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Liability in respect to Independent Contractors – Part 2

When might a principal contractor avoid liability for injuries to a worker who is not their own employee?

In Part 1 of this series we discussed a number of scenarios where a Court identified a breach of duty by a principal contractor to an independent contractor or their worker.

In this second instalment, we will consider circumstances where a Court found no such duty was breached.

No duty of constant supervision

In the case of Mambare Pty Ltd T/A Valley Homes v Bell & Anor [2006] NSWCA 332, a bricklayer suffered significant injuries after falling 1.5m from an unsupported section of scaffolding.

The scaffolding had been properly erected and the incident occurred because carpenters working nearby had “borrowed” three planks while the bricklayers were on lunch.

The injured worker, Mr Bell had been aware that the scaffolding had been interfered with but brought his claim on the basis that there was insufficient scaffolding for all trades on site to safely carry out their work, arguing that the principal contractor, Valley Homes, was responsible for this.

The NSW Court of Appeal disagreed and noted that the bricklayers and carpenters were required to provide their own scaffolding and were responsible for deciding what equipment would be used for this purpose.

The NSW Court of Appeal did not consider that the principal contractor had a duty of “constant supervision” of the work and was not required to check that subcontractors had on site all the equipment and materials necessary for the job.

The Court of Appeal also noted that Mr Bell must bear considerable responsibility for the incident given his knowledge that the scaffolding had been interfered with.

Criteria relevant to the Court’s consideration

In the matter of Sydney Water Corporation v Abramovic & Anor [2007] NSWCA 248, Mr Abromovic, who became incapacitated in about 1973 by a lung disease caused by inhalation of silica commenced proceedings against five defendants.

Proceedings against the majority of defendants were dealt with separately and the NSW Court of Appeal was required to specifically consider what, if any duty had been breached by Sydney Water Corporation.

The facts established that work undertaken by Mr Abramovic was for the benefit of Sydney Water Corporation and was done so under the supervision of employees of Sydney Water Corporation and, further, was subject to inspection by Sydney Water Corporation under statutory powers. It was also established that the injury suffered was reasonably foreseeable and the means of preventing the injury were known to Sydney Water Corporation.

However, the NSW Court of Appeal ultimately found that, although Sydney Water Corporation exercised a degree of oversight and supervision, there was no evidence that it either assumed or retained the necessary degree of control to place it in a relationship analogous to that of employer and employee.

In coming to this conclusion, the Court identified a number of criteria that may give rise to a duty owed by a principal contractor to a worker who is employed by an independent contractor.

These include circumstances where:-

  • The principal contractor directs the manner of performance of the work;
  • The work requires coordination of activities of different contractors;
  • The principal contractor has (or ought to have) knowledge of the risk and the employer does not (and cannot be reasonably expected) to have such knowledge;
  • The principal contractor has the means to alleviate the risk and the employer cannot be expected to do so; and
  • Although the employer has (or should have) the relevant knowledge and can be reasonably expected to take steps to alleviate the risk, it does not and the principal has knowledge of the failure of the employer to do so.

It pays to be organized – and to engage a competent contractor

In a particularly well known decision of Leighton Contractors Pty Ltd v Fox & Ors [2009] HCA 35, the High Court of Australia recognised that, in some circumstances, a principal contractor will owe a duty to exercise reasonable care to ensure that a system of work for an independent contractor is safe (e.g. where an activity is inherently risky).

However, there is no duty to retain control of working systems if it is reasonable to engage the services of a competent independent contractor.  Once the activity has been organised and the operation is in the hands of the independent contractor, then the principal contractor will not be found liable for any negligence within the subcontractor’s responsibility.

Finally, in the matter of Kabic v Workers’ Compensation Nominal Insurer (No 3) [2017] NSWSC 1281, Mr Kabic was employed by a labour hire company who lent Mr Kabic to a host employer.

That host employer was then subcontracted by a principal contractor to undertake formworks.

Mr Kabic was injured when he fell from a raised platform exposed to the elements.

Mr Kabic was successful against the host employer only.  His claim against his employer failed on the basis that the employer did not exercise any control over the actual working conditions on site and was entitled to rely on the safety procedures of the host employer and principal contractor.

The claim against the principal contractor failed on the basis that, despite retaining some supervisory capacity, the principal contractor had subcontracted the work to the competent host employer who controlled and directed Mr Kabic’s daily activities (and attended to a number of important safety roles pursuant to contractual obligations).

Mr Kabic was found to have contributed to his injuries as he knew, from common sense and experience, that he should not work in rainy conditions and he simply needed to inform his foreman as to the unsafe state of the platform and either undertake other work until it dried, take a break or ask for a towel to wipe down the surface.

Key takeaways

Again, the critical aspect considered by the Courts in these decisions is the extent of control exercised over the workplace and the tasks being performed.

Where a principal contractor has engaged a competent independent contractor to carry out a task, exercises no control over the manner in which that task is performed and is not required to coordinate multiple contractors in order to complete the works, then liability for a claim arising from an injury to an independent contractor (or their worker) may well be avoided altogether.

Additional Resources

Contact us

If you need legal advice regarding your specific circumstances, regarding whether the method of engagement of your worker is an employee or independent contractor, or about broader workplace issues, including workplace injury law and employment law matters, please contact our Employment Lawyers on (07) 4637 6300.

This article was prepared by Carla Adams, Senior Associate with collaboration from Jennifer Kratzmann, Senior Associate, Emily Kelly, Solicitor, and Pat Hall, Legal Practitioner Director, who are based in the Toowoomba office

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