February 27, 2020

Research reveals workplace safety and health implications of outsourcing

Workplace safety and health challenges from outsourcing across a range of sectors and industries have been revealed as part of a new study by Cranfield University. The new study published today and funded by the Institution of Occupational Safety and Health (IOSH) saw researchers from Cranfield University explore how outsourcing

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If your email is hacked, who pays the bill?

With email fraud on the rise, Michael Gerard of Michael Gerard Solicitors (www.mg-law.co.uk) explains the issues around legal liability and email fraud. It’s fair to say that construction companies have not been at the forefront of the conversion to paperless processes. However, as a sector that often has a long

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Latest Issue
Issue 322 : Nov 2024

February 27, 2020

GMI finishes first quarter with record breaking performance with multiple project instructions valued at in excess of £95 million

GMI Construction Group has today announced that it has secured projects valued at in excess of £95 million across the North West, Yorkshire and the Midlands. The projects awarded to GMI by a combination of new and existing clients come from across a range of high profile industrial/warehouse, retail, office and hotel scheme developments which include: Plot A, Goole 36. A new 238,710 sq. ft. warehouse/industrial unit for new customer Tritax Symmetry pre-let to Croda Europe Ltd. Kirkby Retail Development. A new 94,000 sq. ft. retail park development featuring a new 42,000 sq. ft Morrisons Store and Petrol Station for long standing customer St Modwen. Booths Park, Knutsford. A new two storey 70,676 sq. ft. office building development for repeat customer Bruntwood in Cheshire with the end occupier being Portswigger Web Security. Hampton by Hilton York. A new 143-bedroom hotel in the heart of York City Centre awarded by Avantis Hotels and with a value of £25 million. Harrier Park, Hucknall.  A new 195,840 sq. ft. UK headquarters for leading educational resource supplier RM Educational Resources on behalf of Muse Developments and Rolls-Royce within the heart of a 70-acre mixed use site in Hucknall. Park Lane, Leeds. A 188-bed student accommodation scheme on Park Lane, Leeds for Waypoint with a project value of £20 million Speaking about the announcement, Andy Bruce, GMI’s Group Managing Director said: “2019 was a record-breaking year for GMI in all aspects but particularly in terms of new client wins, expansion into new sectors and the growth of our order book. To open things up in the same fashion so early into 2020 is a very encouraging sign, a solid endorsement of our credentials and a strong indication of further growth to come this year. It’s also very encouraging to see GMI securing such high-quality repeat business from several of its most valued and long-standing customers together with picking up new project instructions from new customers including some of the market’s biggest operators. We will continue to strengthen our offering in the sectors we are strongest in together with our unswerving commitment to the highest levels of customer service, quality and innovation. Our expanding divisional operations in the Midlands, North West, Yorkshire and the North East continue to reap strong rewards and fully justify our commitments to grow our capacity in those areas in the face of strong demand” Andy Bruce is GMI’s Group Managing Director responsible for the day to day running of the business and expansion into the Midlands.  GMI’s Manchester Office is presided over by Marc Banks in the role of Divisional Managing Director. Marc has worked on many of GMI’s prestigious projects, developing relationships with a number of clients and securing repeat business. GMI’s Yorkshire/North East Office is led by Lee Powell also as Divisional Managing Director. Lee brings 25 years’ service in the construction industry, with a wealth of experience across all industry sectors and a background based in a regional contracting

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Research reveals workplace safety and health implications of outsourcing

Workplace safety and health challenges from outsourcing across a range of sectors and industries have been revealed as part of a new study by Cranfield University. The new study published today and funded by the Institution of Occupational Safety and Health (IOSH) saw researchers from Cranfield University explore how outsourcing practices vary when working with different types of contractors. The study focused on the relationship between client firms and the main sub-contractor. Challenges for maintaining occupational safety and health standards when outsourcing included tensions between organisations and varying regulations across countries. The research also found limited reviewing of safety performance during and after contracts were signed in outsourced relationships – which acted as a barrier to improvements in safety performance. Dr Colin Pilbeam, Reader in Safety Leadership at Cranfield University, said: “Outsourcing is a significant and increasingly common organizational change initiative of the modern era, occurring not only in private companies but also in public sector organisations across the globe. However, outsourcing can also introduce safety risks into an organisation. “This research, funded by the Institution of Occupational Safety and Health, highlights some of the safety challenges involved in outsourcing relationships and shows many industries manage safety through a common set of practices. While this can establish an acceptable level of safety performance, there can be issues around execution in organisations. More needs to be done to understand how safety can be managed in outsourced relationships between organisations.” As part of the study the research team developed a framework to distinguish between tasks that were core to a firm’s strategic goals and the difficulty of a task, accommodating both firm-to-firm and firm-to-individual relationships. They then conducted a systematic literature review to identify safety risk factors and safety management practices found in 44 empirical studies of outsourcing relationships. The study engaged with three global companies across the engineering, logistics and pharmaceuticals sectors. These companies outsourced a variety of activities including construction and facilities management to other global companies, just like a Chinese employer of record. Through a series of 60 semi-structured interviews with employees in both organizations in each outsourcing relationship, the study investigated safety risks and the management of safety in these relationships. Challenges associated with the management of safety in outsourced relationships included: Operating across national borders where the legal and regulatory frameworks for safety found locally differ from those which govern the policies and procedures developed by the headquarters and prescribe wider company practices. Outsourcing to another company where expectations of monitoring safety performance, e.g. for near misses and safety-related incidents, differ. Tensions at board level can adversely affect otherwise amicable and effective relationships locally. Conversely, agreeable relationships at board level. cannot mitigate antagonistic relationships locally. Hard fought negotiations over the contract can adversely affect resource availability and subsequent safety performance A safety dip at the beginning of an outsourcing relationship can be mitigated by transferring staff from the old to the new provider. But this limits innovation and improvements in safety performance. Mary Ogungbeje, Research Manager at IOSH, said: “Employers can’t abdicate their health and safety responsibilities just by having a contractor in place to do the job. “History has shown us that health and safety disasters happen when contractor arrangements are not managed properly. So, whilst each context may be different, this study usefully reveals some common set of practices in outsourcing relationships, that can help employers to minimise the safety risks. The specific case studies also highlight some learning opportunities for businesses to consider.” The research report, “Managing safety following organisational change through outsourcing: Dysfunctional processes and fractured relationships” is available on request by emailing alex.phillimore@iosh.com.

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If your email is hacked, who pays the bill?

With email fraud on the rise, Michael Gerard of Michael Gerard Solicitors (www.mg-law.co.uk) explains the issues around legal liability and email fraud. It’s fair to say that construction companies have not been at the forefront of the conversion to paperless processes. However, as a sector that often has a long supply chain and makes frequent use of sub-contractors, the financial and administrative transactions around a building project can be numerous and complex. This is one of the reasons why construction companies can sometimes be targeted by online scammers. Unfortunately, when phishing schemes and email hacking are successful, not only can it be disastrous for the defrauded businesses, it can also be difficult to determine liability.  Paper protection In a time gone-by, when invoices were issued by post and payment made by cheque, companies were afforded some protection by the cheque rule which allowed a payee to bring an action against the payer if a cheque had been stopped. This was due to the fact that issuing a cheque created a binding contract for both parties, separate to the contract for the supply of goods and/or services. Nor was there a legal defence for stopping a cheque unless it was stolen or fraud was involved. Essentially, once the cheque was signed and sent, the payer was obliged to settle the bill.      However, with electronic funds transfers (EFT’s) now the most common form of payment, the question of cyber security is one that all companies involved in the building trade need to address. Unfortunately, most of us have seen examples of how online systems can be breached. So, if an email system is hacked resulting in fraudulent transactions, who is legally liable? The answer might surprise you. The real-life results of email hacking Essentially, to avoid a claim where funds are diverted or not received due to email fraud, the payer would need to establish either a breach of contract or negligence. This is best illustrated by a real-life case. The main contractor on a building project lasting several months had engaged a specialist contractor who was involved most of the way through. It was agreed in the contract that they would receive regular payments throughout the project’s duration. As is now standard practice, all document exchanges and financial transactions were carried out electronically. So, when the specialist contractor’s email account was hacked, they became vulnerable. The hackers then installed software capable of reading all incoming and outgoing emails, flagging up key commercial words. The specialist contractor was unaware that their email system had been compromised and the situation was further compromised by the fact that part way through the contract they informed the main contractor of an intention to change bank accounts. At this point, the hackers sprang into action. Having intercepted an application for payment, the hackers advised the main contractor’s accounts department that a new bank account had been set up and requested that all future payments be paid into it. The accounts department duly complied, paying a five-figure sum into the hacker’s account. The email hack was only discovered when the specialist contractor started to chase payment. By this time, it was too late as the fraudster’s account had been cleared of almost all of the money. In terms of liability, the main contractor had complied with what appeared to be a legitimate request for payment into what they believed to be the supplier’s bank account.  However, despite the fact that it was the specialist contractor’s email account that had been hacked, the payer was still liable. This is because the specialist contractor had a strict contractual claim for the monies owed and to avoid that claim, the main contractor needed to establish either (a) a breach of contract; or (b) negligence to set-off the contractual claim. Furthermore, there was no evidence that the specialist contractor was aware of the fraud which could have shifted liability. Similarly, if the fraud had been carried out by an employee of the payee, they would be vicariously liable, but this was not the case. Finally, neither the contract nor common law imposed a duty of care on the specialist contractor to maintain a cyber-security system capable of preventing such a payment fraud. As a result, the main contractor was legally obliged to pay the amount originally owed – for the second time.   4 steps to guard against the impact of email hacking Such cases underline the importance of companies putting measures in place to protect themselves against email fraud and security breaches. Here are four simple steps that companies can take: As spam is the most likely cause of malware entering an IT system, businesses need to have a robust software security system in place, including a firewall to monitor network traffic and connection attempts in and out of a network or computer.   When setting up payment on an EFT, test the details sent by a supplier by transferring a small and unusual amount into the account, then ask the supplier to confirm receipt by telephone. Follow the same procedure if an existing supplier changes their bank details.  If someone in your organisation can read message headers and IP addresses, they can cross-check a particular IP address with a previous IP address to authenticate communications. Include contract clauses around minimum security standards on a supplier’s server, including protection against malware and viruses and a firewall, regularly updated software and a stipulation that changes to company bank account details be confirmed in writing by post or hand delivered and signed.  Breaches in cyber security are rising as hackers are constantly finding ways to get through security measures. So, if a company isn’t adequately protected, they could find themselves the next target. Having cyber liability insurance is a good move but won’t protect an organisation from all types of losses, so prevention really is the best option, and some of that prevention includes doing things the old-fashioned way – like using the telephone and post! Author background Michael

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