Friday, February 11, 2011
Negotiation -Thoughts on Negotiating Responsibility for Supplier Personnel
If you have Supplier personnel visiting or working on your site, there are several things to be concerned with.
The first is potential employment law claims. A number of years ago there was a major lawsuit filed by individuals that were contract workers of Microsoft claiming that in their work on behalf of Microsoft, by the way they were treated and managed they should have the same rights and benefits as Microsoft employees. It cost Microsoft ninety-seven million dollars to settle those claims. Since that lawsuit most companies have sought to manage the risk by not hiring contract workers directly, instead they hire them through independent companies. Further they make it clear that is the Supplier's responsibility to manage their people.
The second issue is potential liability. For example companies want Suppliers to be fully responsible for the safety of their personnel and will instruct their own personnel not to be directing a Supplier’s employee on how to perform their work, especially from a safety perspective. Buyer’s may require some safety standards that they require Supplier to meet, but again will place the responsibility for the overall management of safety for their employees on the Supplier. This is to try to avoid personal injury lawsuits by Supplier employees that are injured at the Buyer’s facilities. If the Supplier is responsible, in most locations the employee would be covered against those injuries by workers compensation. As a requirement you would also typically require the Supplier to carry the necessary workers compensation insurance as part of the insurance requirements.
The only objection a Supplier should have to this would be if you were instructing the Supplier employee what to do and how to do it including necessary safety precautions where they can’t manage the risk. If that’s necessary (which it shouldn’t be) Supplier’s may look for the Buyer to be responsible for any negligent instructions.