Australia: Clarity For "Deemed" Employers Of Contractors In WA?

Principals and site managers frequently contract out specialist work often under the belief that they are "not responsible" for the contractor's safety. This is clearly not the case. Some recent cases have been expansive in the scope of liability. This has created a concern that a principal will always be responsible and liable. Recently in Western Australia a principal was held not to be the deemed employer and therefore not liable following a fatality on site. The case sheds some light on the scope of a principal's liability pursuant to the Occupational Health and Safety Act 1984 (WA).

Reilly v Devcon Pty Ltd [2007] WASC 106

Devcon Australia Pty Ltd was the registered builder and the principal of the construction of some new showrooms. The buildings were being constructed with concrete tilt-up panels. Devcon contracted Kefo Steel Erection and Fabrication Pty Ltd to provide the labour for the erection of the tilt up panels and all structural steel. Devcon contracted Kefo because it had experience and expertise in tilt-up panel construction, which Devcon did not have.

Kefo's director, Kelsh, was also the rigging supervisor directing the on-site work for Kefo. Kelsh was an experienced and safety conscious rigger with extensive tilt-up experience. While affixing the steel rafters, one rafter slid and fell to the ground. As a result a concrete tilt-up panel collapsed. Kelsh was killed and another Kefo employee was injured.

WorkSafe alleged that Devcon was the "deemed" employer of Kefo's employees and Kelsh. WorkSafe claimed that Devcon had the necessary control over Kefo to deem Devcon to be the employer. At the first trial Devcon was found to not have the necessary control to be the deemed employer and was therefore not liable. WorkSafe appealed.

They key question was whether, in relation to the hazard, the principal controlled the system of work. The hazard was the risk of the panels or steel falling causing injury.

The court determined that control arises where:

• the principal has a right to direct that the worker is not to perform work in a certain way; or

• the principal has practical authority to give such a direction and the worker would accept it and comply (even if there was no formal or written authority to direct).

The facts in this case indicated that the principal did not have the right to direct Kefo employees in the way it conducted the work in relation to the hazard. Additionally, Devcon did not have any practical authority on site to direct action.

Implications

This decision confirms that principals in WA who have the capacity to exercise control will likely be deemed to be the employer in relation to ensuring a safe system of work.

It does however provide some comfort to principals. When principals engage contractors to perform specialist work with authority and direction remaining under the contractors control, the principal will not become the deemed employer for the hazards associated with that specialist work.

Those engaging contractors should review the arrangements and specifically consider:

• the extent to which any contract includes a legal right to give directions concerning possible hazards; and

• what capacity there is, in practice, to give instructions which would effectively demonstrate control.

This is also a timely reminder for all those who control workplaces or work practices to ensure that suitable hazard identification and control is in place.

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.