Contractor management plays a critical role in ensuring businesses meet their work health and safety (WHS) obligations in Australia. As workplaces evolve and contractual relationships become more complex, managing health and safety responsibilities in these arrangements can be challenging. Wil Haviland, Associate Consultant, offers a straightforward guide to understanding Contractor WHS responsibilities within contractor chains. This article explores the core principles of contractor management, legislative frameworks, and the practical steps businesses can take to navigate their duty of care effectively. From legal obligations to real-world case studies, Haviland provides insights to help businesses stay compliant and protect their workers in increasingly complex work environments.

The Challenge of Contractor Management

Effective contractor management is an essential part of the work health and safety (WHS) obligations for Australian businesses. Changes to the nature of work, evolving relationships between workers and businesses, and increasingly complex supply chains all contribute to the challenging and nuanced nature of WHS responsibilities in a contractual chain. While the complexity of these contractual chains can vary from case to case, it is always important to understand how your business relates to others in the chain, and what that might mean for your responsibilities regarding duty of care, worker consultation, and shared risk management activities. The increased challenge of effective contractor management has recently been recognised by a number of regulatory and policy bodies. The Australian Work Health and Safety Strategy 2023-2033 has highlighted that workers are more vulnerable to WHS risk when employed in a more complex contractual chain.[1] This can be due a number of factors, including:

A lack of WHS capability development in a complex working arrangement
Insufficient support
Ineffective communication resulting from a generic approach between businesses

Comcare, the national authority for WHS, has also identified contractor management as one of its regulatory priorities for 2023-2024. In support of this ambition, they refer to the high number of incidents involving contractors in recent years, as well as a significant demand for regulatory assistance with notification requirements, risk management, duty of care, and consultation.[2]

Following on is a brief discussion on some key concepts and terms you need to understand when it comes to contractor management. Wherever possible, we have tried to include reference to useful, authoritative material, so you have plenty more resources if you’d like to delve deeper into any of these topics. Finally, we wrap up our discussion with a more detailed look into a couple of legal case studies that demonstrate the nuance and complexity of this area of work health and safety.

Says Who? (Legislation!)

The legal responsibilities of businesses to ensure the wellbeing of contracted workers and others is set out most fundamentally in the Work Health and Safety Act 2011 (Qld), henceforth referred to as the WHSA. Other Australian states and territories each have their own version of the WHSA, but generally speaking, legislation will be similar across the country. Supporting the WHSA is the Work Health and Safety Regulation 2011 (Qld), which supports the WHSA by describing more detailed procedural and administrative requirements. There are also a number of pragmatic, task-specific codes of practice which are designed to help you achieve the legal standards required by the WHSA.

Before we get into the specifics of contractor management, it is worth clarifying some of the terminology used in the WHSA, and how it applies to businesses. One important term frequently encountered is ‘person conducting a business or undertaking’ (PCBU). This is a catch-all term used throughout WHS legislation to encapsulate any entity that conducts business or commissions work, including companies, partnerships, sole traders, educational institutions, and public authorities.[3] The term ‘worker’ also has a specific definition under the WHSA: it means anyone who ‘carries out work in any capacity’ for a PCBU.[4] This definition is extremely broad, and includes people whoz:

Employees of a PCBU
Contractors or subcontractors
Employees of contractors or subcontractors
Apprentices or trainees
Employees of labour hire companies

The breadth of these two definitions becomes apparent when we consider an example from the WHSA. Take section 19, which determines primary duty of care. It states that a PCBU ‘must ensure, so far as is reasonably practicable, the health and safety of . . . workers engaged, or caused to be engaged’ by the PCBU.[5] This means that in a general sense, any entity that conducts business has a duty of care toward any person involved in carrying out the work of that business, regardless of their contractual relationship. We’ll return to the concept of ‘reasonably practicable’ a little later, but for now keep in mind that PCBUs are required to exercise careful judgement when taking into account risks, potential harm, and the cost of potential control measures.

The Fundamentals of WHS in a Contractual Chain

Under the WHSA, there are three general principles that primarily inform the responsibilities of different PCBUs in a contractual chain. They are:

Shared and concurrent duties
The concept of ‘reasonably practicable’
Worker consultation

Each of these guiding principles will be discussed in more detail below, but keep in mind that both PCBUs and workers have duties under the WHSA, and each must exercise sound judgement in ensuring they do not adversely affect the safety of others, either through action or negligence.

What is reasonably practicable?

As mentioned above, the WHSA requires PCBUs to do all that is reasonably practicable to ensure the health and safety of workers and others. The WHSA defines “reasonably practicable” as ‘that which is, or was at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters.’[6] The challenge of meeting this standard is that there is no universal approach that could account for all possible risk scenarios. Rather, a PCBU must consider the risk mitigation actions that an objectively reasonable person might take, and whether, once ‘all relevant matters’ have been considered, those actions are practical and achievable.[7]

In considering ‘all relevant matters’, a PCBU must take into account the following:[8]

The likelihood of the hazard or the risk concerned occurring.
The degree of harm that might result from the hazard or the risk.
What the PCBU ought reasonably to know about the risk and how it might be eliminated.
The availability and suitability of ways to eliminate the risk.
The cost associated with eliminating or minimising the risk.

This does not mean that a PCBU is required to take all possible steps all the time, only that it does what is reasonably practicable at the time. For some useful advice on risk management approaches, see the ‘Code of Practice: How to Manage Work Health and Safety Risks.’[9]

Understanding Shared and Concurrent Duties

When a PCBU hires a contractor to do specialist work, the PCBU will still need to consult and coordinate with that contractor to ensure they are both working to minimise risk. It is essential to understand that a PCBU can not offload their WHS obligations by hiring a contractor, and it is possible for someone to be both a PCBU and a worker simultaneously.[10] It is also possible (and very common) for more than one party to concurrently hold the same duty.[11] This is demonstrated in the following diagram from Safe Work Australia.

Inherent in this concept of shared duty is the principle that the more control a PCBU has over the work, the greater their responsibility to discharge the shared WHS duty.[12] Irrespective of a PCBU’s level of control over a contractor’s work however, they always maintain an obligation to ‘consult, co-ordinate and co-operate with the contractor throughout the life of the contract.’[13]

You might like to read these relevant articles:

‘Electrical Contractor’s Warned’

Work Health & Safety Obligations and How to Manage them

Consultation with Workers

Direct and open communication is an important part of ensuring a safe workplace. Effective consultation processes ensure workers and businesses can share health concerns, identify hazards, and cooperate on solutions. All PCBUs in a contractual chain are required under legislation to consult with workers and each other. Consultation can take many forms, and will depend on the nature of the work, and the geographical proximity of the various parties involved. The WHSA states that PCBUs ‘must, so far as is reasonably practicable, consult . . . with workers who carry out work for the business or undertaking who are, or are likely to be, directly affected by a matter relating to work health or safety.’[14] The individual circumstances of each case, including the urgency and magnitude of the risk, will determine the level of consultation required.[15] Amongst other requirements, the WHSA states that as part of the consultation process, PCBUs must share information with workers, give workers a reasonable opportunity to raise concerns, and take workers’ views into account.[16] For more information, see the ‘Code of Practice: Work Health and Safety Consultation, Cooperation and Coordination.’[17]

Case Study 1: Kerle v BM Alliance Coal Operations and ors [2016] QSC 304

A 2016 case in the Queensland Supreme Court demonstrates the irrevocable duty of care a PCBU has toward workers, regardless of where they sit in the contractual chain.[18] The plaintiff in this case was injured driving his car home (a massive 430 km journey!) immediately after completing the last of four consecutive twelve-hour night shifts. He worked as a dump truck driver, and was employed by a company subcontracted to another company that operated at the mine. Here’s what the contractual chain looks like in this case:

Mine operator (BMA)
Host Employer (HPM Constructions)
Labour Hire Company (Axial HR)
Plaintiff

The plaintiff sought damages against all three of the companies above him in the contractual chain, while each of these companies denied liability.

Ultimately, the court found the mine operator, the host employer, and the labour hire company had all failed in their duty of care toward the plaintiff, and were subsequently liable for his injuries. Of particular interest to our exploration of contractor management is that the mine operator (BMA) was found liable in this case, regardless of the fact that they had no direct relationship with the plaintiff.

The presiding judge, Justice McMeekin, considered a number of factors which ultimately informed his decision that BMA failed their duty of care toward the plaintiff. The most significant of these factors, summarised below, address BMA’s competence, control, and responsibility for workplace risk:

As the operator of the mine, ‘BMA brought the risk into existence.’[19]
BMA had ‘detailed knowledge of the safety issues surrounding managing workplace fatigue.’[20]
Neither the host employer nor the labour hire contractor had particularly specialised expertise in the management of fatigue.[21]
BMA had ‘complete control’ of the length and timing of the shifts assigned to the plaintiff (and all other workers).[22]
Rather than utilise a labour hire arrangement, BMA could just as easily have directly hired workers themselves; that is to say, the work the plaintiff performed was well within BMA’s own capabilities.[23]
The plaintiff’s actual employer (the labour hire company, Axial) had clear and obvious deficiencies in their workplace safety procedures that should have been addressed by BMA, had they fulfilled their duty to properly establish work health and safety protocols.[24]

Evidently, the judge was also highly suspicious of BMA’s motivation in setting up their chain of contractors in this way, and seemed to suggest that it was a deliberate attempt to evade their WHS obligations:

By the organisation it had put in place BMA seeks to remove the responsibility of the risk that it has created to a company far less qualified to meet it. In making that comment I note that BMA is described in the contractual documents as an alliance of BHP Billiton and Mitsubishi – two of the largest corporations in Australia.[25]

The court found that fatigue was a well-understood risk, which could have been mitigated or reduced by a variety of measures, including a reduction in shift length, worker education, and the provision of transport.[26] As this case clearly demonstrates, all PCBUs, from the top to the bottom of the contractual chain have a shared duty to minimise the risk of harm to workers.

Case Study 2: Sawyer v Steeplechase Pty Ltd [2024] QSC 142

Another more recent case in the Queensland Supreme Court shows how important it is to consider the specific nature of any contractual chain, and how differences in expertise can change the balance of WHS responsibilities between a principal contractor and an independent contractor.

In this case, the plaintiff was a concreter employed by Cretek Concreting (Cretek), who had in turn been engaged by SWConstructions (SWC) to undertake concreting works at a residential property. The contractual chain here begins with SWC as the Principal Contractor, continues to Cretek as a subcontractor, and ends with the plaintiff as an employee of the subcontractor. The plaintiff alleged he suffered a number of injuries to his back as a result of work he had been directed to do by his Cretek supervisor. For one of these injuries, he brought a claim against both his employer (Cretek), and the Principal Contractor (SWC).

The judge in this case, Justice Crowley, considered that the relevant common law and legislation ‘clearly establish that in some circumstances a principal contractor will be under a duty to use reasonable care to ensure a safe system of work for independent contractors.’[27] He qualified this duty by noting that the level of responsibility a Principal Contractor has toward ensuring a safe working environment for independent contractors is determined by a broad consideration of the specific relationship between the relevant parties. The judge also noted that while there were a number of relevant safety standards and industry codes of practice (including the Hazardous manual tasks Code of Practice 2011, and AS/NZS4804:2001: Occupational Health and Safety Management Systems), these can only guide, but not dictate ‘the standard of reasonable care required in the circumstances of individual cases.’[28]

When considering these circumstances for this specific case, Justice Crowley found that SWC did not have a duty of care toward the plaintiff to such a degree that they are responsible for his injuries.[29] He acknowledged that while SWC should have been able to foresee the risks and potential harms of the task in a general sense, they were ultimately not liable for the plaintiff’s injuries. A number of highly nuanced factors contributed to this finding:

Cretek was competent to devise and control its own system of work. SWC had a reasonable expectation that Cretek, as a reputable and capable concreting business, were capable of performing the work they had been contracted to do.[30]
SWC did not retain control over Cretek’s work systems. While SWC had responsibilities resulting from their overall control of the job site, WHS legislation, best practice guidelines, and their contractual relationship, they did not prescribe specific tasks that Cretek had been contracted to perform. The crucial nuance here is that SWC’s general WHS obligations toward subcontracted workers did not require them to supervise the kind of task that caused the plaintiff’s injury.[31]
Cretek had provided a SWMS that noted manual handling tasks. While both parties had acknowledged the manual handling risks likely to be encountered as part of the job, it was up to Cretek as a competent subcontractor to determine the exact method of performing the work, and to carry it out in a way that would avoid the risk of injury.[32]

While the court that found that SWC did not neglect their duty of care toward the plaintiff, it is not surprising, considering that the judge’s reasoning relied heavily on establishing SWC’s subcontractor as competent, independent, specialised, and in control of their own work, that a different verdict was handed down to Cretek. Justice Crowley decided that Cretek did not adequately monitor and maintain workplace health and safety at the site, not did they employ any of a range of suitable mitigation measures to lessen the risk of what was plainly an easy to foresee hazard. As a result, Cretek were found liable for the injuries, damage, and loss sustained by the plaintiff.