A recent court ruling reinforces the need to carry out effective handover processes when contractors are engaged to undertake works – or risk penalties
Need to know:
- 465 Leichhardt Pty Ltd was fined after an industrial gate, installed by a contractor, fell and injured a family. The gate lacked an essential safety feature due to an oversight.
- The Court stated that failing to inspect the gate after installation constituted a breach of the company’s duty of care, even though the flaw was caused by the contractor.
- This case serves as a reminder for companies to embed thorough handover processes in their contractor management systems to minimise risks and ensure compliance with safety obligations.
A company has been convicted and fined $180,000 in relation to an incident where an industrial gate fell on a family walking past a site that was being redeveloped. The company, 465 Leichhardt Pty Ltd (465 Leichhardt), engaged a specialist contractor, Star Professional, to manufacture, supply and install the gate. Unbeknownst to the company, Star Professional failed to install an end stop on the gate. As a result, the gate moved past the stopper when it was opened and it fell on a mother and her three young children.
In sentencing 465 Leichhardt for an offence under s 32 of the Work Health and Safety Act 2011 (NSW), his Honour Taylor J (the president of the Industrial Relations Commission) emphasised the importance of a proper handover and risk assessment after works have been completed.
The fact that 465 Leichhardt did not know the stop was missing did not excuse the offending, and the Court considered that this only emphasised 465 Leichhardt’s failure in discharging its primary duty of care. His Honour stated at [20] of the judgment: “they did not know because they had not taken the basic step of inspecting the gate after installation”.
Taylor J considered that had 465 Leichhardt taken the above step – as required under its statutory duty – the flaw would likely have been identified. While being aware of the flaw and then failing to act would have increased 465 Leichhardt’s culpability, not knowing there was an issue because no-one had inspected the gate once installed was a breach in and of itself.
Factors the Court took into account in imposing penalty
In sentencing 465 Leichhardt, the Court noted:
- the gate was installed alongside a public footpath on a major thoroughfare;
- the risk of the gate falling was foreseeable;
- the risk involved a potential for serious injury or death; and
- given the extensive guidance material available, a person with day-to-day control of the workplace should have been aware of the dangers.
These factors were balanced by two considerations. The first was that 465 Leichhardt had relied on Star Professional, a licensed specialised contractor, to install the gate. The second was that there was no prior incident to alert 465 Leichhardt to the risk.
Key takeaways
Handover involves formally closing out an engagement by confirming that the contractor has properly completed the work and that the site is safe and free from risks. It is not simply a box-ticking exercise – it is a critical aspect of the contractor management lifecycle.
As this decision highlights, failure to properly effect handover can lead to potentially fatal consequences – and in this case, a significant financial penalty. It serves as a timely reminder to businesses which engage specialist contractors to review their contractor management systems to ensure adequate handover is built into the contractor management framework.
For more information, please contact Michael Tooma, Partner, Head of ESG, Co-head of Workplace & Employment.
