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New Guidelines Clarify Penalties for Construction Companies that Violate Safety Procedures

The Housing Ministry’s Registrar of Contractors has for the first time published a procedure that regulates contractors with multiple safety referrals from the Ministry of Labor's Occupational Health and Safety Administration

אתר הבנייה בו נהרג הפועל (צילום: איחוד הצלה)
A construction site in Bnei Brak where a worker was recently killed. The procedure comes in an attempt to prevent work accidents in the construction industry, which have become widespread (Photo: United Hatzalah)
By Nizzan Zvi Cohen

The Housing Ministry’s Registrar of Contractors published guidelines earlier this month that for the first time regulate the procedure for imposing penalties on contractors who commit multiple safety violations. The guidelines come in response to a petition to the High Court of Justice by Kav LaOved (Israeli Workers’ hotline). The sanctions, which the Registrar of Contractors may impose based on information received from the Labor Ministry’s Occupational Health and Safety Administration, are one of the central tools identified by government ministries for combatting the widespread phenomenon of workplace accidents in the construction industry.

In September 2022, Kav LaOved petitioned the High Court of Justice on the grounds that the Housing Ministry had failed to clarify key details of its procedure for responding to safety violations, including timelines for imposing sanctions on contractors and the manner of supervision of contractors whose licenses have already been suspended.

The petition noted that the Registrar’s authority over contracting companies began in 2018, and it has since held 68 hearings with contracting companies and has even imposed some sanctions, such as fines, revocation of licenses or temporary suspension of a license. However, in the petition, the organization notes that some of the suspensions were conditional or allowed companies to continue working despite being found to have committed safety violations.

The petition cites the case of the ‘Walid Ghraib’ construction company, whose license was suspended last February after two workers were killed at its sites in two separate accidents. Despite this, the company was allowed to exclude 19 projects from the suspension order, and a subsequent inspection revealed continuing safety violations at workplaces associated with those projects even after the company had already received safety orders.

In the past, it had already been government policy to transfer details of contractors with a problematic safety record from the Ministry of Labor's Safety Administration to the Registrar of Contractors, which has the authority to impose sanctions against these contractors.

The new procedure clarifies that the Safety Administration's referral must include details of deficiencies and violations documented in relation to the contractor, including visit reports, stop-work orders, safety orders and notices of correction of the defects.

According to the new procedure, employees of the Registrar of Contractors will examine the files transferred to them from the Safety Administration and will send said contractors summons for a hearing, to which copies of the Safety Administration's referral will be attached.

Contractors will be required to respond in writing within 21 days, after which they will be invited to a meeting of the Registrar's Advisory Committee, which will be held within 60 days of the Registrar’s receipt of the file. To the extent possible, relevant inspectors from the Safety Administration will be present or available for clarification to the Advisory Committee.

Contractors summoned to a hearing will be required to attend the meeting along with their professional workplace safety teams, including external consultants. As part of the hearing, they will be required to provide information about any safety workers employed by them, as well as details about existing internal systems for enforcing safety rules at work, management structures, details regarding the use of innovative technologies to improve the level of safety at sites and information about safety committee meetings at the company.

The Advisory Committee will try to formulate its recommendation regarding sanctions on the day of the meeting, unless it decides that additional clarification or supplementation is needed to formulate its recommendations. The Registrar will try to make its decision up to ten days after receiving the committee's recommendation.

If it is found that the contractor has regularly violated workplace safety procedures, the Registrar may order the cancellation of the company’s registration and the revocation of its license. The Registrar may also impose a temporary license suspension or a probationary period of one to three years in which a suspension will take effect if additional grounds are found for disciplinary action against the contractor. In addition, the Registrar may impose fines on contractors and issue them a reprimand or warning.

If the Registrar receives a report from the Safety Administration of another violation by a contractor during their probation period, the Registrar will order the actual suspension of the license. However, if they are convinced that under the circumstances it would be unjust to carry out the suspension, the Registrar may extend the probation period by up to an additional two years, with any additional reports leading to suspension.

The procedure states that the Registrar's decision will be shared immediately with the Safety Administration and to the Administration of Recognized Contractors for Government Works in the Accountant General's Department of the Ministry of Finance, and will also be published on the Ministry of Construction and Housing's website.

In cases where the Registrar decides to suspend a contractor's license, they may permit the contractor to finish work at specific sites in accordance with the contractor's request. A contractor who requests a reconsideration of the Registrar's decision will be required to present new material information for their case.

This article was translated from Hebrew by Ronen Cohen.

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