Am I a PCBU, Principal Contractor, Contractor or Employee? Who does what? How can I reduce all this labour pain? Perhaps you already understand these issues, but we'd like to reduce your 'labour pain with an epidural of our own. We'll clear up some confusion, expand your knowledge base, and provide eight specific labour pain reducing suggestions.
More specifically, we will:
- Clear up the confusion.
- Clarify the roles and relationships of Principal Contractors and contractors/subcontractors.
- Bust some PCBU and contracting myths.
- Clear up who is responsible for what.
- Provide eight VERY useful tips.
Am I a PCBU? What Does That Mean?
We won't labour the basics (pun intended) here. Most of our readers know that a PCBU is a 'person conducting a business or undertaking". Not as well known is that if you are conducting a business or undertaking - and contractors by definition are - then for WHS purposes, you are a PCBU. But there's more to it than just that.
Here are some of the critical takeaways right up front:
- Don't be fooled by the word 'person'; a PCBU can be a company, partnership, sole trader, government department and more.
- On a single worksite there may be many PCBU's.
- Every PCBU on site must ensure, so far as is reasonably practicable, that the health and safety of workers, visitors and volunteers are safeguarded.
- PCBU responsibilities for WHS peak when it comes to your own employees.
- Some believe you can contract your way out of responsibility, but this simply isn't true.
Misunderstand any of the guidelines above, and you might take on obligations you don't need to, or be negligent in an area that falls unavoidably to you.
But if you have responsibilities that cannot be dodged, how do you know what those are? We'll have answered that by the time we finish this journey together, but let's start by stating some obligations that are common to all:
- You must cooperate/facilitate meaningful and open consultations,
- You must collaborate and coordinate with other PCBUs, and
- You will have the primary duty of care for WHS in activities and locations you are working.
You can learn more about being a PCBU here, and we will soon show you how you can avoid fatal WHS and PCBU confusion.
The Principal Contractor and the Subbies Below
When many PCBU entities work together, the potential for confusion obviously exists. Work health and safety legislation, therefore, appoints one PCBU to be in charge of a project. They call this 'top dog' the Principal Contractor.
By default, the PCBU that commissions a project takes on this responsibility, but they can appoint another to the role. Until they delegate the job, however, the WHS responsibilities are all on them. Also, during the project’s lifecycle there can be multiple Principal Contractors, but only one of them can be active at any point in time.
As 'top dog' on-site (or chief midwife in attendance to run with the labour pain theme), this Principal Contractor is given:
- Authority to manage the site and project as they deem fit, and
- Overarching responsibility for ensuring the work, health and safety of all persons on site.
They do not carry ALL responsibility because the remaining PCBU contractors/subcontractors have obligations also, but the overarching burden is theirs.
So whether you are a Principal Contractor or not, you should ensure all your agreements cover the provisions and requirements of your state or territory's WHS Regulations.
Are you from Victoria or Western Australia? If so, it's worth noting that there are slight variations in your regulatory requirements. If you're using a reliable supplier, however, these complications will have been taken care of. We've already reduced the pain.
Busting Some Other Contracting and PCBU Myths
There are many myths around contracting, and it's worth being careful to not get snagged by these. Some of these myths include:
- If the work is short term, you are a contractor.
- If you have an ABN, you are a contractor.
- If you're asked to provide an invoice, you are a contractor.
- If most of the workers are contractors, you are a contractor.
- If your contract says you're a contractor, you are a contractor.
- If you are not the Principal Contractor or stakeholder, you are a contractor.
- Taking on a subcontractor will remove your work, health and safety obligations.
- Being a subcontractor will remove your work, health and safety obligations.
ALL OF THESE are myths. The statements are either entirely false or usually false (those damn exceptions again).
Like an employee, contractors provide services for a fee, but contractors also usually:
- Use their own systems, tools and resources,
- Have room to negotiate fees and working arrangements,
- Have the right to contract other PCBUs to help, and
- Are held accountable for meeting targets and deadlines.
So, as a PCBU, What are my WHS Responsibilities?
To exhaustively answer that question would require an elaborate series of articles. The goal of this article was to empower you with enough clarity to reduce your labour pain.
We have established six pillars of understanding that undergird the tips we are about to offer. These pillars are:
- The Principal Contractor has the authority and responsibility to manage the site and project.
- The Principal Contractor has ultimate responsibility for work, health and safety.
- All PCBU entities must cooperate with meaningful and open WHS consultations.
- All PCBU entities must cooperate and coordinate with other PCBUs, and
- All PCBU entities assume the primary duty of care for WHS in their work activities and locations.
- Some types of work (such as high-risk) place additional obligations on a PCBU.
Hopefully, we've cleared up some confusion, but how do we remove the pain?
Give Me An Epidural! I'm Having Labour Pains!
Oh, how good it would be if there was an injection to take the pain away, but there certainly are things we can do.
Principal Contractors and contractors/subbies usually have good intentions. Still, confusion, poor communications, and occasionally malicious manoeuvres do occur, and these can see you take on responsibilities that are not yours to carry.
For example, especially in an ongoing and friendly relationship, a Principal Contractor might provide their SWMSs or other resources to a subbie. They probably don't realise that in directing their behaviours in this way, they may have established more WHS liability for themselves than they needed to.
So, with this and other challenges in mind, here are some labour-pain tips.
Eight Pain-Reducing Tips
If you are a Principal Contractor:
- You must have and implement a site or project-specific WHS Management Plan if the value of the project is $250K and over. A minor works Site Safety Management Plan may be beneficial for projects under $250K to set out responsibilities. You must ensure these are followed by everyone, including subcontractors.
- Insist on your subbies supplying their own SWMS and ensure they are compliant. Avoid any confusing WHS 'grey space' by not giving them yours to use.
If you are a contracting PCBU:
- Be aware that the Principal Contractor's “site or project-specific” Management Plan does NOT include all the policies, procedures and more that are required for you to be WHS compliant as a PCBU.
- You should ideally have your own Work Health and Safety Management System (WHSMS) to help you look after your WHS obligations to your workers and others on site.
- You should use your own SWMS resources and provide these to the Principal Contractor.
Whoever you are:
- If your resources are directed at employee management, the responsibility is primarily yours. If the resource is directed at managing subcontractors, the burden can be delegated.
- Put your Workplace Consultation Policy to work (more on this below).
- Always communicate clearly that you NEVER cut corners on WHS.
Just to be clear, your Work Health and Safety Management System (WHSMS) should have a Workplace Consultation Policy. This policy governs communications with employees, not subcontractors. This is what the existing standard requires, but when migration to the new ISO 45001 standard is required (by July 2023), the scope of WHS related communications will broaden. Until then, try voluntarily lifting your communication standards with all interested parties. There's nothing to lose on this one.
Most of our customers need to manage both employees and contractors, so our WHS Management Systems are designed to empower both situations. But whatever your situation, we hope we've removed some confusion and given you some pain-reducing remedies for safe and painless project delivery.We've got your back, and we'll help you reduce your labour pains. Just call 1800 304 336 for quick answers, or request an email response or call back at a time of your choosing by following this link.