Nov 7, 2021

How to Safely Manage External Workers and Contractors


Caring for all your workers should be the utmost priority. Permanent staff in your company might have care packages, insurance covers and safety measures put in place to ensure they are well taken care of but what about external workers? How do you navigate the risks associated with contractors and external staff? Although they may not formally be a part of your business/organisation, those who are working onsite for a particular project also need to be included in the duty of care as a legal requirement. However, regardless of the legal implications, it is important to always prioritise the safety and well-being of every person associated with your business. Staff, customers and external workers alike.

Failing to remain diligent when organising contracted work with external parties, can leave you at risk, from a legal and commercial perspective. If you haven’t already, it may be worth creating a comprehensive contractor management system.

What is a Contractor Management System?

A Contractor Management System is a document that clearly outlines the protocol that needs to be followed when engaging with external workers/contractors. This would include everything from, the methodology behind selecting the contractors, the induction process, the health and safety measures and the guidelines on supervision when they’re on site. You, as a business owner, would need to ensure that all legislative and industry requirements are included in this document. This document serves as a tool to mitigate the possible risks that might arise from hiring contract staff.

Steps for Implementing a Contractor Management System

As earlier mentioned, mitigating your company’s risks due to employing contractors, spans all the stages of working with them. From the initial stage of hiring them to daily supervision.

  • Hiring external workers: The procedures captured in the contractor management system started in the employment phase. First and foremost, ensure that the contractors have the relevant insurance, and are duly licensed and registered to work in the industry. Be sure to complete reference checks to ensure they have the relevant experience to complete the contracted work well and safely.

A formal written contract should also be signed and agreed upon between you and any contractors to outline all the conditions of working with your business. Including; attending all inductions, following all safety and site-specific procedures, reporting all accidents and so on (a state that this extends to all their employees and/or subcontractors).

If a contractor has employees or sub-contractors on-site, the contractor needs to provide evidence to confirm that all staff are qualified and give a reason as to why the staff were selected for the job. It is also necessary for the contractor to acknowledge that they are responsible for ensuring that all their workers will follow all onsite procedures and health and safety protocols.

  • Contractor Induction: Both your contractors and their employees and/or subcontractors must attend the induction session, prior to starting work on your site. Keep a record of attendance and get signed confirmation of each attendee. The induction process should cover an overview of the job duties, emergency procedures and specific training on health and safety rules. Make a copy of the OHS/WHS regulations available to each of the staff as well as any other site-specific safety procedures.
  • Contractor Supervision: To ensure maximum safety, a qualified and experienced company employee should be appointed as a supervisor to ensure everyone is remembering and abiding by the health and safety rules—as well as completing the work to a satisfactory level. Its recommended that a sign-in/sign-out system is put in place to ensure you are aware of exactly who attends your site- this is particularly important in the case of emergencies. Any meetings that happen between you (or a representative from your business) and the contractors should be recorded. In any case, it is a great security measure to ensure you have a record of all communication between your business and external workers.

Relevant Business Insurances to Put in Place to Mitigate Risks

Apart from creating a contractor management system, you can also take out insurance to reduce your exposure to risk—particularly when working with contractors. These insurances include; Worker’s Compensation, Professional Indemnity and Public Liability insurance. If you would like to get some guidance on your business’s insurance, reach out to your local insurance broker and they will be able to help you navigate your company’s insurance needs.

General Advice Warning

The information provided in this blog is to be regarded as general advice. We recommend that you consider the suitability of this information, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider relevant product disclosure statement(s) before making any decision to purchase this type of financial product.

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