Engaging a principal contractor

A principal contractor must oversee all construction projects.

By default a Person Conducting a Business or Undertaking (PCBU) that commissions construction work valued at $450,000 or more is the principal contractor. However, a PCBU can appoint another PCBU as principal contractor by authorising them to have management or control of the workplace where the construction work will take place.

In other words, the person that commissions a construction project is the principal contractor unless they duly appoint another PCBU as principal contractor.

Engaging a principal contractor does not discharge the commissioning person of all their work health and safety (WHS) obligations.

Handing over management and control of the workplace may help to limit the commissioning person’s responsibility for incidents that occur onsite following handover. However, the commissioning person must ensure that they give the principal contractor any information they have in relation to hazards and risks at, or in the vicinity of, the workplace where the construction work is to be carried out.

An individual may directly or indirectly engage a PCBU to undertake a construction project on their residential premises. In this situation, the person engaged to undertake the construction project becomes the principal contractor if they have management or control of the workplace.

Principal contractor duties

As principal contractor, you must prepare a WHS Management Plan before work commences, which includes:

  • the names, positions and specific responsibilities of those with health and safety responsibilities
  • the arrangements for consultation, cooperation and coordination of activities that you have with others who have work health and safety responsibilities at the site
  • the arrangements in place should a health and safety incident arise
  • site-specific health and safety rules
  • arrangements for the collection, assessment, monitoring and review of Safe Work Method Statements (SWMS).

A WHS Management Plan template is available to help you manage your health and safety duties for your construction projects.

You also have additional duties as a principal contractor, including:

  • a requirement to install signage identifying the principal contractor
    • the signage must:
      • display the Principal Contractor’s name, 24-hour contact phone numbers and the location of the site office
      • be clearly visible from outside the workplace (or work area of the workplace) of the construction project
  • a duty to ensure, so far as is reasonably practicable, all persons who are to carry out construction work in connection with the project are informed of the content of the WHS Management Plan before they commence work and their right to inspect the plan
  • a duty to review the WHS Management Plan, keep it up-to-date and inform all relevant construction workers of any revisions to the plan
  • an obligation to keep a copy of the WHS Management Plan (and all revised versions) available for inspection and readily accessible to workers until the project is completed – or for at least two years if there is a notifiable incident
  • an obligation to take all reasonable steps to ensure SWMS are obtained relating to high risk construction work before the work commences.

Principal contractors must also put in place arrangements for ensuring compliance at the workplace with regulations pertaining to:

Any arrangement the principal contractor provides does not absolve other PCBUs from complying with these requirements. The principal contractor may put in place arrangements for ensuring compliance with hazard control measures through contractual arrangements, but they cannot rely only on these arrangements to ensure compliance. The principal contractor must also coordinate, so far as is reasonably practicable, with other PCBUs, such as contractors, and check compliance whenever the principal contractor attend the constructions site.

Principal contractors must also identify and control risks to health and safety, including maintenance and review of control measures, for:

  • the storage, movement and disposal of construction materials and waste at the workplace
  • the storage at the workplace of plant that is not in use
  • traffic in the vicinity of the workplace that may be affected by construction work carried out in connection with the construction project
  • essential services at the workplace.

Construction projects

A construction project is any project that involves construction work valued at $450,000 or more.

A construction project covers all the activities involved in the construction work. The cost of construction work can be determined by the contract price for carrying out the work. The kinds of costs that would be included are:

  • project management costs
  • cost of fittings and furnishings
  • any taxes, levies, or charges payable in connection to the work, excluding GST.

The cost of the construction work should not include:

  • the cost of the land on which the development is to be carried out
  • the costs associated with marketing or financing the development, including interest on any loans
  • the costs associated with legal work carried out or to be carried out in connection with the development.

Construction work valued at less than $450,000

A PCBU can authorise a contractor to have management or control of a workplace for construction work that is valued less than $450 000 (and is therefore not a construction project).

However, in this situation the contractor would not inherit the additional duties of a principal contractor.

PCBUs who commission construction work must understand their obligation to influence safety with the person engaged to undertake the work through the use of agreements and arrangements. This means asking questions about how the work will be performed to ensure foreseeable hazards are adequately controlled.