Disclaimer: In consideration of the companies involved, we have opted to maintain the anonymity of all parties.

At PNOinsurance, we understand how vital workplace health and safety (WHS) is, not just for protecting workers but for fostering a strong and positive working environment. A recent case involving an on-hire recruitment firm serves as an important reminder of the shared responsibility that comes with managing WHS obligations in on-hire arrangements, and the steps that need to be taken to effectively ensure safety at all times.

The on-hire recruitment company was fined $25,000AUD after an employee was injured at a host employer’s site. While clearing a blocked vent with a plastic pipe, the worker’s hand was caught by a rotary valve, resulting in partial amputation and degloving of their middle finger.

The court found that although the recruitment firm was aware of its WHS obligations and had implemented some measures, those efforts were not enough to meet the standard of what is considered “reasonably practicable” for ensuring the employee’s safety. This case underscores the crucial point that on-hire recruitment firms must actively engage in managing workplace safety, even when they don’t have direct control over their clients’ worksites.

The court highlighted that the duty of care increases for on-hire recruitment firms, particularly because they don’t have direct oversight of the host employer’s site. As a result, on-hire recruitment firms must take proactive steps to assess and manage risks, ensuring that the health and safety of their employees are never compromised.

Key Lessons for On-Hire Recruitment Firms: Conducting a thorough workplace evaluation

The court emphasised that on-hire recruitment firms bear a crucial responsibility for worker safety, even when they do not directly oversee the work environment. It outlined multiple proactive measures such firms should take to fulfill their WHS obligations:

• Host employer workplace assessments: Before and on an ongoing basis, review your host employer’s safety protocols and especially when the nature of the role(s) changes.
• Host employer and employee collaboration: Encourage communication with your on hired workers, as well as your host employer to determine and clarify the specific expectations of each role, as well as identify any potential hazards.
• Clarify role expectations and skill/training requirements: Ensure that your on hired workers have the right skills, experience and accreditations/qualifications for their intended roles

It’s essential to understand that in on-hire arrangements, WHS responsibilities cannot be entirely transferred to the host employer. Each Party Conducting a Business or Undertaking (PCBU), or employer, must fulfill their duty of care under the law. Safe Work Australia’s guidance on WHS duties makes it clear that these duties are non-transferable. Every employer has a responsibility to manage and mitigate risks to workers wherever reasonably practicable.

What Happens When the Host Employer Doesn’t Cooperate?

On-hire recruitment companies need to consider whether they’ve fulfilled their duty of care and taken steps to ensure safety, such as requesting to review the host employer’s WHS policies. Even if the host does not fulfill their obligations, the on-hire provider must continue to demonstrate their own commitment to ensuring a safe workplace.

Both on-hire recruitment firms and host employers have a legal duty to consult, cooperate, and coordinate on WHS matters. If the host fails to cooperate, they are not meeting their obligations. Regardless, your primary duty of care as an on-hire recruitment firm remains unfulfilled unless you can demonstrate that you’ve taken all reasonable steps to ensure the safety of the workplace and the employee’s placement.

Be Proactive

At PNOinsurance, we believe that shared responsibility and proactive risk management is key for the overall workplace health and safety. By continually reviewing safety procedures, fostering open communication with both employees and host employers, and taking a considered approach to risk, on-hire recruitment firms can fulfill their duty of care and avoid costly legal consequences.

An incident such as this would have far reaching insurance implications, with numerous policies being called on by the recruitment firm, and also the host employer.

The recruitment firm would likely be claiming on their workers compensation policy (for the injured workers medical costs and loss of wages), as well as their management liability policy (for possible occupational health and safety defence or investigation costs).

The host employer may well need to access their public liability policy in relation to the injury sustained by a third party, resulting from the work being undertaken at their site. Similarly, they may need to access their own management liability, for possible occupational health and safety defence or investigation costs.

In addition to insurance, this case also involves the management of workplace risk—areas in which PNOinsurance is exceptionally well-equipped to provide support.

If you’d like more information on insurance related to this case, contact Mark Laudrum at mlaudrum@pno.com.au or call (03) 9536 7350. And for a non-obligation workplace risk assessment, Paul Marsh is your best contact at pmarsh@pno.com.au or call (03) 9536 7312.