The contractor came on site without authorization and used hazardous paint near an air conditioning vent, exposing building occupants to fumes. This caused over $240,000 in losses from medical treatment and lost productivity. An investigation using the domino theory identified failures in security systems, contractor consultation, risk analysis, and coordination between stakeholders as underlying causes. The incident highlighted shortcomings in the PCBU's management of contractors and use of hazardous materials.

1. Contractor Management
Section 5
Topic 8 Construction Projects & High Risk Construction
Topic 9 Responding to incidents

2. Welcome to this HR Learning Course on
Contractor Management
The course has 5 sections.
Each Section has slides.
Some have resources and videos. Make sure that you use all the
resources.
There is an Assessment Workbook for you to complete. This will help you
to understand the most important information. It will also help you
engage with hypotheticals to UP your skills and knowledge.
If you see a key symbol It indicates this is important for your assessment.
If you see a book symbol it indicates there is a resource that is
downloadable accompanying these slides.
Upload your assessment when complete, and It will be assessed by one
of our HR Learning experts. You will also be awarded a certificate of
completion.

3. INSTRUCTIONS FOR
LEARNERS
• Make sure to download the Assessment
Workbook after looking at the two units in this
Section.
• Have a look at the resources.
• Ask yourself- Can I remember what this material is
about? What are the main learning points? Do I
understand the material? How would I teach
someone else this material?
• If you get really stuck. Send your question to
michael@hrlearning.com.au.
• (You must be enrolled in the HR Learning Course
at hrlearning.com.au to get academic support)

4. Topic 8 Construction Projects & High
Risk Construction

5. Legislation
• There is a lot of Work Health and Safety Legislation that
covers Construction Work.
• The WHS Act of your state has general obligations for duty
of care and consultation but it is the WHS Regulations that
has detailed procedures that must be followed.
• Have a look at Chapter 6 of the WHS regulations for your
state.
• There is also a Code of Practice for Construction Work that
should be referred to and understood completely by the
Contractor Manager

6. Legislation applying to Construction work
over $250,000

7. Phase 1/Phase 2 [Concept &
Design]
• The PCBU has a reasonable practicable duty under the WHS
Regulations once it commissions construction work.
• Part of this duty involves consultation with the designer of
construction (architect/builder) around the health and
safety elements of the project.
• As a WHS Adviser you may be asked to provide a brief on
hazards that exist at the proposed construction site and
hazards that may arise.

8. The designers
WHS Report
• The designer, briefed by your WHS report must provide the
PCBU with a written safety report that specifies the hazards
that relate to the design of the structure.
• A copy of this report must be given to the person who will
act as the Principal Contractor on the project.

9. Leaving it to the experts
• There can only be one Principal Contractor on a construction
project at any one time. They take on responsibility similar to
that of a PCBU.
• The test for who has the major responsibility for safety comes
down to “control”. Who is in control of the workplace.
• On a fenced off construction site your PCBU has a very low
level of control. It is highly likely that the principal contractor
would take possession of the place where works are being
carried out and will have management and control of the
workplace.

10. Things the
PCBU can do:
Even if the PCBU relies on the building company (as a specialist or
technical expert) the PCBU is required to:
• verify the building company has the necessary expertise for the work
(such as licences, qualifications, level of experience etc)
• verify the building company has their own systems in place for
carrying out work safely,
• verify the building company is carrying out that work safely as per
their own stated procedures (and not putting others at risk)
• continue to consult co-ordinate and co-operate with the building
company.
• Access and egress to the worksite is still a consideration for the PCBU
as people may still be in the vicinity. This should be discussed with the
principle contractor to ensure both parties understand who is
responsible for what.
• Verify if work being performed will have an impact on the immediate
surroundings, e.g. dust, noise, falling objects, crane and tower work
etc.
• The PCBU should disclose any information they are aware of that
might put people at risk from the site such as asbestos or chemical
contamination.

11. What you would expect from
the construction company
Consult co-ordinate and co-operate with the PCBU.
Provide reports to the PCBU sharing information on WHS issues and how
they are addressing hazards.
Discuss access and egress management with the PCBU.
Ensuring fencing and barricades are in place and continue to act as a
deterrent to keep unauthorised people out of the construction site.
Consult with all workers on site.

12. Real life
examples
• At a Sydney university, students were cutting
through a building under construction
because it was a good shortcut to their
lectures. This was incredibly dangerous as
there were voids of two and three storeys,
lots of equipment to fall, trip hazards etc.
• The Principal Contractor contacted the PCBU
[WHS Manager University]. After
consultation the PCBU paid for security
guards to guard the entrance to the fenced-
off worksite and the through access to the
lecture theatres was boarded off by the
builder.

13. Real Life example
• The project to move a large property developer from one
Sydney building to a new luxury Sydney building had reached
phase 2 of project. The designer brought in the PCBU’s WHS
Consultant for consultation around the safety elements of the
design. Because of his safety background the WHS Consultant
quickly recognised that a fabulous “plaza” style break out
area for the office was also blocking two of four fire exits.
Thousands of dollars were saved and the project was re-
designed to ensure access and egress.

14. Real life example
• Projects where staff has to share space with construction/refurbishment are always the worst because of the compromises
involved.
• Staff were housed on one side of a plywood partition and construction was taking place on the other side. When staff
complained of noise and dust it was clear that 1) their workplace was under the control of the PCBU not the Principal
Contractor 2) there had been no or little consultation with staff about the construction work and no alternatives had been
offered 3) dust and noise was at unacceptable levels for an office space but were fine for a construction site.
• The PCBU raced to increase separation; isolate the air conditioning system; create more sound proof barriers and give people
the choice of working from home. Had consultation with PCBU and Contractor and Staff occurred earlier all those issues
would have been mitigated. This would have saved time, money and rancour. As it was staff and contractors were both
equally annoyed with the situation.
• Why have refitting occurring during business hours- It was a poor decision based on money calculation without really thinking
it through. Quite often Capital Works staff of the PCBU will not know the legislation, their duties to provide a safe workplace
and their duties to consult.

15. High Risk
Construction
Work
• High Risk Construction Work has the same
requirements as Construction work but relies
heavily on the use of Safe Work Method
Statements [SWMS].
• SWMS if done correctly should analyse a work
process by breaking it into logical steps or
sequences. At each sequence the SWMS
developers should 1) Consult with workers who
do this task and 2) Consider inherent and
emergent risks, their control and mitigation.
• SWMS will often list PPE requirements, SDS
information, Australian Standards, required
licenses and authorities

16. Beware the
dodgy SWMS
• Some contractors will download SWMS from the internet
and pass them of as their own. Many a time a contractor’s
SWMS will have a generic logo labelled “Place logo here”. It
tells you that they haven’t done their safety due diligence
and that’s a dangerous situation that can’t be allowed.
• It’s OK for contractors to get someone to prepare a SWMS
for them but High Risk Construction Work SWMS have to
be site specific taking into account the Principal
Contractors WHS plan and site specific hazards.

17. PCBU duty
with relation
to high risk
construction
work
With High Risk work the PCBU has an even smaller
level of control. It’s the construction company that
has the expertise after all.
However, the Contractor Manager will still need to
communicate about things such as underground
services, known asbestos, confined space
information, chemicals stored on a site.
When demolition work is being carried out your
PCBU must provide a copy of the asbestos register
to the contractor.

18. Summary
• As the Contractor Manager/Safety Officer for your PCBU
there is a lot to prepare in order to ensure that a
Construction Project goes smoothly.
• Although, the contractor, in this instance, has expertise
there is no time at which the PCBU can waive its duty of
care. That means that you have to understand who has
which responsibility and implement that understanding.
• Preparation, clear communication and cooperation is the
way to ensure a project runs to plan.

19. Contractor
Management
Topic 9 Responding to Incidents

20. Responding
to Incidents
• A Contractor (Bob’s Roofing) had been
working after hours on a small job to fix a
roof leak at the top of a ten storey building.
• He was required to sign on and off before
commencing work. The previous evening he
almost finished the job but didn’t have time
to finish the top coat of polyurethane so he
has returned without signing in during
working hours the next day.
• He has gone to the roof of the building and
started to paint around the air conditioning
intake vent. People start feeling unwell and
phone calls start coming in to you within
about ten minutes of him starting.

21. Safety Data Sheet
• You ask him to stop. He looks
mystified and tells you that he
uses this paint all the time and it
doesn’t affect him.
• You read the safety data sheet for
polyurethane. It says that the
polyurethane contains xylene
and Toluene.

22. What next?
Your PCBU has a duty of care to ensure a safe
workplace. The SDS makes it quite clear that
when the polyurethane is wet, it is hazardous.
What controls can we impose?
Start ringing people and get the building
evacuated. There are no controls in place at all
for this exposure. Elimination. Not possible.
Substitution. Should have consulted with
painter prior to job. Now it’s too late. Isolation.
Yes. Possible. Evacuate the Building.
But what about the cost of hours lost??
Nope bad luck, because the risk has
happened, you cannot now argue cost.

23. In real life
• In real life this is a notifiable incident-It is
a dangerous incident S37 because there
has been an uncontrolled escape of a
substance and there have been medical
treatment for exposure to a substance
S36.
• Your state regulator must be informed.
They may ask you not to disturb the
incident site S39.
• You would go through all the preliminary
steps for an incident investigation.
• Instead we are going to go straight into
analysis mode

24. Response
This foolish contractor, has broken the rules (by
working during office hours), come onto your site
unauthorised and just cost you thousands of dollars.
Ten storeys of workers having to evacuate.
What an outlandish scenario! Was it made up? No! It
happened at a particular company in Sydney in 2012!
When an incident like this occurs what is the best
course of action? See answer below.
• The Domino Theory

25. 25
Domino Theory -Loss Causation Model 1985
Based on the work of Herbert William Heinrich (1930’s) and later Bird and Germaine (1980’s). Is the
basis of root cause analysis investigative methods.

26. • Help identify the root cause of a problem.
• Determines the relationship between different root causes of a
problem.
5 Whys

27. Let me show
you how it
works
• If you are a contractor manager or
safety adviser then the Domino Theory
and its friend The 5 Why’s are your
friends.
• Let’s look at the scenario described and
use the domino theory.

28. What loss has been
sustained by the PCBU?
• People- Staff have been affected by the
exposure to toluene and . It’s a respiratory
irritant but can effect eyes and skin. Let’s say all
our asthmatics have been affected. Lets say 2
per floor. 600 in the building. That’s 20/600
people needing some medical attention.
• Property loss- No property loss has been
sustained.
• Process- Yes all work has had to stop in the
building. That’s 600 people’s wages let’s be
conservative and say on average $50 ph. That’s
$400 x 600 people over 8 hours= $240,000.
• Yes the company has just lost almost ¼ million
dollars.

29. Has the law
been broken?
Certainly, S19 of the WHS Act has been breached. The
PCBU has failed in its primary duty of care. The
Contractor is also a PCBU and has failed in his duty. Fines
Up to $1.5 m for the Company PCBU. Up to $300K for the
Contractor
Officers ? Yes. Officers have failed in their due diligence
duties to acquire and keep up to date knowledge of work,
health and safety matters and also they have failed to gain an
understanding of the nature of the operations of the PCBU
and generally the hazards and risks associated… Fines..Up to
$300K
Workers?.. The Contractor is a worker and has failed to
take reasonable care that their act or omission hasn’t
adversely affected the health and safety of other persons.
$150K

30. Incident Loss Calculator
Queensland State Government has developed an
incident loss calculator that is very useful to turn
incident elements into dollar losses.
Imagine saying to your Executive that you’ve had an
incident and a forklift has toppled.
Now imagine that you say that and tell the company
that it has cost it $450,000 in equipment, wages,
fines and other costs.
Download a copy of this tool from the resources
link in this Section.

31. Total loss
• So taking into account the lost hours,
possible compensation costs, medical
expenses and possible prosecution
and fines the loss sustained in this
hypothetical is : MAJOR
• Please realise that small errors can
lead to major loss by companies.
• But was this a small error or
something bigger. Back to the domino
theory

32. Describe the Incident
• Contractor came onto site-unauthorised.
Security let him on site, without sign on .
• Used polyurethane paint-hazardous with very
controversial ingredients Toluene and Xylene.
Was there consultation with contractor? WHS plan?
• Paint was used near an air conditioning intake
vent that feeds the whole building.
Was there consultation with air-conditioning
contractor?
• Paint fumes spread through the entire building
forcing the decision to send people home.
Had this been considered as a WHS Scenario?
Exposures via air-con?

33. What were the
immediate causes?
• Contractor came onto site-unauthorised.
He got past security. How come?
• Used polyurethane paint-hazardous with very
controversial ingredients Toluene and Xylene.
Why had no-one checked on use of this paint?
• Paint was used near an air conditioning intake
vent that feeds the whole building.
Was there a risk analysis conducted?
• Paint fumes spread through the entire building
forcing the decision to send people home.
Why was there no isolation feature on the sir-
conditioner intake? Was there a company procedure
for contaminated atmosphere?

34. What were the
underlying causes?
• Security System failed. Pass system failed.
• Contractor Consultation. Did the PCBU know that
polyurethane was going to be used?
• Did anyone look over Contractor’s risk analysis?
Did contractor complete a risk analysis? Did PCBU
check SDS’s for paints being used. Why was the
job scheduled for after hours? Was there a SWMS
that the contractor was using?
• Had there been consultation with all
stakeholders? Was the PCBU air conditioning/
maintenance manager consulted about the job?

35. Where was control lost
When experts are called in there is an argument for
a low level of control excusing the PCBU. Was there
a “low level of control”?
• Who had control of the security system?
• Who has a Section obligation to consult?
• Who developed the tender or the job
specification?
• For a small job sometimes it goes straight from
maintenance to the contractor. Why did
maintenance not consult with WHS and develop a
WHS plan for the project?
• What is the PCBU policy on using hazardous
materials such as Toluene and Xylene.

36. What did we learn?
• In the scenario, it would be easy to just blame the Contractor. There is no
doubt that he acted unsafely and unprofessionally as well. If we sack him,
does that make the problem go away?
• Obviously, that is not the case. Would you agree that our brief investigation
using the Domino Theory has shown us that our PCBU has:
• Significant shortcomings in our Security System. How are we tracking
Contractors on site? How could a Contractor gain entry without the
correct entry permit outside of hours?
• Problems with Consultation. There was either a lack of consultation or
very poor communication.
• Problems with policies and procedures around the use, handling and
maybe even storage of dangerous goods.
• Issues with tendering or job allocation, lacking proper detailed risk
analysis.
• With such significant issues do you feel concerned about the PCBU’s
whole WHSMS and process of risk management. Remember, the PCBU
just lost close to $1million.

37. The importance of
Incident Response
• As the Contractor Manager you can see that your role has a large
scope in protecting the interests of your PCBU.
• Even small incidents can be impactful and cost a great deal of
money and reputation.
• You can see that our findings show us the importance of
consultation where there is more than one PCBU. This is even if
one PCBU has been commissioned because of their expertise.
Remember no PCBU can waive or transfer over their duty of care.
S16
• The risk management approach is methodical. There are no
excuses, our risk management should have foreseen the use of
hazardous materials, possible exposures and the consequences.

38. Responding to
incidents
• It is important for us to know when an incident has
occurred on our site. Our contractor should inform us
immediately for all incidents including near misses.
• It’s then important to fully investigate and ensure that our
own WHSMS continually improves but also that those
people who bring their expertise onto our sites work safely.
• Contractor management involves creating control over an
uncontrolled situation. We must ensure that Contractors
work in an agreed way that is safe and legal. We must
ensure that we consult fully and that communication is
high quality. Then we must apply a rigorous methodical risk
management approach to foresee danger and control it .

39. What’s next?
• Look at the two videos that
accompany this presentation.
• Download the resources.
• Fill in and submit the
assessment for this section.
• This is the final Section for this
course. Once your assessment
is marked you will be awarded
a certificate of completion.
Congratulations!