Contractor Management | Safety Consultants

What is Contractor Management?

This article is a discussion of the legislative requirements for Contractor Management under the Model Work Health and Safety legislation. The discussion includes the pre-engagement process for managing contractor health and safety, and contractor management processes to be implemented during work activities. A contractor is considered to be a person (or a company) that provides a service to another business on a contractual basis. This means that the contractor is not an employee/worker of the business they are supplying services to and (in most instances) is responsible for managing their own work activities.

There remain activities where the contractor may impact on the business or expose the employees of the business to risk. This must be understood before engaging the contractor to ensure that there is clear and concise understanding of what is required by both parties.

Engaging a contractor to perform work can bring unwanted issues or it can be an extremely rewarding process. However, workplace incidents involving contractors can have consequences for both the contractor and the business they are providing services to. It is essential to ensure that the business set clear rules of engagement as part of a contractor management process and that the contractors are aware of and be seen to comply with them. This includes any relevant health and safety requirements to prevent workplace incidents and injuries.

The Model Work Health and Safety legislation (WHS Act) is the basis for the WHS legislation across most of Australia. NOTE Victoria chose to not move to the Model legislation. The legislation clearly states the legislative requirements for managing health and safety in the workplace. This includes the Primary Duty of Care for the PCBUs. This all relates to engaging contractors as they are considered as being workers under the WHS Act. Specifically, PCBUs must ensure that the health and safety of contractors and their workers are not put at risk by the work activities they undertake and this can be assisted through a contractor management process.

Contractors must also be included in the consultation process and be provided with information as it relates to hazards in the business before the contractor commences work.

PCBUs have duties under the WHS Act when engaging contractors, including:

  • Undertaking a risk assessment of the interaction of the business with the activities of the contractor tasks before engaging a contractor. This is to find any potential hazards and risks associated with the work.
  • Provide the contractor with necessary information about any hazards or risks associated with the work area managed by the Business.
  • Check that the contractor is competent and suitably qualified to undertake the work safely and efficiently. Added emphasis must be placed on the insurance requirements around professional and public liability insurance.
  • Establish processes to develop and maintaining effective communication with the contractor. This will ensure that the contractor is aware of their health and safety obligations and that any issues are communicated quickly and efficiently.
  • Most importantly a system is developed to monitor the contractor’s work activities ensuring that the contractor complies with any business rules and the health and safety requirements.

Contractors also have duties under the WHS Act, including:

Contractors are also a PCBU and have the same Primary Duty of Care requirements however more focused on the task they are completing. Though their workers are workers for the Contractor as a PCBU they are also workers (to the extent of the law) for the Business. Ultimately there are duties owed to all parties as part of the contractor management process. Some of the key duties mirror that of the Business and include:

  • Undertaking a risk assessment of the task and the interaction with the Business and have a system to implement and monitor control measures to eliminate or minimize risks to health and safety.
  • Ensuring that there are processes in place to comply with any health and safety policies and procedures established by the Business or the WHS Act.
  • Establish a process for coordinating and cooperating with the Business (other PCBUs where applicable) and with their workers to ensure health and safety is communicated in the workplace.
  • Agree and develop a quick and effective reporting any incidents or hazards to the PCBU.

All the Workers, (including contractors’ workers), have the duties under the WHS Act, including:

  • Taking reasonable care for their own health and safety and that of others.
  • Following any reasonable instructions given by the PCBU.
  • Reporting any incidents or hazards to the PCBU.

Non-compliance with health and safety requirements can result in consequences that will affect both the business and the Contractor. These include penalties levied by the Regulator, legal action by either party or a third party, and reputational damage. Workplace incidents involving contractors can also result in business interruptions, injuries, illnesses, or even fatalities. All having a significant emotional and financial impact on those affected. For this, it is crucial for all parties involved in the contractor management process to understand their legal obligations and establish process to comply with health and safety requirements to prevent workplace incidents and injuries.

The pre-engagement process is the first step and critical in contractor management to ensure that both parties are happy to proceed. This is where the health and safety considerations should be discussed and agreed to prevent incidents and injuries to the Business workers, the PCBU workers or others in the workplace.

When these health and safety considerations have been set during the pre-engagement process, PCBUs can be assured of the contractor’s ability to perform the task. Additionally, that they are competent, qualified to perform the work safely and complying with the business and legislative health and safety requirements. This will help prevent workplace incidents and injuries and ensure the health and safety of all workers involved.

The following are some of the health and safety considerations that should be taken into account during the pre-engagement process:

Risk assessment: PCBUs should conduct a risk assessment to identify potential risks and hazards related with the work before hiring a contractor. The type of work, the location where it will be done, and the contractor’s qualifications and experience should all be considered in the risk assessment. The possible effects on the health and safety of workers, including those employed by the contractor and any other workers nearby, should also be taken into account in the risk assessment.

Pre-qualification of contractors: To make sure that contractors have the skills, knowledge, and experience required to complete the work safely, PCBUs should pre-qualify them. Verifying the contractor’s credentials, experience, and licencing should be part of this contractor management process. PCBUs should take into account the contractor’s safety history as well as their capacity to adhere to health and safety regulations.

Contractor selection: PCBUs must choose a contractor who can carry out the job safely and adhere to health and safety regulations. Reviewing the contractor’s safety management system, safety policies, and performance on prior projects should all be part of the selection process.

Contract agreement: Health and safety criteria, including the contractor’s responsibilities to abide by pertinent laws, rules, and standards, should be included in the contract agreement between the PCBU and the contractor. The agreement should also outline the tasks and duties that each party will have in managing health and safety, including reporting and looking into incidents.

Communication of health and safety requirements: PCBUs should explain to the contractor the health and safety requirements, including any risks or hazards related to the work, the applicable safety rules and procedures, and any site-specific health and safety standards. The communication must be made in writing, and the contractor must confirm that they have read and comprehended it.

How to include monitoring as part of Contractor Management process.

The Business must review and evaluate the contractor’s performance through the task to ensure that the outcome is what was planned for initially. The PCBU can ensure that the contractor is complying with health and safety requirements my visiting the site and ask questions and inspect work already completed. At this point, the Business can discuss any issues or concerns to ensure that they are addressed promptly. This process will ensure that both parties to the contract remain on track for the desired outcome and help prevent workplace incidents and injuries.

  1. Monitoring contractor activities: PCBUs should keep an eye on the contractor’s work to make sure that all health and safety regulations are being followed. The contractor’s safety documents, such as risk assessments and safe work procedure statements, may also be examined, along with site audits and inspections. Regular communication with the contractor should also be a part of the monitoring process in order to review performance in terms of health and safety and pinpoint any problems or concerns.
  2. Providing necessary resources and support: PCBUs should give the contractor the tools and assistance they need to complete the work safely. This can entail giving out personal protection gear, training, and supervision. Additionally, PCBUs need to guarantee that all risks and hazards have been recognised and controlled at the site.
  3. Incident reporting and investigation: PCBUs and contractors should have a defined mechanism in place for reporting and looking into incidents and near-misses. Finding the incident’s underlying cause and putting preventative measures in place should be part of the process. The contractor should be included in the incident enquiry as well because they could know something that can be used to determine what caused the occurrence.
  4. Review and evaluation of contractor performance: Contractors and PCBUs should have a defined procedure for reporting and looking into incidents in the case of an incident or near-miss. Finding the incident’s primary cause and putting appropriate measures in place to stop a repeat should be part of the process. The contractor should be included in the incident investigation as well because they may have knowledge that can aid in determining the incident’s cause.

General Contractor Management considerations before engaging a Contractor.

  • High-risk tasks such as working at heights, using hazardous chemicals, and working in restricted areas must be heavily regulated.
  • Building work must be overseen to ensure that it complies with the National Construction Code when completed.
  • Processes must ensure that no work commences until the Business confirms that the contractor is suitably licenced, properly trained, and experienced to complete the task. One method is to check with other Businesses who have used the Contractors to ensure the safety record and capacity to adhere to health and safety legislation is adequate.
  • That as part of the prequalification process the health and safety standards are made clear to the Contractor.
  • The healthcare sector for instance is heavily regulated, therefore PCBUs should make sure the contractor has the permits, credentials, and training required to carry out the operation properly in a health care setting.

Final thoughts on Contractor Management

  • The Work Health and Safety Act 2011 sets out the legal framework for contractor management in Australia.
  • PCBUs have a duty of care to ensure the health and safety of contractors and workers.
  • Contractors have a duty of care to ensure their own health and safety and that of others affected by their work.
  • Thorough pre-engagement process, risk assessment, contractor selection, and communication of health and safety requirements are crucial to ensure safe contractor engagement.
  • PCBUs should monitor contractor activities, provide necessary resources and support, report and investigate incidents, and review and evaluate contractor performance.

From pre-engagement to contractor review, businesses should ensure that health and safety considerations play a significant role in their contractor management operations. Contractors should have access to the specialists’ tools and support in order to complete their task safely. All contractors and workers should be informed of their duties and responsibilities, and health and safety legislation should be effectively and clearly communicated through a structured contractor management process. Monitoring, reporting, and evaluating contractor performance on a regular basis can help to pinpoint problem areas and guarantee continuing adherence to health and safety legislation.

If you are interested in our WHS Consultancy services, you can contact David, Andrew or Mark to discuss your Health and Safety Issues.

We have qualified and certified Safety Consultants that can assist you in your business and offer a range of WHS consulting services along with general and specific health and safety training courses.

Contact us today for an obligation free quote on any of our services.