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21 September 2009

Brodribb re-visited – comforting principles for principals

For many years there has been tension between the legal principles governing the relationship between an employer and employee and those principles which govern the relationship between a principal and independent contractor.

Leighton Contractors P/L v Fox; Calliden Insurance Limited v Fox [2009] HCA 35 (02/09/09)

For many years there has been tension between the legal principles governing the relationship between an employer and employee and those principles which govern the relationship between a principal and independent contractor.

This tension is particularly evident in large construction projects where the legal relationship between parties can often become blurred. This High Court decision, whilst not resolving that tension, should provide some comfort to principals.

The case arose out of the large scale re-development of the Sydney Hilton in 2003. Leighton Contractors (Leighton) was the principal contractor. It engaged the services of Downview P/L (Downview) to undertake certain concreting services. Downview in turn engaged two individuals, Cook and Still, to undertake concrete pumping who in turn engaged the injured claimant and one Stewart. One might say a typical construction site.

The claimant was injured when he was negligently struck by a pipe during a cleaning operation carried out jointly by the claimant, Still and Stewart. Neither Leighton nor Downview had representatives present directing the activity. Leighton did not know the claimant was on site.

The claimant sought damages against Leighton and Downview arguing each had breached a common law duty of care owed to him to ensure he had received proper training. He also argued Downview should have prescribed a safe system of work and further, by allowing its own sub-contractors to engage other labour, it was not meeting its obligation to engage competent contractors.

It was not disputed that Leighton and Downview owed obligations under the NSW equivalent of the Workplace Health and Safety Act 1995 (Qld) to ensure that those coming onto the site had received general safety training. The claimant however did not allege a breach of those statutory duties (or indeed legally could). The claimant did allege that such statutory obligations should inform the common law duty and dictated that Leighton and Downview should provide activity based specific safety training and ongoing supervision of the particular activity. The High Court disagreed.

The Court found that the activity of concrete pumping was a highly specialised but self contained one which it was appropriate to assign to an independent contractor. It followed that neither Leighton nor Downview had an obligation to provide activity based safety training in an area where both entities were unlikely to have the requisite skills to provide such training.

The Court found that, to impose such training obligations would be inconsistent with maintenance of the distinction between the duty of an employer to an employee and the duty of a principal to an independent contractor. Given the self contained nature of the activity, co-ordination by each principal was found unnecessary.

Downview’s only obligation was to engage an ostensibly competent contractor and was not subject to an ongoing common law obligation with respect to the safety of the work methods employed by the contractor or those with whom the contractor subcontracted.

The following principles emerge from the judgment:

  • Generally, a principal will not owe a duty of care for the benefit of an independent contractor.
  • A principal will come under a duty of care to an independent contractor if the circumstances dictate that there should be co-ordination and direction of activities performed by more than one party on site to avoid injury.
  • A principal is obliged to engage competent contractors and, provided that is done, the principal will generally have no ongoing obligation to monitor their compliance with safe work methods employed by the contractor or those engaged by the contractor.
  • If the activity undertaken by the independent contractor involves specialised knowledge then the principal has no obligation to provide activity based training.
  • Obligations under the OHS laws will be relevant to defining the existence and scope of the common law duty of care, but should not be translated into that duty of care.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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