Views in the last 30 days: 50
Estimated read time: 11 minute(s)
1️⃣ Purpose of Clause 6.1
The aim of Clause 6.1 in both editions is to clearly assign responsibility for engaging and managing staff and labour to the Contractor. This includes:
- Hiring and payment of personnel.
- Providing accommodation, transport, food, and welfare services.
📌 This clause emphasizes that unless otherwise stated in the Employer’s Requirements, the Contractor bears full responsibility for organizing these resources.
✅ Implication for Parties:
- Contractor: Has autonomy and accountability for workforce management.
- Employer: Reduced logistical burden but must be clear in specifying exceptions in the Employer’s Requirements.
- Risk Allocation: Any failures or deficiencies in worker conditions or engagement are clearly placed on the Contractor.
2️⃣ Breakdown of Clause 6.1
🔹 1999 Edition Text:
“Except as otherwise stated in the Employer’s Requirements, the Contractor shall make arrangements for the engagement of all staff and labour, local or otherwise, and for their payment, housing, feeding and transport.”
🔹 2017 Edition Text:
“Except as otherwise stated in the Employer’s Requirements, the Contractor shall make arrangements for the engagement of all Contractor’s Personnel, and for their payment, accommodation, feeding, transport, and welfare.”
📌 Key Changes:
- The term “Contractor’s Personnel” is used in 2017 to consolidate and clarify scope (includes employees, subcontractors’ staff, etc.).
- “Welfare” is now explicitly included in 2017, emphasizing duty of care and modern labor standards.
3️⃣ Key Interpretations and Implications
✅ Obligations:
- Contractor must cover full lifecycle logistics for its workforce.
- Specific care for welfare and accommodation becomes more pronounced in 2017.
🚨 Risks:
- Non-compliance can lead to penalties or claims under labor law or contract breach.
- Misunderstanding “except as otherwise stated” can shift obligations unexpectedly — careful drafting is essential.
🔎 Interpretative Question:
Can “Contractor’s Personnel” include off-site administrative staff?
👉 Not typically—FIDIC uses “Contractor’s Personnel” to mean those involved in executing the Works, whether on-site or in direct support. This is further supported by definitions in Clause 1.1.16.
4️⃣ Cross-Referencing with Other Clauses
Understanding Clause 6.1 doesn’t happen in isolation. It is interconnected with several other clauses that together define the Contractor’s responsibilities and the Employer’s expectations around workforce management. Here’s how it fits into the broader framework:
🔄 Clause 1.1.16 (2017): Contractor’s Personnel
This definition expands the scope beyond direct employees:
“Contractor’s Personnel” includes all persons used by the Contractor on-site or at other places where the Works are carried out, including subcontractors’ staff and other support personnel.
✅ Implication: Any obligations under Clause 6.1 automatically extend to subcontractors and even off-site workers contributing to the Works.
🔄 Clause 4.1: Contractor’s General Obligations
1999 & 2017 Editions: The Contractor is responsible for all means and methods required to deliver the Works in accordance with the Contract.
📌 Connection to 6.1:
- Reinforces that workforce management (hiring, housing, welfare, etc.) falls under the Contractor’s broader duty to “execute and complete the Works.”
- Any deficiency in managing staff (e.g., inadequate housing or delayed payment) could be deemed a breach of Clause 4.1.
🔄 Clause 4.8 (2017): Health and Safety Obligations
(Clause 6.7 in the 1999 edition)
The Contractor must establish and maintain procedures for health and safety and must comply with all applicable safety regulations.
✅ Cross-link:
- The term “welfare” introduced in Clause 6.1 (2017) naturally overlaps with the obligations under Clause 4.8.
- Together, they build a composite duty: 6.1 governs the engagement and logistics of workers, while 4.8 mandates safe and humane conditions for them.
🔄 Clause 6.4: Labour Laws
1999 & 2017 Editions:
The Contractor shall comply with all applicable labour laws, including those relating to employment, working conditions, and safety.
🚨 Critical Link to 6.1:
- Non-compliance with housing, feeding, or welfare requirements under Clause 6.1 may trigger violations under Clause 6.4 if such conditions are regulated by national law.
- Especially important in jurisdictions with stringent labour standards or migrant worker protections.
🔄 Clause 6.6: Facilities for Staff and Labour
The Contractor must provide appropriate facilities including housing, sanitation, and medical services.
📌 Complementary to 6.1:
- Clause 6.1 assigns the general duty to engage and manage personnel.
- Clause 6.6 provides specific deliverables that arise from that obligation — e.g., not just “housing,” but also the quality and sufficiency of facilities.
🔄 Clause 2.3 (2017) / Clause 2.3 (1999): Employer’s Personnel
This clause allows the Employer to have its own staff on-site or interacting with the Contractor’s workforce.
✅ Why It Matters:
- Situations may arise where Employer’s and Contractor’s personnel cohabit or share facilities.
- This overlap makes it essential to have clear boundaries and mutual responsibilities, which Clause 6.1 helps initiate but must be reinforced in the Employer’s Requirements.
🔄 Clause 20.1 / 20.2 (Claims)
If the Contractor believes the Employer failed to meet obligations that affect workforce provisions (e.g., late access to housing), it can initiate a claim.
📌 Strategic Relevance:
- Any ambiguities in the Employer’s Requirements about responsibilities for staff accommodation or transport may lead to claims under this clause.
- Proper drafting and understanding of Clause 6.1 are essential to prevent disputes.
5️⃣ What If Scenarios
🧩 Scenario: The Employer wants to provide housing for the Contractor’s staff.
If so, the Employer must explicitly state this in the Employer’s Requirements. Otherwise, the Contractor remains responsible.
🧩 Scenario: Labour unrest occurs due to poor accommodation.
Responsibility lies with the Contractor under Clause 6.1, unless Employer’s Requirements altered that duty.
6️⃣ Suggestions for Clarity and Improvement
While Clause 6.1 provides a baseline allocation of responsibility for workforce engagement and welfare, there are areas that could benefit from clarification, customization, or elaboration—especially in complex or international projects.
Let’s break down key opportunities to make this clause more effective and less open to disputes:
📌 1. Clarify the Scope of “Contractor’s Personnel” (2017) or “Staff and Labour” (1999)
Issue: The terms can be interpreted differently — does it include off-site administrative personnel? What about third-party labour agencies?
Suggestion: Add a definition enhancement in the Particular Conditions or Employer’s Requirements.
🔍 Example:
“For the purposes of Clause 6.1, ‘Contractor’s Personnel’ shall include all individuals engaged, directly or indirectly, by the Contractor for the execution of the Works, whether located on-site, off-site fabrication yards, or temporary logistics hubs within the project boundaries.”
✅ This eliminates ambiguity about who must be accommodated and paid by the Contractor.
📌 2. Specify Employer-Supplied Support (if any)
Issue: The phrase “Except as otherwise stated in the Employer’s Requirements” gives flexibility — but if left vague, it can become a grey area.
Suggestion: Be explicit in the Employer’s Requirements if the Employer is providing anything (e.g., transport, security, shared housing).
🔍 Example:
“The Employer shall provide on-site accommodation units for up to 50 Contractor’s workers. The Contractor remains responsible for all welfare services, including cleaning, catering, and waste management.”
🚨 This prevents double-provisioning or unexpected claims if the Employer later asserts it’s not their duty.
📌 3. Define “Welfare” Services
Issue: The term “welfare” was added in 2017 but is undefined. Different jurisdictions have different expectations—sanitation, recreation, religious spaces, etc.
Suggestion: Create a welfare baseline in the contract or Particular Conditions.
🔍 Example Clause Add-on:
“Welfare services shall include, at a minimum: potable water supply, first aid station, sanitation units with handwashing stations, rest facilities, and shaded eating areas.”
✅ Clear definitions reduce conflict and help with compliance, especially under Clause 6.4 (Labour Laws).
📌 4. Link to National Labour Standards or Project-Specific Codes
Issue: Some projects (e.g., financed by the World Bank or built in Gulf countries) must follow strict codes for worker welfare.
Suggestion: Tie Clause 6.1 obligations to applicable labour codes or specific project frameworks.
🔍 Example:
“In fulfilling obligations under Clause 6.1, the Contractor shall comply with the International Labour Organization (ILO) Core Conventions and the IFC Environmental and Social Performance Standards.”
✅ This ensures consistency with ESG, CSR, or donor compliance requirements.
📌 5. Add KPIs or Monitoring Tools
Issue: Without benchmarks, it’s difficult to measure or enforce the Contractor’s compliance with Clause 6.1.
Suggestion: Introduce minimum standards and KPIs (Key Performance Indicators) linked to inspections or audits.
🔍 Example:
“Contractor shall maintain a Labour Welfare Logbook, updated weekly, including housing occupancy levels, water quality tests, incident reports, and worker complaints register. Access shall be granted to the Engineer upon request.”
✅ This can tie into Clause 4.20 (Progress Reports) or Clause 4.8 (Health and Safety).
📌 6. Avoid Ambiguities Around Subcontractor Staff
Issue: Subcontractors often supply their own staff. Who’s responsible for their housing and welfare?
Suggestion: Clarify in the Particular Conditions whether the Main Contractor is responsible for welfare provisions for all Subcontractors.
🔍 Sample Language:
“The Main Contractor shall ensure compliance with Clause 6.1 by all Subcontractors and shall be fully responsible for providing or coordinating all required welfare services for Subcontractor personnel.”
🚨 This addresses a common loophole that results in unmanaged or unsafe labour camps.
🧠 Summary Table: Areas of Improvement
| Ambiguity | Suggested Clarification | Tool |
|---|---|---|
| “Contractor’s Personnel” | Define scope | Particular Conditions |
| Employer’s role | Specify in Employer’s Requirements | ER |
| “Welfare” | List components | Technical Specs |
| Compliance Benchmark | Refer to labour codes (ILO, IFC) | Contract Clause |
| Monitoring | Add KPIs | Monthly Reports |
| Subcontractor Staff | Assign accountability | Special Provisions |
7️⃣ Final Takeaways
🔹 Clause 6.1 plays a foundational role in workforce management on FIDIC contracts.
🔹 The 2017 edition tightens the language by using “Contractor’s Personnel” and adding a broader duty of care through explicit mention of “welfare.”
🔹 Risk and responsibility remain squarely with the Contractor unless specifically varied by the Employer’s Requirements.
🧠 Best Practice Tip: Always double-check the Employer’s Requirements for any exceptions. If unclear, seek clarification before tendering or executing.
✅ Clause 6.1 Compliance & Drafting Checklist
| Checklist Item | Purpose / Explanation | ✔️ |
|---|---|---|
| Defined “Contractor’s Personnel” clearly? | Ensure scope includes subcontractors, off-site staff, etc., to avoid misinterpretation. | ☐ |
| Employer’s support stated in Employer’s Requirements? | Specify if Employer provides housing, transport, etc. to avoid disputes. | ☐ |
| Welfare components defined (e.g. water, toilets, rest areas)? | Clarify what “welfare” includes for alignment with labour and HSE laws. | ☐ |
| Local labour law compliance referenced? | Ensures compatibility with Clause 6.4 and avoids legal breaches. | ☐ |
| Health & Safety link to Clause 4.8 established? | Welfare under Clause 6.1 complements HSE duties — must align. | ☐ |
| KPIs or reporting tools established (e.g. Labour Welfare Logbook)? | Enables monitoring of compliance; aligns with Clause 4.20 (Progress Reports). | ☐ |
| Responsibilities for Subcontractor personnel clarified? | Avoids gaps when subcontractors engage their own staff. | ☐ |
| Language allows for third-party inspections (e.g., Engineer or Client checks)? | Ensures transparency and contractual enforceability. | ☐ |
| Cultural/religious considerations included if relevant? | Useful for projects in jurisdictions with mandatory prayer spaces or dietary restrictions. | ☐ |
| Budget allocations accounted for in Pricing Schedules? | Ensures Contractor has considered costs for staff housing, welfare, etc. | ☐ |
📩 Sample Letters
📩 Letter 1: Contractor Notifying Employer of Engagement Arrangements
Scenario: Proactive notice from the Contractor at project start to inform the Employer about the engagement and welfare arrangements for labour.
Subject: Notification of Engagement and Welfare Arrangements under Clause 6.1
To: [Employer’s Representative]
From: [Contractor’s Representative]
Date: [Insert Date]Dear [Name],
In accordance with Clause 6.1 [Engagement of Staff and Labour], we hereby notify you that we have made arrangements for the engagement of our staff and labour, including:
- Recruitment and onboarding of personnel (local and international)
- Provision of housing and meals
- Transport to and from site
- Welfare facilities (sanitation, drinking water, rest areas)
All arrangements comply with the requirements set out in the Contract and relevant labour laws.
Should you require further information or inspection of these facilities, please do not hesitate to contact us.
Sincerely,
[Contractor’s Representative Name]
[Title]
[Company Name]
📩 Letter 2: Contractor Requesting Clarification on Employer-Provided Facilities
Scenario: Employer’s Requirements are vague about responsibilities for worker housing.
Subject: Request for Clarification – Responsibility for Labour Accommodation
To: [Employer / Engineer]
From: [Contractor]
Date: [Insert Date]Dear [Name],
With reference to Clause 6.1 [Engagement of Staff and Labour], we request clarification regarding the responsibility for the provision of accommodation for the Contractor’s Personnel.
The Employer’s Requirements refer to “on-site facilities” but do not specify whether the Employer will provide housing or whether it is to be arranged by the Contractor.
Kindly confirm whether:
- The Employer will be providing accommodation and, if so, the capacity and location; or
- The Contractor should proceed to procure external facilities independently.
Early confirmation will enable us to finalize logistics and avoid delays.
Yours faithfully,
[Contractor’s Representative Name]
[Company Name]
📩 Letter 3: Employer Notifying Non-Compliance with Welfare Standards
Scenario: Employer observes that the Contractor’s facilities do not meet agreed standards.
Subject: Non-Compliance with Clause 6.1 – Welfare Facilities for Contractor’s Personnel
To: [Contractor]
From: [Engineer / Employer]
Date: [Insert Date]Dear [Name],
During a recent inspection on [Date], we noted several deficiencies in the welfare facilities provided for the Contractor’s Personnel, including:
- Overcrowded accommodation
- Inadequate sanitation
- Lack of potable drinking water
These conditions do not meet the standards required under Clause 6.1 [Engagement of Staff and Labour] nor the applicable labour regulations.
We request that you rectify these deficiencies immediately and submit a corrective action plan within 7 days from the date of this letter.
Failure to comply may lead to further action under the provisions of the Contract.
Sincerely,
[Engineer’s / Employer’s Representative Name]
[Title]
[Organization]
📩 Letter 4: Contractor Claiming for Costs Due to Employer-Requested Welfare Additions
Scenario: Employer later requests additional welfare services (e.g., separate dining for cultural reasons).
Subject: Notice of Claim – Additional Welfare Facilities Requested
To: [Employer / Engineer]
From: [Contractor]
Date: [Insert Date]Dear [Name],
We refer to your instruction dated [Instruction Date] requesting the provision of [e.g., separate dining areas and prayer rooms] for Contractor’s Personnel.
In accordance with Clause 6.1 [Engagement of Staff and Labour], such provisions were not included in our original engagement arrangements.
As these changes constitute additional requirements, we hereby notify our intent to claim for the associated Cost and/or extension of time under Clause 20.1 [Contractor’s Claims].
A detailed breakdown of the cost implications will follow within the time frame required by the Contract.
Yours sincerely,
[Contractor’s Representative Name]
[Company Name]