Contractors and labour hire

Under work health and safety legislation all employers and workers have legal obligations to be proactive about their own and their co-workers’ health and safety.

If you are employed as a contractor or sub-contractor, or through a labour hire recruiter or agency, you are a worker and have the same obligations to ensure your own and your co-workers’ health and safety.

Sometimes though, you might be unclear about what your, your host employer and your agency's specific responsibilities are for health and safety in the workplace.

Read Safe Work Australia's Labour hire: duties of persons conducting a business or undertaking.

Employee or contractor

Usually, a ‘contractor’ means a person who is engaged by any person (except as an employee) to do any work for gain or reward. There are some common factors that may contribute to determining whether you are an employee or independent contractor are listed in the table below.

Principal contractors and subcontractors - workers compensation

If you are a principal contractor you also need to make sure your subcontractors:

  • take out appropriate workers compensation for their workers
  • workers compensation premium payments are up to date
  • are classified in the correct industry
  • declare an appropriate amount of wages for their insurance coverage
  • sign a statement declaring no outstanding liabilities and all workers compensation premiums applicable for that work have been paid.

The State Insurance Regulatory Authority (SIRA) is the agency with responsibility for workers compensation.

Labour hire workers

Labour-hire workers are workers who are directly employed by an agency which then ‘on-hires’ them to perform labour for a different organisation. The first company is responsible for payment and other employee entitlements. The second company directs the worker tasks.

Both the labour hire employer and host organisation are responsible for making sure a specific risk assessment of potential hazards is undertaken and appropriate safety measures are put into place.

The individual worker still has an obligation to look after their own and others health and safety in the workplace.

Work health and safety issues

There are general concerns about the work health and safety of labour hire workers. This is because they are often:

  • less experienced due to an average younger age
  • exposed to greater work intensification pressures
  • exposed to greater risks in general
  • less likely to have control over how tasks are performed
  • less represented at workplaces
  • more frequently exposed to unfamiliar workplaces
  • less likely to receive workplace specific training and induction
  • unsure of who they report to on the job.

The problems for injured labour-hire workers are compounded when they do not have a specific work site to return to for rehabilitation and return to work duties.

Labour-hire workers are also more vulnerable in the workplace when:

  • labour-hire agencies neglect to carry out site-specific risk assessments before placement of the worker and they don’t conduct monitoring visits
  • communication between the labour-hire agency and host employer is poor with no systems in place to identify changes to the work tasks or environment
  • there is no follow up or verification that risk assessments and training have been completed.

Workers compensation and health and safety responsibilities

A labour hire agency must provide workers compensation coverage for its workers and ensure their health and safety in the workplace.

The host organisation has an obligation to ensure the safety of labour hire workers and ensure that labour hire workers on site are not exposed to risks.

To comply with existing health and safety legislation we recommend that the agency and host organisation work together to:

  • implement effective health and safety management systems to manage hazards and risks
  • provide an adequate induction and site- and task-specific training
  • ensure the appropriateness of pre-placement assessments for labour hire workers
  • make sure there is sufficient safety representation and consultation
  • maintain continual and effective communication between all parties.
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