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  • Gavin Wright

How to handle the biggest risk in your Business..Subcontractors

Updated: Oct 23, 2019

As a PCBU ( person conducting a business or undertaking), you have a primary duty of care to any contractor you engage, and to any workers, they may have working for them. Under this duty, you must ensure their health and safety, so far as is reasonably practicable.

PCBU PRIMARY DUTIES:

The primary duty of a PCBU is to ensure, so far as is reasonably practicable, that the health and safety of workers and others is not put at risk by the work carried out by the business or undertaking.

Accordingly, this duty requires PCBU's to provide and maintain:

a safe work environment safe plant and structures safe systems of WorkSafe use, handling, and storage of plant, structures and substances, adequate facilities to support the welfare of workers, information, training, instruction or supervision monitoring of workers’ health and workplace conditions to prevent illness or injury

You cannot use a contract to limit or modify your statutory obligations. If you attempt to transfer your duty to an independent contractor via a contract, the provision will be invalid.

PCBU's should treat contractors in the same way they treat their direct employees and any policy or procedure should include contractors as a relevant party.

Five steps for exercising your duty of care

Develop a comprehensive contractor management system addressing the following elements is a key part of meeting your duty of care to independent contractors:

1: Selection: Select contractors based on their expertise, competence and WHS&E record. For example, are they properly licensed? Do they have references from commercial/domestic clients? Under a selection process tenders should include details of WHS&E requirements which should be reviewed and checked during the contract period.

2: WHS&E documentation: Obtain and review all relevant contractor documentation, including competencies, policies and procedures, training records.

3: Induction: Induct all contractors in your WHS&E policies and procedures before they commence work. Provide contractors with information, instruction, and training that is both easy to understand and relevant to the work they are engaged to perform. (Organisations should have a detailed site traffic management plan in place and this should make up part of a service agreement and also the induction process).

4: The three Cs: Consult, cooperate and coordinate activities with contractors and others involved in the work.

5: Monitoring: Monitor contractors’ work activities to ensure they are carried out in accordance with your contractor management program and relevant WHS&E legislation. This includes the regular review of evidentiary documents to confirm that contractors are working as per the WHS&E requirements and are not breaching the WHS&E State and Federal Law.


When reviewing an organisation's Risk matrix the use of contractors should also be taken into account and how to make sure they are managed. As with direct employees training is essential to minimise risk and adequate records of this should be kept (this can also be discussed at Project review meetings along with any recent incidents).


At the end of the day, you must take ‘all reasonable steps’ not just to educate and ensure WHS&E compliance by your contractors, but to avoid any breach.

If, despite your best endeavours, your contractors continue to pose a compliance risk, you may need to enforce the ultimate compliance assurance condition and reconsider using them. This is because if your monitoring and assessment shows that a contractor has a systemic compliance problem, the requirement for you to take ‘all reasonable steps’ will likely include the step of not using them unless they can demonstrate that their compliance is up to scratch.

Of course, if you are in a service agreement with a contractor, you may be constrained in the circumstances in which you can suspend performance or terminate the contract. So, it is important to ensure that the compliance assurance conditions in your contractor agreements include:


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© 2018 by Gavin Wright - Wright Business Development

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