Section 37(2) Agreement South Africa: Contractor Safety, Legal Duties & Employer Guide
Updated: Sep 25
Hiring a contractor does not make workplace health and safety somebody else's problem.
South African businesses regularly use contractors for maintenance, construction, electrical work, welding, cleaning, installations, repairs, shutdowns, machinery work and specialist services.
But once another company starts working on your premises, an important management question arises:
Who is responsible for what?
That is where a Section 37(2) agreement South Africa becomes important.
A properly structured written arrangement can help the employer or user and the contractor define how Occupational Health and Safety Act requirements will be managed between them.
But the document should not be treated as a liability waiver, a ceremonial signature page or a substitute for controlling the actual work.
Quick Answer: What Is a Section 37(2) Agreement in South Africa?
A Section 37(2) agreement is a written agreement between an employer or user and a mandatary setting out the arrangements and procedures between them intended to ensure the mandatary complies with the Occupational Health and Safety Act.
The OHS Act says the Section 37(1) framework concerning employee acts and omissions applies, with the necessary changes, to a mandatary except where the parties have agreed in writing on arrangements and procedures intended to ensure compliance by the mandatary. (Government of South Africa)
A Section 37(2) agreement is therefore not automatically:
a transfer of every OHS duty;
a guarantee that the employer cannot face investigation or prosecution;
proof that a contractor is competent;
a replacement for risk assessment;
a replacement for induction or supervision;
proof that unsafe work is being controlled; or
a complete contractor safety-management system.
Its value comes from how well the written arrangements match what actually happens at the workplace.
Section 37(2) at a Glance
Management question | Practical position |
Is Section 37(2) simply an indemnity form? | No |
Does it transfer every OHS duty to the contractor? | No |
Does Section 37(2) refer to written arrangements and procedures? | Yes |
Can the contractor still have its own legal responsibilities? | Yes |
Does signing prove competence? | No |
Should the agreement reflect the actual work and hazards? | Yes |
Does paperwork replace implementation? | No |
Should contractor controls be monitored and evidenced? | Yes |
What Is a Mandatary Under the OHS Act?
The word mandatary matters because Section 37 distinguishes between employees and mandataries.
The Act's definition includes an agent, contractor or subcontractor for work, while preserving that person's status in their own right as an employer or user. (Government of South Africa)
That means a contractor does not stop having its own OHS responsibilities simply because it is performing work for another company.
Likewise, an ordinary employee should not simply be labelled a mandatary to make Section 37(2) fit a situation where it does not.
What Does Section 37(2) Actually Do?
Section 37(1) sets out circumstances in which an employer or user may be presumed responsible for an employee's act or omission unless specified matters are proved.
Those matters include whether the employee acted without the employer's connivance or permission, whether the conduct fell outside the employee's authority, and whether all reasonable steps were taken to prevent conduct of that kind.
Importantly, the Act states that merely issuing instructions forbidding the conduct is not, by itself, sufficient proof that all reasonable steps were taken. (Government of South Africa)
Section 37(2) then says that this framework applies mutatis mutandis—with the necessary changes—to a mandatary, except where the parties have agreed in writing on the arrangements and procedures between them intended to ensure compliance by the mandatary. (Government of South Africa)
That is why the Section 37(2) agreement should be treated as a working contractor-control arrangement, not as a document filed and forgotten.
Does a Section 37(2) Agreement Transfer Liability to the Contractor?
It should not be marketed that way.
The employer continues to have direct obligations under the OHS Act.
Section 8 requires employers, as far as reasonably practicable, to provide and maintain a working environment that is safe and without risk to employees' health. It also addresses safe systems, hazard identification, precautions, information, instruction, training, supervision and enforcement. (Government of South Africa)
Section 9 separately addresses risks to people other than the employer's own employees who may be directly affected by its activities. (Government of South Africa)
Section 37 itself also allows an employee or mandatary to be convicted in relevant circumstances and provides that such conviction can occur in addition to the employer or user. (Government of South Africa)
So the stronger management question is not:
“Did we transfer the liability?”
It is:
“Can we show how contractor-related risks and responsibilities were actually controlled?”
What Should a Section 37(2) Agreement Cover?
There is no value in a six-page document filled with legal terminology if it does not explain who controls the actual work.
A practical agreement should address the areas relevant to the contract.
Control area | Questions the arrangement should answer |
Scope | What work is the contractor actually performing? |
Hazards | What hazards come from the site and the contracted work? |
Risk assessment | Who prepares, reviews and updates the assessments? |
Competence | What qualifications, experience or training must be verified? |
Induction | What site-specific information must contractor workers receive? |
Work control | Who controls permits, isolations, access and authorisation? |
Supervision | Who supervises contractor personnel? |
Equipment | Who verifies machinery, tools and inspection requirements? |
PPE | What PPE is required and who provides it? |
Incidents | How are incidents and unsafe conditions reported? |
Subcontractors | Can subcontractors be used and how are they controlled? |
Monitoring | Who inspects or audits performance? |
Enforcement | Who can stop unsafe work? |
Records | What contractor documentation must be retained? |
Review | What happens when the work scope or hazards change? |
The agreement should be shaped around the real contractor relationship, not merely around a generic downloadable template.
Who Should Sign a Section 37(2) Agreement?
Section 37(2) focuses on the written agreement between the relevant parties; it does not prescribe one universal corporate job title that must sign every Section 37(2) agreement. (Government of South Africa)
From a practical governance perspective, the people signing should have appropriate authority to bind or represent their respective organisations and to ensure the agreed arrangements can actually be implemented.
A signature from somebody who has no operational authority will not create the supervision, resources, permits, training or corrective action required on site.
When Should a Section 37(2) Agreement Be Put in Place?
The Act does not prescribe a universal calendar deadline such as “seven days before work”.
But if the document is intended to define how contractor compliance will be managed, the arrangements should logically be established before the relevant contractor work begins, rather than being created retrospectively after an incident.
The arrangement should also be reviewed where material changes occur, such as:
a significantly altered scope of work;
new hazards;
a different work location;
different plant or equipment;
new subcontractors;
changed supervision; or
new legal or client requirements.
The Six-Stage Section 37(2) Contractor-Control Framework
A stronger contractor system begins before the signature and continues after the work starts.
Stage 1: Scope the Work
Management should clearly establish:
exactly what work will be performed;
where it will happen;
expected duration;
plant, machinery, tools or substances involved;
high-risk tasks;
interaction with employees or other contractors;
access restrictions;
permits or isolations; and
emergency implications.
A vague scope produces vague controls.
Stage 2: Verify the Contractor
Verification should be proportionate to the work and risk.
Depending on the job, the employer may need to examine relevant evidence such as:
company and responsible-person information;
experience relevant to the work;
task-specific competence;
training records;
required appointments;
medical fitness where applicable;
plant or equipment records;
operator authorisations;
risk assessments;
safe-work procedures;
emergency arrangements; and
proposed subcontractors.
The objective is not to collect paperwork for its own sake.
The objective is to answer:
Can this contractor safely perform this particular work in this particular environment?
Stage 3: Agree the Controls in Writing
This is where the Section 37(2) agreement becomes operational.
Record:
responsibilities;
communication channels;
site information;
required documentation;
permits;
supervision;
stop-work authority;
incident reporting;
inspection;
corrective action;
subcontractor controls; and
evidence retention.
The agreement should tell management what happens before, during and after the work.
Stage 4: Induct the Contractor
General qualifications do not teach a contractor everything about your workplace.
Site-specific induction may need to cover:
workplace hazards;
emergency alarms;
evacuation;
assembly points;
restricted areas;
traffic routes;
first-aid arrangements;
fire procedures;
permits;
isolation requirements;
incident reporting;
environmental rules; and
prohibited activities.
Section 8 of the Act expressly includes appropriate information, instruction, training and supervision within the employer's general duties. (Government of South Africa)
Stage 5: Monitor the Work
Contractor approval on Monday does not prove safe performance on Friday.
Monitoring may include:
pre-start checks;
supervisor observations;
permit verification;
equipment checks;
toolbox discussions;
inspection findings;
changed-condition reviews;
corrective-action tracking;
contractor meetings; and
stop-work interventions where necessary.
Evidence should show more than the problem identified.
It should also show what happened next.
Stage 6: Close Out and Learn
When the contractor leaves site, retain the records relevant to the work.
These may include:
Section 37(2) agreement;
scope documentation;
assessments;
permits;
induction records;
competence evidence;
inspection records;
incident information;
corrective actions;
contractor performance notes; and
close-out findings.
A contractor-control system should become stronger from one appointment to the next.
Does Section 37(2) Replace the Construction Regulations?
No.
If the contracted work falls within the Construction Regulations 2014, the applicable duties created by those regulations still need to be addressed.
The Construction Regulations were made under the OHS Act and create specific responsibilities for construction role players. (Department of Labour)
A Section 37(2) agreement should therefore not be treated as a replacement for project-specific construction requirements.
For construction-related work, management should identify the precise regulations,
appointments, plans, competence and records that apply to that project.
How Does Training Fit Into Section 37(2) Contractor
Management?
Training is important where the actual gap involves knowledge, competence, inspections, reporting or supervision.
But the sequence matters.
Do not begin with:
“Which certificate should we buy?”
Begin with:
“What work is being performed, what can go wrong, who has authority, what competence is required and what controls must operate?”
Swift Skills Academy's OHSA / SHE Compliance Training currently references SAQA Unit Standard 13223 and covers areas including statutory responsibilities, workplace inspections, identifying unsafe conditions, corrective action and safety reporting. (Swift Skills Academy)
That can support employees and supervisors involved in workplace SHE systems.
It does not create the Section 37(2) agreement or automatically prove the employer's entire contractor system is compliant.
The Section 37(2) Management Evidence Test
After reading the agreement, management should ask a harder question:
If somebody challenged our contractor-control system tomorrow, what could we actually produce?
1. Can we show why this contractor was selected?
Not simply the lowest quotation.
Relevant evidence may include experience, competence and suitability for the work.
2. Can we show exactly what work was authorised?
The contractor's scope should be identifiable.
3. Can we show what hazards were identified?
Both workplace hazards and contractor-created hazards matter.
4. Can we show what information the contractor received?
Site rules, emergency arrangements and hazard information should not exist only in somebody's memory.
5. Can we show how competence was checked?
A certificate should be assessed against the actual task and role.
6. Can we show who had authority?
Who approved work?
Who supervised it?
Who could stop it?
7. Can we show how the contractor was monitored?
A pre-start document review is not the same as ongoing control.
8. Can we show what happened when a problem was found?
Inspection without corrective action is incomplete.
9. Can we show how subcontractors were controlled?
The chain should not disappear below the first contractor.
10. Can we show what was retained after completion?
A management system needs retrievable evidence.
Common Section 37(2) Myths
Myth | More accurate position |
“The contractor signed, so we have no liability.” | The employer's direct statutory duties do not simply disappear. |
“Section 37(2) transfers every duty.” | It provides for written arrangements and procedures intended to ensure the mandatary's compliance. |
“The contractor has certificates, therefore competence is proven.” | Competence should correspond to the actual work and role. |
“A Section 37(2) agreement guarantees immunity.” | The Act does not provide a blanket immunity guarantee. |
“A safety file proves the workplace is safe.” | Documentation is evidence; workplace conditions and implementation still matter. |
“We told the contractor not to work unsafely, so we are protected.” | Section 37(1) expressly says instructions alone are not sufficient proof of all reasonable steps. (Government of South Africa) |
“One generic agreement works for every contractor.” | The practical arrangements should correspond to the actual work. |
“Training replaces supervision.” | Training and supervision are separate elements of effective safety control. |
What Can Happen if OHS Duties Are Breached?
The OHS Act creates criminal offences and penalties for specified contraventions.
The government-hosted current text of Section 38 provides, for listed offences, for penalties including a fine of up to R50,000, imprisonment for up to one year, or both; Section 38(2) contains a higher maximum of R100,000, imprisonment for up to two years, or both where that subsection applies. The actual offence, person charged and outcome depend on the facts and applicable provisions. (Government of South Africa)
A Section 37(2) agreement should therefore never be sold internally as:
“Sign this and management is protected.”
A more responsible question is:
“Are the arrangements real, appropriate and evidenced?”
Ten Section 37(2) Contractor-Control Mistakes
1. Signing After Work Has Already Started
The agreement cannot meaningfully guide contractor control if nobody considered the arrangements until after the work was underway.
2. Using the Same Template for Every Job
Changing only the contractor's name does not make an agreement site-specific.
3. Failing to Define the Scope
If management cannot clearly describe the work, it becomes difficult to identify the right hazards and controls.
4. Collecting Certificates Without Checking Relevance
The existence of a certificate does not automatically prove competence for every task.
5. Treating Induction as a Signature Register
The purpose of induction is communication and understanding—not simply attendance.
6. Ignoring Subcontractors
The risk does not disappear because another layer has been added to the contracting chain.
7. Failing to Monitor the Work
Contractor performance needs to be observed where the risk and circumstances require it.
8. Recording Problems Without Closing Them
A corrective-action register filled with unresolved findings creates its own management questions.
9. Giving Supervisors Responsibility Without Authority
People expected to enforce OHS controls need sufficient authority to act.
10. Believing the Safety File Is the Safety System
The file should reflect what is happening.
It should not exist as an alternative reality to the workplace.
Section 37(2) Contractor Evidence Checklist
Before and during contractor work, determine which of the following are relevant:
defined scope of work;
signed Section 37(2) arrangement;
responsible-person information;
contractor risk assessments;
safe-work procedures;
training and competence evidence;
medical-fitness evidence where applicable;
machinery and equipment records;
operator authorisations;
site induction;
required permits;
isolation procedures;
PPE requirements;
emergency arrangements;
incident-reporting procedure;
subcontractor controls;
inspection records;
corrective-action tracking;
contractor performance review; and
close-out documentation.
The correct evidence will depend on the work and applicable legal requirements.
A maintenance contractor changing light fittings does not automatically need the same documentation as a contractor erecting scaffolding, entering a confined space or performing major structural work.
Build a Contractor System — Not a Paper Defence
The strongest Section 37(2) agreement South Africa is not necessarily the document with the most pages.
It is the one embedded inside a real system.
Management should be able to show:
SCOPE — what the contractor was hired to do.
VERIFY — why the contractor was considered suitable.
AGREE — how responsibilities and procedures were divided.
INDUCT — what workplace information was communicated.
MONITOR — how actual work was checked.
EVIDENCE — what records show the system operated.
Frequently Asked Questions
What is a Section 37(2) agreement in South Africa?
It is a written agreement between an employer or user and a mandatary recording arrangements and procedures between them intended to ensure compliance by the mandatary with the Occupational Health and Safety Act. (Government of South Africa)
Who is a mandatary under the OHS Act?
The Act's definition includes an agent, contractor or subcontractor for work while preserving that party's own status as an employer or user. (Government of South Africa)
Does a Section 37(2) agreement remove the employer's liability?
It should not be understood as an automatic transfer or removal of every employer duty. Employers continue to have direct duties under provisions such as Sections 8 and 9, while Section 37 also provides for potential liability involving employees and mandataries in qualifying circumstances. (Government of South Africa)
Is a Section 37(2) agreement the same as an indemnity?
No. Section 37(2) specifically refers to written arrangements and procedures intended to ensure the mandatary's compliance with the Act. (Government of South Africa)
What should a Section 37(2) agreement contain?
The exact contents should reflect the contractor relationship and work. Typical management topics can include scope, hazards, responsibilities, risk assessments, competence, induction, permits, supervision, equipment, incidents, subcontractors, monitoring, enforcement and records.
Who should sign a Section 37(2) agreement?
The Act does not prescribe one universal corporate job title for every agreement. The parties should ensure that the people involved have appropriate authority to represent their organisations and implement the agreed arrangements.
When should a Section 37(2) agreement be signed?
The Act does not prescribe one universal number of days before work. As a practical contractor-control measure, the arrangements should be established before the relevant work starts if they are to govern how the contractor operates.
Does a Section 37(2) agreement replace a contractor safety file?
No. The agreement deals with the arrangements and procedures between the parties. Other contractor documentation may still be required by the nature of the work, applicable regulations, risk controls or contractual requirements.
Does the agreement prove that a contractor is competent?
No. Competence must be assessed in relation to the work, applicable requirements, the person's role and the hazards involved.
Does Section 37(2) replace Construction Regulations requirements?
No. Where the work falls under the Construction Regulations 2014, the relevant project-specific duties remain applicable. (Department of Labour)
Authoritative Sources & Regulatory References
Source | Why It Matters |
Primary legislation for the article, including Sections 8, 9, 16, 37 and 38. (Government of South Africa) | |
Official Act text supporting the explanation of Section 37(1), Section 37(2), mandataries, employer duties and penalties. (Government of South Africa) | |
Relevant where contractor work falls within construction work and additional client, principal-contractor and contractor duties apply. (Department of Labour) | |
Supports contractor-specific requirements such as health and safety plans, safety files, competence and resources for construction work. (Department of Labour) |
Read More
Read More
Related Post | Why Read It Next |
Understand management responsibility, Section 16, contractor exposure, inspections and the evidence leadership should retain. | |
Understand the employer’s underlying duties around hazards, safe systems of work, training, supervision and workplace controls. | |
See how legal appointments, competent-person roles, authority and OHS responsibilities fit into the wider management system. |
Final Word
A Section 37(2) agreement is not valuable because somebody signed it.
It is valuable when it accurately reflects how the employer or user and contractor intend to manage occupational health and safety in the real workplace.
The strongest contractor-control system can answer six questions:
What work is being done?Was the contractor appropriately verified?Were responsibilities agreed?Was site information communicated?Was the work monitored?Can management produce the evidence?
That is the difference between a document sitting in a file and a contractor-control system that actually operates.
