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Contractor Categories? Is there a better way?

Contractor Categories? Is there a better way?

Often when I look at contractor management systems there is an attempt to categorise contractors, usually by the level of risk they pose to the Principal Contractor. Using a risk matrix or some other pretty subjective process we try and assign contractors into categories of high medium or low in terms of the risk they pose to our organisation by their work.

For example, an excavator might be ranked as high risk and a carpenter low risk. Exactly why we categorise them like this is always unclear to me. It might be in fact that an excavator is lower risk because their work is segregated whereas the carpenter is working in amongst out people with tools, dust and ladders.

In this article
Most important way to categorise contractors is by type
Labour Hire Contractors
Independent Contractors
Appointed Principal Contractor
Summary

Most important way to categorise contractors is by type

In fact, the best and most important way to categorise contractors is by type. By that, I mean the following types;

    1. Labour hire (a human resource we direct in our workplace)
    2. Independent skilled contractor (service provider who directs their own work)
    3. Appointed Principal Contractor (an independent third party who manage an entire construction project on your behalf)

The reason it is far more valuable to categorise our contractor is because our legal duties, how they are met and what we need to do on the ground needs to change depending on the category. Critically because our degree of control is significantly different between each category.

Yes you can flag contractors that are doing work we consider to be dangerous but understanding their category type is far more important as it will totally change what you do in contractor management.

Labour Hire Contractors

Labour hire contractors are under our direction and control and incorporated into our workplace therefore we have almost total control over their work and safety. As a result, we need to incorporate them into our safety arrangements in respect of the work they are doing including providing.

  1. A safe system of work
  2. Safe equipment
  3. Training, information, and supervision

Independent Contractors

Independent contractors have control over their own work and must provide their own

  1. A safe system of work
  2. Safe equipment
  3. Training, information and supervisions

So our obligations are limited to acting with diligence when engaging them (good prequalification) and ensuring they are aware of critical risks in the workplace that can impact on them, and that they need to take into account when designing their methods of work (good induction).

Appointed Principal Contractor

Finally an Appointed Principal Contractor is not under our control at all. By making an appointment of a third party to act as Principal Contractor in a construction project you have delegated all obligations owed under health and safety law to the third party. As a result, the Appointed Principal Contractor must provide;

  1. A safe system of work
  2. Safe equipment
  3. Training, information and supervisions
  4. Contractor management

Our role is limited to either leaving and coming back when the keys are ready to be handed over or taking an active client role by observing and monitoring performance against contractual obligations.

Summary

In summary, there is a sliding scale as to how much you need to be involved with your contractors in respect of managing their safety. Have fun looking at your contractor categories and seeing if this type of categorisation works better for you.