Why do we need this Guide?The question of principal contractor appointment is a source of great confusion. It is important that contractors are only appointed as principal contractors where it is appropriate to do so. |
Who is a principal contractor?The term ‘principal contractor’ has specific meaning under the WHS Regulations. Principal contractors have specific duties under the WHS Regulations; however, appointing a principal contractor will not relieve University of Tasmania of its obligations under the WHS Act. The following are some of the incorrect myths about appointing principal contractors:
Under the WHS Regulations, if University of Tasmania commissions a construction project valued at $250,000 or more, it will automatically be the principal contractor. This is, unless, it has appointed another party as the principal contractor, has authorised them to have management or control of the workplace and appoints them to discharge the duties required under the WHS Regulations. Failure to follow this guide could result in University of Tasmania breaching the WHS Regulations. |
When should University of Tasmania appoint a principal contractor?University of Tasmania must only appoint a principal contractor in relation to a construction project where:
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What does it mean that a construction work costs $250,000 or more?The relevant cost is the cost being done on a project at a particular site. A common mistake is to add up costs of several projects across different sites and different times believing that the cost on the face of the contract is the relevant cost for these purposes. This is not the case. You have to treat each piece of construction work separately. Work done over separate disparate sites or over separate time periods are separate construction projects. |
What is a construction project?A construction project is any project that involves construction work where the cost of the construction work is $250,000 or more. |
What is construction work?Construction work is defined very broadly under the WHS Regulations, as any work carried out in connection with the construction, alteration, conversion, fitting-out, commissioning, renovation, repair, maintenance, refurbishment, demolition, decommissioning or dismantling of a structure. It includes the following:
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What is a structure?A structure is defined in the WHS Act as anything that is constructed, whether fixed or moveable, temporary or permanent, and includes buildings, masts, towers, framework, pipelines, transport infrastructure and underground works (shafts or tunnels), and any component of a structure, and part of a structure. |
What is a Project?While the term ‘project’ is not further defined under the WHS Act, it is normally used to describe all the work involved in a construction project (ie design, engineering, building surveyors, quantity and cost surveyors etc) at one site. The intention is to have a defined site where someone maintains control. Adjacent sites forming part of a project may be the same project but disparate sites will not be. |
What is excluded from construction work?Construction work is defined as excluding a number of activities, including relevantly, testing, maintenance or repair work of a minor nature carried out in connection with a structure. Construction work does not include any of the following:
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Can University of Tasmania appoint multiple principal contractors?There can only be one principal contractor for each ‘construction project’ at any one time. However, University of Tasmania may appoint two or more principal contractors under the same program of works where:
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What are the duties and obligations of a principal contractor?Principal contractors have specific duties and obligations under the WHS Regulations, including, for example:
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What are the duties and obligations of University of Tasmania (as a PCBU) once it appoints a principal contractor?Appointing a principal contractor does not relieve University of Tasmania of its obligations under the WHS Act. University of Tasmania remains a person conducting a business or undertaking (PCBU) and retains all PCBU obligations. These are set out in Chapter 3 of the WHS Regulation and include an ongoing obligation to identify hazards and manage risks. Accordingly, when appointing a principal contractor, the requirements set out in University of Tasmania’s WHS contractor management procedure must be complied with. This will also include monitoring and reviewing a principal contractor’s performance against strict WHS targets and objectives. University of Tasmania must ensure that the principal contractor is performing the work in a safe manner as stipulated in their documentation. This may include undertaking site inspections and audits as identified under the WHS contractor management procedure. Undertaking site inspections and audits will not have the effect of making University of Tasmania the principal contractor and is in fact a critical step for University of Tasmania in managing its obligations as a PCBU under the WHS Act. |
What is the effect of an invalid principal contractor appointment?Where University of Tasmania fails to correctly appoint a principal contractor in accordance with the WHS Regulations, it can lead to the appointment being invalid. Where the appointment is invalid, University of Tasmania may be the principal contractor. An invalid appointment may expose University of Tasmania to liability under the WHS Act, as it may not have discharged the specific duties of a principal contractor. |
What is the effect of appointing a contractor as a principal contractor where a principal contractor appointment is not available under the WHS Act?If University of Tasmania seeks to appoint a principal contractor in circumstances where the a principal contractor cannot be appointed, for example, the project or program does not involve construction work then University of Tasmania may fail to provide the required level of oversight and supervision of the contractor as University of Tasmania is operating under a mistaken belief that the contractor is a principal contractor and as a result this may expose University of Tasmania to liability under the WHS Act. |
What should University of Tasmania do where the work is not construction work or it is less than $250,000?Where the work is not construction work or it is less than $250,000, University of Tasmania should not seek to appoint a principal contractor. Instead, University of Tasmania may choose to authorise its contractor to have management or control of the workplace under the contract. Additionally, University of Tasmania may choose to require its contractor to meet additional WHS requirements in its contract some of which may be similar to the duties imposed on principal contractors under the WHS Regulations, such as:
However, not all of these obligations will necessarily be appropriate for contractors that are not principal contractors (for example, signage obligations). Accordingly, University of Tasmania must follow a risk based approach to specifying the WHS requirements for contractors as set out in University of Tasmania’s WHS Contractor Management framework. |
If they are not a principal contractor, does that mean they have to follow the procedures that apply to our employees?No. The Contractor Management framework requires contractors to develop safe work method statements and for complex work, a WHS Management Plan. |