The Chain of Responsibility: Duties of Principals under Section 18A

Industry Pulse · Occupational Safety & Health

Safety liability does not stop at the employment contract

The 2024 amendments to the Occupational Safety and Health Act 1994 (OSHA 1994) make one point clear: organisations cannot shift safety responsibility simply by hiring contractors. Section 18A introduces a formal duty of care for principals toward contractors, subcontractors, and their workers when work is carried out under the principal’s direction.

Who is a “Principal” under Section 18A?

A principal is any person or organisation that engages another party to perform work for their trade, business, or undertaking. In practice, this includes companies that appoint:

• Independent contractors and service vendors
• Subcontractors on project or facility sites
• Outsourced maintenance, logistics, cleaning, construction, or technical teams
• Any external workforce operating under the principal’s instruction or control

If those workers are directed by the principal in how work is done, the principal carries a legal duty to ensure their safety and health — not only the safety of permanent staff.

What duties does Section 18A place on principals?

Principals must take reasonably practicable steps to protect contractors and their employees. That typically includes:

Why this matters for Malaysian employers

Many organisations still treat contractor safety as “the vendor’s problem.” Under the amended framework, that approach creates legal exposure. If a principal directs the work, they are expected to support safe conditions — including planning, resourcing, and oversight.

This is especially relevant for facilities management, manufacturing, construction-related works, logistics hubs, events operations, and any site where multiple employers share the same workplace.

Penalties for non-compliance

Failure to fulfil principal duties is treated as a serious offence under Section 19. Penalties may include:

• Fine of up to RM500,000, and/or
• Imprisonment for up to two years

The policy intent is clear: companies cannot outsource safety liability merely by appointing third-party contractors.

Practical compliance checklist for principals

1. Map all contractor and subcontractor relationships on each site.
2. Define who has direction/control over contracted work activities.
3. Build contractor onboarding: induction, permits, PPE, emergency response.
4. Include safety requirements, reporting lines, and stop-work authority in contracts.
5. Allocate realistic timelines and budgets that do not force unsafe shortcuts.
6. Coordinate shared risks where multiple employers operate in the same workplace.
7. Document inspections, briefings, incident reports, and corrective actions.
8. Train managers and supervisors on principal duties under Section 18A.

Build internal capability on OSH and compliance

Legal awareness only creates value when supervisors and managers can apply it on site. CXCons supports Malaysian organisations with HRDC claimable learning pathways in occupational safety, employment compliance, and leadership accountability — including in-house programmes tailored to your operational risks.

Frequently asked questions

Does Section 18A apply only to construction sites?

No. It applies more broadly wherever a principal engages contractors to carry out work for the business and exercises direction over that work.

If I hire a contractor, am I automatically free from safety duties?

No. Appointing a contractor does not remove the principal’s duty of care where workers operate under the principal’s direction.

What should HR and safety teams do first?

Review contractor agreements, clarify supervision arrangements, strengthen induction and risk-control processes, and train line managers on principal responsibilities.