In a recent case before the South Australian Industrial
Relations Court, an appeal by a labour hire company against an OHS
fine was upheld on the basis that the company had less control over
the work site compared to the host employer, such that the company
should be considered less culpable for the worker's injury.
In 2005, Adelaide Industrial Labour Service Pty Ltd (AILS) sent
an 18 year old worker, who had no trade qualifications or
experience, to work for a host employer as a general labourer. The
host employer put the worker to work on an unguarded pipe bending
machine and he suffered serious finger injuries to both hands. It
was found that the worker had not been given adequate instruction
The host employer and AILS were both charged with an offence
under the South Australian Occupational Health Safety and Welfare
The Industrial Magistrate found that AILS had failed to ensure
that the host employer would inform it of any changes in the
worker's duties, failed to make a sufficient amount of site
visits and failed to tell the worker that he must refuse to do any
work apart from general labouring.
AILS and the host employer were each ordered to pay a fine of
$9,000. AILS appealed this decision on the grounds that the fine
was excessive and its conduct was not as serious as that of the
The Court said that in some circumstances a labour hire
company's capacity to influence matters relating to the health
and safety of its workers may be substantially similar to the host
employers. In those circumstances, the respective culpability of
each party is equal. However, the Court went on to say that,
generally, a labour hire company has less capacity to influence
health and safety issues. It should, however, do all that is
reasonably within its capacity.
In this case, the Court found that it was acceptable for AILS to
assume the worker would only be performing general labouring work.
AILS had a written hazard identification and risk assessment which
provided that the work would not involve the operation of plant and
machinery. Further, AILS printed its terms and conditions on the
back of its weekly time sheets. They clearly required the host
employer to instruct AILS on the requirements of the assignment and
duties and notify AILS of any change to the duties or system of
The Court decided that, in this case, the host employer was more
at fault as it knowingly, and in breach of its terms and conditions
with AILS, put a young and inexperienced person on a machine that
was unsafe, without providing any training or instruction to the
worker. AILS was unaware that the employee had been directed to use
the machine, which represented a significant change in
circumstances after the initial agreement. This demonstrated the
lack of control AILS had over the employee's activities. The
Court therefore found that AILS' culpability was not as great
as that of the host employer because its conduct was not comparable
with that of the host employer.
The Court decided that the penalty given to AILS was manifestly
excessive when balanced against that imposed upon the host
employer. The penalty was reduced from $9,000 to $6,000.
Lessons for employers
It is important for labour hire companies to be diligent in
ensuring the workplace health and safety of its workers when
supplying them to host employers. A labour hire company should not
assume their responsibility ends once the employee begins work with
the host employer. Safety is a responsibility of all parties and
this case reinforces, to a large extent, the non-delegable duty of
care that labour hire companies owe to their employees.
In this case, AILS had undertaken risk assessments and expected
the employee to be perform labouring work only. However, the host
employer directed the employee to perform work for which he was not
engaged. Had AILS not clearly spelt out its terms and conditions
and undertaken the risk assessments the outcome in terms of penalty
may have been significantly different. For further information see
Adelaide Industrial Labour Service Pty Ltd v Barnett  SAIRC
38 [17th June 2008].
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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