Principal Contractor

This was one of those granular topics you occasionally found yourself noodling around in, inside the OHS profession.

It started with what, from the outside, looked like a reasonably easy question to find an answer for, although the issue wasn't anything I had had to consider in the (almost) two decades I had already spent knocking about within the construction industry, with Bechtel.

At its core, I think the question is reasonably simple. Who is deemed to be the principal contractor on a commercial construction site, in those instances where nothing has formally been uttered about that?

To get a little more nuanced - and accepting that the question comes from my perspective within the context of how things roll in Victoria , Australia - in the absence of anything to the contrary, is the entity that holds the building permit automatically considered to be the principal contractor on a commercial construction site?

In early May, 2020 I whacked the question up onto LI to try to help draw to a close a debate that had, by that stage, been floating the business for about two months.

(I borrowed the term 'hive mind' from a facebook mate. She's a wise soul and knows much - very much - about writing. And when she writes things, if there's a phrase or a sentence she's used that I feel makes sense, with no shame I will borrow it. One of those phrases is "hive mind".

Also, looking back I wish I had clarified that I was asking the question within the context of how things apply within and to commercial/industrial construction sites, not domestic. Why that matters is made clear, below).

Posted in early May, 2020

Hoping the wise hive mind can help. (The post circles around the nuances of Victoria (Australia), so bear that in mind if you chime in).

Is the holder of a building permit deemed to be principal contractor if no other information is conveyed to the contrary?

For context: (The business I am working for is) reconfiguring our building/construction site entrance signs. Part of that process sees us considering how we express who the pc is and how that info is conveyed.

Traditionally, our signs conveyed what reg 41 of the 2018 Building Regulation required: registration numbers and contact details of the builder and building surveyor, the building permit number and date the permit was issued.

Regulation 334 of the 2017 OHS Regulations (presume project cost > $350,000) requires the pc to put in place signs showing their name and contact phone numbers unless those details are displayed IAW reg 41 of the 2018 Building Regs.

On some sites we carry the building permit, performing as an Agent of the Owner, and our info gets displayed per reg 41. But, if complying with reg 41 also satisfies reg 334 of the 2017 OHS Regs, does some mysterious way exist that means displaying our building info per reg 41 means we could be deemed to be the pc? (Again, presuming no other info is conveyed to the contrary).

The responses

Surprisingly, for something as boring as this subject is, the question seemed to generate a reasonable degree of interest. As of writing, it had been viewed 645 times. (Though it's entirely possible - likely even - that that amount of eyeballs on it had more to do with the fact it was posted in the middle of Australia's COVID-19 lock-down phase, than any real interest in the subject matter).

Three people - Gary, Kat and Dan - also took the time to write a comment. I have worked with each of them, and respect each of their points of view. (Which all congeal around the same outcome).

... from Gary Hogg

'Hoggy', as I call him, is a bloke I've known since 1999. We met and worked together on a site in Victoria, and have maintained contact since. He's been involved with OHS for as long as I have known him. He began in the industry way back when on the tools, swinging a hammer as a chippy.

He currently earns his crust with Master Builders, Queensland.

Gary asked whether the owner had "appointed and authorised another person to manage or control the workplace". If so, that person (entity) "is the principal contractor". A fairly blunt appraisal of the situation: if you, as the owner of the site have not appointed and authorised someone else to be the principal contractor, then you are it.

In fact, that's exactly what Hoggy then went on to close his comment with. "All that said, my understanding is that the Owner is the PC until they make the appointment. I don't believe by just displaying a sign it makes a person/company the PC. There has to be a legal appointment by the owner."

My response to Hoggy (part 1)

Gary, thanks for commenting.

I’m with you on this - put bluntly, I feel unless there’s documentation from the owner that unequivocally nominates another entity (‘X’) as the pc, then the owner is the pc. (Perhaps unwittingly).

But I can’t work with an “I feel”. I’m foraging for the ‘one ring that binds them all’.

In addition to today’s LI post, I reached out and asked WorkSafe and the Master Builders, for their take(s). I suspect they’ll come back with something very close to what you’ve delivered.

As an interesting aside, in the research I did to inform my LI post I noodled through the (VIC) 2018 Building Regulations. Unless I mistook my search results, nowhere within that document does it mention, or refer to, a principal contractor.

Literal response to Gary's comment, posted a day or two after his post.

My response to Hoggy (part 2)

(As as aside, Hoggy and I spent about an hour on the phone one morning in mid-May discussing the question (among other things). The conversation basically bedded down what was already becoming clear about where the answer was heading).

Anyway...

Thank you for your time on the phone and for the sample document you fired my way.

While the question is still noodling its way around the traps with organisations like MBAV, WorkSafe and a couple of other potential answerers (answerers??? Hope that makes sense) if I had to summarize the close-to-formal feedback received so far, it is this: unless the owner specifically appoints an entity as a pc, then in those circumstances where Victoria's OHS Regulation suggests the owner would be viewed as the pc, they are pc, whether they like it (or, even know it) or not.

So, if you don't want to be a pc, make that absolutely crystal clear by appointing your builder/contractor as the pc.

And without this being stated anywhere I could find, I recommend that that appointment is in writing, so nobody can claim 'Well, that's not what I agreed to' if things went pear-shaped, at some point down the track.

Literal response to Gary's follow-up comment.

... from Katryna ('Kat') Dawson

Kat is one hell of a smart cookie. She knows things - about environmental stuff, in particular - that no mortal person should. (And what she has yet to find out, has yet to be found out, if you get the jist).

Kat became involved in the conversation in one of the threads that had kicked-off between Gary and myself.

As she said, "reg 333 (of the 2017 Victorian OHS regulations) identifies who is the PC under what circumstances." And as she pointed out, "if there has been no appointment and authorisation of another entity to be the PC, then the owner is the PC..."

Also, and as an aside, Kat pointed out that if we were talking about a domestic construction site, where the owner had engaged someone to manage/control the work, then that person managing the site is PC. This is the one distinction the Victorian regulations do make clear, and it makes sense.

If your common-or-garden-variety Mum and Dad engage a professional builder to build their family home then the builder is, by default, the PC. (Except, as I understand things, if the Mum and Dad entity choose to perform as the owner/builder, in which case they are the PC). (And as if this wasn't potentially confusing enough).

... from Daniel Martin

Then there's Dan... a bloke who I think I'll need to spend some time writing about at some stage somewhere on this site. Dan is one of those truly unique individuals in the profession you come across from time-to-time. One of a kind and unlike anyone I've ever had the pleasure of working with (which I mean with 100% sincerity, in case his eyeballs ever, somehow, find their way onto this page).

First up, Dan threw up what he called a "fairly good summary of the different entities' approach" from an excellent site operated by MinterEllison, called construction law made easy

From that, and using what I guess is typical legal-speak for this sort of subject matter, MinterEllison use less than 20 words to provide their summation:

"If (in Victoria) an owner fails to appoint a principal contractor, the owner is taken to be the principal contractor."

I presume MinterEllison meant this as it applies to commercial/industrial construction - NOT domestic.

But... Dan had more (Dan always has more). "In a court of law, there is always the "appearance of the thing" to consider..."

What he wrote about that was interesting. I've (lightly) paraphrased what he finished up with on this page, where he wrote about situations where a positive appointment of a PC has not taken place.

..."It could be argued that between signage on the gate, the details of the contract and scope and the relative competency of the parties for the purpose," in the absence of any formal agreement stating otherwise "the entity holding the building permit could have 'assumed' the role as the Owners Agent."

therowersraspberry

Who is the Principal Contractor?

Is the holder of a building permit deemed to be principal contractor ...

... if no other information is conveyed to the contrary?

The question...

Posted in early May, 2020

The responses

... from Gary Hogg

My response to Hoggy (part 1)

My response to Hoggy (part 2)

... from Katryna ('Kat') Dawson

... from Daniel Martin

Who is the Principal Contractor?

Is the holder of a building permit deemed to be principal contractor ...

... if no other information is conveyed to the contrary?

The question...

Posted in early May, 2020

The responses

... from Gary Hogg

My response to Hoggy (part 1)

My response to Hoggy (part 2)

... from Katryna ('Kat') Dawson

... from Daniel Martin

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