By Daniel McConville
Auditing is a powerful, yet underrated business tool for helping businesses comply with contractor obligations. In this article, I look at how you can use a contractor management system to audit the contractors you use—and why doing so is an important part of meeting your obligations under work health and safety (WHS) legislation.
When businesses use the term auditing, they could be referring to a wide range of assessments that will tell them a host of different things. In this article, we will be looking at auditing specifically as it relates to contractors. This type of auditing may tell you whether a contractor:
- Is licensed;
- Is insured; and
- Will be safe while completing the job
Are you making this common contractor auditing mistake?
A common pitfall of internal audits is that auditors often just “tick the box” and move on to the next question without thoroughly exploring whether the business has adequately complied.
For example, I recently undertook an audit at a food manufacturing facility. When I asked about their contractor management processes, I was told, “We don’t have any contractors.” When I pointed to a nearby electrician’s van, the response was, “We have that all under control, they have been here for years.” However, the business couldn’t verify if the electrician had a relevant licence or had even been inducted.
Not having clear, documented contract management processes in place is not an acceptable standard for any business.
What are your exact obligations to contractors?
WHS legislation is clear about the obligations employers/persons conducting a business or undertaking have to contractors. Broadly, you have an obligation to ensure, so far as is reasonably practicable, that your workplace is safe and that the health and safety of your workers—including contractors—is monitored.
Plus, most external auditors and the health and safety regulators will want to see evidence to verify that the documented procedures match what is happening in the workplace.
How can you make sure you meet these obligations?
Here are five simple steps you can take to ensure you are complying:
- Identify the contractors in your workplace or on your worksite
- Ensure that you have inducted all contractors. Adopt the common slogan “No induction, no start”
- Ensure that you have checked relevant licenses and qualifications
- Implement a contractor management system
- Develop and implement a contractor management procedure
What is a contractor management system?
One of the best ways to meet your monitoring obligations under WHS legislation is to have a contractor management system in place.
Such a system should store copies of:
- Your contractors’ licenses and qualifications along with any training certificates, which will help verify that contractors are competent;
- Any insurances—such a work cover and public liability—so you can verify that your contractors have some form of insurance should an issue arise; and
- Completed company inductions, so you can verify that contractors have been made aware of any on-site hazards, as well as emergency, first aid and other relevant contact details.
The above systems are not hard to implement and maintain and could be initially started on an excel spreadsheet. A contractor management software package will advise you of whose licenses or qualifications have expired and when the renewals are due. Simpler, manual systems require a little bit more work but can be managed easily enough through your email system.
What are contractor management procedures?
A contractor management procedure should outline your company’s process for approving and managing contractors, including:
- Reviewing workers’ compensation and public liability insurances; and
- Completing inductions, including familiarising contractors with their work environment, the specific hazards they may be exposed to and your safe work procedures.
My advice? Keep your contract management procedures as simple as possible.
Should you use contractors who haven’t provided the relevant information?
The short answer is no. If there is an incident and you haven’t properly inducted or managed your contractors, you could be held liable.
This was the case for two businesses in VWA v Vibro-Pile Pty Ltd (2014), after a worker died when a rig collapsed. The builder had engaged Frankipile Pty Ltd to undertake piling work associated with building foundations at the site. Frankipile in turn engaged Vibro-pile (Australia) Pty Ltd—an affiliated company—to operate the piling rig. Frankipile and Vibro-pile were each found guilty of two counts of breaching the Occupational Health and Safety Act 2004 (Vic) for failing to provide safe systems of work and appropriate instruction, supervision, and training.
Despite the risks, my experience is that a number of businesses are already engaging contractors without first obtaining the right documentation—and they either aren’t aware of it, or aren’t worried about it. If you are one of these businesses, remember that putting contractor management systems and procedures in place is not difficult—and you aren’t expected to implement them overnight. If you are visited by the regulator during the implementation process, you will able to demonstrate that you have identified the issue and are in the process of eliminating the hazard.
About the author
Daniel McConville has over 35 years’ experience in the occupational health and safety (OHS) and food industries. Daniel has extensive experience in OHS and food safety auditing, along with delivering health, safety, food safety, and quality-based services to a range of industries and events including Taipei Summer Universiade 2017, the ADF, Universities and Colleges, Hospitality and Food Manufacturing, Health and Aged Care, Local Government, Facilities management and Contractor Management.
Daniel is a tertiary-qualified professional who is committed to sustaining OHS and food safety improvements and objectives across the business, while promoting a culture where safety, prevention, and reporting are paramount.