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Principal contractors

Engaging a principal contractor

By default, a person conducting a business or undertaking (PCBU) that commissions construction work valued at $250,000 or more (often referred to as the client) is the principal contractor. However, a client can appoint another PCBU as a principal contractor by authorising them to have management or control of the workplace where the construction work will take place.

It is recommended that any authorisation or appointment regarding the principal contractor be documented and signed by the relevant parties to ensure clear definition of roles.

The Work Health and Safety Regulation 2011 (WHS Regulation) defines a construction project as any project that involves construction work where the cost is $250,000 or more. This is an increase from the previous value of $80,000. Work valued at less than $250,000 is not deemed to be a construction project.

Principal contractor duties

Principal contractor duties include:

  • signage identifying principal contractor
  • preparation of the work health and safety (WHS) management plan (includes site rules)
    • duty to inform all persons of plan before they commence
    • duty to review – must remain up-to-date
    • must obtain safe work method statement (SWMS) before high risk construction work commence
    • put in place arrangements for ensuring compliance with specified requirements such as facilities and amenities
    • manage risks associated with construction materials and waste, plant, traffic and essential services.

Principal contractors for construction work valued at $250,000 or more

Each construction project will have a principal contractor who has specific duties under the WHS Regulation, in addition to their duties as a PCBU.

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.

Contractors for construction work valued at less than $250,000

A PCBU can engage a contractor to undertake construction work that is valued less than $250,000. The construction work is not a construction project within the meaning of section 292 of the WHS Regulation. A Principal Contractor cannot be appointed.

A PCBU can authorise a contractor to have management or control of a construction workplace, but cannot transfer any duty in relation to management or control under the Act. What is reasonably practicable for the PCBU must be considered.

No requirement to notify the regulator

The WHS Regulation does not require that Workplace Health and Safety Queensland is notified of the appointment of principal contractors. Notification must still be made to QLeave, the portable long service leave authority.

Only one principal contractor per construction project

Section 293 of the WHS Regulation states that a construction project can have only one principal contractor at any specific time.

Where a client has commissioned two or more construction projects and intends to appoint different principal contractors to each one, it is essential that the workplaces associated with each construction project are defined as separate and distinct. Only one PCBU can have management or control of a defined workplace at any given time. The following scenario helps to illustrate these requirements.

Two construction projects taking place immediately adjacent to each other working either on entirely separate projects or as part of a large program of works. For example, the construction of a bridge as one construction project and the approaching road works as another construction project. Or the refurbishment of a structure as one construction project and the installation, maintenance or repair of a significant item of plant within the structure as another construction project.

  • Each construction project must clearly identify where management or control starts and ends for each principal contractor. This is ideally done by using physical boundaries (e.g. a fence) or visible markers (e.g. signs).
  • Where it is not possible or practical to physically separate or visually demarcate a boundary between the two construction projects, both principal contractors must be able to demonstrate:
    • how risks associated with workers or others crossing the boundary between the two construction projects are identified and managed
    • how the duty to ensure that the workplace is secured against unauthorised access is met.
  • Each principal contractor must be in a contract directly with the client –one principal contractor cannot be a subcontractor to the other.
  • Each of the PCBUs (the principal contractors, any subcontractors, and the client) must consult, coordinate and cooperate with each other to ensure that risks to health and safety are managed. This is an equal duty between the parties and must be carried out prior to and during the work.

WHS levy for building and construction projects valued at $150,000 or more

The  Building and Construction Industry (Portable Long Service Leave) Act 1991 provides for payment of a work health and safety levy on certain building and construction work. The fee is payable for building and construction  projects valued at $150,000 or more and is collected by Q Leave.