Collaborative Contracting Improves WHS In Construction

Greater use of collaborative contracting and consistent safety systems across the supply chain are required to improve work health and safety outcomes in the construction industry, according to RMIT.

“I think it is fair to say now that many large organisations are highly aware of the need to manage their supply chains and take deliberate action to do so,” said Helen Lingard, RMIT Distinguished Professor and director of Construction Work Health and Safety @ RMIT.

For example, she said client organisations (particularly in publicly funded infrastructure projects) now engage in considerable WHS-related activity in the procurement and project management activities.

“WHS management capability and previous performance are considered in mandatory evaluation criteria when selecting contractors and clients will often include specific WHS requirements in contracts (over and above the requirement to comply with applicable WHS legislation), and require reporting of WHS performance data throughout the life of a construction project,” said Lingard, who was speaking ahead of the AIHS National Health & Safety Conference, which will be held from 2-4 June 2025 on The Gold Coast.

For their part, Lingard said contractors engaged as principal contractors take pro-active pre-engagement processes, risk assessments, communication of safety requirements, and ongoing monitoring of performance to ensure subcontractors perform their work to required WHS standards on their projects.

Recent research shows that, although clients undoubtedly play a significant role in ensuring WHS is well-managed in the construction projects they procure, in some instances their actions may have unintended consequences, she added.  

“For example, a reliance on the use of traditional lagging indicators of WHS performance, sometimes linked to financial incentives or penalties, was found to discourage reporting of safety-related incidents and reduced trust and openness of information-sharing at the client-contractor interface,” said Lingard.

“Tension has also been observed in clients’ establishment of detailed WHS management requirements in contracts, with some contractors arguing this is over-reach, with the potential to stifle innovation.”

Recent research on the topic of ‘safety clutter’ in the construction industry also identified client and principal contractor requirements relating to WHS accreditations, documentation, data collection and audits as having the potential to consume valuable WHS resources and effort without improving operational safety.

“One of the key challenges is that construction projects should be regarded as temporary networks within the larger permanent network of the construction industry as a whole,” said Lingard, who noted that the role of different groups varies from project to project depending upon the contractual form taken and companies can be partners with one another in some circumstances, and competitors in others.

“Large contractors are all reliant on the same supply network, with subcontractors working for different head contractors under different WHS system requirements,” she said.

“Subcontractor organisations, in particular, observe considerable duplication between these system requirements, for example in pre-qualification, which potentially impacts the time that can be spent in detailed planning of the work prior to commencement. Creating more consistent processes and requirements for subcontractors at an industry level could improve this.”

“There also remain structural challenges to ensuring that WHS standards are maintained in construction projects that are linked to long-standing ways of procuring construction work and traditional commercial arrangements used in project delivery.”

For example, the use of ‘hard dollar’ contracts with financial penalties for time overruns (liquidated damages), coupled with tight timelines and low profit margins create significant pressures in construction project delivery.

Furthermore, commercial pressures experienced by head contractors are typically transferred down the supply chain to subcontractors, and Lingard said it is estimated that between 80 and 85 per cent of construction work is undertaken by subcontractors.

“Subcontractors who are engaged to work on projects by head contractors are typically smaller organisations with less adequate systems for the management of health and safety risk,” she said.

“Moreover, research indicates that pressures emanating from higher up the supply chain, create constraints and pressures for firms operating at the next level down that adversely impact WHS.

“Subcontracting arrangements can also create challenges for coordination of work and financial pressures associated with the supply of services and labour in short-term contracts discourages investment in WHS,” said Lingard, who added that, in some sectors of the industry, the fragmentation of the workforce reduces the extent to which workers are able to utilise their ‘collective voice’ in relation to WHS.

Other structural challenges relate to the ability to eliminate or reduce WHS risk in the early planning and design stages of construction projects.  “Construction projects are delivered through temporary, multidisciplinary organisational structures in which different specialists work together in a ‘web’ of inter-organisational relationships,” said Lingard.

Project organisations are characterised by vertical segregation, whereby the specialist groups involved in different lifecycle stages of a project are engaged at different times and under different contracts.

Lingard said this vertical segregation reduces the opportunity to communicate or engage in joint problem-solving, which is problematic because decisions made in the early stages of a project lifecycle can impact the WHS of people engaged in subsequent stages, for example, planning and design decisions are known to impact the WHS of construction and maintenance workers.

“These challenges can be addressed through the use of more collaborative integrated forms of project procurement, which are underpinned by more collaborative forms of contract that promote trust, information sharing and joint problem-solving between clients, contractors, designers and others,” said Lingard.

“These collaborative contracting approaches are not yet in widespread use across the industry, but they have been used in some major infrastructure projects with considerable success.”

The impacts on WHS of the use of collaborative contracting should be more carefully investigated, said Lingard, and there is emerging evidence to suggest they have a positive impact on WHS.

Lingard said there are important implications for WHS professionals working in the industry, and that many of the opportunities for improvement lie outside the remit of the WHS management system per se.

“Many problems arise at the interfaces between organisations, whether this be client-contractor, designer-constructor, or the principal contractor-subcontractor interface. The challenges that are persistent for the management of WHS in construction are inter-organisational challenges,” she said.

“The opportunities to address these require an understanding of the structural and commercial arrangements through which projects are delivered and consideration of how and when these are likely to impact WHS.

“WHS professionals working in construction need to ensure that they are integrated into broader project decision-making so that they are able to understand and influence the properties of project design and delivery that impact on operational safety.”

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Collaborative Contracting Improves WHS in Construction: AIHS - May 2025

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