Contractors and your business, Minimising your exposures

Contractors and your business, Minimising your exposures

July 30, 2020 Views: 792
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Contractors can save you time and money by helping you to manage workload spikes, fill temporary resource gaps, perform specialist services and run defined projects. But they can also expose you to a range of legislative and commercial risks if you don’t handle them with care.

A contractor is a person, other than an employee, who is engaged to perform work or carry out a service at a workplace. The contractor may be employed on a one off basis, intermittently or regularly. Your business, through legislation owes a duty of care to its employees and visitors/contractors coming on site to provide a safe place to work, as such the business has the following responsibilities:

  • To ensure that contractors follow site safety guidelines and/or have their own approved safe work procedures.
  • Identify and assess possible risks that the contractor may be exposed to and how you can eliminate or control those risks.
  • Ensure that the contractor identifies and assesses the risks that may be caused by their work to any person and or equipment and provides you with information as to how those risks will be eliminated or controlled.
Creating effective contractor management systems is key

An effective Contractor Management System includes a defined selection process, guidelines for inducting new and returning contractors and sub-contractors, and defined procedures for controlling, reviewing and supervising all aspects of their work. A well-thought-out system can help you mitigate a range of workplace risks including safety, property, commercial, reputation and quality.

Many industries have legislative requirements and minimum work standards that must be met to ensure risks associated with specific operations and activities are managed. In turn, employers have the same duty of care towards contractors and their subcontractors as they do for their permanent employees. Which is why plans need to be put in place to ensure contractors utilise the same procedures as other staff and do not introduce any new unmanaged risks.

At the bare minimum, your Contractor Management System should include a process for conducting pre-work assessments of a contractor’s qualifications (e.g. ensuring they hold the necessary insurances, licences and permits) with regards to the scope of works required and any other necessary compliance requirements for completing the task required. In addition, your system needs to provide details of training and information that has been provided to mitigate any associated workplace risks.

The aim of your company’s Contractor Management System is to:

  • provide a safe and healthy workplace and systems of work that prevent/reduce risk of illness and injury equally for employees and contractors
  • to provide a practical, consistent and relevant system for Company staff managing and overseeing the work of contractors and/or their sub-contractors
  • to integrate OHS/WHS requirements into contractor management
  • fulfill Company’s OHS/WHS legal requirements to ourselves and to contactors.
Selecting the right contractors

Working out what qualifications are required for what jobs can be a minefield, and to make things more complicated, they can vary from state to state.

At, you’ll find the relevant authority in each state for a range of industries including:

  • Regulators for carpenters, joiners, builders and bricklayers
  • Regulators for plumbers and gasfitters
  • Regulators for electricians, electrical fitters, cable joiners, line workers, restricted electrical licences and electrical contractors
  • Regulators for air-conditioning and refrigeration mechanics
  • Regulators for asbestos and demolition contractors.
During the selection process, ask yourself:
  • What experience does the contractor have in this area? You need to know the contractor has the background and skill sets to do the job correctly, on time and safely.
  • Do they have the appropriate identification, licence and permits, registrations and certificates?
  • Do they have the appropriate documentation and is it still valid?
  • Do they have adequate insurance cover?
Managing Contractors

Once a contractor has been selected, your induction process needs to ensure they receive the necessary training and information to perform their work safely and comply with relevant legislative requirements, which can vary from state to state.

All Contractors should receive training on site safety and your emergency procedures. You should provide the company Workplace Health and Safety (OHS/WHS) rules/regulations. Also conduct relevant induction training covering day-to-day procedures relevant to the site/business, including safe work practices and the supervision/monitoring of work.

Reinduction also needs to be undertaken for all returning/existing contractors on an annual basis with the following consideration:

  • Is there a register that tracks who has/has not been inducted?
  • Are relevant licenses /permits/registrations/certificates up-to-date?
  • Is the contractor’s insurance cover current and adequate?
  • Is the contractor familiar with all Safety Training and Emergency Procedures?
  • Have any significant changes been made on site that the contractor needs to know about?
  • is the contractor’s WHS/OHS documentation up to date?

If you would like a sample evaluation sheet to assist you to effectively select and manage your contractors please get in touch with Tudor Insurance Australia and we would be more than happy to provide this to you.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

Tudor Insurance Australia AFSL : 243299

Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Tudor Insurance Australia.

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