10 tips that all host employers need to know

If you are a host employer and have labour-hire staff in your business, then keep reading.

Tip 1: Safety first & foremost
Whether your workforce is made up of direct employees, contractors or labour-hire workers, safety must always be a number one priority at any workplace. Appropriate risk management frameworks must be constantly identified, revised, documented and implemented to ensure all workplace risks and accidents are kept to a minimum.

Tip 2: Educate your staff on labour-hire risks

Information and training on a ‘host’ employer’s significant responsibilities when it comes to safety and labour hire in the workplace, particularly for supervisors, safety officers and leaders within your organization, should be a top concern.

The incorrect perception that ‘host’ employers are somehow ‘protected’ from labour-hire worker injury claims because they are not their own employees is all too common and may lead, in some instances, to a relaxation of safety standards and risk management practices.

Tip 3: Ensure the terms of labour-hire arrangements are documented, agreed to and stored

Written contracts, signed and dated, provide a fundamental safeguard which helps ensure each party understands their respective rights and obligations. They also form key evidence necessary to prove those agreed responsibilities, should there be a claim. A failure to keep copies of relevant documents, particularly labour hire contracts and associated documentation, can prove fatal to any claim defence.

Tip 4: Negotiate a written indemnity clause

A written indemnity clause in a labour-hire contract which states that the parties agree to shift the ‘host’s’ liability for any claim onto the labour-hire company (regardless of fault) is a critical risk management tool.

These clauses are specifically designed so that one party agrees to indemnify the other for the liabilities they incur in certain circumstances. If such a promise can be negotiated, a contractual indemnity clause in your favour is an obvious, and often the most effective means of transferring risk from you onto the labour-hire employer.

Tip 5: Avoid agreeing to an indemnity clause in the labour-hire companies favour

The converse is also true. If possible, avoid agreeing to any indemnity clause or other contractual provision that attempts to shift the labour-hire company’s liabilities onto you in the event of a claim.

Tip 6: Negotiate other contractual terms relating to worker fitness and capacity

Apart from indemnity provisions, contractual terms which state that the labour-hire company warrants the fitness of the workers provided and their capacity and training to do the job required are important.

In the absence of an express contractual provision, the law will not impose an obligation on a labour-hire company to warrant the fitness of the workers provided to you. So, if you have a large labour hire workforce it may be cost-beneficial to have those workers medically assessed, particularly if it is a longer-term engagement or one involving heavier physical activity.

Tip 7: Encourage the labour-hire company to take on more responsibility for safety

Consider negotiating for the labour-hire company to agree to take on other obligations for the safety of its workers. For instance, it may be beneficial in some circumstances to have the labour-hire company agree to undertake tasks relevant to maintaining workplace health and safety at your worksites, or supervision of their workers within your workplace.

In the event that something goes wrong, this could potentially strengthen your argument that a greater apportionment of liability should be borne by the labour-hire company.

Tip 8: Act on any risk reports or safety issues raised by the labour-hire company

Labour hire company inspections of ‘host’ worksites, coupled with open and regular dialogue on health and safety issues can only improve the safety and well-being of these workers and reduce your exposures.

In addition, should a workplace accident occur, involvement by the labour-hire company in safety issues (particularly with shorter-term assignments) can potentially assist you to defend a later claim by the injured worker.

However, you need to ensure that any risk reports or issues are raised by the labour-hire company, either in writing or otherwise.

Tip 9: Ensure you have the appropriate liability coverage in place

Workers’ compensation insurance will not respond to labour hire claims. Your liability coverage will need to be read carefully and in conjunction with the labour-hire agreement. There may be uninsured exposures that you need to take into account, such as liabilities assumed under contractual indemnity promises that the insurer will not cover.

Tip 10: Ensure risk management practices are implemented in the event of an accident

Should a workplace accident involving a labour-hire worker occur, it is important that you have risk management protocols (including the completion of incident reports, retention of worker and witness details, collation and preservation of evidence such as photos or storage of damaged equipment) that are communicated and accessible.

If you want to find out more, download our free guide here or get in touch with one of our team to discuss your insurance requirements

Note: this article contains general advice only & you should seek further information from your personal Rivers Insurance Broker about the impact of any information provided here on your personal or business needs. ABN: 28 010 242 681 AFS License: 247093 www.riversinsurance.com.au