Australia: Contractor management—striking the right balance when managing work health and safety

For many organisations, working with contractors and subcontractors is part and parcel of daily life. More and more organisations are seeking the services of specialist contractors to assist them with large-scale projects or simply day-to-day maintenance tasks. This can make life easier for everyone in many respects, but it can also create a number of issues when it comes to managing work health and safety.

What does the law say about contractors?

For certain construction work over $250,000, the model work health and safety regulations (WHS Regulations) impose specific work health and safety obligations on principal contractors. However, these obligations don't mean that those who engage principal or regular contractors are off the hook when it comes to ensuring health and safety.

Work health and safety legislation across Australia imposes an obligation on organisations to ensure the health and safety of their contractors and sub-contractors, where it is reasonably practicable to do so. These qualifying words "reasonably practicable" are very important. In a number of recent cases, the courts have stated that it is reasonably practicable for organisations to rely on the expertise of their contractors to maintain a safe work environment.

Organisations should be clear about what they want their contractors to do, and contractors should be asked how they will do the task safely.

In Baidia Polutry v The Queen Justice Heydon stated:

"In some circumstances, the employment of independent contractors may be the only reasonably practicable way of ensuring and maintaining a safe working environment... Very often those who engage independent contractors know much less about safety than the independent contractors do."

Where there are multiple parties working on the same site, the various roles of each party need to be determined right at the beginning. If this doesn't happen, then generally when an incident occurs, the parties will start arguing about who was supposed to do what. Unfortunately, by this stage it's too late to only start dealing with roles and responsibilities! Further, regulators will rarely prosecute just one party at a site. Instead the regulator will look to see who are duty holders under the legislation, what the duty was and what reasonably practicable steps those duty holders could have taken to prevent the risk arising.

Another common mistake by organisations is engaging a contractor and then leaving them to their own devices – effectively delegating all safety responsibility. States that operate under the harmonised model work health and safety legislation (WHS Act) are now specifically prohibited from transferring all safety responsibilities. Section 272 renders any such attempt as void. No matter how cleverly worded a contract may be, any clause within a contract that attempts to:

  • exclude, limit or modify the operation of the WHS Act
  • exclude, limit or modify any duty owed under the WHS Act, or
  • transfer to another person/entity any work health and safety duty owed under the WHS Act,

will be deemed void and therefore unenforceable.

What should you be doing?

When looking to engage a contractor, the lowest price should not be your primary consideration. What you should be looking for in a contractor is:

  • what experience and competency they have in undertaking the task you are getting them to perform
  • whether they have any convictions under safety legislation
  • evidence of their safety management system, including what process and documentation they will use to assess, eliminate and minimise risks, and
  • what level of supervision they will provide for their workers at the site.

It may be that the cheapest contractor has the best safety record and evidence of an excellent safety management system. But if they don't and you select a contractor based purely on price, it will be difficult to argue that you took all "reasonably practicable" steps to ensure a safe work environment when engaging the contractor.

Once a contractor comes on board, the WHS Act requires that you consult with that contractor about the specific health and safety issues listed in the WHS Act. In particular, you need to work with them to identify and minimise risks. Many organisations make the mistake of engaging a contractor and then not keeping lines of communication open.

However, it's important that the right balance is struck. For example, if your organisation engages a contractor and is overly prescriptive about what you want your contractor to do and more importantly, exactly how to do it, you run the risk of inheriting liability for a task through your actions. Organisations should be clear about what they want their contractors to do, and contractors should be asked how they will do the task safely. It's then your job to monitor and communicate with your contractor to ensure they are doing what they said they would.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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