As an employer, you have obligations to ensure the health and safety of contractors and others at your worksite. And as the employer, you will be the principal.

A contractor (sometimes called an independent contractor) is a person or company that provides goods or services to a business under the terms set out in a contract.

Contractors are not employees, instead they carry out their own trade or business and contract with you on that basis. Therefore, the contractors themselves also have a duty to care for their own safety.

Work Health and Safety (WHS) Regulations impose additional obligations on principals, principal contractors and subcontractors working in the construction industry.

But who is responsible for the health and safety of a contractor at your workplace?

Principal confusion

A business that engages a contractor is described as a ‘principal’. A principal is not to be confused with a ‘principal contractor’, which is the head contractor engaged by a principal. Principal contractors may assign work to subcontractors who do not have a direct legal relationship, i.e. a contract, with the principal.

Although contractors are primarily responsible for their workers’ safety, your business may also be liable under health and safety laws if a contractor’s worker is injured and you failed to take reasonable steps to protect their safety. This is known as concurrent liability.

The differences between contractors and employees

Sometimes the distinction between a contractor and an employee is not immediately obvious. The fact that someone is described as a contractor does not mean they are one. Courts look at a range of factors to determine whether a worker is a contractor or an employee. These factors differ slightly between tax law, superannuation law, workers’ compensation law and common law.

It is an offence under the FW Act to represent that you have a contractor arrangement with a worker when you are actually in an employment relationship. This is called sham contracting.

Sham contracting occurs when a business arranges for an employee to form their own business and become a contractor so the business can avoid meeting obligations that would exist if the worker was an employee.

Only engage contractors under the following contract arrangements:

  • limited access contracts, e.g. to deliver goods or repair equipment;
  • labour hire contracts, e.g. a temporary worker contracted to your business during another worker’s absence;
  • short-term project contracts, e.g. a graphic designer contracted to design your company logo; and
  • major contracts involving large expenditure and long periods onsite, e.g. a 3-year public works construction project.

As a business-owner, you owe the same duty of care to your contractors’ workers as you do to your own workers. You are responsible for all safety hazards that exist on your premises, so you need to consider the risks that contractors pose in your workplace, e.g. as a result of having less training in your systems than your employees as well as the risks that they are exposed to as a result of your operations.

You must take all reasonable steps to reduce these risks.

The fact that a contractor may only be on your worksite for a short period or for a limited purpose does not reduce your obligation to minimise any health and safety risks they may create or be exposed to.

Be aware that you cannot assume that the contractor will follow the right procedures, even if they have been hired for their specialist knowledge and skills. You must ensure that the contractor has taken all reasonable steps to identify hazards. Then you will need to satisfy yourself that they have adopted a safe system of work.

This is because your obligation to provide a safe workplace is a non-delegable duty – the buck stops with you.

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