Presentation to the National Summit on Independent Contracting

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OHS EEO issues for independent contractors

• Presentation to the National Summit on
  Independent Contracting
• The Workforce of the Future?
• Kerry Rehn, Partner, Workplace Relations
• 24 August 2004

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The Australian workplace Better Building
Products PtyLtd

• Workers on site
• Employees of BBP
• Employees of AB Labour Hire supplied to BBP
• Apprentices placed with BBP by CD Group Training.
• Employees of XY performing maintenance work under
  contract between XY and BBP
• Employees of SC erecting scaffolding for
  maintenance work under contract with BBP
• Owner drivers engaged by delivery contractor LF
  collecting products for delivery.
• Principal building contractor, JD and its
  employees building new offices on site.
• Sub-contractor is JD and their employees
• Employees of cleaning contractor, TT

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Occupational Health and Safety Duties

• Common Law duty of care
• Occupational Health Safety Legislation,
  Regulations and Codes of Practice
• Crimes Legislation eg negligently causing
  serious injury, industrial manslaughter

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Common Law Duty of Care

• Employer owes duty of care to
• own employees
• non-employees, including independent contractors,
  employees of contractors and members of the
  public
• Standard of care is standard of reasonable
  employer

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Occupational Health Safety Legislation
General Duties

• General duties imposed upon
• employers (in relation to own employees and
  others)
• self-employed persons
• occupiers of premises
• persons carrying on undertakings and designers,
  manufacturers, suppliers and importers of plant
  and substances
• erectors and installers of plant
• employees in relation to own safety and safety of
  others

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Employer duties application to independent
contractors

• Duty owed by contractor to own employees
• Duty owed to contractor by employer (ie principal)

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Employer duties application to independent
contractors

• Duty owed to contractor by employer imposed in
  one of two ways
• Independent contractor deemed to be employee in
  relation to matters
• (a) over which employer has control or
• (b) would have control but for contrary agreement
  between employer and contractor.
• (Victoria, South Australia, Western Australia,
  Tasmania, Northern Territory, Commonwealth
  employers/licensees)
• Independent contractor owed same duty as other
  persons who are not employees
• (New South Wales, Queensland, ACT)
• Special provisions apply to construction
  workplaces in QLD

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Employer duties applicable to independent
contractors (cont.)

• Employer must provide and maintain, so far as
  reasonably practicable, a working environment
  that is safe and without risk to health of
  employees
• Working environment includes
• physical workplace, plant and equipment
• work systems and procedures
• rostering/staffing arrangements
• lighting, heating, ventilation
• emergency/crisis response systems
• provision of information, instruction, training
  and supervision
• risk assessment
• stress factors

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Employer duties applicable to independent
contractors (cont.)

• Employer must ensure that people other than
  employees are not exposed to health or safety
  risks arising from employer's undertaking while
  at employer's place of work.

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OHS Legislation Other duties applicable to
independent contractors

• Self-employed persons must ensure so far as
  reasonably practicable that persons (other than
  their employees) are not exposed to risks to
  their health and safety arising from the conduct
  of the self-employed persons undertaking
• Occupier of workplace must take such measures as
  are reasonably practicable to ensure that the
  workplace and the means of access to and egress
  from the workplace are safe and without risks to
  health

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OHS Legislation Other duties applicable to
independent contractors

• Designers, manufacturers, suppliers etc of plant
  or substances for use at a workplace must
• ensure that plant or substances are safe and
  without risks to health when properly used and
• ensure that adequate information is available in
  connection with the use of plant or substances
• carry out such examination and testing as is
  necessary to ensure safety.
• Employees must take reasonable care for their own
  health and safety and that of others who may be
  affected by their acts or omissions in the
  workplace

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Penalties under OHS Legislation

• Penalties vary considerably between States and
  Territories highest in New South Wales
• Maximum penalties for first offence
• body corporate 550,000
• officer - 55,000

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Criminal offences

• Directors and officers can be liable for
• manslaughter by gross or criminal negligence
• negligently causing serious injury
• Gross negligence is where conduct falls so far
  below the standard of reasonable care and there
  is such a high risk of death or serious injury
  that criminal punishment is warranted
• Industrial manslaughter (ACT only)

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Allocation of responsibility amongst dutyholders

• Duties apply to multiple dutyholders
  simultaneously in respect of same workplace
• Legislation provides little guidance as to
  allocation of responsibility amongst dutyholders
• Key determinant is capacity to control

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Case study 1

• Roofing contractors (SH) engaged by construction
  company (VDL) to supply and fix roofing at site
  where VDL was engaged in construction work as
  head contractor
• B, an employee of SH, fell from ladder on VDL
  site
• VDL prosecuted for failure to provide and
  maintain plant and safe system of work

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Case study 1 (Cont.)

• VDL argued that roofing work was a specialist
  activity conducted by experts and it had no
  control over system of work
• However, VDL required SH to submit description
  of safe system of work prior to start, and VDL
  supervisors were able to give directions about
  safety to SH employees
• Held VDL had control over safety aspects of SHs
  performance
• - Stratton v Van Driel Ltd 1998 VSC 75

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Case Study 2

• Maintenance contractor (AIS) engaged by O to
  remove heating and cooling coils from resin tank
• O designed system of work and gave instruction to
  AIS employees (as per contract with AIS)
• Employee of AIS seriously injured following
  failure of electric hoist
• O and AIS prosecuted for breaches of OHS Act
• Both fined (O - 90,000, AIS - 30,000)

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Case Study 2 (cont.)

• Primary liability allocated to O on account of
  responsibility for system of work, instruction
  and supervision but AIS also liable
• A false sense of security as to the safety of
  its
• employees cannot remove from . the
• contractor its obligations under the Act.
• - Mansell v Anytime Industrial Services 2001
  NSWIR Comm 237
• - Mansell v Orica Australia Pty Ltd 2002 NSWIR
  Comm 155

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Maxwell Review

• Major review of Victorian OHS legislation
• Key recommendations include
• Control to the factors to be taken into account
  when assessing practicability
• Applying employer duties to workers (rather
  than employees)
• Defining control to include the ability to
  influence decisions
• Providing for consultation on OHS with all
  persons working in or in connection with
  employers undertaking
• Providing for a new duty on officers to ensure
  compliance with OHS Act and not wilfully or
  recklessly place anyones health or safety at
  risk
• Increasing penalties

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Secure Employment Test Case

• Application to vary NSW Awards
• If work is to be performed at employers premises
  by agency workers or contractors workers,
  employer must
• Consult workers in relation to OHS consultative
  arrangements and provide OHS training
• Provide protective equipment and clothing and
• Ensure that workers are aware of risks and
  procedures to control them
• Employer must provide injured workers with
  suitable duties as part of rehabilitation program

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EEO Legislation

• EEO laws prohibit discriminatory conduct in
  relation to recruitment and employment on grounds
  such as gender, race, age, marital status, status
  as a carer, disability and also prohibit sexual
  harassment
• Specific grounds vary across jurisdictions
• EEO laws extend protection to contractors, eg by
• Defining employee, employment or work to include
  contractors and work performed by contractors
• Including provisions expressly prohibiting
  discriminatory conduct towards contract workers
  ie persons performing work for a principal under
  a contract between their employer and principal

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EEO Legislation cont.

• Laws also apply to independent contractors in
  their capacity as employers
• Employers and principals can be vicariously
  liable for the conduct of employees/contractors
  unless they can prove that they have taken
  reasonable steps to prevent contravention