Tip 1: Safety first and foremost
Whether your workforce is made up of direct employees, contractors or labour hire workers,
safety must always be a number one priority at any workplace.
Appropriate risk management frameworks must be constantly identified, revised,
documented and implemented to ensure all workplace risks and accidents are kept to a
Tip 2: Educate your staff on labour hire risks
Information and training on a ‘host’ employer’s significant responsibilities when it come to
safety and labour hire in the workplace particularly for supervisors, safety officers and
leaders within your organization, should be a top concern.
The incorrect perception that ‘host’ employers are somehow ‘protected’ from labour hire
worker injury claims because they are not their own employees is all too common and may
lead, in some instances, to a relaxation of safety standards and risk management practices.
‘Hosts’ must ensure that all reasonable care is taken to provide labour hire workers with the
same safe place of work, safe system of work and safe plant and equipment they are
obliged to provide their own employees.
Tip 3: Ensure the terms of labour hire arrangements are documented, agreed to and
Written contracts, signed and dated, provide a fundamental safeguard which helps ensure
each party understands their respective rights and obligations.
They also form key evidence necessary to prove those agreed responsibilities, should there
be a claim.
A failure to keep copies of relevant documents, particularly labour hire contracts and
associated documentation, can prove fatal to any claim defence.
Tip 4: Negotiate a written indemnity clause
A written indemnity clause in a labour hire contract which states that the parties agree to
shift the ‘host’s’ liability for any claim onto the labour hire company (regardless of fault) is a
critical risk management tool.
These clauses are specifically designed so that one party agrees to indemnify the other for
the liabilities they incur in certain circumstances. If such a promise can be negotiated, a
contractual indemnity clause in a your favour is an obvious, and often the most effective
means of transferring risk from you onto the labour hire employer.
However, the trick with these clauses, is that they are often difficult to negotiate given the
respective bargaining power of the parties.
In addition, even if you can agree to include one in your labour hire contract, these clauses
are often looked at with ‘hostility’ by the courts and interpreted narrowly if they are in any
way ambiguous or unclear in their meaning.
In certain jurisdictions they may also be void in claims involving the relevant WorkCover
It is therefore recommended that legal advice is obtained in regard to their expression,
operation and validity.

Tip 5: Avoid agreeing to an indemnity clause in the labour hire company’s favour
The converse is also true. If possible, avoid agreeing to any indemnity clause or other
contractual provision that attempts to shift the labour hire company’s liabilities onto you in
the event of a claim.
Tip 6: Negotiate other contractual terms relating to worker fitness and capacity
Apart from indemnity provisions, contractual terms which state that the labour hire company
warrants the fitness of the workers provided and their capacity and training to do the job
required are important.
In the absence of an express contractual provision, the law will not impose an obligation on
a labour hire company to warrant the fitness of the workers provided to you. So if you have
a large labour hire workforce it may be cost beneficial to have those workers medically
assessed, particularly if it is a longer term engagement or one involving heavier physical
Otherwise, having a written term in your labour hire agreement warranting the fitness of the
workers provided will give you some comfort.
Equally, a contractual description of the type of worker required and a warranty by the
labour hire company of their capacity to carry out the required tasks will also assist,
particularly if the worker was injured whilst carrying out a task within the area of their
experience and expertise.
Tip 7: Encourage the labour hire company to take on more responsibility for safety
Consider negotiating for the labour hire company to agree to take on other obligations for
the safety of its workers.
For instance, it may be beneficial in some circumstances to have the labour hire company
agree to undertake tasks relevant to maintaining workplace health and safety at your
worksites, or supervision of their workers within your workplace.
In the event that something goes wrong, this could potentially strengthen your argument
that a greater apportionment of liability should be borne by the labour hire company.
However, this is not a step to be taken lightly and you must be confident not only that it will
assist in your safety management, but that the tasks assigned to the labour hire company
are within their capacity to address and can be adequately resourced.
Tip 8: Act on any risk reports or safety issues raised by the labour hire company
Labour hire company inspections of ‘host’ worksites, coupled with open and regular
dialogue on health and safety issues can only improve the safety and wellbeing of these
workers and reduce your exposures.
In addition, should a workplace accident occur, involvement by the labour hire company in
safety issues (particularly with shorter term assignments) can potentially assist you defend
a later claim by the injured worker.
However, you need to ensure that any risk reports or issues raised by the labour hire
company, either in writing or otherwise, regarding the safety of their workers is
appropriately considered and actioned. The steps taken by you in response should be
You should maintain your own register documenting when and where inspections and
discussions with the labour hire company take place, the individuals present, what was
observed and discussed, and the course of action taken by you in response.
Formal feedback and communication channels between you and labour hire companies
should also be established and encouraged.
Tip 9: Ensure Council has in place appropriate liability coverage
Workers’ compensation insurance will not respond to labour hire claims.
Your liability coverage will need to be read carefully and in conjunction with the labour hire
agreement. There may be uninsured exposures that you need to take into account, such
as liabilities assumed under contractual indemnity promises that the insurer will not cover.
Tip 10: Ensure risk management practices are implemented in the event of an
Should a workplace accident involving a labour hire worker occur, it is important that you
have risk management protocols (including the completion of incident reports, retention of
worker and witness details, collation and preservation of evidence such as photos or
storage of damaged equipment) that are communicated, accessible and implemented.
Copies of all contractual documentation relevant to the injured worker and evidence of the
task being completed at the time of the accident and the labour hire arrangements entered
into are crucial, and should be complete and easily accessible in the event of a claim.
For more information please contact Megan O’Rourke,
P: +61 7 3231 6358
F: +61 7 3231 6399
Connect on LinkedIn or follow us on Twitter @Elevista

e.g s138 Accident Compensation Act (Vic)

Source: http://www.elevista.com.au/icms_docs/154262_Top_Tips_for_Host_Employers.pdf

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