Insights

In brief - Construction businesses need to be aware of their obligations

Occupational health and safety (OHS) is vital to the construction industry. On 1 January 2012 it received an overhaul.

The new regime imposes wider coverage, greater obligations and stricter penalties. Principals, designers and contractors now have new non-transferable duties. Principal contractors need to be appointed differently, otherwise the appointment will be ineffective. Directors and officers need to implement new due diligence steps to avoid harsher financial and custodial penalties.

The new work health and safety (WHS) laws came into effect in NSW, Queensland, NT, ACT and the Commonwealth. Victoria, Tasmania and SA will follow suit by 2013 and WA during the course of 2013.

PCBUs - more responsibility for more people

Any person conducting a business or undertaking (PCBU) now has WHS responsibilities. This covers construction industry participants such as principals, contractors, subcontractors, consultants, designers and suppliers. It doesn’t matter if they are partnerships, trustees, companies, governmental authorities, councils, schools or sole traders.

Even some strata corporations, incorporated associations, franchisors/franchisees and volunteer associations are PCBUs. This includes sports clubs, charities and community organisations.

As a PCBU, you are responsible for all persons who carry out work for you. This covers not only workers you engage, but also workers you influence or direct. Examples include your employees, contractors and subcontractors and their employees, as well as hired labour, apprentices, trainees, work experience students and volunteers.

Non-transferrable PCBU obligations

As a PCBU, you have obligations that are not transferable, regardless of whether you appoint a principal contractor or not. This includes:

  • a primary duty of care to ensure, "so far as is reasonably practicable", that workers are healthy and safe while they are working and non-workers are not put at risk from work carried out by the PCBU. This requires you to provide, so far as is reasonably practicable, a risk-free work environment, WHS information, training and supervision as well as WHS monitoring;
  • a duty to facilitate the appointment of a health and safety representative (HSR) if workers request one and a health and safety committee if the HSR or five or more workers request one;
  • an obligation to consult about work health and safety with other PCBUs who have overlapping obligations, as well as workers, health and safety representatives and health and safety committees;
  • special duties if you manage or control workplaces or fixtures, fittings or plant at workplaces, or if you design, manufacture, import or supply plant, substances or structures, or if you install, construct or commission plant or structures.

Obligations specific to the construction industry

There are additional obligations which are specific to the construction industry. As a PCBU, you need to consult with designers about how to ensure that WHS risks from the design during the construction work are eliminated or, where that is not reasonably practicable, minimised.

Consultation must include giving the designer any information that the person who commissions the construction work has in relation to the hazards and risks at the workplace where the construction work is to be carried out.

If you are commissioning construction work, you must also advise the principal contractor of any information that you have in relation to hazards and risks.

There are other specific obligations in relation to construction, risk management (including personal protective equipment, training and instruction, workplace facilities, emergency plans and first aid), electrical safety (including inspection and testing, energised electrical equipment, residual current devices and power lines), asbestos, hazardous environments (including falling objects, hazardous atmospheres, hot and cold workplaces and remote and isolated work), large chemical warehouses, plant or structures (particularly installation, construction or commissioning, supply or importation), substances (particularly supply and importation) and recording and reporting WHS incidents and near misses.

"So far as is reasonably practicable" – new test

To determine what is "reasonably practicable" WHS practice in your business, you need to evaluate what is reasonably able to be done weighing up all relevant matters including the likelihood and harm of the hazard or risk and the availability and cost of preventative measures. Check the codes of practice for some guidelines.

Principal contractors – simple appointment no longer effective

Until this year, the principal contractor was the employer carrying out the work. This was not normally the owner. This responsibility could be transferred by nominating a different principal contractor in the contract documents.

Now, the principal contractor is the person conducting the business or undertaking that commissions a construction project (usually the owner). This responsibility can no longer be transferred simply by nominating a different principal contractor in the contract documents.

The principal contractor also needs to be authorised and empowered to have management or control of the workplace for the transfer to be effective. Otherwise, the PCBU commissioning the construction project will remain the principal contractor.

It is also no longer possible to appoint multiple principal contractors on a project. Only one is allowed and that person is responsible for the construction work at all times until the work is completed.

Bear in mind that appointing a principal contractor will not relieve you of the non-transferable obligations set out above.

New obligations of principal contractors

The principal contractor must:

  • do what is "reasonably practicable" to ensure the health and safety of workers and others;
  • secure the workplace so unauthorised persons cannot enter;
  • ensure that the workplace is secure from unauthorised access where construction work is being carried out;
  • ensure that general construction induction training is provided to any workers they engage;
  • prepare a written Work Health Safety Management Plan (WHSMP). Although the WHSMP is similar to the old OHS management plan, a principal contractor now has a positive obligation to ensure that all people who carry out construction work in connection with the project are made aware of the content of the WHSMP before they commence work;
  • comply with all safe work method statement (SWMS) requirements for high risk construction work;
  • put in place arrangements with regard to general workplace management, falls, the disposal of construction materials/waste, signage, the storage of plant on site and traffic and essential services that may be affected by the construction work;
  • obtain current underground essential services information about areas where excavation work is being carried out and any adjacent areas before directing or allowing that work.

New liability for designers

Designers have a new obligation to give the PCBU who commissioned the design a written report that specifies construction hazards relating to the particular design of the structure.

Definition of high risk construction work has been broadened

The definition of high risk construction work has been broadened so that it now includes matters such as:

  • work where there is a risk of a fall from two metres (previously it was three metres);
  • demolition of an element of a structure that is load-bearing or otherwise related to the physical integrity of the structure;
  • work that involves, or is likely to involve, the disturbance of asbestos;
  • work carried out in or near a confined space.

PCBUs must now ensure that a safe work method statement (SWMS) is prepared prior to commencing high risk construction work and that the SWMS is complied with.

The statement must identify the hazards of the work and set out how control measures are to be implemented, monitored and reviewed. It can form part of the work health safety management plan but is additional to it, rather than a substitute for it. A copy must be given to the principal contractor.

Directors and officers must exercise due diligence

Directors and other persons who are involved in making decisions that affect a substantial part of your business must now exercise due diligence to ensure compliance with WHS laws. They must take reasonable steps including:

  • maintaining an up-to-date knowledge of WHS;
  • understanding the PCBU's operations, hazards and risks;
  • ensuring the PCBU has and uses appropriate resources and processes to eliminate or minimise risks to WHS, record and respond to incidents and comply with WHS obligations.

It is worth noting that a PCBU does not have to be liable for its director or officer to be guilty of an offence.

Penalties for breach of WHS laws

Penalties for breach of the WHS laws now range from enforceable undertakings, to increased fines up of to $3,000,000 and even five years’ imprisonment.

The onus of proof is on the prosecution to establish that the offence was committed without reasonable cause.

Licences for particular types of work

Licenses are required for work involving asbestos, explosives, demolition, high risk and major hazard facilities.

WHS entry permits for union officials

A union official must now firstly apply for a WHS entry permit to be entitled to enter a workplace.

Transitional arrangements

In states where the WHS regime has commenced, most of these changes took effect from 1 January 2012. There are some transitional arrangements and exceptions.

For example, the obligations on designers in relation to hazard reports will not commence until 1 January 2013. OHS management plans and safe work method statements under the old regime will be valid until the end of this year.

OHS representatives can be deemed to be WHS representatives in some circumstances.

Where the design, manufacture or supply of plant or substances for use by people at work was commenced but not completed as at 1 January 2012, the persons engaged in those activities will still have the old OHS safety obligations for a transition period ranging from 1-2 years.

How construction businesses need to respond to the new WHS laws

It is imperative that businesses respond to these changes by:

  • updating agreements to ensure that clauses appointing principal contractors are effective;
  • introducing processes to comply with new obligations including in relation to consultation with principal contractors, designers and workers, WHS management plan awareness and directors' and officers' due diligence;
  • ensuring that employees have a practical and current understanding of the WHS regime through education seminars and workshops.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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