Labour hire: work health and safety obligations and the duty to consult16 December 2016
The nature of employment is evolving. It is now common for work that was previously performed by employees to be outsourced to other entities or businesses, which can include labour hire or group training agencies. This often involves a triangular employment relationship where there is an agreement between a worker and the agency, and a commercial contract between the agency and host organisation.
These relationships often cause confusion about which party holds health and safety obligations—the host is not engaging the worker directly as an employee and the agency is not in control of the workplace, so the responsibility for safety obligations can become blurred. The model work health and safety legislation provides clarification on this issue by establishing that health and safety duties are held concurrently by both parties...but what does this mean in practical terms?
Work health and safety duties
Under the model work health and safety laws, host organisations have a duty to ensure the health and safety of all workers while at work, so far as is reasonably practicable. This includes any labour hire workers at their workplace.
Labour hire agencies are also obligated to ensure the health and safety of workers during their placement with host organisations so far as is reasonably practicable. This involves the elimination of or, if this is not reasonably practicable, the minimisation of risks to health and safety that a labour hire worker may encounter during their placement.
The recent case of Boland v Big Mars Pty Ltd  SAIRC 11 highlights the serious consequences that can occur when a labour hire organisation misunderstands its duties and leaves all health and safety considerations to a host.
The Big Mars decision
In Big Mars, a labour hire worker was assigned to work at an abattoir run by a separate host company. On 6 November 2013 the worker was performing duties for the host by sterilising meat hooks when he fell into a chemical bath and suffered burns to 32% of his body. It was found that a major contributing factor to the incident was the worker's inability to read or speak English to the required standard. This meant he was unable to understand the host's safety instructions regarding the duties he was assigned.
Following the incident, the labour hire company, Big Mars Pty Ltd, was prosecuted for failing to provide a safe system of work and failing to provide information, instruction, training and supervision to the worker.
Big Mars did not meet its safety obligations as a labour hire provider as it failed to have any policies in place regarding risk management. Instead it left these considerations to the host company. This was evident given Big Mars did not audit the host's safety procedures or the work areas where its labour hire workers were placed. If an audit had been undertaken, Big Mars would have become aware that there were communication issues for workers who did not understand English, which led to the host's safety instructions being ineffective.
Big Mars had a duty to take all reasonably practicable steps to ensure that risks to safety were controlled. This included satisfying the duty to provide appropriate safety instructions that the worker could understand.
Duty to consult, cooperate and coordinate
A crucial part of ensuring that concurrent duty holders meet their safety obligations is the need for parties to consult. Section 46 of the Work Health and Safety Act 2011 (Cth) (the Act) sets out that all duty holders who have safety obligations around the same matter must consult, cooperate and coordinate so far as is reasonably practicable to ensure their concurrent obligations are met.
This duty was highlighted in the recent decision of Boland v Trainee and Apprentice Placement Service Inc  SAIRC 14 where a group training provider entered a guilty plea for failing to consult with a host employer. It was found that the defendant did not adequately consult with the host employer, resulting in a failure to adequately audit the host's safety measures on-site. The defendant was therefore unable to satisfy that the host undertook risk assessments and implemented necessary control measures for work undertaken by the defendant's apprentice. As such, the defendant was not in a position to confirm that its apprentices were working in line with safe work practices.
This was the first prosecution in Australia for a failure to consult under the Act and is likely to result in more attention being placed on the requirement for duty holders to liaise with each other, particularly in cases involving labour hire or group training relationships.
Tips for ensuring compliance
These decisions highlight the need for labour hire and group training providers to ensure they are compliant with their safety obligations under the Act and do not rely too heavily on host organisations to ensure the safety of workers.
Before placing a worker with a host, it is generally a requirement that a labour hire agency should (subject to what is reasonably practicable in the circumstances):
- exercise due diligence by reviewing the host's safety record before agreeing to the placement of a worker
- set out each party's safety responsibilities in writing so expectations are clear
- provide workers with a general safety induction, covering consultation methods (so workers are aware of who to contact if they have safety concerns during their placement)
- audit workplaces for any risks to work health and safety
- verify that the host will provide site-specific and task-specific inductions, safety training and personal protective equipment
- gather information about the work to be performed and any associated risks as well as consult with the host to ensure safety controls are in place to eliminate or, if this is not reasonably practicable, minimise safety risks, and
- ensure that consultation with the host is ongoing.
If the above steps are taken (and documented so compliance can be easily demonstrated) then labour hire and group training providers should be in a good position to ensure they have met their safety obligations under work health and safety legislation.