The Facts

Carpenter engaged to work on construction site in NSW

On 31 May 2021, a carpenter began working on a construction site in northern NSW, not far from the Queensland border. The principal contractor on the work site was a company based in Queensland.

The carpenter had been contacted about the job by a NSW colleague he had known for decades, a licensed builder, allegedly on behalf of the principal contractor. The licensed builder then rang the principal contractor to confirm that the carpenter would start work on site the following Monday. There was no paperwork done, nor any employment declaration form filled in with either the licensed builder or with the principal contractor.

The principal contractor's name was on the gate, and it appeared that this Queensland company was in control of the work site, irrespective of any other contractors. The carpenter assumed that the principal contractor would pay his wages. The licensed builder indicated to the carpenter that all payment had to be put through to the principal contractor.

Carpenter suffers injuries due to fall from scaffolding

On 2 June 2021, the carpenter fell from scaffolding and suffered severe life-threatening injuries. He was airlifted by a helicopter to Gold Coast University Hospital.

The carpenter made a claim against the principal contractor for weekly compensation because of his injuries and consequent inability to work. At the time of determination in December 2022, the carpenter continued to suffer total incapacity for employment.

Principal contractor denies liability for workers compensation claim

In denying the claim, the principal contractor argued that it worked under a management contract with the owners of the property. According to this arrangement, any works on site would be performed either by contractors, or by employees of a contractor.

The principal contractor maintained that the carpenter had his own ABN and was brought onto the work site by the licensed builder, who had workers compensation insurance in NSW.

The principal contractor also provided the following contractual disclaimer in its contract with the property owners:

[The Principal contractor] will perform no work on the construction site other than to observe the progress, communicate with contractors, suppliers and service providers and report progress to the client. Constructions means, methods, techniques, sequences, procedures and safety on site are the sole responsibility of the contractors, suppliers and service providers working for the client.

Principal contractor's role on construction site

The principal contractor was responsible for arranging for the work to be done on the job site and determining which contractors would carry out which work, at what rate. It also monitored the work carried out by subcontractors and checked their invoices to determine whether to recommend payment by the property owners.

The principal contractor argued that nevertheless, it was otherwise not liable in the event of injury to a contractor or their employee on the construction site.

When the carpenter brought proceedings against the principal contractor seeking payment of workers compensation, the company defended the claim on the basis that either the carpenter was an independent contractor, or he was the responsibility of the property owners, or he was otherwise working for the licensed builder who introduced him to the work site.

It was up to the Personal Injury Commission to determine whether or not the principal contractor was liable to pay the carpenter's workers compensation claim.

CASE A

The case for the carpenter

CASE B

The case for the principal contractor
  • The principal contractor oversaw the construction of the build and in doing so decided what work was to be done and in what order. Therefore, the principal contractor should be held liable.
  • The principal contractor approved payment by the owners of the invoices of all persons who worked on the site.
  • The licensed builder was acting on behalf of the principal contractor when he engaged my services.
  • The licensed builder who introduced me to the job was not my supervisor; he was just another carpenter on site.
  • There were four builders on site, and we were all instructed by the principal contractor.
  • The fact that I didn't meet the principal contractor's representative until the day of the accident is irrelevant.
  • I primarily used my own tools, but tools were also supplied by the principal contractor.
  • It was the principal contractor which provided the scaffolding on site, not the owners of the property nor the licensed builder.
  • We build "zero energy" homes. This type of build is not common in Australia, so we provide the contractors with guidance to allow them to be able to complete their work.
  • We have a management contract with the owners. We oversee the management of the site and are paid a management fee. The owners are liable for contractors on site.
  • Under no circumstances do we pay any contractors working on site. This is clearly set out in our management contract. We merely check the invoices on behalf of the owners.
  • We do not let people on site unless they have their own insurances. They have all got to be insured. We knew that the licensed builder who brought the carpenter to the site has workers compensation insurance.
  • We have not received an invoice for any wages from the carpenter. If a contractor like the licensed builder has his own employees, then he is responsible for their payment.
  • The licensed builder needed more tradesmen on site, so he brought in the carpenter.

So, which case won?

Cast your judgment below to find out

Geoff Baldwin
Workers compensation
Stacks Champion

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.