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.


Top stories for Contractors


Property manager cannot discharge OHS duties to contractor

Safety Management

In an important decision in March, the NSW District Court found a property manager of a building guilty of breaching its primary duty of care to ensure safety by failing to arrange or verify that a major 10-year inspection of […]

By Michael Selinger on May 3rd, 2019

Sound contractor management system saves PCBU from prosecution

Safety Management

A contractor safety management system. This is what spelt the difference between a very hefty penalty and a not guilty verdict over a contractor’s death. In SafeWork NSW v The Austral Brick Co Pty Limited (2018), SafeWork NSW alleged that […]

By Portner Press on April 30th, 2019

Your questions answered: What obligations do we have to ensure our principal contractors are complying with safety recommendations from third-party audits?

Safety Management

Q We engage principal contractors on our construction projects. We also engage a third party to conduct audits on each principal contractor once per year on each of their projects. We then coordinate the completion of any actions in response to the audit with the principal […]

By Portner Press on April 12th, 2019

Your questions answered: What insurance information should we seek from contractors?

Safety Management

Q: What insurance documents do we need our contractors to provide us with before conducting work at our site?

By Portner Press on February 5th, 2019

Your questions answered: What are the insurance requirements for subcontractors?

Safety Management

  Q Our question relates to the safety responsibility and liability our business has for subcontractors of a nominated contractor. The scenario is: Our business – Controller of premises Contractor A – Principal contractor (mechanical services company) Contractor B – […]

By Portner Press on October 16th, 2018

Why are safety management systems so important?

Safety Management

A safety management system is a planned process or procedure for carrying out a certain activity in the workplace. The reason you should implement safety management systems is to ensure that when a task is carried out in your workplace, […]

By Joanna Weekes on November 30th, 2017

Why you should have a contractor management system

Safety Management

CHECKING the licences and insurances of contractors before you hire them is vital for meeting your obligations under work health and safety (WHS) legislation, an OHS expert has recommended. McConville OHS & Risk Solutions principal consultant Daniel McConville says employers […]

By Andrew Hobbs on October 6th, 2017

3 types of workers you need to supervise differently

Safety Management

Today’s bulletin will look at the different ways to supervise different types of workers including: young workers, experienced workers and contractors.

By Joanna Weekes on September 13th, 2017

$80,000 fine for company after worker falls from height

Safety Management

Could more have been done to prevent worker injuries?

By Jeff Salton on July 4th, 2017

Research to improve construction industry safety culture

Safety Management

Face-to-face meetings and site visits part of research to improve construction industry safety culture

By Jeff Salton on April 13th, 2017