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Contractor Management Procedure

Version 1.0 Updated 1 Apr 2020
Policy Manage

Overview

Under the relevant health and safety legislation (Legislation) and associated regulations and codes of practice, the primary duty to eliminate or minimise, as far as reasonably practicable, the risks to health and safety in the workplace is imposed on a person conducting a business or an undertaking ('PCBU').

It is common misconception that a business wipes its hands clean of safety obligations under the Legislation by engaging contractors and relying on the contractors to fulfil their safety obligations.

Businesses should use this Procedure prior to engaging contractors or allowing them onto their worksites. This Procedure will assist businesses to meet their work, health and safety (WHS) obligations regarding any contractors that they engage and help ensure that any potential risks are eliminated, or minimised, as far as practicable, so that work is able to be performed in a safe manner.

Am I a PCBU?

The Legislation does not provide a comprehensive definition of a PCBU. However, generally the broad concept is intended to capture all types of modern working arrangements such as businesses and undertakings conducted by persons including employers, principal contractors, franchisors etc.

Safe Work Australia notes that a “business” is usually defined as an enterprise usually conducted with a view to making a profit and have a degree of organisation, system and continuity, whereas an “undertaking” may have elements of organisation, systems, and possibly continuity, but are usually not profit-making or commercial in nature. Some examples of a business or undertaking are retailers, manufacturing business, school, builder etc.

If you are unsure whether you are a PCBU, you should seek legal advice.

What is the duty of care owed by PCBUs?

The primary duty of care owed by the PCBU under the Legislation is to ensure, so 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 the work are influenced by the person while the workers are at work.

 

This primary duty also extends to other persons who may be put at risk from work carried out as part of the PCBU.

The Legislation provides some guidance on how PCBUs can fulfil this primary duty. The Legislation states that 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 and storage of plant, structures and substances;
  • 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 condition at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business or undertaking.

 

What is reasonably practicable will depend on the circumstances and involves considering what is able to be done to ensure WHS, balancing the likelihood of hazards or risks occurring, the degree of harm and what workers know or could be expected to know, against the availability, cost and suitability of methods to eliminate or minimise the risk.

What other duties are owed by the PCBU?

The Legislation also imposes some further specific duties on PCBUs:

  • who have management or control of a workplace;
  • who have management or control of fixtures, fittings or plant at a workplace;
  • that design plant, substances or structures;
  • import plant, substances or structures;
  • supply plant, substances or structures;
  • that install, construct or commission plant or structures.

If you fall within any of the above categories then you should seek legal advice to ascertain what your additional duties are under the Legislation.

Who is a worker?

The Legislation does not distinguish between the obligations that are owed to contractors and to direct employees. A “worker” under the Legislation is broadly defined as a person who carries out work in any capacity for a PCBU. Therefore this will include contractors, subcontractors and their employees working for the PCBU.

Does the contractor or do other parties also have a duty?

This primary duty can be the responsibility of more than one party at any one time, for example, where a company engages a contractor to perform work at the workplace. In this instance, both the company and the contractor are PCBUs for the purposes of the Legislation and each hold a duty to ensure the health and safety of the workers of the contractor. Each duty holder must comply with the duty imposed on it, to the extent that it has the capacity to influence or control the matter, even if the same duty is also held by another party.

This means that the company must comply with its primary duty for the health and safety of the workplace, irrespective of whether a contractor holds the same duty. In addition, work health and safety regulations may also impose specific obligations on a principal contractor for specific industries (e.g. on a construction project) as a PCBU (i.e. they manage or control the work at the workplace) in relation to some types of high risk work.

What happens when there are a number of parties who owe duties?

Further, in situations where responsibility for health and safety is shared, or duties overlap, the Legislation requires that there is consultation, co-operation and co-ordination of activities with all duty holders, as far as reasonably practicable (for example, there may be a contract principal, project manager, architect, superintendant etc between the company and the contractor). This will ensure that all actions taken are complimentary and will avoid any gaps in managing health and safety. There is further guidance on the consultation requirements in the Safe Work Australia Code of Practice-Work Health and Safety Consultation, Co-Operation and Co-Ordination (effective from 1 January 2012 in some States and shortly thereafter in the remaining States and Territories). The code is generally applicable to all types of work and all workplaces covered by the Legislation, including workplaces that are mobile, temporary and remote.

Compliance with this procedure will assist the company in meeting its obligations under the Legislation, associated regulations and codes of practice in circumstances where contractors are engaged.

It is important to note that the company’s duty under the Legislation cannot be transferred or assigned by contract and cannot be outsourced.

This procedure does not cover the specific legal requirements for:

  1. the mining industry - refer to the relevant work health and safety regulations and to the Safe Work Australia Code of Practice- Work Health and safety Management Systems in Mining (effective from 1 January 2012 in some states and shortly thereafter in the remaining states and territories); or
  2. high risk chemical facilities or other major hazard facility (including where asbestos is present) – refer to Safe Work Australia Codes of Practice – Hazardous Manual Tasks; Preparation of Safety Data Sheets for Hazardous Chemicals; Labelling of Workplace Hazardous Chemicals and How to Safely Remove Asbestos (effective from 1 January 2012 in some states and shortly thereafter in the remaining states and territories).

 

Before engaging a contractor

Prior to engaging a contractor to perform any work, it is important for employers to consider the following:

  • understanding and identifying the level of risk involved for the particular project or work to be undertaken;
  • ensuring that your contractual arrangements with contractors provide sufficient insurance coverage for the level of risk involved in the work or project to be undertaken by the contractor;
  • ensuring that the contractor can demonstrate how they will conduct their work safely and in accordance with the Legislation. This can be done by creating an “Approved Contractor Register”. This is explained in further detail in the Procedure;
  • implementing a system of monitoring the contractor to ensure they are meeting their safety obligations. This will help employers satisfy their duty of care obligations to all workers; and
  • reviewing the contractor’s performance. This should be done on a regular basis. The frequency of such a review will depend on the level of risk involved in the work or project undertaken by the contractor.

 

One of the most important things for employers to remember when fulfilling their legislative requirements is to keep records during and after the contractor’s engagement. These records become important in the event a safety incident occurs and the employer is required to show how they satisfied their duty of care to all workers. An example of some of the documents employers should keep a record of include risk assessments, induction documents, training registers, minutes of meetings etc.

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