Principal Contractor: What Building Owners and Facilities Managers Must Know

When a building commissions a refurbishment, a fit-out, or a plant replacement big enough to count as a construction project, someone has to run that work under work health and safety law as the principal contractor. If nobody is appointed, under the model laws the role lands on the business that commissioned the work, often the owner itself, acting through its facilities team. In Victoria it is the owner.

This guide is for facilities managers and owners' representatives in property and facilities management who commission that work. It covers who holds the role by default, how to appoint one properly, what each side owes, and the checks to run before you sign an appointment letter. The examples are illustrations, not customers.

What Is a Principal Contractor?

A principal contractor is the business that holds the extra work health and safety duties for a construction project, which under the model WHS Regulations is construction work costing AU$250,000 or more, or AU$350,000 or more in Victoria.¹²³ Under the model Regulations, by default it is the business that commissions the project; in Victoria it is the owner (r 333).⁴ Another business takes the role only when the commissioning business engages it as principal contractor and authorises it to have management or control of the workplace and to discharge the principal contractor's duties.¹

A construction project has only one principal contractor at any specific time.¹ One business puts up the sign and writes the WHS management plan, which sets out how the businesses on the job consult, cooperate, and coordinate.

The term is easily confused with three others. It is a different term from the "principal" in a construction contract, though under the model rule that principal, the party that commissions and pays for the work, is the principal contractor by default unless it engages and authorises someone else. It is not a tax term, so whether someone with an ABN counts as a contractor or an employee does not decide it. And guidance written for the United Kingdom describes a different law with different duties.

When Is a Job a Construction Project?

When it is construction work and that work costs AU$250,000 or more, or AU$350,000 or more in Victoria.¹⁵³ Construction work is wide. The model definition takes in fitting-out, renovation, repair, maintenance, and refurbishment of a structure, and the installation, testing, or maintenance of an essential service, while leaving out testing, maintenance, or repair work of a minor nature (regulation 289).¹ An office floor refurbishment or a tenancy fit-out is plainly in. A routine filter change is not.

Plant replacement needs a closer look. The construction chapter of the model Regulations does not apply to plant unless the plant falls in a listed set, which includes work on plant that relates to construction work, and outage or overhaul work on fixed plant that may involve 5 or more businesses at any one time (regulation 290).¹ When a chiller swap also needs building work around it, such as new plinths, slab penetrations, or structural supports for a crane lift, that building work is alteration of a structure and so construction work in its own right.

Victoria writes its own definition. Its construction work covers the construction, alteration, fitting out, renovation, refurbishment, or demolition of a building or structure, and leaves out routine or minor testing, maintenance, or repair work (Occupational Health and Safety Regulations 2017, r 321).⁴ Its AU$350,000 is valued the way the Building and Construction Industry Security of Payment Act 2002 values a construction contract, and applies where the construction contract was entered into on or after 1 July 2014 (r 332).⁴³

How the Project Cost Is Counted.

Safe Work Australia's construction code says the cost can be set by the contract price for carrying out the work.⁵ It lists what may be included: project management costs, the cost of fittings and furnishings including any refitting or refurbishing associated with the work, and taxes, levies, or charges other than GST.⁵ It should not include the cost of the land, marketing or financing the development, or legal work.⁵ So, outside Victoria, count the contract price with project management and fit-out included, GST left out.

A refurbishment under the threshold on building work alone can cross it once project management and new joinery are counted. Count it before the contract is let, and write the figure and the method on the file.

The code also says how long a project lasts: a construction project covers the activities involved in the construction work up to the point where it is handed over to the person who commissioned it.⁵ For a facilities team, that handover is the moment the floor, the plant room, or the roof comes back under the building's control, and it deserves the same paperwork as the hand-out.

Who Is the Principal Contractor When a Building Owner Engages Contractors?

The building owner, where the owner is the business that commissions the project and appoints no one else. The model rule says a business that commissions a construction project is, subject to the rest of the regulation, the principal contractor for the project (regulation 293).¹ Queensland's Regulation uses the same words, and WorkSafe Queensland describes the commissioning business as "often referred to as the client".⁶²

Hiring a project manager does not move the duty. The construction code says that people who represent the commissioning business and coordinate the commissioning, such as project managers, construction managers, architects, or engineers, leave the business that actually commissions the work as the duty holder.⁵ In a property portfolio, a useful starting point is which business signs the head contract in its own right. Where a facilities management company engages the builder as the owner's agent, the business that actually commissions the work stays the duty holder, so the management agreement should record which business commissions major works.

There is one exception in the model rule, and it is residential. Where an individual who owns residential premises directly or indirectly engages a business for a construction project on them, the business engaged is the principal contractor if it has management or control of the workplace (regulation 293(3)).¹ That covers a homeowner's renovation. It does not help a company that owns a commercial building.

How to Appoint a Principal Contractor Properly.

Do two things, and record both. The model rule makes another business the principal contractor only if the commissioning business "engages another person conducting a business or undertaking as principal contractor for the construction project and authorises the person to have management or control of the workplace and to discharge the duties of a principal contractor".¹ Signing a building contract is not enough on its own: the role moves only when the business is engaged as principal contractor and authorised as well.

In practice, authorising management or control means handing over a defined part of the building: the plant room and roof, or one floor and its riser, with the access routes, the goods lift, and the loading dock times written down. If the building team keeps issuing permits, controlling access, and directing work inside that area, the record no longer matches the authorisation. WorkSafe Queensland says only one business can have management or control of a defined workplace at any given time, and recommends that any authorisation or appointment of a principal contractor be documented and signed by the parties.²

Handing over authority does not hand over your duties. Under the model WHS Act a duty cannot be transferred to another person (section 14), and where duty holders share a duty, each must meet it to the extent of its capacity to influence and control the matter, or the capacity it would have had but for an agreement or arrangement purporting to limit or remove that capacity (section 16(3)(b)).⁷ Each duty holder also retains responsibility for its own duty (section 16(3)(a)), so an agreement that purports to limit the owner's capacity to influence and control the matter does not reduce what its duty requires. WorkSafe Queensland agrees: a business can authorise a contractor to have management or control of a construction workplace, but cannot transfer any duty in relation to it.²

What Does a Principal Contractor Have to Do?

It takes on duties on top of the general construction duties, plus those of a person with management or control of a workplace (regulation 307).¹ For some duties below, the maximum penalty tier under the model Regulations is shown in brackets.

Signs must show the principal contractor's name, its telephone numbers including an after-hours number, and the site office location if there is one, and be clearly visible from outside the workplace or the work area (regulation 308; tier G).¹ In an occupied tower, signs at the hoarding on the floor and at the loading dock are a practical way to make them visible from outside the work area.

The WHS management plan must be written before work on the project starts (regulation 309; tier E).¹ It must include:

• the names, positions, and health and safety responsibilities of everyone with a specific safety role on the project;
• the arrangements between the businesses at the workplace for consultation, cooperation, and coordination;
• the arrangements for managing work health and safety incidents;
• any site-specific health and safety rules, and how everyone at the workplace is told about them;
• the arrangements for collecting, assessing, monitoring, and reviewing safe work method statements.

The principal contractor must ensure, so far as is reasonably practicable, that each person who will carry out construction work is made aware of the plan's content and of their right to inspect it before they start (regulation 310), and must review and, as necessary, revise the plan to keep it up to date, telling people doing the work about any revision so far as is reasonably practicable (regulation 311), both tier G.¹

SWMS, Site Arrangements, and Induction.

The principal contractor must take all reasonable steps to obtain a copy of the safe work method statement for high risk construction work before that work starts (regulation 312; tier G).¹ Each business that carries out the high risk work must make sure a SWMS is prepared, or has already been prepared by someone else, before the work starts (regulation 299).¹ On a building job, look for a risk of a fall of more than 2 metres, likely disturbance of asbestos, work on or near refrigerant lines or energised electrical installations, and moving powered mobile plant (regulation 291).¹ Our guide to what a SWMS must include covers the document itself.

It must also put in place arrangements for the conditions the whole site shares, among them first aid, emergency plans, falling objects, and falls (regulation 314; tier E).¹ And it must manage the risks of construction materials and waste, plant not in use, traffic near the workplace that the work may affect, and essential services at the workplace (regulation 315).¹

Three duties reach wider than the principal contractor. Whoever has management or control of a workplace where construction work is carried out must ensure, so far as is reasonably practicable, that it is secured from unauthorised access (regulation 298).¹ A business that engages a worker for construction work must provide general construction induction training if the worker has none, or completed it more than 2 years ago and has not done construction work in the past 2 years (regulation 316).¹ And no business may direct or allow a worker to carry out construction work without that training, current on the same 2-year test (regulation 317).¹

What the Commissioning Business Still Owes.

Appointing a principal contractor leaves the commissioning business with three duties of its own, each tier G under the model Regulations. It must, so far as is reasonably practicable, consult the designer of the structure about eliminating or minimising design risks during the construction work, and that consultation must include giving the designer the hazard and risk information it holds (regulation 294).¹ If it did not commission the design, it must take all reasonable steps to obtain the designer's written safety report (regulation 295).¹ And it must give the principal contractor any information it has about hazards and risks at or near the workplace (regulation 296).¹

In an older building that includes the asbestos register. Before refurbishment, the person with management or control of the workplace must ensure the register is reviewed, and revised if it is inadequate for the work (regulation 448; tier G).¹ Before the refurbishment of a structure or plant constructed or installed before 31 December 2003, the person with management or control of the workplace must ensure the business doing the refurbishment is given a copy of the asbestos register before the work starts (regulation 449).¹

The building's own duty stays too. The person with management or control of a workplace must ensure, so far as is reasonably practicable, that the workplace, the means of entering and exiting it, and anything arising from it are without risks to the health and safety of any person (section 20).⁷ The owner still controls the lobby, the lifts, and the floors its tenants occupy. Safe Work Australia's own renovation example lists the building owner and property manager among the businesses a principal contractor shares duties with, and puts their coordination in the WHS management plan.⁸

Where duties overlap, each business with the duty must, so far as is reasonably practicable, consult, co-operate, and co-ordinate activities with the others (section 46; tier C).⁷ Our guide to the duty to consult, cooperate, and coordinate shows what that looks like between owners, tenants, and contractors.

How Victoria and Queensland Differ.

Victoria is the only jurisdiction that has not implemented the model WHS laws.⁹ Under its OHS Regulations 2017, the principal contractor rules apply to construction projects costing AU$350,000 or more, against AU$250,000 under the model Regulations.⁴³² The owner is the principal contractor of the workplace unless the owner both appoints a principal contractor and authorises it to manage or control the workplace to the extent necessary to discharge the principal contractor's duties (r 333).⁴ Victoria names the owner, where the model names the business that commissions. In every other state and territory, start from the model rules above and check your own state's Regulation and penalty figures.

A Victorian principal contractor must put up signs showing its name and contact telephone numbers, and must prepare a health and safety co-ordination plan before work starts and keep it up to date for the duration of the work (rr 334 and 335).⁴ The plan has four required contents rather than the model's five (r 336).⁴

Queensland follows the model wording, with the same AU$250,000 threshold (Victoria's is AU$350,000) and the same appointment test.⁶³ WorkSafe Queensland also says that below the threshold the work is not a construction project and a principal contractor cannot be appointed.²

What Are the Penalties for a Principal Contractor?

The model Regulations print penalty tiers, not dollar amounts: tier E for preparing the WHS management plan, and tier G for signage and for obtaining SWMS.¹ The model WHS Act turns each tier into dollars in Schedule 4, as base amounts indexed each 1 July, and each tier has a separate maximum for an individual and a higher one for a body corporate; each jurisdiction sets its own figures.⁷ In the model Act's base table (as at 5 December 2025), tier E carries higher maximums than tier G, and for both tiers a body corporate's maximum is 5 times an individual's.⁷

Victoria and Queensland write their penalties in penalty units. Victoria's signage duty carries a maximum of 100 penalty units for a natural person and 500 for a body corporate (r 334).⁴ In Queensland the signage duty carries a maximum of 36 penalty units and preparing the plan 60, for an individual.⁶ A court may fine a body corporate up to 5 times those, 180 and 300 penalty units (Penalties and Sentences Act 1992 (Qld), sections 181B and 181C).¹⁰ Check your state's current penalty unit value before converting to dollars.

A Chiller Replacement in an Occupied Office Tower, Worked Through.

An owner's facilities team runs a fully tenanted office tower built in the 1990s, and the owner commissions the replacement of two rooftop chillers, with new plinths, a crane lift over the roof, and new refrigerant pipework through the plant room. The job is well over the threshold, so it is a construction project. Office cleaners work the floors each night, a security contractor runs the lobby and the loading dock, and the fire services contractor is on site every month.

The team does not run construction sites, so it engages and authorises the mechanical contractor as principal contractor, after checking four things. The draft WHS management plan names the site supervisor and safety roles, sets out coordination with the building's security, cleaning, and fire services contractors, and covers incidents, site rules, and SWMS review. A SWMS is promised for each high risk activity: refrigerant lines, energised work at the main switchboard, the crane lift, and work near the roof edge. The signage plan covers the roof access door and the loading dock. And every worker has general construction induction training on record before the building's own site induction.

The appointment letter names the workplace precisely: the roof, the plant room, the riser to the roof, and the loading dock between 6am and 7am on lift days, from the start date to handover. Everything else stays with the facilities team. Before work starts, the team gives the contractor the asbestos register, the roof structure drawings, and its known hazards, including a fragile skylight and the night cleaning schedule, and records the date and what was given.

What it keeps: the signed letter and a marked-up plan of the area, the WHS management plan and each revision, the SWMS received, the hazard information record, weekly coordination notes, and the signed handback. If an inspector asks who controlled the plant room on a given Tuesday, the answer is one page.

When the Job Is Under the Threshold.

Take a smaller job in the same tower: a tenant's meeting rooms repartitioned and a ceiling replaced on one floor, well under AU$250,000 (or AU$350,000 in Victoria).²³ That is not a construction project, so there is no principal contractor and no WHS management plan under those rules.²

Under the model laws, most of the duties remain. The commissioning business must still consult the designer so far as is reasonably practicable, because that duty applies to construction work whatever it costs.¹ The partitioning contractor still needs a SWMS if the ceiling work carries a risk of a fall of more than 2 metres, and its workers still need general construction induction training.¹ The building keeps management or control of the floor, and must, so far as is reasonably practicable, consult, cooperate, and coordinate with the tenant, the cleaners, and the contractor wherever they share a duty on the same matter (section 46).⁷ In an older building, the asbestos register still goes to the contractor before refurbishment starts.¹ In Victoria, the OHS Act 2004 and OHS Regulations 2017 apply instead.⁹⁴

The Checklist Before You Sign an Appointment Letter.

Run these checks with the builder's documents in front of you, before anyone signs.

• The cost has been counted the way the code counts it (in Victoria, the way r 332(2) values it), project management and fit-out included and GST left out, so you know whether the principal contractor rules apply.
• The letter says the business is engaged as principal contractor and authorised to have management or control of a defined workplace, described by floor, room, access route, and dates, and both parties have signed it.
• The builder's capability to run the project has been checked, its licences included, before the letter is drafted; our guide to prequalifying a contractor sets out what to look at.
• The WHS management plan names the people with safety roles, sets out coordination with your security, cleaning, and fire services contractors and your tenants, and covers incidents, site rules, and SWMS review.
• A SWMS is listed for every high risk construction activity on the program, with the date each will be supplied before that work starts.
• The signage plan shows the name, phone numbers including after hours, and where the signs will be seen from outside the work area.
• Every worker has general construction induction training on record, and your building's own site induction is booked.
• Your hazard information, the asbestos register included, is ready to give the builder, and the date you give it will be noted on the file.
• The designer has been consulted, so far as is reasonably practicable, with your hazard information; and if you did not commission the design, you have taken all reasonable steps to get the designer's safety report.
• A coordination meeting is set with security, cleaning, and the tenants on the floors above and below.
• The handback is written down: who inspects the area, when management or control returns to the building, and who signs.

Keep every item with the contract. What you gave the builder, and when, is what shows the authorisation was real rather than a line in a contract.

Keeping Contractor Documents and Sign-Ins in One Place.

In ComplyFlow, what a contractor must provide is bundled into Requirement Sets: a prequalification set holds the forms and documents a supplier company must provide to qualify, a site set holds what must be completed to access a particular site, and invitations, reminders, and renewals when a document expires run from there, as the Onboarding Requirements guide describes.¹¹ Our contractor prequalification page shows how that works.

At the gate, each sign-in point in site access can carry a site induction, completed at sign-in when it is due and recorded, and can display site documents such as asbestos registers, traffic management plans, and site plans as the last step of signing in, as the Live Access sign-in guide sets out.¹² Sign-ins and sign-outs go into the Sign In Book as a live register of who is on site.¹²

Decide Who Holds the Floor Before Anyone Picks Up a Tool.

The principal contractor question is settled on paper weeks before work starts, or it is found to have been settled by default on the day something goes wrong. A facilities team that has counted the cost, written down exactly which areas the builder controls and when they come back, and noted what it gave the builder can answer an inspector, an insurer, or a tenant in one page. To see contractor documents, inductions, and site sign-ins on one record, book a demo.