Taking Over a Delayed Build: A WHS Lawyer's Guide to Your Exposure Under QLD's 2024 WHS Laws
KEY TAKEAWAYS
The Electrical Safety and Other Legislation Amendment Act 2024 (Qld) introduced a "negligence" fault element for Category 1 offences under the Work Health and Safety Act 2011 (Qld) from 30 August 2024, which can significantly lower the prosecution threshold for inherited site hazards.
Section 272A expressly prohibits builders from using insurance policies to indemnify against monetary WHS penalties, meaning regulatory fines are likely to be paid directly from your own pocket. The prohibition commenced in stages, with the bans on entering into and providing such arrangements applying from 28 September 2024 and the ban on taking the benefit of an existing arrangement applying from 28 September 2025.
Company officers may face personal liability under section 272B if they authorise or permit their building company to hold or benefit from prohibited WHS penalty insurance arrangements.
Before assuming control of a delayed site, incoming builders should formally audit and document the absence of Safe Work Method Statements (SWMS) to help establish a baseline for section 27 due diligence defences.
You have just signed the contract to take over a half-finished residential build in Brisbane after the original contractor went into liquidation — a scenario that carries its own web of insolvency and completion-cost exposures beyond the safety issues covered here. You walk onto the site on day one and see the previous builder’s roofing trades still working—without edge protection and without a signed Safe Work Method Statement (SWMS) in sight. At that exact moment, the financial pressure of the delayed schedule collides with the reality that you are now the Person Conducting a Business or Undertaking (PCBU) in charge. Under Queensland's newly amended WHS legislation, ignoring those missing documents because it is "not your mess" is no longer just a regulatory risk—it can expose you to criminal negligence.
Immediate Triage: Halting Work and Auditing the Inherited Site
You have just walked onto a delayed, half-built site taken over from a previous builder, only to find trades actively working without SWMS for high-risk activities. At this exact moment, you face a critical decision: immediately halt the non-compliant work to protect your licence, or allow it to continue and risk inheriting the previous supervisor’s safety liabilities. This section outlines the immediate triage steps required to secure the site and draw a hard procedural line between the previous builder's breaches and your tenure.
Suspending non-compliant trades in the first 48 hours
The immediate priority upon taking over a site is to formally suspend any trades who cannot produce a valid SWMS for high-risk construction work. While an incoming builder may be eager to get the project moving, pausing work limits the new PCBU's exposure to inherited risks and manages the transition of safety duties. The WHS duty a builder owes in respect of subcontractor workers on site does not wait for a new subcontract to be signed — as a person with management or control of the workplace under section 20 of the WHS Act, your duty attaches the moment those trades are working under your control.
A Queensland PCBU assuming control of a construction site must verify that all high-risk construction work is supported by a valid SWMS before allowing trades to commence or continue work. For the site supervisor who is physically first on the ground, this is a first-hour task, not a first-week one: walk the site, identify every high-risk activity in progress, and stand down any trade who cannot hand you a current, signed SWMS on the spot. The supervisor's contemporaneous note of who was stood down and when becomes part of the builder's due diligence record.
It is a common mistake for incoming site managers to let "minor" trades finish out the day to avoid conflict or keep the client happy. Doing so can inadvertently transfer liability for that non-compliant work directly to your company. If trades refuse to supply updated safety documentation or comply with your site rules, you may need to consider your options for terminating a construction contract or subcontract, depending on the terms of your engagement.
Documenting existing site hazards before assuming PCBU control
Before allowing any work to resume under your control, you must establish a clear administrative and physical baseline of the site's condition. This evidence is critical to separating the previous builder's safety breaches from your own WHS obligations as a builder in Queensland.
Photograph the physical environment: Capture images of existing unsafe scaffolding, missing temporary fencing, and unprotected penetrations before any of your staff or trades touch them.
Audit the paperwork: Formally record the absence of safety documentation, induction logs, and SWMS left by the previous contractor.
Issue formal notices: Send written directives to all inherited trades stating that previous safety approvals are void and new SWMS must be submitted and approved before re-entry. Treat this internal stop as seriously as a regulator-issued prohibition notice or improvement notice in Queensland — if SafeWork attends and issues one, your own documented directive shows you were already managing the hazard under the WHS Act.
Distinguishing Statutory WHS Liabilities from Contractual Delay Exposure
When managing a distressed site takeover, you must separate your statutory duty to halt unsafe work under the WHS Act from your contractual exposure for delaying the project. While pausing the build to rectify missing SWMS or unsafe scaffolding will cause timeline pressures, statutory WHS obligations generally take priority over contractual schedules, and a contractual deadline is not a defence to a safety breach.
The commercial pressure to reach practical completion quickly does not legally excuse a PCBU from their primary duty of care. Courts and tribunals do not accept contractual deadlines or client frustration as a defence to safety breaches. A builder who allows unsafe work to continue simply to avoid liquidated damages risks trading a manageable commercial dispute for a statutory prosecution. That trade is rarely rational once the figures are compared: liquidated damages on a stalled residential build typically run to a capped daily rate, whereas a Category 1 or industrial manslaughter conviction reaches into the millions and, for officers, personal imprisonment. The delay is recoverable; a conviction is not.
The 2024 Category 1 Trap: Why "Negligence" Changes the Legal Threshold
The days of requiring regulators to prove a builder acted with flagrant "recklessness" to secure a Category 1 conviction are over. With the introduction of the negligence standard, failing to enforce basic site safety protocols—like verifying SWMS on a site you just took over—is a statutory liability pathway that can now directly expose you to the most severe penalties under the WHS Act 2011.
How the section 31 amendment removes the "recklessness" requirement
Introduced by the Electrical Safety and Other Legislation Amendment Act 2024 (Qld) and commencing on 30 August 2024, the amendment fundamentally lowers the prosecution threshold by introducing "negligence" as a fault element for a Category 1 offence — a change builder operating in Queensland should treat as current law, not a proposal on the horizon. Historically, establishing this offence required proof of reckless conduct, which often proved difficult for regulators to demonstrate in complex residential building scenarios. Under the Electrical Safety and Other Legislation Amendment Act 2024 (Qld), a builder's failure to do what is reasonably practicable—within the meaning of section 18 of the WHS Act—amounting to gross negligence, may now be sufficient to trigger severe penalties.
Under section 31 of the WHS Act, builders commit a Category 1 offence if they expose any individual owed a health and safety duty to a risk of death, serious injury, or illness without reasonable excuse. Courts may consider the failure to rectify an inherited site hazard as negligent conduct, which can increase the likelihood of conviction if an incident occurs.
Under the 2024 amendments to the Queensland WHS Act, a Category 1 offence can be established by proving negligence, removing the previous burden of proving reckless conduct.
Expanding liability to sub-trades, site visitors, and clients
Expert insight: In practice, the people who get hurt on a residential takeover are rarely the roofers everyone is watching. They are the homeowner who "just popped in" to see progress, the concrete truck driver reversing up a churned-up driveway, or the client's teenage kid wandering the frame on a Saturday. These are exactly the individuals a builder assumes are someone else's problem — and exactly the ones the primary duty of care under section 19 of the WHS Act does not carve out.
On a residential job, the client feels a sense of ownership over the site and will let themselves in unannounced. That is the single most common blind spot on handovers. A worker refusing to enter an unsafe zone will usually make noise about it; a roaming homeowner will walk straight under an unguarded penetration without a second thought.
The primary duty under section 19(2) extends to persons other than workers, and the amended section 31 sharpens this because you no longer need to have been reckless about that visitor's safety. If you knew clients were wandering the site and took no reasonable steps — no signage, no induction, no controlled access — a failure to guard against a foreseeable visitor injury can now be framed as negligence rather than mere oversight.
Tactically, the fix on day one is simple and worth documenting: lock down access with perimeter fencing and a single controlled entry point, put a standing written direction to the client that inspections happen by appointment and escorted only, and add delivery drivers to your traffic management and induction process rather than treating them as passing traffic. If you are unsure how these expanded duties impact your site handover protocols, consider obtaining advice from a WHS lawyer or Queensland building and construction lawyers.
The industrial manslaughter exposure of inherited missing SWMS
Example: Suppose you assume control of a residential project and allow the previous builder's roofing contractor to finish laying sheets for the afternoon without first verifying their SWMS or ensuring edge protection is compliant. If that roofer falls, your failure to halt work and verify safety documentation can be relied on as evidence of gross negligence under the new statutory framework. A fall from height builder prosecution is one of the most common enforcement scenarios in residential construction, and inheriting the hazard does not soften the regulator's approach. With 188 Australian workers losing their lives at work in 2024, regulators remain focused on site fatalities, and inheriting another builder's hazard without acting may significantly elevate your WHS prosecution risk.
The numbers on conviction are not abstract: a Category 1 offence exposes an individual to a maximum penalty in the hundreds of thousands of dollars and up to five years' imprisonment, and a body corporate to a maximum in the millions—penalties being expressed in penalty units and converted to dollar figures under section 181B of the Penalties and Sentences Act 1992 (Qld) — while an industrial manslaughter conviction under Part 2A of the Work Health and Safety Act 2011 (Qld)—section 34C for a PCBU and section 34D for a senior officer—carries a maximum of 20 years' imprisonment for an individual and, for a body corporate, a maximum of 100,000 penalty units (in the order of $10 million or more, depending on the prevailing penalty unit value). Under these circumstances, courts may assess your inaction as directly exposing the worker to a risk of death or serious injury, satisfying the elements of a Category 1 or industrial manslaughter charge.
The Section 272A Insurance Prohibition: Fines Paid from Your Own Pocket
If you are assuming your Management Liability or D&O insurance policy will simply cover the cost of a regulatory fine if a site handover goes wrong, you are mistaken. Section 272A voids any policy purporting to indemnify you against WHS penalties, transferring the cost directly to the company — and potentially to you personally via section 272B.
The statutory ban on indemnifying against WHS monetary penalties
The section 272A prohibition creates three distinct offences: it is an offence, without reasonable excuse, to enter into, to provide, or to take the benefit of an insurance contract or other arrangement that purports to indemnify a person for all or part of a monetary penalty under the WHS Act, each carrying a maximum penalty of 500 penalty units. It is an offence for a builder or an individual to hold, enter into, or benefit from an insurance policy that covers monetary fines imposed under the WHS Act. This prohibition means that any existing insurance policies are void to the extent that they offer this specific cover, as reinforced by WorkSafe Queensland’s guidance on the prohibition on insurance.
Why your Management Liability policy is void for regulatory fines
Expert insight: The conversation with a principal usually goes the same way. They forward the broker's summary, point to the "statutory liability" or "WHS defence costs" line, and treat it as proof they are covered. What they have actually bought is a lawyer to run the defence — not a cheque to pay the fine if the defence fails.
That distinction is where the pain lands. Defence costs cover keeps the meter running on your representation during the investigation and prosecution. The monetary penalty on conviction is a separate line item, and s272A voids any part of the policy that purports to pick it up.
The trap is that both sit in the same policy schedule, often under headings that read as if they are one product. Principals see a healthy limit against "statutory liability" and assume the whole outcome is insured. When the penalty is handed down, they discover the insurer will fund the fight but not the fine.
Two practical steps are worth taking now. Ask your broker in writing to confirm, clause by clause, which parts of the policy respond to defence costs versus any monetary penalty — and expect the penalty response to be nil or void in Queensland. And do not restructure the policy to disguise a penalty indemnity as something else, because holding or benefiting from that arrangement is itself the s272A offence. If you are uncertain about how this affects your specific coverage, it is prudent to seek advice from a commercial lawyer in Queensland.
Section 272B personal liability for officers authorising prohibited cover
The prohibition on insurance also creates a separate exposure channel for company executives. Under the section 272B officer liability provisions, company officers of a building company—an "officer" taking the meaning given by the Corporations Act 2001 (Cth) as applied by the dictionary to the WHS Act—can be held personally liable if they authorise or permit the company to enter into a prohibited insurance arrangement for WHS fines. As outlined in the Review of the Work Health and Safety Act 2011 Final Report, if the body corporate commits an offence against section 272A, courts may determine that directors or senior managers who permitted the conduct are also guilty of the offence.
Working With a WHS Lawyer to Activate Your Due Diligence and "Reasonable Excuse" Defences
Assuming control of a compromised site does not mean you are automatically guilty of the previous builder's sins—provided you act immediately. By establishing clear administrative boundaries and fulfilling your officer obligations from day one, you can map out a solid procedural mechanism for defending against regulator scrutiny.
Establishing a "reasonable excuse" position against inherited safety breaches
Documenting the state of an inherited site and immediately halting unsafe work serves as a critical evidence factor if the regulator intervenes. If a SafeWork Queensland builder investigation occurs shortly after you take control, comprehensive day-one documentation can help establish that any exposure occurred with "reasonable excuse", an element the prosecution must exclude under section 31 of the WHS Act. This evidence demonstrates that the hazard was pre-existing and that you were actively managing the risk according to your statutory duties.
A Queensland builder may rely on the "reasonable excuse" element within section 31, together with evidence of due diligence, if they can evidence that they took all reasonable, immediate steps to rectify inherited safety hazards upon assuming site control.
Meeting section 27 officer due diligence obligations on a newly taken-over site
Officer duties under WHS law for builders are proactive, not passive: officers of a building company must exercise due diligence under section 27 of the WHS Act, and this duty is acute when acquiring an active project. Satisfying this obligation requires you to direct the new site supervisor to conduct an immediate safety audit, verify the licences of all inherited trades, and demand updated SWMS before allowing tools to be picked back up. Courts typically look for evidence of these immediate, system-driven actions to assess whether an officer took reasonable steps to understand and mitigate the hazards associated with the newly acquired site.
Why subcontract indemnity clauses cannot shield builders from primary WHS duties
Incoming builders often require existing trades to sign new subcontracts containing strong subcontract indemnity clauses designed to transfer liability. While the intended function of an indemnity clause is to protect the head contractor from a subcontractor's failures, this protection may be limited by statutory prohibitions against contracting out of WHS duties, namely section 14 (which provides that a duty cannot be transferred to another person) and section 272 of the WHS Act (which renders any term of an agreement purporting to exclude, limit or modify a WHS duty void). A subcontract indemnity might cover commercial losses or property damage, but it cannot legally transfer a PCBU's primary duty of care. If a court assesses that a builder relied on paper indemnities while failing to physically verify SWMS or site safety, the builder may still face direct prosecution under the WHS Act, rendering the contractual clause ineffective against regulatory fines or Category 1 charges.
Conclusion
Standing on that delayed residential build in Brisbane and watching roofers work without edge protection or valid Safe Work Method Statements might feel like a purely commercial problem left behind by the previous contractor. It is not. Under the amended Queensland WHS legislation, inheriting and ignoring another builder's safety hazard is a direct legal exposure issue.
The Electrical Safety and Other Legislation Amendment Act 2024 (Qld) means that regulators no longer need to prove you were "reckless" to pursue a Category 1 offence—a failure to take reasonable care that exposes an individual to risk can now trigger negligence charges. Furthermore, the section 272A insurance prohibition ensures that if you are fined for turning a blind eye to those missing SWMS, your Management Liability policy cannot legally cover the penalty. Those fines may ultimately come directly out of your company’s capital or your personal assets.
Do not let the commercial pressure of a delayed schedule dictate your safety compliance. Before any trade picks up a tool on an inherited site, formally suspend high-risk work, photograph the existing hazards, and demand updated SWMS. By drawing a hard procedural line on day one, you establish the baseline required for your section 27 due diligence defence and protect your licence from the previous builder's mistakes.
FAQs
What is a Category 1 offence under the Queensland WHS Act 2011?
A Category 1 offence occurs when a person with a health and safety duty exposes an individual to a risk of death or serious injury without reasonable excuse. Following the Electrical Safety and Other Legislation Amendment Act 2024 (Qld), which took effect on 30 August 2024, this offence can now be triggered by negligence, rather than requiring the regulator to prove reckless conduct. This means Queensland builders may face severe penalties for failing to take reasonable care on site.
Can my building company use insurance to pay for WHS fines in Queensland?
No, section 272A of the Queensland WHS Act strictly prohibits entering into or benefiting from insurance policies that indemnify against monetary penalties. Policies are void to the extent they offer this cover, meaning any regulatory fines must typically be paid from company or personal assets. However, depending on the specific policy wording, insurance may still cover legal defence costs incurred during an investigation.
Can company directors be personally liable if the business has prohibited WHS insurance?
Yes, company officers can face personal liability under section 272B if they authorise or permit their building company to hold prohibited insurance for WHS fines. If the body corporate commits an offence under section 272A, directors who permitted the arrangement are likely to be deemed to have also committed the offence. This may create a significant personal financial risk for Queensland builder principals.
Do I need a SWMS before taking over high-risk work from a previous builder?
Yes, a Queensland PCBU must ensure a valid Safe Work Method Statement (SWMS) is in place before any high-risk construction work commences or resumes. Inheriting a site does not remove your primary duty of care, and allowing trades to continue without documentation may be relied on as evidence of negligence. Halting work to verify safety paperwork can help establish a due diligence defence if the regulator investigates.
Will a subcontract indemnity clause protect me from WHS prosecution in Queensland?
A subcontract indemnity clause cannot legally transfer a head contractor's primary statutory WHS duties to a subcontractor. While these clauses are often used to allocate commercial risk, statutory prohibitions against contracting out of safety duties severely limit their effectiveness in regulatory matters. Courts may still hold the head contractor directly liable if they fail to physically manage site safety, regardless of the paper indemnity.
Does my duty of care extend to site visitors and delivery drivers?
Yes, the WHS duties of a Queensland builder extend to any individual whose health and safety may be put at risk by the construction work, including visitors, clients, and delivery drivers. The Category 1 and industrial manslaughter provisions apply to exposing any owed individual to risk, not just direct employees. Builders must enforce site safety compliance strictly across all parties to effectively manage this exposure.
This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law
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