Who is liable for WHS injuries on construction sites?

In NSW, a Principal Contractor must be appointed for a construction project where the cost of the construction work is $250,000 or more[1]. The Principal Contractor is responsible for overseeing the work health and safety requirements of a project. However, there are likely to be other Persons Conducting a Business or Undertaking (“PCBUs”) on the site.

In November 2024, the Industrial Relations Commission revoked an Improvement Notice which was issued against the Principal Contractor of a construction project after an employee of a subcontractor was injured.

Diona Pty Ltd (“Diona”) was the Principal Contractor engaged by the Hunter Water Project for a construction project, which involved the installation of underground pipes. Diona engaged E&M Cahill Pty Ltd (“Cahill”), who in turn engaged Country to Coast Services Pty Ltd (“Country to Coast”), both of which were directly involved trenching and pipe laying works. Cahill had prepared the Safe Work Method Statement (“SWMS”) for the project, which is required for high risk construction work.[2] The SWMS must identify the work that is high risk construction work, specify any hazards, describe the measures to be implemented to control the risks and describe how the measures are to be implemented, monitored and reviewed.[3]

On 12 August 2022, an employee of Country to Coast entered into an exclusion zone, which workers were prohibited from entering into, after which they were struck by an unsecured pipe and suffered injuries.

SafeWork NSW issued an Improvement Notice to Diona as the “Principal Contractor” alleging that Diona had not put in place arrangements to ensure that the high-risk work task was carried out in accordance with the SWMS prepared by Cahill. Diona sought external review of the Improvement Notice so that the Industrial Relations Commission could determine whether there were any “objective facts which could have allowed the inspector to have formed a reasonable belief that Diona was contravening the relevant obligations.” The Industrial Relations Commission revoked the Improvement Notice, for the following reasons:

• The Safework NSW Inspector did not make sufficiently “reasonable inquiries” to be able to conclude on a reasonable basis that the Improvement Notice should be issued to Diona;[4]
• Safework did not adequately consider the relationship between Diona, Cahill and Country to Coast;[5]
• The parties which were undertaking and supervising the relevant construction activity were Cahill and Country to Coast;[6]
• The parties with the relevant expertise were Cahill and Country to Coast; [7] and
• Safework NSW took the “lazy” approach in determining that the Principal Contractor should be responsible for all inadequacies on the site.[8]

Key takeaways

The key takeaways from this case are:

• It is not only the Principal Contractor of a site who can be found liable for an injury on site;
• The other PCBUs on a construction site can also be found liable for an injury on site; and
• Principal Contractors can rely on specialist expertise of the other PCBUs on site.

It is important for Principal Contractors and other PCBUs to carefully consider who may have the expertise for a task on site, particularly when the task involves specialist expertise, as it may not be the Principal Contractor who has this specialist expertise. Once this is determined, the relevant PCBU should ensure that they undertake the safety responsibilities for that particular task, to prevent any incidents occurring while that task is being performed.

For legal guidance on work health and safety related duties in the construction sector, contact a member of Addisons’ Construction & Infrastructure team.