Can You Outsource Your Inspection Programs?
We often encounter businesses which rely on other companies to inform them of when inspections, certifications or assessments are due for renewal.
A good example is fire equipment.
Fire equipment is often only serviced when the previously used external provider contacts the company and reminds them they’re due for renewal.
What Happens If Your External Provider Doesn’t Trigger An Inspection Or Service?
What happens if your provider:
Loses their records,
Ceases operations or
Changes business practices without fully communicating those changes to you.
Do your systems have to ensure your activities are still undertaken?
A recent court case provides some guidance here.
Recent Court Case
SafeWork NSW v Investa Asset Management (IAM) Pty Ltd [2019] NSWDC 472 (19 August 2019)
Two workers from a cleaning company were using a BMU on one of the office buildings managed by IAM to wash the building's external windows. The BMU's fatigued load-bearing bolts failed, and the unit plummeted about 30 metres onto the building's awning.
It was determined that the unit’s 10-year service and inspection had not been carried out and fatigue cracks in the bolts were present leading to the incident occurring.
Investa had embarked on a process of sending a scope of works to each of its external service providers and asking them to outline the budget for regular maintenance on each piece of equipment they were responsible for.
What Did The Court Decide?
The case made it clear that companies are not allowed to rely on external providers to ensure safety critical services and inspections are undertaken at the required frequency, even when that job is included in contractual agreements.
The Judges Commentary
"As part of the due diligence exercises involved in... [the project, Investa] sought to contractually bind BMUS to inform it of the need for a major inspection. For the reasons I gave in the verdict judgment as a matter of contract law, those attempts were ineffectual," Judge Scotting said.
"I accept that [Investa] and BMUS may have proceeded on the assumption that BMUS would advise [Investa] of the need for a major inspection. However, that is not particularly mitigating because [Investa] was not entitled to rely on BMUS to inform it of the need for a major inspection, even if BMUS had been contractually bound to do so," he said.
Judge Scotting went on to find that Investa and BMUS were similarly culpable, and fined the former $400,000 from a maximum $1.5 million.
BMUS was also handed a nominal fine of $400,000, prior to the discount for its guilty plea.
What You Need To Do
You need to make sure your company has clear systems and process in place, such as a Safety Business Plan or Safety Calendar. You need to capture and monitor all service and inspection dates for all relevant:
Equipment
Tools
Plant
Services
This will ensure the dates are identified and actioned regardless of the action or inaction’s of external providers.
