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Friday Workplace Briefing

Delegating safety liability to contractors: The legal obligations and ongoing risks around managing safety liability in your organisation

Join Andrew and Mathew for this week’s briefing where they will be discussing the legal obligations and liability issues around safety in Australian organisations, following recent cases that affirm the ongoing risk to principals.

To view the full episode and catch up with the week’s latest news and developments please visit this link.

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About the Hosts

Managing Principal - Victoria

Episode Transcript

Andrew Douglas: I want to talk about contractors for a couple of reasons. One is, being out of clients recently, there’s been a number of both lay and legal advice that says that if I craft a contract that says, Matt is a contractor to me as a principal, then he’s responsible for safety, I can somehow subvert the effect of safety legislation.

Mathew Reiman: Yeah. Just go completely hands off.

Andrew Douglas: Yeah. That is just a quote Kim. Absolute bullshit.

Mathew Reiman: Yes. Fantastic. I didn’t even have to say anything though. Kim’s legacy lives on.

Andrew Douglas: Yeah. Kim. It is just the biggest load of nonsense. So the law in Australia, in every jurisdiction in Australia is this. A principal must do everything that is reasonably practical, standard of care which is, identifier has to determine its risk, institute a control using the resource, the organisation, to provide a safe place of work, a safe system of work, and to monitor people’s health. It cannot get rid of that.

Mathew Reiman: No.

Andrew Douglas: What it can do is, I’m a principal and Matt comes in. Matt can demonstrate that he will do all that is reasonably practical and that I have a monitoring system that shows that every day Matt is doing it. Therefore, my liability’s still here but I’m able to say, no, I had a proper basis for expecting Matt to do it. Now, Matt’s a one man operation. I have no proper basis for doing it at all.

Mathew Reiman: No.

Andrew Douglas: If Matt is a large construction business, has dedicated safety people, advanced safety systems, good digital reporting, that means I can go, okay. But I still need a monitoring-

Mathew Reiman: That’s right.

Andrew Douglas: … process. And what I can’t get rid of is, if I have a specific knowledge of risk of something Matt is doing, so I’m a large construction business and I get Matt in as a builder to do something. I look at Matt’s SWMS and I go, that’s clearly deficient.

Mathew Reiman: Yeah.

Andrew Douglas: Or I don’t look at it and I must look at it in the contractor relationship. And I bring with that the acquired knowledge, then I’m definitely liable. And I’m liable at a much higher level than Matt is because I was the one who had the original duty.

Mathew Reiman: That’s right.

Andrew Douglas: And that’s the law of contractors in safety. And if anyone tells you anything else, slap them across the chops.

Mathew Reiman: Yeah. Gently. Politely.

Andrew Douglas: Why not?

Mathew Reiman: Make sure the SWMS says it’s okay.

Andrew Douglas: The SWMS crafted by me will be, use a large piece of steel. Okay. Now we had a case, which is an interesting case, which is illustrative rather than actual in sense that it’s not a pure contractor relationship. And that’s Dial-A-Tow and AHRNS. AHRNS provided bins that were dragged onto Dial-A-Tow and placed.

Mathew Reiman:


Andrew Douglas: Now there was no method, safety method, which defined when you drag the bins back on about the crush point between the back of the bin and the cab, the head of the cab.

Mathew Reiman: It was almost entirely ignored. Yeah.

Andrew Douglas: Yeah. Which means there was no engineering system. Now this is, when you look at hierarchy of control, this is a very high risk of fatality.

Mathew Reiman: Yeah. Okay.

Andrew Douglas: And it’s frequent because they do it all the time.

Mathew Reiman: Yeah, that’s right.

Andrew Douglas: So therefore there had to be at least an engineering control. There wasn’t.

Mathew Reiman: There was none.

Andrew Douglas: But there wasn’t even an administrative control. There wasn’t even-

Mathew Reiman: No.

Andrew Douglas: … training, direction.

Mathew Reiman: No.

Andrew Douglas: And eventually a person got crushed.

Mathew Reiman: That’s right. Eight days into working there, unfortunately a young bloke sort of gets up there, thinks he’s got enough time to put his tools back on the truck and fatally crushed. That’s all.

Andrew Douglas: Yeah. So what they did find is a high proportion liability around Dial-A-Tow because they were observing and watching, they told the kid not to do it.

Mathew Reiman: Yes, that’s right.

Andrew Douglas: But that didn’t prevent it.

Mathew Reiman: No. No.

Andrew Douglas: And when they look at AHRNS, they said, well you are the one who does all this. Where’s the engineering stop? Where is the method by which you can prevent this from occurring? So it’s a good case because what it tells you is this, you cannot divest a liability when you’re a designer, a manufacturer, because they are all duties owed.

Mathew Reiman: Yes.

Andrew Douglas: You can’t divest the responsibility for the use, which you’re expecting someone to do something.

Mathew Reiman: Yes, that’s right.

Andrew Douglas: Which is exactly the same as the contractor and principal.

Mathew Reiman: Yes.

Andrew Douglas: A principal can’t use Matt and say, well now you are in charge.

Mathew Reiman: Yeah. Yeah.

Andrew Douglas: You must, a, ensure there is everything reasonably practical being done. AHRNS didn’t do that.

Mathew Reiman: No.

Andrew Douglas: So they were liable.

Mathew Reiman: Yep.

Andrew Douglas: Principal doesn’t do it. They’re liable. But more importantly, you must continue to monitor and provide sufficient systems to ensure the person who doesn’t, does it correctly or knows what correct looks like if you’re relying on anything lesser than an engineering.

Mathew Reiman: Yeah.

Andrew Douglas: It’s just a rant, really-

Mathew Reiman: Well, it’s a good rant.

Andrew Douglas: … because I’m sick of it. I’m just sick of it.

Mathew Reiman: It’s a good rant. It’s a great reminder, Andrew. I think we do come across this a lot and it does seem to be out there, this idea that yes, we can somehow divest ourselves of our liability and-

Andrew Douglas: And its proselytised by people who love saying the businesses, you can do the wrong thing-

Mathew Reiman: Yeah. I think that’s a part of it.

Andrew Douglas: … because it’s cheaper and it’s better.

Mathew Reiman: And everyone likes to hear cheaper and better of course. But when that comes to a question of safety, it just does not make, it does not work.

Andrew Douglas: Yeah. And it’s unlawful. Just say that out loud, it’s unlawful.

Mathew Reiman: Unlawful.

Andrew Douglas: You said it there.

Mathew Reiman: Yeah, I did.

Andrew Douglas: Let him say it. Unlawful. Sorry mate. Holy awful tower just fell down.

Mathew Reiman: Ah, it fell down.

Andrew Douglas: Very dangerous being unlawful.

Mathew Reiman: I’ll let the French know that. Okay. All right.

Andrew Douglas: But very quickly, very good case the ABCC, and unions behaving badly, CFMMEU.

Mathew Reiman: Yes.

Andrew Douglas: Its other name, unions behaving badly.

Mathew Reiman: Unions behaving badly. And that’s in the brackets. Yeah, that’s right.

Andrew Douglas: Where unions held unlawful meetings, ended sites unlawfully. They were told not to do it. The organisation properly complied with the law about demanding correct methods of entry, identifying unlawful meetings. And yet the unions, through their own behaviour, repeatedly did it. And they were fined very significantly, $360,000.

Mathew Reiman: Yeah. It was quite significant.

Andrew Douglas: 70, 30 and 10, I think, various organisations. But what I want to say, this case does nothing other than be funny. For starter, the unions behaving badly. But secondly what it does show, the ABCC is about to be gutted. Okay? But what it does show is that employers who have courage, and this was Kane Constructions, a really good solid national builder. If you stick by the law and you stare it down, you can stop it.

Mathew Reiman: That’s right.

Andrew Douglas: So do it.

Mathew Reiman: Yeah. And it ties into the safety point here too, because the sort of fake safety intern was raised by the union and they said, okay, we’ll look at… They did all the right things. They checked it, they got a proper person come in to check it.

Andrew Douglas: They got WorkSafe itself.

Mathew Reiman: WorkSafe itself came in and checked it.

Andrew Douglas: So we’ll often see unions industrialise safety as a method, taking unlawful action to pressure something that they want. And this was, they didn’t like a particular contractor.

Mathew Reiman: Yeah.

Andrew Douglas: So follow the law. It’s a very powerful thing.

Mathew Reiman: Don’t delegate your responsibility for OHS. There you go, that’s that.

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