The language and terminology used in relation to work health and safety (WHS) can be confusing. It is derived from law and is therefore sometimes intentionally broad or difficult to express in a different way without losing a complex meaning. The term ‘person conducting a business or undertaking’, or PCBU is one such example. In this article, we discuss what is and isn’t a PCBU.
Person conducting a business or undertaking
The Work Health and Safety Act 2011 places the primary duty of care and various other duties and obligations on a PCBU. The PCBU has the ultimate responsibility for WHS and cannot pass that responsibility on to someone else.
The meaning of PCBU is set out in section 5 of the WHS Act.
PCBU is a broad concept used to capture all types of modern working arrangements. It’s not about the size of your business, it’s the stucture of your business that’s important. Let’s break it down further.
A ‘person’ may be an organisation or an individual. A ‘person’ is defined in laws dealing with the interpretation of legislation to include a body corporate (company), unincorporated body or association and partnership. An individual is also a ‘person’ but will only be a PCBU where they are conducting the business in their own right, either as a sole trader or a self-employed person. In a partnership arrangement, the partners are the PCBU both collectively and individually.
Although the term ‘business or undertaking’ appears in WHS Act and Regulations nearly 700 times, these terms are not defined. A business will normally mean an enterprise that has a degree of organisation, system and continuity to make a profit. An undertaking may have elements of organisation and continuity but generally does not have the objective to make a profit.
So, the PCBU can be working alone or together with others, and may or may not work for profit or gain.
What is a PCBU?
First up, it’s not always a company, so to be clear, here are some examples of a business or undertaking:
- A shop
- A school
- A manufacturing or wholesale business
- A government department or agency
- A local council
- An importer
- An owner-driver
- A sole trader
- A charity that employs and pays staff
- A church
- A builder
- A partnership
There may be multiple PCBUs operating under the same roof, or in the same area. Examples of this include a construction site with multiple contractors or a shopping centre with multiple show owners.
Who isn’t a PCBU?
Great question, as there are exceptions and we’ve listed some of these below:
- Volunteer associations that do not employ or pay anyone to conduct work
- A worker engaged solely in that capacity
- Strata title bodies corporate if they are responsible for common areas used only for residential purposes. However, they would be a PCBU if the strata title body corporate engages one or more workers as an employee.
- Individuals who carry out domestic work in and around their home for themselves or organise one-off events e.g., dinner parties or garage sales
- Individuals who engage a worker to carry out ad hoc home maintenance and repairs or domestic work e.g., a tradesperson or a casual babysitter.
- Elected members of a local authority
Examples of a PCBU
To further explain, let’s look at a few examples of a PCBU.
Sam and Dave own a landscape company. They are registered as a Partnership. Therefore, they are recognised individually and collectively as PCBUs.
Tracy and Adam own a boat building operation. They registered their business as a company. However, they also have 14 employees. Therefore, their business is the PCBU, not Tracy and Adam.
Alice runs a landscaping business and is a sole trader. Therefore, Alice is the PCBU.
Why do I need to understand who the PCBU is?
PCBUs are duty holders under the Act. PCBUs who do not meet their WHS responsibilities may face penalties, including fines and prosecutions, as well as increased compensation claims. It is also important to note that the conduct of employees, agents, or officers of a PCBU that is a body corporate is taken to be the conduct of the body corporate. The knowledge, intention, recklessness, or mistake of fact of those individuals are also taken to be that of the body corporate.
We highly recommend you seek specialist advice to help you understand how to meet your obligations.
For more information on the definition or duties of a PCBU, or to book a complimentary consultation, get in touch with the team from Masula Compliance on 07 3348 3666 or email info@masulacompliance.com.au