- Recent NSW decision - summary
- Legal background Bench Decision
- Actual case
- What can we learn from this?
A recent interpretation by the Full Bench of the NSW Industrial Relations Commission, regarding the relative liabilities of the employer may well be of interest to us in New Zealand.
In a nutshell, the Bench determined that the liability lies not just with the company doing the hiring. The fact that the legal employer (labour hire company) is not able to supervise is the very reason why they have a positive obligation to ensure their employees are safe.
While legislation in New Zealand is not identical, the similarities are significant, particularly in the concept of "a person in control" of a place of work.
The labour hire relationship differs from the traditional
master/servant relationship between employer and
employee. In a typical labour hire scenario, a labour
hire company is the legal employer who it then contracts
out their employees to perform work for a host.
Section 8(1) of the NSW Act imposes a duty on employers
to provide a safe workplace, whilst s10(1) provides
that "A person who has control of premises used by people
as a place of work must ensure that the premises are safe and without risks
to health". With Laboour Hire, as with contractors, an issue can arise in terms
of who is "in control" of the place of work.
Even though, in most circumstances, the labour hire company is the employees' legal employer, it does not have effective control and supervision. The more obvious duty lies with the host company, as the "controller" of the workplace.
But the issue is not a black and white one. Clearly, the legislation intends that both parties have obligations and the fact that either party has obligations may not relieve the other of theirs.
The NSW Bench found that a labour hire company is not necessarily relieved of its duty to provide a safe workplace for its employees just because their employees are at other premises.
They noted that ".an employer who sends its employees into another workplace over which they exercise limited control is, for that reason, under a particular positive obligation to ensure those premises, or the work done, do not present a threat to the health, safety or welfare of those employees" .
It is worth noting that this finding was in regard to a particular case, in which BOTH the employer and host company were successfully prosecuted.
In regard to the actual case , the labour hire company did send representatives to the host company's premises and equipment to assess its safety. However, the labour hire company failed to ensure the host company carried out an adequate risk assessment of the industrial power press involved in the accident, or to warn the worker of the potential hazards. The host company pleaded guilty to breaching its obligations under the Act. The labour hire company was found guilty at first instance and this finding was upheld on appeal.
While this is an Australian case decision, there are close parallels with NZ. Labour hire companies need to ensure the safety and welfare of their employees. In doing this, they cannot rely on the word of host businesses.
Both parties have an obligation to ensure:
- employees have adequate safety training (and the labour hire company may have to actively do this themselves).
- the host company's workplace and practices are known and approved;
- have written
contracts to ensure:
- adequate induction is provided by the host company to the employee for every new task; and
- the host company undertakes regular risk assessments and steps to identify hazards, and to notify workers of any risks or potential hazards; and
- the induction is occurring,
- the labour hire workers are being supervised, and
- risk and hazard identification is being undertaken.
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