Management of Contractor Safety – A Matter of Due Diligence

By Sue Bottrell, Lawyer | LinkSafe Legal

For those employers who engage independent contractors to undertake work for or on their behalf, the issue of managing contractor safety has been the subject of much interest of late. For Councils who employ, literally thousands of independent contractors it is particularly important. 

Historically, the interpretation of the duty owed to contractors for safety under health and safety legislation was that the duty was akin to that owed to direct employees. Subsequently, complex contractor management systems comprising lengthy questionnaires, copious quantities of paperwork and detailed inspection, reviewing and monitoring of contractor’s safety arrangements by employers have been used to attempt to meet those obligations. Potentially costing many thousands of man hours and dollars but, in fact potentially increasing an employer’s liability by interfering in contractor’s safety arrangements.

In 2012, in Baiada Poultry V the Queen, the High Court made it quite clear that while an employer has the right under contract to exercise control over its contractors, the question to be answered is whether exercising that control is a step which is reasonably practicable for an employer to take to meet their obligations to provide and maintain a safe working environment. 

The matters the court considered when considering the question of practicability were;

1. The matters over which the employer had control
2. The cost and effort of controlling and directing independent contractors in matters of their safety arrangements. 

The court said, “just because a Principal has a legal right to issue instructions and it is possible to take that step, this does not establish that it is a step which was reasonably practicable to provide and maintain a safe working environment, even where the Principal has knowledge of the risks and knows of ways to control such risks.”

This position was evident prior to 2012. In Leighton Contractors Pty Ltd v Brian Allen Fox 2009 the court held that, “once an activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the Principal Contractor".

Specifically, the court found that

• a head contractor owes no stringent or strict common law duty to train subcontractors engaged to work on a site in the way the subcontractor is to perform its speciality work; and
• a contractor who subcontracts work to a competent subcontractor is not subject to an ongoing general law obligation with respect to the safety of the work methods employed by the subcontractor.

In Kirk v WorkCover NSW 2010 the Court stated that "it is absurd to have prosecuted the owner of a farm and its principal on the ground that the principal failed to properly ensure the health, safety and welfare of his manager, who was a man of optimum skill and experience – skill and experience much greater than his own." 

In Fortescue Metals 2012 Supreme Court of WA the court recognised that “Whilst the respondents could not delegate or contract out of their duties, they could perform them by ensuring that an appropriately experienced and qualified person was retained to deal with matters beyond their own knowledge and ability.”

The issues highlighted by these judgments are;

1. what control does an employer retain over matters of health and safety with respect to contractors it engages?
2. whether it is reasonably practicable for an employer to specify and enforce arrangements to be adhered to by contractors.
3. the elements of reasonable practicability which need to be considered include;
   • the knowledge of the work and risks associated with the work being done by an independent contractor
   • the cost and effort of issuing instructions to an independent contractor
   • the cost and effort of directly supervising an independent contractor’s safety arrangements

The cases now clearly state that it is not considered reasonably practicable for employers to issue instructions to independent contractors in respect of their safety arrangements. It has also confirmed that the practice of requiring complex evidence of contractor’s safety arrangements, including collecting documentation, reviewing and monitoring compliance with those arrangements is not practicable. 

What is required is that employers demonstrate due diligence when engaging contractors by asking them to confirm that they are competent to undertake the work and have safety arrangements in place by;

1. Clearly defining the tasks to be undertaken by independent contractors
2. Clearly assigning responsibilities for work and risk management in contracts 
3. Requiring contractors to confirm they and their workers are competent to undertake the work they have been engaged to undertake 
4. Requiring contractors to confirm they have identified risks associated with their work and are acting to control them. 
5. Managing safety in respect of the work controlled by the employer 
6. Defining processes to review contractor safety performance at the completion of contracts. 

Sue Bottrell is a leading lawyer and safety professional in the contractor safety management space, and has 15 years of experience in unravelling the myths and mistakes in this area. She has been a front-line safety professional for 25 years and a safety lawyer for 15 years which makes her presentations informative and practical.