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Labour hire is now embedded in Australian construction. Concrete pours, shutdowns, civil crews and fit‑out projects are routinely staffed with agency workers, subcontracted teams and “on‑hire” trades. Against that backdrop, the WHS Act raises a deceptively simple question: who is really the PCBU, and where does liability land when something goes wrong?
This article uses the model WHS Act as a reference point and then applies it to labour hire arrangements in the construction industry. It is written for principal contractors, labour hire providers, subcontractors and construction business owners who need a clear, legally‑literate explanation – not marketing gloss. It should be read together with the relevant WHS legislation and guidance in your State or Territory, because each jurisdiction implements the model WHS Act with local variations.
Throughout this article, you will find internal links to additional WHS resources, case reviews and specialist services provided by HSE Direct for the construction sector.
1. The WHS Act, labour hire and construction – setting the frame
Under the model WHS Act, a person conducting a business or undertaking (PCBU) is any person or entity that conducts a business or undertaking, whether alone or with others and regardless of profit motive. Section 5 makes it clear that PCBUs include companies, partnerships and unincorporated associations, and that more than one PCBU can exist on the same project at the same time.
In a typical construction project using labour hire, there will usually be at least three PCBUs:
- The principal contractor or head contractor
- One or more host PCBUs engaging labour hire workers on site
- One or more labour hire PCBUs supplying those workers
In some instances, specialist subcontractors or labour hire agencies themselves will also be principal contractors for specific packages of work. The model WHS Act expressly anticipates this overlap: sections 13–16 confirm that duties are not transferable, that a person can hold more than one duty and that multiple duty‑holders must each meet their obligations to the extent of their capacity to influence and control the matter.
For construction businesses seeking to understand their exposure under the WHS Act, it is not enough to identify “the employer”. Liability turns instead on:
- Whether you are a PCBU (you almost always are)
- Whether the injured person is a “worker” for your undertaking
- The extent to which you influence or direct the work being done
- What is reasonably practicable for you to do in the circumstances
HSE Direct has covered the harmonisation background and jurisdictional nuances in more detail in its article on WHS harmonisation in Australia.
2. Key definitions: PCBU, worker and workplace (sections 5, 7, 8, 19)
2.1 Person conducting a business or undertaking – section 5
Section 5 of the model WHS Act defines a PCBU in deliberately broad terms. A person conducts a business or undertaking whether or not it is for profit or gain, and regardless of whether it is conducted alone or with others. In labour hire‑heavy construction, this typically captures:
- Labour hire agencies placing workers with host organisations
- Principal contractors controlling large construction projects
- Specialist subcontractors delivering discrete work packages
- Developers and clients who may themselves be PCBUs commissioning construction work
Certain persons are expressly carved out (for example, elected members of local authorities, pure volunteer associations), but these exceptions are narrow and rarely relevant on commercial construction sites.
2.2 Worker – section 7
Section 7 defines worker extensively, including an employee, contractor or subcontractor, an employee of a contractor or subcontractor, an employee of a labour hire company assigned to work in the PCBU’s business, an apprentice or trainee, a work‑experience student and a volunteer. This is the critical link for labour hire:
- A labour hire worker is a worker for the labour hire PCBU that engages them.
- The same labour hire worker is also a worker for the host PCBU, if they carry out work in the host’s business or undertaking and their work is influenced or directed by the host.
The definition deliberately focuses on the work being done and who influences it – not just on who signs the employment contract.
2.3 Workplace – section 8 and construction sites
Section 8 defines a workplace as any place where work is carried out for a business or undertaking, including any place where a worker goes or is likely to be while at work. In construction, this encompasses:
- Greenfield and brownfield construction sites
- Temporary yards, lay‑down areas and compound facilities
- Mobile plant, vehicles and temporary structures
Both the labour hire PCBU and the host PCBU have obligations in relation to these workplaces, although the extent and nature of those obligations differ.
2.4 Primary duty of care – section 19
Section 19 imposes the primary duty of care. A PCBU must ensure, so far as is reasonably practicable, the health and safety of:
- Workers engaged, or caused to be engaged, by the PCBU; and
- Workers whose activities in carrying out work are influenced or directed by the PCBU while they are at work in the business or undertaking.
Section 19 also requires PCBUs to ensure that the health and safety of other persons is not put at risk from work carried out as part of the business or undertaking. In labour hire arrangements on construction projects this means:
- Labour hire PCBUs owe duties to their on‑hire workers, including while they are working at the host’s site.
- Host PCBUs owe duties to those same workers, as their work is performed in the host’s business and is typically directed day‑to‑day by the host’s supervisors.
The Safe Work Australia page on Duties of a PCBU provides an accessible, official summary of this framework.
3. Multiple PCBUs, shared duties and labour hire
3.1 Duties are concurrent, not sequential
The model WHS Act is explicit: more than one person can concurrently have the same duty, and each duty holder must comply with that duty to the extent of their capacity to influence and control the matter. Duties:
- Cannot be transferred
- Are personal to each PCBU
- Are judged according to what is “reasonably practicable” for that PCBU in the specific circumstances
In practice, a labour hire worker injured while using a mobile plant item on a construction site may give rise to WHS enforcement interest in:
- The labour hire PCBU, for placing and monitoring the worker
- The host PCBU, for site conditions, supervision and systems of work
- The principal contractor, for project‑wide risk management and coordination
- Possibly upstream PCBUs such as plant owners, designers and manufacturers (sections 20–26)
Recent case law and commentary highlight that courts look to the real level of control and the steps each PCBU has taken in practice.
3.2 Consultation, cooperation and coordination – section 46
Section 46 requires PCBUs with overlapping duties to consult, cooperate and coordinate activities so far as is reasonably practicable. SafeWork NSW and Safe Work Australia have both published dedicated material on labour hire that emphasises this requirement.
On construction sites this usually demands:
- Pre‑placement WHS consultation between labour hire and host PCBUs about hazards, controls, supervision and training
- Agreement on who supplies PPE, who provides task‑specific training, and how incidents will be reported and investigated
- Integration of labour hire workers into the principal contractor’s WHS management plan and site‑specific safety management systems
HSE Direct has analysed how these consultation duties intersect with union and right‑of‑entry provisions in its article on WHS right of entry lessons for construction.
4. Who is the PCBU in labour hire arrangements?
4.1 Labour hire PCBU
The labour hire provider is a PCBU because it operates a business supplying workers to host organisations. Its WHS duties include:
- Vetting host sites and not placing workers into unsafe or uncontrolled environments
- Ensuring workers are appropriately qualified, licensed and competent for the tasks they will perform
- Providing general WHS induction and information, including how workers can raise safety concerns directly with the labour hire PCBU
- Maintaining contact with workers and monitoring their health and safety during placements
Guidance published by Safe Work Australia and various regulators stresses that, in some circumstances, the labour hire PCBU must withdraw workers from a site where it believes there is a risk to health and safety or where risks are not adequately controlled.
4.2 Host PCBU
The host is likewise a PCBU under section 5 and owes a primary duty of care to all workers carrying out work in its undertaking who are influenced or directed by it, regardless of who pays them. For construction hosts this means:
- Ensuring a safe work environment and safe systems of work on the construction site
- Providing site‑specific and task‑specific inductions, supervision and instruction to labour hire workers
- Ensuring plant, equipment and temporary works are safe and properly maintained
- Giving labour hire workers access to welfare facilities, first aid and emergency arrangements equivalent to directly‑employed workers
Safe Work Australia’s labour hire duties tool for PCBUs provides practical examples of these responsibilities.
4.3 Principal contractor and other PCBUs
On larger construction projects, the principal contractor has additional duties under the WHS Regulations, including preparing a WHS management plan and managing high‑risk construction work. Courts and regulators have emphasised that:
- A principal contractor is not automatically responsible for every worker on site in every circumstance.
- However, where the principal exerts significant control over the work environment, sequencing and coordination, it will usually be a PCBU with overlapping duties owed to labour hire workers and subcontractor workers.
The BESS safety risk assessment guide and mobile plant operational standard published by HSE Direct illustrate how principal contractors can structure their controls around complex, multi‑PCBU construction activities.
5. How liability is determined in practice
5.1 Reasonably practicable – section 18
The meaning of reasonably practicable in section 18 is central to how liability is determined. It requires a PCBU to do what is reasonably able to be done, taking into account:
- Likelihood of the hazard or risk occurring
- Degree of harm that might result
- What the PCBU knows, or ought reasonably to know, about the hazard and ways of controlling it
- Availability and suitability of control measures
- Cost of controls, including whether cost is grossly disproportionate to the risk
Courts have repeatedly affirmed that this is a positive, proactive duty. PCBUs must actively identify, assess and control construction risks – they cannot rely on generic paperwork or passively “trust” that someone else is doing the right thing.
5.2 Control, influence and expertise
In labour hire cases, courts and regulators examine:
- Who had day‑to‑day control over the work environment and systems of work
- Which PCBU had the relevant technical expertise to identify and control the risk
- What consultation actually occurred between labour hire and host PCBUs
- Whether the labour hire PCBU made any reasonable effort to verify site safety
For example:
- In Boland v Trainee and Apprentice Placement Service Inc (2016), a placement agency was convicted after failing to consult adequately with the host employer about overhead power‑line risks; the court found that recognising and controlling the obvious hazard was “not rocket science”.
- More recent decisions have clarified that a principal contractor will not always be responsible for every subcontractor worker if they are not truly a worker for the principal’s undertaking and are not directed by the principal.
HSE Direct regularly reviews WHS prosecutions, such as its WHS risk assessment case in review, workplace duty of care case in review and analysis of 900k in WHS fines for ignoring inspectors, to extract practical lessons on how courts evaluate “control” and “reasonable practicability” on construction sites.
5.3 Civil and criminal exposure
Under Part 2 and Part 13 of the model WHS Act, breaches of health and safety duties can give rise to:
- Category 1–3 criminal offences for failure to comply with a health and safety duty, including gross negligence or reckless conduct
- Industrial manslaughter offences in some jurisdictions, targeting the most serious breaches leading to death
- WHS civil penalty provisions, enforceable undertakings and court orders
HSE Direct’s article on industrial manslaughter laws in Australia outlines how these higher‑end offences are being implemented across jurisdictions and what they mean for construction PCBUs.
6. Practical allocation of WHS duties between labour hire and host PCBUs
6.1 Due diligence before placement
A labour hire PCBU should:
- Obtain detailed information about the host’s construction activities, hazards and controls
- Review the host’s WHS management plan, relevant SWMS and site procedures
- Verify the host’s incident history and regulator interactions where reasonably available
- Confirm that appropriate supervision, training and PPE will be provided, and that workers can raise WHS issues without detriment
Hosts should, in turn:
- Provide accurate information about tasks, risks and required competencies
- Clearly identify any high‑risk construction work (for example, confined space, working at heights, drilling and piling, concrete pumping)
- Confirm supervision arrangements, including who is responsible for directing labour hire workers day‑to‑day
HSE Direct assists both labour hire and host PCBUs with WHS audits, third‑party investigations and independent safety consultant support to verify and document these arrangements.
6.2 Induction, training and supervision
To meet section 19 and section 18 obligations in a construction context:
- Labour hire PCBUs should provide general WHS induction, role clarity, and training on how workers can report hazards or cease unsafe work.
- Host PCBUs must deliver site‑specific inductions, task‑specific training and close supervision proportionate to the risk (for example, new workers on confined space entry permits or mobile plant operations).
Coordinated training, documented competency checks and clear supervisory structures are essential to demonstrate reasonably practicable steps have been taken.
6.3 Monitoring, incident response and removal from unsafe sites
Once workers are placed:
- Labour hire PCBUs must maintain effective communication channels to monitor conditions and respond promptly to safety concerns, including removing workers from unsafe sites where necessary.
- Hosts must ensure labour hire workers are integrated into incident reporting, investigation and corrective action systems alongside directly‑engaged workers.
HSE Direct has published multiple case‑based reviews that highlight the consequences of failing to respond effectively to emerging hazards, including A wake‑up call for WHS compliance and analyses of chemical safety failures.
7. Jurisdictional differences and the model WHS Act
The document considered here is the model Work Health and Safety Act, which provides a nationally consistent framework but does not itself have legal effect. Each State and Territory that has adopted harmonised WHS laws has enacted its own WHS Act based on this model, with local variations, transitional provisions and additional offences.
In construction and labour hire contexts, important jurisdictional differences may include:
- The threshold and definition of “construction project” and principal contractor duties
- Specific labour hire licensing regimes and associated WHS conditions
- Industrial manslaughter provisions, penalty levels and sentencing trends
- Codes of practice and guidance issued by State or Territory regulators
HSE Direct’s industry news section tracks these developments, including updates on topics such as the new biological hazards Code of Practice and asbestos compliance framework reviews.
As always, construction PCBUs should obtain jurisdiction‑specific advice from a suitably qualified WHS consultant or legal practitioner. HSE Direct provides expert workplace health and safety consultants across multiple jurisdictions, including safety consultants in Sydney, Armidale and Perth.
8. How HSE Direct supports construction PCBUs with labour hire WHS compliance
Construction businesses engaging or supplying labour hire workers can reduce WHS risk and strengthen their position under the WHS Act by:
- Implementing robust safety management systems aligned with the model WHS Act and relevant regulations
- Undertaking periodic WHS audits focusing on labour hire arrangements, consultation mechanisms and risk controls
- Engaging an independent WHS consultant or OHS consultant to review contracts, SWMS, supervision arrangements and principal contractor obligations
- Using HSE Direct’s technical standards and guidance for high‑risk activities (for example confined spaces, working at heights, drilling and blasting, precast and tilt‑up panels)
HSE Direct also provides specialist support on psychosocial risk solutions, health monitoring and sustainable environmental management, recognising that labour hire workers face not only traditional physical risks but also psychosocial and environmental exposures.
For tailored assistance or to discuss a specific labour hire arrangement on a construction project, you can contact HSE Direct or review the services available on the WHS services and safety consultant pages.
9. Questions and answers: WHS Act, labour hire and construction
Q1. Under the WHS Act, is the labour hire agency or the host the PCBU?
Both are PCBUs. Under section 5, the labour hire provider conducts a business supplying workers and the host conducts a business in which those workers perform work. Each owes a concurrent duty under section 19 to ensure, so far as is reasonably practicable, the health and safety of those workers.
Q2. Are labour hire workers “workers” for both PCBUs?
Yes. Section 7 expressly includes labour hire workers as workers for the labour hire PCBU, and they will usually also be workers for the host PCBU because they carry out work in the host’s business and are influenced or directed by the host.
Q3. Can a principal contractor avoid liability by delegating WHS obligations to subcontractors or labour hire agencies?
No. Duties under the WHS Act are non‑transferable (section 14), and courts have consistently held that principal contractors retain obligations to the extent of their capacity to influence and control the work. However, courts will consider actual control, expertise and the steps taken to verify subcontractor competence when assessing liability.
Q4. What is the role of consultation between labour hire and host PCBUs?
Section 46 requires PCBUs with overlapping duties to consult, cooperate and coordinate their activities so far as is reasonably practicable. Regulators expect documented consultation about hazards, risk controls, training, supervision, PPE, incident reporting and health monitoring.
Q5. Does the WHS Act apply in the same way across all States and Territories?
The model WHS Act provides a harmonised framework, but each adopting jurisdiction has enacted its own WHS legislation with variations in detail, penalties and additional provisions (for example, industrial manslaughter). Construction PCBUs should consult the specific Act, Regulations and codes in their jurisdiction and, where necessary, seek advice from a competent WHS consultant.
Q6. What practical steps should construction PCBUs take to manage WHS risks in labour hire arrangements?
Key steps include thorough pre‑placement due diligence, clear contractual allocation of WHS responsibilities, integrated inductions and training, robust supervision, active monitoring and a documented process for withdrawing workers from unsafe sites. Independent WHS audits and third‑party investigations can provide additional assurance and demonstrate due diligence.