When you contract out work, your health and safety obligations remain down to you.

If you are in business and contract people or businesses to do work for you, then you will have duties as a principal under the Health and Safety in Employment Act 1992 (the Act). Putting work out to contract doesn't remove your health and safety obligations. You cannot pass on a legal duty that falls on you as an employer, a person in control of a place of work, or a principal in terms of the Act.

The aim of the Act is the prevention of harm to people at work or as a result of work activities. To do this, the Act places a range of duties and responsibilities on people in the workplace to manage hazards and ensure work is done safely.

The Act creates a duty requiring principals to a contract to take "all practicable steps" to ensure contractors, subcontractors and their employees are not harmed while undertaking work under the contract.

As a principal to a contract, you are liable for the health and safety of contractors under the Health and Safety in Employment Act 1992. If you fail in your duty, the Act provides for substantial penalties.

Who is a principal?

A "principal" is any person, or corporate entity, who engages another to do any work for gain or reward, other than as an employee. The exception is engaging someone to do work on your own home (residential work).

If you engage a self-employed person, the duties of a principal under the Act apply - as long as the person meets the accepted tests for that person being an independent contractor and not an employee.

A contractor is considered a "principal" with respect to subcontractors.

What is a principal responsible for?

A principal has a duty to a contractor, a subcontractor and their employees. The duty is to take "all practicable steps" to ensure none of these people are harmed while doing work they were engaged to do. As the legal requirement is that all practicable steps be taken, a failure to take even one practicable step is a breach of the Act.

"All practicable steps"

Taking "all practicable steps" means taking all steps that are reasonably practicable to prevent harm. It involves consideration of:
• the nature and severity of any injury or harm that may occur;
• the current state of knowledge about the likelihood of such injury or harm occurring;
• the current state of knowledge about harm of that nature;
• how much is known about the risk of potential harm and the ways of eliminating, isolating or minimizing that risk, and;
• the availability and cost of safeguards.

What is reasonable depends on factors such as the:
• scale and nature of the contract;
• type of work the contractor was engaged to do;
• current state of knowledge and "best practice" in the industry;
• nature of hazards in the place of work, and;
• contractor's and principal's respective expertise in the work being undertaken.

For example, the steps expected of a principal to a photocopier service contract would be different to those expected of the principal to a contract for a major building alteration. The "practicable steps" expected of the principal to a major building contract would be extensive.

A principal needs to follow a process to ensure that the contracted work will be performed in a safe and healthy way. This will often include:
• planning and preparing for the work;
• ensuring the contractor is up to the job;
• providing information or resources to contractors;
• monitoring the performance of the contract.

Sometimes duties might be shared by the principal and a contractor. So, if you are a builder or developer who engages an electrician to do electrical wiring on a building project, you will usually have limited duties in relation to the safety of the wiring itself. However, the principal's duty is much clearer when it comes to providing scaffolding for the electrician to gain access to the work.

The principal cannot contract out of their obligations by passing the duties on to contractors or subcontractors. Courts will not accept contractual clauses that attempt to do so.

The Department of Labour has produced new guidance for principals to contracts to meet their obligations under health and safety legislation. To find out more visit