1. Compliance with safety legislation: Contracts should include a broad obligation requiring the contractor to comply with all applicable occupational safety and health legislation, regulatory guidance, and industry standards. Where international contractors or consultants are involved, the clause may also refer to recognised international safety frameworks such as CDM principles. This ensures that safety obligations remain enforceable even as regulations evolve.

2. Appointment of safety dutyholders: Contracts should clearly define the parties responsible for coordinating safety during both the design and construction phases.

These roles should reflect the functional responsibilities of:

• the Principal Designer, responsible for safety during the design phase, and
• the Principal Contractor, responsible for safety during the construction phase.

The contract should also require these parties to perform their statutory obligations and indemnify the employer for failures to do so.

3. Competency and qualification requirements: Modern safety regulation places increasing emphasis on competency. Employers should therefore require contractors and consultants to warrant that:

• they possess the necessary professional qualifications and experience;
• their personnel are appropriately trained and certified; and
• adequate safety management systems are in place.

Employers may also require periodic verification of competency throughout the project.

4. Safety documentation and information management: Safety regulation increasingly emphasises the importance of maintaining a comprehensive record of safety information throughout the life of a building. 

Contracts should therefore require contractors to maintain and provide:

• risk assessments;
• method statements;
• safety audit reports;
• inspection records; and
• incident investigation reports.

Employers should retain access to these records, which may be essential in the event of regulatory investigations or disputes.

5. Incident reporting and investigation: Contracts should require immediate notification of:

• accidents and dangerous occurrences;
• near-miss incidents; and
• regulatory inspections or investigations.

Employers should also retain the right to conduct independent safety audits and investigations where necessary.

Governance Measures Project Owners should Implement 

Beyond contractual provisions, project owners should implement governance structures to ensure that safety obligations are effectively monitored and enforced.

Practical measures may include:

1. establishing project safety committees;
2. conducting periodic independent safety audits;
3. implementing contractor competency assessments;
4. organising pre-construction safety planning workshops; and
5. maintaining centralised safety documentation systems.

These measures help demonstrate active safety management, which regulators increasingly expect from project owners.

Strategic Implications for Employers 

Responsibility for safety is increasingly moving upstream to those who initiate and control construction projects. Contractors remain responsible for site operations, but project owners are expected to ensure that appropriate systems and competent personnel are in place.

Employers who fail to review their contracts and governance frameworks risk being exposed to statutory liability without corresponding contractual protection.

Conclusion

The modern construction safety framework, reflected in the CDM regime and mirrored by obligations under OSHA 1994, requires project owners to take a more proactive role in safety management.

Employers undertaking construction projects should therefore:

1. review their existing construction contracts;
2. ensure safety responsibilities are clearly allocated;
3. implement governance structures to oversee safety compliance; and
4. ensure that contractors and consultants possess appropriate competency and safety systems.

By aligning contractual frameworks with statutory obligations, employers can better ensure that construction projects are not only delivered successfully but carried out safely and in compliance with evolving regulatory expectations.