Successful companies focus on their core business and, for many reasons, outsource other functions to contractors. It’s common to find contractors performing tasks alongside other contractors and company employees. This can easily result in complex and overlapping duties of care with regards to health and safety.
However the Person Conducting the Business or Undertaking (PCBU), who retains a contractor’s services, is liable for ensuring that the contractors’ employees are not exposed to health and safety risks, while at the hiring company’s place of work. This general duty of care, under health and safety legislation cannot be delegated.
Under the Australian harmonized Work Health and Safety (WHS) Laws, contractors engaged to undertake work for a PCBU are considered to be workers of that PCBU. PCBU’s therefore have the same duties towards contractors, as they do to their own employees.
The hiring company is responsible for having overall control and management of contractor projects, including monitoring health and safety issues onsite and ensuring that the company’s health and safety policy is followed. However, the hiring company is not required to oversee the technical aspects of the work which it has contracted out, particularly if it has no expertise in that work and those matters are within the role and expertise of the contractor/subcontractor.
The Essential Handbook developed by the Australian Government for Businesses operating in Australia, states: “If you hire independent contractors, you are legally responsible for ensuring their health and safety at all times while in your workplace (to the extent that this is reasonably practicable). For example, you should ensure that your workplace, machinery, substances and facilities used are safe, and that all workers have adequate training, supervision and are properly licensed if required.”
Understandably a contractor as a PCBU in their own right, has the same obligations to their employees and to any sub-contractors which they may make use of. If more than one person has the same duty concurrently under the WHS Act, each person with the duty must, so far as is reasonably practicable, consult, co-operate and co-ordinate activities with all others who have a duty in relation to the same matter.
As workers for another PCBU, contractors’ duties are to take reasonable care for their own health and safety while at work and to comply with any reasonable instruction, policy or procedure concerning workplace health and safety. Contractors are also required to take reasonable care so that their acts or omissions do not adversely affect the health and safety of other persons at the workplace.
For example, a Note under sec 19(5) of the model WHS Act states that a: ‘self-employed person is also a PCBU. This means that self-employed contractors must ensure, so far as is reasonably practicable, that workers and others are not exposed to health and safety risks arising from the conduct of the self-employed contractor’s undertaking.’
The contractor must ensure that the workplace that his workers are sent to, does not pose any threats to their health and safety.
If a worker of a contractor is injured at the Hiring company’s place of work, both businesses could be held liable. This is called concurrent liability
A PCBU must ensure, as far as is reasonably practicable, the health and safety of:
- Workers engaged, or caused to be engaged by the person, and
- Workers whose activities in carrying out work are influenced or directed by the person, while the workers are at work in the business or undertaking.
With regard to workers, including contractors, PCBUs must ensure, so far as is reasonably practicable:
- The provision and maintenance of a work environment without risks to health and safety
- The provision and maintenance of safe plant and structures
- The provision and maintenance of safe systems of work
- The safe use, handling, storage and transport of plant, structures and substances
- The provision of adequate facilities for the welfare at work of workers in carrying out work for the business or undertaking, including ensuring access to those facilities
- The provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety, arising from work carried out as part of the conduct of the business or undertaking, and
- That the health of workers and the conditions at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business or undertaking.
The hiring company needs to exercise due diligence when effectively managing contractors and take many factors into consideration to ensure that the task is carried out safely:
- Ensure that the contractor and all his employees have the required skills, expertise and resources. This also applies to his use of sub-contractors.
- Take immediate action if any concerns are raised with regards to a contractors competency or safety record.
- Require the contractor to identify risks and provide evidence that the risks are being managed.
- Expect the contractor to demonstrate and report on compliance to health and safety requirements.
Contractors and Subcontractors Under the Work Health and Safety Act 2011.
Under section 7 of the WHS Act, a worker is broadly defined as a person who carries out work in any capacity for a PCBU. This includes employees, outworkers, apprentices, trainees, students gaining work experience, volunteers, contractors, subcontractors and their employees working for a Commonwealth or non- Commonwealth licensee business or undertaking Workers’ have duties under section 28 of the WHS Act which are subject to consideration of what is ‘reasonable’.
As a worker or contractor, while at work, you have a duty to:
- Take reasonable care for your own health and safety
- Take reasonable care that your acts or omissions do not adversely affect the health and safety of other persons
- Comply, so far as you are reasonably able, with any reasonable instruction given by the PCBU in line with legislation
- Cooperate with any reasonable policy or procedure of the PCBU relating to health and safety at your workplace.
As a worker, the contractor should be proactive in recognising potential hazards in the workplace and reporting those hazards. It is important that the contractor is familiar with the workplace procedures that outline the actions they need to take. If they are involved in or witness a health or safety incident in the workplace, the contractor should ensure it is reported as soon as possible after it occurs. Early reporting will assist the PCBU to meet their notification obligations as required under the WHS Act.
Around the world, rules and regulations with regards to managing contractors vary considerably. Due to this the International Labour Organisation (ILO) emphasizes the importance of OSH training for all workers, including contractors and sub-contractors. Governing safety bodies view safety infringements seriously and the punishments for non-compliance can be costly. Further to this, businesses who disregard safety can be held at risk for criminal allegations. Safety and training for contracted organisations and labourers needs to be formalized to address contractors’/subcontractors’ safety at work. Safety training should concentrate on preventive activity and finding practical solutions.
David Smith, Chairman of the Committee developing ISO 45001 states that “In the new standard, an organization has to look beyond its immediate health and safety issues and take into account what the wider society expects of it. Organizations have to think about their contractors and suppliers as well as, for example, how their work might affect their neighbours in the surrounding area. This is much wider than just focusing on the conditions for internal employees and means organizations cannot just contract out risk.”
Induction training which stipulates safe work procedures on the hiring company’s site, is essential before any work commence. Ensuring contractors have the correct safety management systems in place will help with reducing unnecessary legal expenses and unnecessary incident investigations. Unexpected damages alone cost more than $146.6 billion every year. Besides the moral obligation, the long term benefits associated with safety promotion are the reduced cost of incidents, increased efficiency, reduced work interruption, increased quality and proactively assisting to keep contractors from harming others on the site.
The following sites provided a wealth of information for this article and are worth a visit:
Employment New Zealand https://www.employment.govt.nz/
ISO 45001 First Draft