Core OH&S Obligations in NSW

Published Monday, 1 March 2004 by Leighton O'Brien

The Occupational Health & Safety Act 2000 (NSW) (OH&S Act) and Occupational Health & Safety Regulation 2001 (NSW) (OH&S Regulation) have been in force since 1 September 2001. The Act and Regulation introduced stringent new requirements and obligations in order to secure and promote the health, safety and welfare of people at work. These obligations are imposed on people and companies in a number of different capacities, such as employers or controllers or owners of premises.

Many building owners, property developers and commercial enterprises (principals) continue to assume that OH&S obligations can be avoided through the appointment of a competent building or site manager, contractor, or by divesting responsibilities to tenants. The contracts with these parties frequently seek to limit or extinguish the liability of a principal by passing responsibility for OH&S obligations to the manager, contractor or tenant. However, the intention of the NSW Government in introducing its OH&S legislation, and the manner in which it is being interpreted and enforced, indicate that a principal will still retain some liability, regardless of how explicit contractual provisions may be in divesting obligations to another party. Delegation of many responsibilities is possible, but overall responsibility will be retained by the principal.

The OH&S Obligations

Employer's Obligations

The OH&S Act imposes a general duty on employers to ensure the health, safety and welfare of employees at work. This duty includes ensuring the safety of premises and equipment, ensuring the safety of work systems and the working environment, and providing information, training and supervision to employees. However, the duty also applies to third parties at a workplace. For example, employers must ensure that couriers are not exposed to risks to their health and safety when delivering to their business.

The OH&S Regulation contains explicit requirements that must be obeyed by employers in order to fulfil their duty under the OH&S Act. These requirements impose obligations on employers to:

• identify foreseeable hazards that may arise from the conduct of the employer's work;


• assess the risks of those hazards and to eliminate those risks or, if not reasonably practicable to do so, to control the risks;


• comply with risk control obligations for certain activities, eg fall prevention measures, lift safety and electricity precautions; and


• introduce procedures for workplace consultation and training.

Procedures that employers can adopt to fulfil these obligations include implementing appropriate OH&S management plans, establishing employee consultation committees, providing appropriate OH&S training for employees, and assessing, eliminating or controlling workplace risks. The duty on an employer is recognised as a non-delegable duty and cannot be renounced or delegated.1

Controller's obligations

The OH&S Act imposes a general duty on a 'person who has control of premises' used by people as a place of work to ensure that the premises are safe and without risks to health.

'Control' refers to the ability of a person to compel or direct corrective action to secure safety. A 'person who has control of premises' includes:

• a person who has only limited control of the premises (in which case the duty applies only to the matters over which the person has control); and


• a person who has, under any contract or lease, an obligation to maintain or repair the premises (in which case the duty applies only to the matters covered by the contract or lease).

Contractual provisions will indicate the extent of control exercised by a principal versus another party. Courts are concerned with the scope of legal ability to exercise control, not the control that could be exercised in practice. Contractual provisions that indicate a principal's power to exercise control might include a right to provide directions to a contractor regarding workplace safety, a right of a building owner to approve or audit a building manager's safety procedures and safety management plans, a right of the landlord to enter premises to conduct maintenance, and a right to terminate a building manager's contract for breach of OH&S obligations.

A common assumption of building owners and property developers is that the appointment of building managers or contractors responsible for an entire development, or the passing of OH&S responsibilities to tenants in a lease, exempts the owner/developer from having to comply with OH&S obligations, or from liability for the breach of OH&S law by the building manager, contractor or tenant. But this is rarely the case. A building owner will, for example, retain liability for common areas, lifts and the provision of safe ventilation, these being areas over which they are almost certainly capable of exercising control through a contract with the building manager. Passing responsibility for OH&S obligations will also certainly be ineffective where the principal is aware that the contractor, manager or tenant is operating in a manner contrary to the OH&S obligations. Further, an owner or developer may retain liability because duties under the OH&S Act are increasingly being considered as non-delegable.2 This occurs particularly where a contractor is found to have inappropriate or insufficient experience, where there is an inherent risk of damage to persons or property, or where some other special vulnerability between the contractor or tenant and principal exists.

Given this ongoing liability, principals should ensure that their contracts with third parties, such as building managers, provide the principal with sufficient power to discharge their OH&S obligations, by ensuring that best practice in relation to OH&S is implemented and that adequate management and compliance systems are in place. Active steps should be taken by the principal to review building managers' performance in relation to workplace health and safety, including regular reviews of safety management plans. Appropriate inspection and maintenance procedures should be adopted, including periodic site checks of the common areas. The contract should require that building owners be provided with regular reports on OH&S compliance and monitoring reports of ventilation systems or atmospheric quality. Principals and owners are also responsible to stop any activities, or facilitate improvements to systems or repairs to plant where there is a potential for a breach of OH&S law.

Construction sites – owner obligations

The OH&S Regulation imposes particular obligations on owners in relation to construction work in a workplace where:

• the cost of work exceeds $250,000; or


• the work is high-risk construction work and the cost of the work does not exceed $250,000; or


• the work is demolition work or asbestos removal for which a licence is required (regardless of the cost of the work).

In these circumstances, the workplace owner must appoint a principal contractor and must authorise the principal contractor to exercise such authority of the owner as is necessary to enable them to discharge the responsibilities imposed on a principal contractor under the OH&S Regulation. Only owners are capable of appointing a principal contractor under the OH&S Regulation and, if the owner does not properly appoint and authorise a principal contractor, the owner will be deemed to be the principal contractor for the construction work and will be subject to the extensive OH&S obligations imposed on principal contractors.

Building owners and property developers who divest almost all control and project management to another party particularly must be aware of these OH&S obligations. As owners of workplaces, they must ensure that they are made aware of any construction work that is to be undertaken at the workplace and, if the OH&S Regulation applies, ensure that a principal contractor is appointed. As with controllers of premises, buildings or sites, owners should ensure that sufficient powers are incorporated in the contract with the principal contractor to enforce OH&S compliance, and should continue to monitor and review the OH&S compliance of the principal contractor.

Summary

The OH&S legislation is clearly intended to impose obligations for safe workplaces across a wide range of people. Although building owners, property developers and commercial enterprises can engage a third party to carry out some of their obligations, overall responsibility will remain with the principal. The opportunities for principals to avoid liability for the acts and omissions of their managers, contractors or tenants are severely limited because the non-delegable nature of many OH&S duties.

References

1 See Kondis v State Transport Authority (1984) 154 CLR 672 at 680.
2 WorkCover Authority of New South Wales (Inspector Petar Ankucic) v McDonald's Australia Limited and Another [2000] NSWIRComm 277 (4 February 2000) at para 212; McMillan Britton and Kell Pty Limited v Leslie Mervyn Blake [1999] NSWIRComm 80 (10 March 1999).