LEGISLATIVE UPDATES (Issue 21)

By on May 13, 2005

Employer’s Rights for Contractors
Contactors Don’t Have to be Directly Engaged to be Deemed Employees

In a ruling that potentially broadens the scope of employers’ OHS obligations, the Victorian Court of Appeal has found a company that didn’t directly engage a contractor was deemed the employer of the contractor’s workers.

The ruling is seen by some senior OHS lawyers as substantially extending the meaning of the term “engaged” for OHS purposes in Victoria.

The case involved an appeal by ACR Roofing Pty Ltd, which had been retained to erect and install the roof on an extension to a commercial building at Port Melbourne.

It contracted with crane company Associated Rigging Pty Ltd to lift packs of steel roof sheets onto the roof purlins, so that ACR could install them. Associated Rigging in turn, when it realised it didn’t have the resources for the job, contracted with James Cranes Pty Ltd to provide a crane, operator and dogman for the task.

While the lift was taking place, the load touched or came into close proximity to overhead power lines and the dogman handling it was fatally electrocuted.

ACR was charged on three counts of failing to provide and maintain a safe workplace, under s21 of Victoria’s OHS Act 1985. In the County Court, it was acquitted of two of the counts but convicted of the third, being a failure to cover the roof with safety mesh or ensure the use of individual fall arrest systems.

On appeal, ACR argued that it hadn’t engaged James Cranes, and that it therefore couldn’t be deemed the employer of the dogman for OHS purposes under s21 of the Act. (Section 21(3) provides that an “employee” includes an independent contractor engaged by an employer and any employees of the independent contractor.)

ACR argued that the trial judge, in directing the jury on the definition of “engaged“, had wrongly introduced the notion of agency after the prosecutor had closed its case. The company claimed that in doing so, the judge effectively reformulated the prosecutor’s case and deprived it of any opportunity to deal with the matter.

Justice of Appeal Geoffrey Nettle, with Justices of Appeal William Ormiston and Frank Vincent agreeing, found the trial judge was wrong to introduce the notion of agency.

However, Justice Nettle said, this didn’t make a difference to the outcome of the case, because the trial judge had wrongly confined the definition of “engaged” to situations where the employer was party to a contract (in relation to matters over which it had control).

Justice Nettle found the definition of “engagement” wasn’t so limited. He said a contractor could be regarded as engaged by the employer in relation to matters over which the employer had control if it were engaged directly under a contract, or by another contractor under a sub-contract, “or some remoter species of subcontract; regardless of the layers of contractual relations that might separate the contractor from the employer.”

Justice Nettle said the evidence made plain that James Cranes was a contractor (regardless of whether its contract was made with ACR through the medium of an agent or was only a subcontract with Associated Rigging).

“Therefore, the jury properly instructed could not have come to any conclusion but that James Cranes were engaged by [ACR] within the meaning of the section.”

Control grounds rejected ACR also argued that it wasn’t in control of matters surrounding the lift, because it had relied on an expert crane company to carry out a task in which it had no expertise, and it was industry practice for the crane crew to take control of the site when they arrived.

The bench, however, rejected the argument. Justice Nettle said: “Whatever might be said about other aspects of the lift, there can be no doubt on the evidence that ACR did have control over the erection of safety mesh.”

He accepted that ACR would not have allowed its own employees to work on the roof before the mesh was installed, and said: “The fact that ACR chose a crane company instead of employees to lift up the sheets can in principle make no difference. ACR owed to the employees of contractors engaged upon the roof the same duty as it owed to its own employees to do what was practicable to guard against a fall from the roof.”

The Queen v ACR Roofing Pty Ltd [2004] VSCA 215 (1 December 2004)

This article was provided by a CMPA Member. Unfortunately we have been unable to identify the author, however felt this to be of too high an importance not to include.

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