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Contractor Management
Contractor Management


(Revised 20 November 2017)

Under the Work Health and Safety Act 2011 (WHS Act), a contractor is a worker and is owed duties by the person conducting a business or undertaking (PCBU). Where PCBUs engage contractors to perform work, effective contractor procurement and management is essential to make sure WHS duties both to the contractors as workers, and third parties, are met.

Integrating health and safety requirements into contractor procurement and management prevents injury and helps fulfil health and safety obligations. PCBUs must ensure the health and safety of all workers at work in the business or undertaking:

  • who are engaged or are caused to be engaged by the PCBU
  • whose activities in carrying out work are influenced or directed by the PCBU.

Contractors also have a duty as workers under the WHS Act. While at work, a contractor must take reasonable care for his or her own health and safety and take reasonable care that their acts or omissions do not adversely affect the health and safety of others.

7.1 Referenced documents:

WHS Act 2011

Victoria – Occupational Health and Safety Act 2004

WA – Occupational Safety and Health Act 1984

7.2 Definitions

7.2.1 All Model WHS Act and Regulation States

7 Meaning of “worker”
(1) A person is a worker if the person carries out work in any capacity for
a person conducting a business or undertaking, including work as:
a) a contractor or subcontractor, or
b) an employee of a contractor or subcontractor, or
Requirements relating to contractors in Victoria and Western Australia are broadly similar to those under WHS laws.

7.2.2 Western Australia

A contractor or sub-contractor may be defined as a ‘worker’ if they are engaged to do work by another person for the purpose of the other person’s trade or business, and they are paid for their personal manual labour or services.

Examples of people who work under a contract for service and are likely to be considered a worker include:

  • Contractors or sub-contractors who perform the actual activities of the employer’s trade or business (e.g. a bricklayer or plasterer contracted by a builder).
  • Contractors or sub-contractors who perform activities for the efficient conduct of an employer’s trade or business (e.g. a fencing contractor contracted by a farmer).

7.2.2.a Covering all workers down the contractual chain

Under section 175 of the Act, if a person (the ‘principal’) contracts with another person (the ‘contractor’) to perform work which is for the purpose of the principal’s normal trade or business, then both the principal and the contractor are liable to cover any workers the contractor may employ. Both parties are jointly, and severally liable to cover the contractor’s workers. In other words, each must have a workers’ compensation policy.

Furthermore, if the contractor in turn sub-contracts the work to a sub-contractor, then all parties – including the principal, the contractor and the sub-contractor – are liable to cover any workers the sub-contractor may employ. Principals should ensure that all contractors have current workers’ compensation insurance policies, and all workers should check they are covered.

7.2.3 Victoria

The situation in Victoria is a little different, contractors are not considered ‘workers’ like they are in all other States and Territories. But there is still the requirement to provide and maintain a safe workplace and as such there is a requirement to make sure contractors do not introduce uncontrolled risks and assist in maintaining a safe place of work.

Sections 144 and 145 of the OHS Act provide for an officer of a company, partnership or association (the organisation) to be guilty of the same offence as that committed by the organisation, if that offence was attributable to the failure of the officer to exercise reasonable care.

7.3 Contractor Management

There are two distinct elements to Contractor Management under the WHS legislation:

  • Contractor WHS Performance
  • Contractor WHS Consultation

7.3.1 Contractor WHS Performance

This part consists of collecting information and satisfying that all due diligence is covered. Part of that will be collecting insurance policies, work permits and licences, engineering details where relevant, etc. but probably more importantly Safe Work Method Statements, Job Safety Analysis and Standard Operating Procedures. The PCBU contracting the services of another PCBU has a duty to understand the work to be done on-site and any risk introduced by that work. It is critical to understand that contracting work out does not mean that the responsibility is also contracted out, the responsibility is now shared between all the parties involved.

This requirement stems from Section 18 (c) what the person concerned knows, or ought reasonably to know, about:

(i) the hazard or the risk, and

(ii) ways of eliminating or minimising the risk,

Even though someone else may carry out the work, the PCBU requesting the work to be done must make sure that all reasonable steps are taken to protect the health and safety of workers and others in the workplace.

Part of the process ought to include checks on past WHS performance of contractors and their sub-contractors. If a contractor is involved, or recently has been involved, in a Regulator investigation it will be essential to understand the circumstances and remedial action taken.

Section 27 (5)
In this section, due diligence includes taking reasonable steps:
a) to acquire and keep up-to-date knowledge of work health and safety matters, and
b) to gain an understanding of the nature of the operations of the business or undertaking of the person conducting the business or undertaking and generally of the hazards and risks associated with those operations, and
c) to ensure that the person conducting the business or undertaking has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking, and
d) to ensure that the person conducting the business or undertaking has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information, and
e) to ensure that the person conducting the business or undertaking has, and implements, processes for complying with any duty or obligation of the person conducting the business or undertaking under this Act, and
f) to verify the provision and use of the resources and processes referred to in paragraphs (c)–(e).

7.3.2 Contractor WHS Consultation

Because a contractor has the same rights and duties as other workers they must be included in the consultation processes of the workplace. The consultation serves two purposes:

  • Understanding what the contractor will do in the workplace and any associated risks
  • Understanding how other workers or contractors may impact on the workplace safety of the contractor

This can be a fairly straight forward process for long running or large scale events but can be more difficult to manage on small, one-day events even though the same duties exist.

7.4 Procurement of contractor services.

When contractors are engaged to perform work, a PCBU should take the following steps to ensure health and safety in the workplace safety in each stage of the procurement process:

  • Select contractors based on their expertise and their work health and safety record—this may require contractors to provide documented safety records.
  • Insist on a culture that demonstrates the contractor’s commitment to safety.
  • Provide induction training for all contractors prior to commencing work for the PCBU. The PCBU should determine the level of induction by the location and risk of the work being undertaken on behalf of the PCBU and be in line with other induction programs the PCBU delivers to all workers.
    NOTE: This induction may be in addition to the venue or worksite induction.
  • Provide contractors with work health and safety information, instruction and training that is easy to understand and relevant to the workplace and work the contractors are required to perform.
  • Consult, cooperate and coordinate activities with all PCBUs and workers who are responsible for the work being performed—including involving the PCBUs and their workers in identifying, assessing, and managing work health and safety issues as they arise.
  • Assess the risks in consultation with the contractors and seek to find ways to employ the hierarchy of controls in managing those risks.

7.4.1 Contractor duties

Contractors also have a duty as workers under the WHS Act. While at work, a contractor must take reasonable care for his or her own health and safety and take reasonable care that their acts or omissions do not adversely affect the health and safety of others.

The contractor must also comply—so far as the worker is reasonably able—with any reasonable:

  • instruction given by the PCBU to allow the person to comply with the WHS Act
  • policy or procedure the PCBU notified to the contractor relating to health and safety in the workplace.

7.4.2 Control

The PCBU should consider through the event, each party’s degree of control:

  • Who controls the work being undertaken? Where the contractor has specialised knowledge of the work to be performed, the PCBU should remind the contractor of his or her work health and safety requirements under the WHS Act.
  • Is the workplace or activity shared with other PCBUs? If more than one person is responsible for the same matter under the WHS Act, each person—so far as is reasonably practicable—must consult, cooperate and coordinate activities with all other persons responsible for the same matter.
  • Are control measures in place and have these measures been clearly communicated?
  • The PCBU should address and resolve these matters during the planning and negotiation phases of the procurement process. The PCBU should ensure clear lines of accountability for all stakeholders in relation to the respective activity or work.

7.5 Consultation and representation of WHS issues.

As contractors now fall under the definition of workers under the WHS Act, a PCBU has an obligation to consult with workers on WHS issues to minimise the risk to health and safety. This includes workers employed by the contractor to work on the PCBU workplace.

7.5.1 How should consultation be undertaken?

The WHS Act aims to protect the health and safety of all workers and outlines the requirements PCBUs, workers and other relevant parties must follow in order for optimal health and safety to be achieved.

Consultation is a major part of workplace health and safety and as a contractor or subcontractor—and also a worker—it is important that you fully understand your role, rights and responsibilities and the workplace pro-cesses that exist in order to fully engage and effectively participate in this process.

The PCBU’s consultation duty requires that:

  • relevant information about the work health and safety matter is shared with workers
  • workers are given a reasonable opportunity to express their views, raise issues and contribute to the decision making process for dealing with work health and safety matters
  • the views of workers are taken into account
  • the workers consulted are advised of the outcome of the consultation in a timely manner.

Consultation does not require consensus or agreement but it does entitle workers to contribute to any decisions made.

7.5.2 Site representation

To enable consultation and communication between PCBU’s within a workplace it is highly recommended that the principal PCBU appoints a site consultation contact. The purpose is that have one contact person who can enable consultation and mediate where required.

The way to contact this person and how to manage safety concerns can be part of the induction process.

It will be essential that the person holding this position has the power to intervene in reported unsafe practices and mediate a solution between all stakeholders. It is imperative that the response to any concerns is swift even if it may be seen as trivial.

If the matter is serious and may impact on the event delivery, a quick escalation process should be in place to deal with the matter efficiently.

7.6 Contractor Registration

It is recommended to set-up a systematic approach to contractor management to avoid oversights or being overly onerous. The simplest way to collect details is to create a form with tick boxes for required information. The form can also hold expiry dates for insurance policies or permeits.

Follow this link to download a sample registration form. Link