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CONSULTATION, COOPERATION AND COORDINATION – HOW CAN PRINCIPAL CONTRACTORS AND SUBCONTRACTORS COMPLY? This paper

CONSULTATION, COOPERATION AND COORDINATION – HOW CAN PRINCIPAL CONTRACTORS AND SUBCONTRACTORS COMPLY?

This paper considers the obligation in the model Work Health and Safety Bill for duty holders

to consult, coordinate and cooperate with other duty holders who have a duty in relation to

the same matter. The paper considers the implications of this duty for the construction industry, in particular for principal contractors and subcontractors. The paper does not address the duty to consult with workers. 1

Consult, cooperate and coordinate – what does the Bill say?

Clause 46 of the Model Work Health and Safety Bill (WHS Bill) 2 provides as follows:

If more than one person has a duty in relation to the same matter under this Act, each person with the duty must, so far as is reasonably practicable, consult, co-operate and co-ordinate activities with all other persons who have a duty in relation to the same matter.

The maximum penalty for failure to comply with this obligation is $20,000 for an individual and $100,000 for a body corporate.

The obligation to consult, cooperate and coordinate is about achieving outcomes, not merely

a process. The draft Code of Practice entitled Work Health and Safety Consultation, Co-

operation and Co-ordination 3 states that the objective of consultation is to make sure everyone associated with the work has a shared understanding of what the risks are, which workers are affected and how the risks will be controlled. The exchange of information is intended to allow the duty holders to work together to plan and manage health and safety.

The consultation provision needs to be considered in the context of the primary duty of care. The WHS Bill makes a significant change to the nature of the primary duty of care in most

1 Clause 47 of the Work Health and Safety Bill requires a person conducting a business or undertaking to consult with workers who are, or are likely to be, directly affected by a matter relating to health and safety. It should be noted that the definition of worker in the Work Health and Safety Bill is very broad, and includes subcontractors. A subcontractor can be a worker and also a person conducting a business or undertaking (thereby having a primary duty of care to its own workers and the workers of any second tier subcontractors) simultaneously. 2 References in this paper are to the WHS Bill are to the 23 June 2011 version that appears on the Safe Work Australia web site at http://safeworkaustralia.gov.au/AboutSafeWorkAustralia/WhatWeDo/Publications/Pages/model-work-

link

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The

draft

Code

of

Practice

is

available

on

the

Safe

Work

Australia

web

site

through

the

following

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jurisdictions. The duty is not based on the employment relationship (where a duty is owed by an employer to an employee with limited duties for an employee to act in respect of their own

safety and the safety of other employees). Instead, the duty is owed by a person conducting

a business or undertaking (PCBU) 4 to workers engaged or caused to be engaged by the person and to workers whose activities are influenced or directed by the person. ‘Workers’ is a term which encompasses a class far more broadly defined 5 than the notion of an employee

at common law.

The primary duty of care is set out at clause 19 of the WHS Act. It requires duty holders to ensure that, so far as is reasonably practicable, the health and safety of workers engaged or caused to be engaged by the person and workers whose activities are influenced or directed by the PCBU are not put at risk. This duty includes the provision and maintenance of a safe work environment, the provision and maintenance of safe plant, structures and systems of work; provision of adequate facilities and the provision of any information, training, instruction or supervision that is necessary to protect persons from risks to their health and safety arising from work carried out as part of the business or undertaking.

It is important to note that the obligation on each PCBU is to ensure that these requirements

are met. The duty is not to provide each of these things. As Sherriff and Tooma 6 point out, where there are multiple duty holders in respect of the same activities, a PCBU may comply with the duty of care by ensuring that the relevant matters are attended to by another person. For example, a PCBU may not have to actively take any steps for the provision of safe plant, training or welfare facilities if another PCBU is doing so. However, the first PCBU may be in breach of the duty of care if they do not ensure that the second PCBU has discharged the obligations. The first PCBU must therefore take steps to identify and verify the actions taken by others to meet the obligation. 7

Consultation, cooperation and coordination of activities will therefore be critical to ensuring that each PCBU with a primary duty of care fulfils their duty.

What is required to meet the duty?

There is existing case law on the meaning of consultation which is of assistance in interpreting clause 46 of the WHS Bill. In Tvw Enterprises Limited v Duffy, 8 Toohey J stated:

Consultation is no empty term. "The requirement of consultation is never to be treated perfunctorily or as a mere formality" (Port Louis Corporation v. Attorney-General of Mauritius (1965) AC 1111 at 1124). That decision and others e.g. Rollo v. Minister of Town Planning (1948) 1 All ER 13 at 17 and Sinfield v. London Transport Executive (1970) Ch 550 at 558 make it clear that a responsibility to consult carries a responsibility to give those consulted an opportunity to be heard and to express their views so that they may be taken into account.

4 The meaning of this term is set out at clause 5 of the WHS Bill.

5 The meaning of worker is set out in clause 7 of the WHS Bill,

6 Barry Sherriff and Michael Tooma, Understanding the Model Work Health and Safety Act (2010, CCH Australia Ltd) page 25.

7 Ibid, page 26.

8 Re Tvw Enterprises Limited v Michael John Duffy; Australian Broadcasting Tribunal; Perth Television Limited; West Coast Telecasters Limited and Western Television Limited [1985] FCA 251 (12 July 1985), para 19

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So, consultation needs to be genuine and two way. The Courts have also found that directing a particular course of action or telling another party what is going to be done (as opposed to seeking views on what is proposed to be done) 9 do not constitute consultation.

Merely adopting a directive stance over matters where more than one duty holder has a duty of care would also be inconsistent with the approach recommended in the Code of Practice which sets out that discussions with other duty holders should commence as soon as those other duty holders are reasonably able to do so (page 17). The draft Code of Practice states that the nature of those discussions should include the following:

What each will be doing, how, when and where and what plant or substances may be used

Who has control or influence over aspects of the work or the environment in which the work is being undertaken

Ways in which the activities of each duty holder may affect the work environment

Ways in which the activities of each duty holder may affect what others do

Identifying the workers that are or will be involved in the activity and who else may be affected by the activity

What procedures or arrangements may be in place for the consultation and representation of workers, and issue resolution

What information may be needed by another duty holder for health and safety purposes

What each knows about the hazards and risks associated with their activity

Whether the activities of others may introduce or increase hazards or risks

What each will be providing for health and safety, particularly for controlling risks

What further consultation or communication may be required to monitor health and safety or to identify any changes in the work or environment.

An approach which encompasses the listed level of detail is clearly also needed to fulfil the two other legs of clause 46 - to cooperate and coordinate activities. The draft Code of Practice provides the following guidance as to what is meant by cooperation and by coordination.

The Code states that cooperation may involve implementing arrangements in accordance with any agreements reached during consultation with the other duty holder as well as not acting in a way that may compromise health and safety. It also states that cooperation also means that, if a duty holder is approached by other duty holders wanting to consult, the first duty holder must not obstruct communication and must respond to reasonable requests from other duty holders to assist them in meeting their duty.

In relation to coordination, the Code states that coordination of activities requires duty holders to work together so that each person can meet their duty of care effectively without leaving any gaps in health and safety protection. Duty holders should plan and organise activities together with other duty holders. This will include making sure that the measures each duty holder puts in place work effectively together to control the risks.

9 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (no 2) [2010] FAC 652 (unreported, Logan J, 22 June 2010).

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What practical steps should principal contractors put in place?

It is not a requirement to formalise consultation, cooperation and coordination obligations through a contract, although the Code of Practice notes that doing so can help clarify the expectations of all parties. Master Builders therefore recommends that a requirement to consult, cooperate and coordinate activities should be included in the contract between principal contractors and subcontractors. For construction projects with a value of $250,000 or more, the Model Work Health and Safety Regulations also require principal contractors to prepare a work health and safety management plan – that plan must specify the arrangements for consulting, cooperating and coordinating activities for that project. 10

In terms of day to day arrangements, what is put into place will depend on the nature and complexity of the construction work. For smaller projects (e.g. housing construction) arrangements which recognise that principal contractors do not have a full time presence on site may be appropriate. There is no requirement for consultation to be face to face, so consultation in these circumstances could be by phone, fax or email. As noted above, it is not the process that is important but the outcome – that all duty holders are satisfied that each is not only meeting its duty of care but meeting that duty of care in a manner that is clearly communicated to the other parties involved with the construction work.

For larger projects with complex subcontracting arrangements more formal arrangements may be appropriate (for example daily prestart meetings, regular face to face subcontractor coordination meetings and toolbox talks that are expressed to be mandated by the governing contract documents).

Given that the aim of the duty to consult, cooperate and coordinate is to ensure that each duty holder is meeting its duty of care, it would be good practice to integrate consultation, cooperation and coordination with other elements of contractor management. The elements of good contractor management 11 include:

Element

Examples

Planning

Subcontractors are required to provide an appropriate OHS Plan.

Tender documentation stipulates OHS requirements for subcontractors.

A safety information start up pack is available for subcontractors.

A process is in place for subcontractors to submit an OHS plan to demonstrate hazard identification, risk assessment and control procedures.

Selected subcontractors have the required skills and experience to undertake the work and a proven track record in OHS. This could include checking management plan submissions, conducting pre work interviews and checking references.

Site induction

Subcontractors are incorporated into the common system for site induction.

All subcontractors are instructed in the site safety rules and site specific emergency procedures.

A procedure is in place to ensure subcontractors have met minimum induction requirements prior to commencing work.

10 Regulation 309 11 The table is based on the Federal Safety Commissioner’s Fact Sheet An introduction to subcontractor OHS management which is available from the Federal Safety Commissioner’s web site www.fsc.gov.au/Resources

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Pre-start checklists are used to identify whether the subcontractor is licensed to conduct the required work.

Communication

Subcontractors are regularly provided with OHS information.

Toolbox and pre-start meetings are used to regularly communicate information and to discuss OHS issues with subcontractors.

Toolbox and pre-start meetings, and other relevant consultations, are documented.

A site notice board or safety alert/bulletin is used as a weekly source of OHS information and is regularly checked by subcontractors.

Hazard

Subcontractors are consulted in the Job Safety Analysis process and in the development of Safe Work Method Statements.

A procedure for JSAs and SWMS is in place, and is communicated to subcontractors through the induction process.

identification

and

risk

management

A SWMS appropriate to the work activity is completed and signed by the subcontractor before commencing work.

All SWMS are regularly reviewed and updated in consultation with subcontractors.

Monitoring and reviewing safety on site

Subcontractors are engaged in OHS inspection and evaluation processes.

A schedule for inspections and audits is in place and lists attendance by subcontractors.

 

A procedure is in place to regularly inspect the safety of plant, substances, equipment and temporary structures used by subcontractors.

Corrective actions are developed in consultation with subcontractors, and included in the applicable SWMS.

What happens if there is a dispute about a matter?

There may be situations where a principal contractor and subcontractor have consulted about a particular matter in relation to which they both have a primary duty of care but do not agree on the appropriate course of action. This could include disputes about the nature of the risk controls to be implemented or who should bear the responsibility for implementing the risk control.

In such situations, clause 81 12 of the Model Bill requires the parties to the dispute to make reasonable efforts to achieve a timely, final and effective resolution of the issue in accordance with the agreed dispute resolution procedure for the workplace, or if there is no agreed procedure, the default procedure prescribed by the Model Regulations. 13 If it is still not possible to resolve the issue, clause 82 of the Model Bill provides that any party to the issue can ask the regulator to appoint an inspector to attend the workplace to assist in resolving the issue.

12 The Explanatory Memorandum to the Model Bill states on page 39 that “Consultation is an integral part of issue resolution and conversely, issue resolution processes may be required to deal with issues arising during consultation. The provisions for consultation are dealt with separately in Divisions 1 [consultation with other duty holders] and 2 [consultation with workers] of this Part.” 13 Regulation 47

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Agreed dispute resolution procedures need to be in writing and include all of the steps specified for the default procedure. 14 Master Builders recommends that the requirement to comply with the terms of the dispute resolution procedure for the workplace should be in the governing contract documents.

Any party to a dispute can have a representative (such as Master Builders) to represent them in a dispute.

Does the consultation duty mean that principal contractors cannot direct how work is undertaken?

On construction sites, particularly large and complex sites, it is common for principal contractors to put into place site safety rules as well as arrangements to verify that work is actually being carried out in accordance with agreed procedures. As noted above, such arrangements are part of good subcontractor management and are a necessary and important part of ensuring that the principal contractor is meeting the primary of duty of care to workers on site. Clearly adopting a directive approach to site safety, where there is no consultation with subcontractors will not satisfy clause 46. However, the requirement to consult with other duty holders who have a duty in relation to the same matter does not mean that principal contractors cannot direct that subcontractors comply with agreed site safety rules nor that principal contractors cannot ultimately direct that work be carried out in a particular manner if that is what is required in order for the work to be carried out safely.

It should be noted that if a principal contractor directs a particular course of action it is less likely that the principal contractor could successfully argue that they did not have influence or control over the matter. Clause 16 of the Model Act provides that where more than one duty holder has a duty, each person must discharge that duty to the extent to which they have influence and control of the matter. This provision, together with consideration of what is reasonably practicable in the particular circumstances are the two, inter-related ways in which the Model Act deals with the issue of control in relation to the primary duty of care. Master Builders has prepared a comprehensive paper which considers the application of the notion of control in the Model Act. 15

What happens if a principal contractor does not want to consult? The obligation to consult is multi-directional. It is not an obligation on principal contractors to consult with subcontractors but for all duty holders with a duty in relation to the same matter to consult with each other. So subcontractors and labour hire company have an equal obligation to consult with a principal contractor as does a principal contractor with those parties. This raises questions as to what happens if another duty holder does not wish to participate in consultations or does not participate to the extent that satisfies the other duty holders that they have sufficient information to determine that they are meeting their duty of care.

The Code of Practice does not provide adequate guidance to deal with this issue. The Code states “This does not mean that you should simply accept what you consider to be inadequate action by another duty holder. You should check that they are aware of this duty and what you consider is needed to comply with it, and with the health and safety duties that

14 Regulation 46

15 See Master Builders’ research paper Losing Control? The impact of the primary duty of care. This paper discusses

the application of the notion of control in the Model Bill, including where more than one duty holder has a duty in

site

respect

of

the

same

matter.

The

paper

is

available

on

Master

Builders’

web

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you each have.” This somewhat trite statement does not adequately take into account the complexities of the commercial environment in which such consultation takes place. Labour hire companies and subcontractors may be able to rely on contractual arrangements or can call on the regulator to assist with a situation where consultation is not occurring to the extent needed to be satisfied that they are meeting their duty of care. Ultimately, if, for example, a labour hire company is not able to be satisfied that the work that their employees will be undertaking will be done safely, the company needs to carefully consider whether or not that particular placement should proceed.

Conclusion

The requirement to consult, cooperate and coordinate is no mere window dressing. All parties who undertake construction work must ensure that arrangements are in place so that communication about how each party involved with the construction process will meet their duty of care is a consideration about which there is no doubt.

© Master Builders Australia Limited 2011

Disclaimer: This document is not legal advice. Whilst every care has been taken in preparing this document, no responsibility will be accepted for actions taken in reliance upon information contained in this document.