Principal Contractor WHS Obligations — Managing Subcontractor Safety in NSW
Their failure is your problem. WHS Act s.16 means your duty of care extends to every subcontractor worker on your site.
Duty extends to ALL workers on site
WHS Act 2011 s.16 provides that more than one person can have a duty in relation to the same matter. A principal contractor's duty under s.19 extends to workers of other PCBUs (subcontractors) who work on the same site. Section 20 imposes a specific duty on a PCBU who manages or controls a workplace to ensure, so far as is reasonably practicable, that the workplace and anything arising from the workplace does not pose risks to the health and safety of any person. For a principal contractor, this means you cannot contract away your safety obligations. A subcontractor's failure to provide safe systems of work for their own workers creates a liability for the principal contractor if the principal contractor had the capacity to influence or control the relevant conditions.
WHS Act 2011 s.16, s.19, s.20
WHS Management Plan
WHS Regulation 2025 s.309 requires a WHS management plan for construction projects valued at more than $250,000. The plan must address how WHS will be managed across the project, including subcontractor management arrangements. This includes the process for verifying subcontractor qualifications, insurance, and safety documentation before they commence on site. It must detail induction requirements, SWMS collection and review processes, consultation arrangements between the principal contractor and subcontractors, and incident management procedures. The plan is not a generic document — it must be specific to the project and updated as the project evolves.
WHS Regulation 2025 s.309
SWMS review obligations
WHS Regulation 2025 s.299 to s.302 require the principal contractor to collect and review subcontractor SWMS for high-risk construction work before that work begins. Review means confirming that the SWMS addresses the site-specific hazards, includes realistic and adequate controls, and has been signed by the workers who will perform the work. It does not mean rubber-stamping a document you have not read. A principal contractor who approves a generic, non-site-specific SWMS has not discharged their review obligation. The practical standard is: would this SWMS, if followed, actually protect the workers performing this task at this site?
WHS Regulation 2025 s.299-302
Diona v SafeWork NSW (Nov 2024)
The Industrial Relations Commission decision in Diona v SafeWork NSW (November 2024) clarified the scope of principal contractor liability. The IRC revoked an improvement notice against a principal contractor where the subcontractor had specialist expertise and had prepared an adequate SWMS for the work. However, the decision also confirmed that principal contractors cannot simply delegate all safety responsibility to subcontractors. The principal contractor must have systems in place to verify subcontractor compliance, must collect and review SWMS, and must intervene when they observe or become aware of unsafe work practices. The case reinforced that the extent of the principal contractor's obligation depends on the degree of control and influence they exercise over the work.
Diona v SafeWork NSW [2024] IRComm (Nov 2024)
Officer due diligence
Section 27 of the WHS Act requires officers (directors, senior managers) of a principal contractor to exercise due diligence to ensure the PCBU complies with its WHS duties. This includes knowing about WHS hazards on the project, understanding the operations including subcontractor activities, ensuring appropriate resources and processes for managing subcontractor safety, and verifying that those processes are being used. Due diligence failure is a personal liability offence. Fines for officers are uninsurable in NSW since 10 June 2020 under s.272A. An officer who cannot demonstrate they took reasonable steps to ensure subcontractor compliance has no defence.
WHS Act 2011 s.27, s.272A
Right to stop subcontractor work
A principal contractor can and should stop subcontractor work if the subcontractor is operating outside their SWMS, violating site rules, or creating risks to other workers on site. Failing to stop unsafe work when you have the power to do so strengthens any future prosecution case against the principal contractor. The WHS Act does not require you to wait for an incident before acting. If you observe a hazard or a breach, your duty of care requires you to intervene. Documenting the intervention — what was observed, what action was taken, and what was communicated to the subcontractor — creates evidence of active safety management.
WHS Act 2011 s.19, s.20
Penalties for principal contractors
Principal contractors face the same penalty structure as any PCBU. Body corporate penalties for Category 2 offences reach approximately $2,235,363. Officer penalties reach approximately $447,122 personally. Industrial manslaughter penalties reach $20 million for a body corporate and 25 years imprisonment for an individual. All WHS fines in NSW are uninsurable since 10 June 2020. The most commonly prosecuted category is Category 2, which requires only that the failure to comply with a duty exposed a person to a risk of death, serious injury, or serious illness. No actual injury is required. No recklessness is required. Exposure to risk is sufficient.
WHS Act 2011, Penalties Schedule; WHS Act 2011 s.272A
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