Article by: Rachael Arnold and Terri Hirbod-Bassi

A recent NSW Supreme Court decision discusses the apportionment of liability of various parties on a construction site where a worker is injured.  This case raises an important consideration for all labour hire companies, employers and contractors, and their insurers, in order to understand their responsibilities and assess and minimise their risk and liability in the event that an injury occurs on site.

The plaintiff worked as a labourer on the redevelopment of the Redfern RSL.  He was employed by a labour hire company, Caringbah Formwork Pty Ltd (Caringbah), and was hired out as a labourer to Calcono Pty Ltd (Calcono).  Calcono was sub-contracted to undertake formwork for the site by the principal contractor, Deicorp Constructions (NSW) Pty Ltd (Deicorp).  The sub-contract cast a number of obligations on Calcono with regard to site safety, including compliance with the Occupational Health, Safety and Rehabilitation Act 2000 (NSW).

On 26 May 2011, the plaintiff fell two metres from a raised wooden platform on a metal frame within the building site.  He alleged that he slipped on a piece of plywood on the platform, which he claimed was very slippery when wet.  The plaintiff sustained injury and sued Caringbah, Calcono and Deicorp, alleging that each was liable in negligence.

Proceedings were dismissed against Caringbah as the Court held that although it had a non-delegable duty of care as the plaintiff’s employer (it was only his de jure employer whilst Calcono was his de facto employer) practically it had no control over the actual working conditions or state of the site.

Proceedings were dismissed against Deicorp as the Court held that although it had a duty to take reasonably practicable steps to ensure that workers on the building site were able to work in safe conditions, this duty was in the nature of a supervisory role only.

Calcono had contracted with Deicorp to take certain safety measures.  The duty that Calcono owed the plaintiff was to take reasonable care to avoid exposing its (de facto) employees to unnecessary risk of injury.  It was found that Calcono breached its duty to the plaintiff by failing to take reasonable precautions against the possibility that he could fall from the elevated decking.  As a result, the Court found Calcono solely liable in negligence.

However, the Court made a finding of contributory negligence of 33.3%.  The Court was satisfied that the plaintiff was negligent in failing to draw his superiors’ attention to the unsafe conditions in which he had been directed to work, and that this contributed to his fall.

What does this mean for your business?

The case draws an important distinction between a de jure employer and de facto employer.  The case demonstrates that the non-delegable duty of care owed by an employer does not automatically assume that an employer will always be held liable, particularly in circumstances where that employer had little or no control over the work that was being performed.

Further, this case demonstrates the importance of principal contractors undertaking and recording safety measures that have been put in place, and the importance of carefully drafted agreements that specify the obligations of each party on a construction site with regard to, among other things, site safety.

Rachael Arnold is a partner and Terri Hirbod-Bassi is a senior associate in the General Insurance team at Hall & Wilcox.

www.hallandwilcox.com.au