Plant Hire Agreements: Wet Hire, Dry Hire and the Docket Nobody Reads

A civil contractor negotiates a subcontract for three weeks, reads every clause, and marks up the indemnity. The same contractor hires a thirty-tonne excavator for four months on the strength of a phone call and a docket signed by a leading hand who did not read the back of it.

The subcontract might be worth less than the hire. Plant hire is frequently the second largest cost line on a civil job after labour, and its terms are almost always the hire company’s, accepted by someone with no authority to accept them. This guide is about what those terms usually say, what wet and dry hire actually change beyond the operator, and the small number of process fixes that remove most of the exposure.

The docket is the contract

Plant hire in Australia is typically documented in one of three ways, in descending order of how common they are and ascending order of how much protection they give you.

• A delivery docket referencing terms and conditions. The terms are on the back, on a website, or in a credit application signed years ago. Signing the docket accepts them. This is the majority of plant hire.
• A credit account application with terms attached. Signed once, applies to everything thereafter, and frequently includes a personal guarantee from a director. Most contractors do not remember signing it.
• A negotiated hire agreement. Used for long hires and large plant, and the only one where a contractor typically gets to change anything.

Two consequences worth acting on. First, the terms that govern most of your plant hire were agreed at account-opening, not at hire time — so the place to negotiate is the account application, once, rather than the docket, repeatedly. Second, the person signing the docket is binding the business. That is worth a rule.

Wet, dry and everything between

Arrangement	What is supplied	What it usually means commercially
Dry hire	The machine only. You supply the operator, fuel and daily servicing	Lowest rate. You carry operation, damage, fuel and often the float. Most control, most responsibility
Wet hire	Machine and operator, usually with fuel and servicing	Higher rate. The hirer supplies the person, but you still direct the work — which is where the duties get complicated
Wet hire with a rate split	Machine rate plus a separate operator rate	Common in civil. Useful because it makes standing time and after-hours costs explicit
Hire with maintenance	Machine, with the hirer responsible for servicing and major repair	Typical on long-term hire of large plant. Check what “fair wear and tear” excludes
Plant subcontract	A priced scope of work performed with the other party’s plant and people	Not hire at all. Different risk allocation, different payment regime, different tax treatment

The last row is the one that causes the most confusion, and the distinction is worth being precise about. If you are paying for time and directing the work, it is hire. If you are paying for an outcome and the other party is directing their own work, it is a subcontract. Arrangements described as “wet hire” that are really subcontracts, and vice versa, produce arguments about liability for defective work, about whose insurance responds, about whether payment claims can be made, and about employment characterisation. Get the label right at the start and the paperwork will follow.

What the hire terms actually say

Hire terms vary, but the pattern across the industry is consistent enough to be useful. These are the clauses that matter, and what they usually provide.

Clause	What it typically says	What to check
Hire period and minimum hire	Hire runs from delivery to off-hire, with a minimum period and minimum daily or weekly hours	Whether the minimum is days or a week; what happens if you finish early
Rate basis	An hourly rate with a minimum daily hours assumption, or a daily, weekly or monthly rate	What the daily rate assumes in hours, and what happens above it
Standing time	Hire continues while the machine is on site, whether or not it is working	Whether wet weather, site closures, access delays or client-caused stoppages attract full rate. Usually they do
Breakdown	Hire suspends after a qualifying period of downtime, often only if promptly reported	The reporting obligation, the qualifying period, and whether the hirer must provide a replacement
Delivery and collection	Charged separately, sometimes at cost, sometimes at a fixed float rate	Whether it is included in the quoted rate. It usually is not
Fuel	Supplied full, returned full, or charged with a refuelling fee	The refuelling charge rate — it is often well above pump price
Wear items	Tyres, tracks, undercarriage, ground engaging tools, glass and hoses charged to the hirer	How wear is measured and priced. Undercarriage on a long hire can be a very large charge
Damage and loss	You are responsible for the machine while on hire, including theft, vandalism and total loss, at full replacement value	Whether the hirer’s damage waiver applies, what it excludes, and what your own insurance covers
Indemnity	You indemnify the hirer against claims arising from use of the plant, often broadly	Whether it extends to the hirer’s own negligence, and to their operator’s acts on a wet hire
Consequential loss	The hirer excludes liability for loss of profit, delay and consequential loss	The asymmetry: a machine failing can cost you a week, and you generally cannot recover it
Off-hire	Hire runs until off-hire is notified in the required manner and the machine is collected	How off-hire must be given, and whether hire runs until collection. This is the most common dispute
Suitability	You warrant the plant is suitable for your purpose and that you selected it	It removes any argument that the hirer recommended the wrong machine

Read that table alongside your programme and one thing stands out: almost every risk that a civil job actually encounters — wet weather, access delay, client-caused stoppage, breakdown, early completion — sits with the hirer of the plant, not the owner of it. That is not unreasonable, but it has to be priced, and it interacts directly with the treatment of the same risks in your head contract. Where your contract gives you no relief for wet weather and your hire agreement charges you full rate through it, you have bought that risk twice.

Damage, loss and the insurance gap

This is where contractors get hurt financially, and the mechanism is a gap between two documents that each look complete.

The hire agreement makes you responsible for the machine at full replacement value while it is on hire — including theft, fire, flood, vandalism and damage however caused, in many cases regardless of fault. Your own plant insurance, meanwhile, may cover plant you own. Plant you do not own, in your possession, is a distinct category of cover, commonly called hired-in plant cover, and it is not automatically included.

Questions to put to your broker, specifically rather than generally:

• Does the policy cover hired-in plant, and to what sum insured? A single large machine can exceed a modest limit set years ago.
• Does it cover the hirer’s continuing hire charges while a damaged machine is repaired or replaced? That liability is in most hire terms and is frequently uninsured.
• Does it respond to theft from an unattended site, and what security conditions apply?
• Does it cover the machine in transit on a float, and who arranged the float?
• Does it respond in the locations you work — remote sites, water-adjacent sites, interstate?
• Does the hirer’s damage waiver, if offered, actually reduce your exposure, and what does it exclude? Waivers commonly exclude operator error, submersion, tyres and undercarriage — which is most of what happens.

The general treatment of construction insurance is in our guide to insurance requirements in government civil tenders, and what happens when you actually claim is covered in making an insurance claim on a civil job. The specific point here is that hired-in plant is the single most common gap between a contractor’s contractual liability and their insurance programme, and it costs nothing to check.

Who carries the safety duty

Work health and safety law does not allocate duties according to who owns the machine. It imposes duties on each business involved, and more than one business can hold a duty for the same plant at the same time.

Party	Typical duty
The hire company	Duties as a supplier of plant — that it is without risks to health and safety when used properly, is inspected and maintained, and comes with the information needed to use it safely
You, on dry hire	Full operational responsibility — competent operator, pre-start inspection, safe system of work, maintenance while in your control, and the plant’s suitability for the task
You, on wet hire	You direct the work and control the site, so you hold duties over the work, the site and the interaction between the plant and everyone else — even though someone else employs the operator
Both, always	A duty to consult, cooperate and coordinate with the other duty holders

The practical failure mode on wet hire is a supplied operator who is assumed to be someone else’s responsibility: not inducted properly, not included in the daily briefing, not covered by the relevant safe work method statement, and working to instructions from your supervisor without any of your systems applying to them. That is a duty you hold, being discharged by nobody. The fix is to treat a wet hire operator as a worker on your site for every system purpose — induction, briefing, SWMS, fatigue, incident reporting — while their employment remains with the hirer. Our guide to WHS management plans and SWMS covers the documents.

On dry hire, the exposures are different: verifying the operator’s competency for that specific machine, obtaining the plant’s risk assessment and manuals from the hirer, and performing and recording pre-start inspections. A machine that arrives with no documentation is a machine you cannot demonstrate you operated safely.

Heavy vehicle duties on the float

Moving hired plant is a transport activity, and the arrangement determines who holds which duty under heavy vehicle law.

If the hire company delivers, they are generally the operator and loader for that movement. If you arrange the float, you are likely the prime contractor or scheduler and possibly the consignor, and the load restraint of a machine on a float becomes your concern. If you move a hired machine between your own sites on your own float, you hold essentially all of the duties. Permits, route conditions and travel restrictions for oversize movements attach to whoever holds them, and their conditions constrain whoever is programming the work.

The practical rule: establish at hire time who is arranging and paying for each movement, including movements between sites during the hire, and make sure the party doing it knows they hold the duties. Our guide to chain of responsibility for civil contractors covers the roles and what discharging them requires.

Is wet hire labour hire?

A question that did not exist a decade ago and now has real consequences.

Several Australian states and territories operate labour hire licensing schemes, and in those jurisdictions it is generally an offence both to supply labour hire services without a licence and to use an unlicensed provider. The definitions of labour hire are broader than the phrase suggests, and can capture arrangements where a business supplies a worker to perform work under another business’s direction — which is a reasonable description of wet hire.

Whether a particular wet hire arrangement falls inside a particular scheme depends on that scheme’s definitions and exclusions and on the substance of the arrangement, and it is genuinely a question for advice rather than assumption. What a contractor can sensibly do without advice is straightforward: know whether the state you are working in operates a scheme; ask wet hire providers whether they hold a licence and check the public register where one exists; record the check; and raise the question with your adviser if a provider says they do not need one. The framework is covered in our guide to modern slavery and supply chain compliance in tenders.

Security of payment and the hire chain

An underused point that cuts both ways.

Security of payment legislation across the Australian jurisdictions generally covers not only construction work but also the supply of related goods and services — a category that typically includes the supply of plant for use in carrying out construction work, and materials. The consequences for a contractor are two.

• Your plant hire supplier may be able to use the statutory payment regime against you. A hire invoice can be a payment claim, and the response obligations and timeframes apply. A contractor who treats hire invoices as ordinary trade payables and lets them sit can find a payment schedule deadline has passed.
• You may be able to use it when you supply plant to others. A civil contractor doing wet hire work for a head contractor — common on disaster recovery and term maintenance work — may have access to the regime for that hire.

Whether a particular hire arrangement falls within the definition depends on the jurisdiction, the arrangement and whether the plant is supplied with an operator. The mechanics of claims, schedules and adjudication are in our guide to security of payment in Australia. The practical point is to process hire invoices through whatever system you use for payment claims rather than through accounts payable alone.

The personal property securities point

Rarely discussed and occasionally very expensive.

Australia’s personal property securities regime treats certain longer-term hire arrangements as giving rise to a security interest that the hire company can register. Most established hire companies register. Two practical consequences follow for a contractor.

The first is about your own position: hired plant on your site is not your asset, and treating it as though it were — for example in a schedule of assets supporting a financing application — misrepresents your position. Our guide to demonstrating financial capacity in tenders covers how plant is assessed, and hired plant is assessed differently from owned plant.

The second is about on-hiring: if you hire a machine and then on-hire or sub-let it to somebody else, you may be dealing with property in which another party holds a registered interest, and doing so without permission usually breaches the hire agreement as well. The safe rule is not to on-hire plant you do not own without the owner’s written consent — and if a client or head contractor asks you to leave a hired machine with them after your work finishes, that is an on-hire arrangement even when nobody calls it one.

Pricing hired plant into a tender

The estimating method is covered in our guide to preparing civil works cost estimates. What follows is the hire-specific overlay — the lines that get missed.

Item	Why it matters
Float in and out	Charged separately, and it recurs every time the machine moves between work fronts. On a fragmented job this can rival the hire itself
Minimum hire and minimum hours	A machine needed for three days on a one-week minimum costs a week
Standing time	Price the realistic proportion of the hire during which the machine will not be working — wet weather, access, waiting on other trades
Fuel and refuelling charges	On dry hire, fuel is yours. Check the hirer’s refuelling rate before you rely on returning it empty
Wear items	Undercarriage, tyres and ground engaging tools on a long hire in abrasive material. Ask how wear is assessed and priced before hiring, not at return
Operator on-costs on wet hire	Travel time, overtime and after-hours rates. A wet rate quoted for ordinary hours can be materially different at night
Attachments	Buckets, hammers, rippers, tilt hitches and grade control are usually charged separately, and often forgotten entirely
Damage excess and waiver cost	Either the waiver fee or the risk you are self-insuring. Both are real costs
Cleaning and return condition	Machines returned dirty attract cleaning charges. On sites with weed hygiene or contamination controls this is a genuine cost
Rate escalation on long hire	Whether the rate is fixed for the hire period. On multi-year work see rise and fall and cost escalation

One tender-facing point beyond cost. Where a tender requires a plant schedule, hired plant has to be presented honestly and in a way that gives the evaluator confidence: name the plant, identify it as hired, and state the basis on which availability is assured — a written quotation, an allocation from a supplier you have a relationship with, or a standing arrangement. Our guide to plant and equipment schedules in tenders covers the presentation. An evaluator’s concern is not that plant is hired; it is that availability is assumed. Contractors who address that directly score better than those who list hired plant as though they own it.

Hire versus buy

The decision is usually framed as a rate comparison and it is really a utilisation and risk question. Once the decision is to own, how the purchase is funded raises a further set of questions — see our guide to plant and equipment finance.

The arithmetic is simple enough: owning is cheaper per hour above some utilisation and more expensive below it, and the break-even depends on finance cost, maintenance, wear, insurance, registration, transport, operator availability and residual value. The part contractors get wrong is not the arithmetic. It is the assumption behind it.

• Buy against committed work, not against expected work. A machine bought on the strength of a pipeline that does not eventuate becomes a fixed cost during exactly the period you have least revenue.
• Hire is the flexibility premium, and flexibility has value. Paying more per hour to be able to stop paying is a rational choice in a cyclical business.
• Owning changes your balance sheet in both directions. It builds asset backing that supports financing and prequalification, and it consumes working capital and adds debt. Our guides to demonstrating financial capacity and cash flow in civil construction contracts cover both sides.
• Specialised plant is usually a hire decision. Machines used on a minority of jobs rarely reach the utilisation that justifies ownership, however satisfying it is to own them.
• Plant strategy is a scaling decision. The relationship between fleet, utilisation and growth is covered in our guide to scaling a civil contracting business, and plant is one of the two or three things that most often stalls a business at a particular size.

Off-hire and the disputes that actually happen

Ask any hire company or any contractor what plant hire arguments are about and the answer is the same: off-hire and damage. Not rates.

Off-hire. The machine finished on Thursday. The site called it off on Monday. The float came the following Friday. The invoice covers all of it, and under most hire terms it is correct — hire runs until off-hire is properly notified, and often until collection. The fixes are procedural: know the required method of notifying off-hire, notify it in writing the moment the machine is finished, get and keep an off-hire number or acknowledgment, and record the date and time the machine actually stopped. Where hire runs until collection, chase the collection.

Damage. The machine came back with a bent ram, a cracked screen and worn undercarriage, and the assessment arrives weeks later with no evidence of the condition on delivery. The fix is equally procedural and takes five minutes: photograph and video every machine on arrival and on departure, including hour meter, tyres or tracks, glass, attachments and any existing damage, and note them on the docket before signing. This one habit resolves more plant hire disputes than any contract negotiation.

Both belong in the project’s administrative routine rather than in someone’s head — the same argument made for registers generally in our guide to contract administration for civil SMEs.

What to fix in your process

Seven changes, none of them difficult, that between them remove most of the exposure in this guide.

• 1. Negotiate at account opening, not at hire. Read the credit application terms once, mark them up, and pay attention to any personal guarantee. This is the only realistic negotiation point.
• 2. Decide who may sign a hire docket, and tell them what they are signing.
• 3. Photograph on arrival and departure, every time.
• 4. Off-hire in writing, immediately, with an acknowledgment kept.
• 5. Check your hired-in plant insurance — including continuing hire charges after damage — and set the limit against the largest machine you hire.
• 6. Treat wet hire operators as workers on your site for induction, briefing, SWMS and incident reporting, and check the provider’s labour hire licence status where a scheme applies.
• 7. Route hire invoices through your payment claim process, not only through accounts payable.

Checklist

• Have you read the terms attached to your hire account applications?
• Did any of them include a personal guarantee?
• Do you control who is authorised to sign a hire docket?
• Is the arrangement genuinely hire, or is it a subcontract described as hire?
• Do you know what the daily rate assumes in hours, and the minimum hire period?
• Does hire run at full rate through wet weather, access delays and client-caused stoppages?
• What must you do to suspend hire on breakdown, and within what time?
• Are float charges in or out of the quoted rate, and have you priced movements between work fronts?
• Are attachments charged separately, and are they in your estimate?
• How are wear items assessed and priced on return?
• Does your insurance cover hired-in plant, at a sum insured matching the largest machine you hire?
• Does it cover continuing hire charges while a damaged machine is repaired?
• If a damage waiver is offered, what does it exclude?
• On dry hire, do you have the plant risk assessment and manuals, and do you record pre-starts?
• On wet hire, is the supplied operator inducted, briefed and covered by your SWMS?
• Does the wet hire provider hold a labour hire licence where the state requires one?
• Who arranges each float movement, and do they know they hold the heavy vehicle duties?
• Do you photograph every machine on arrival and departure?
• Do you off-hire in writing and keep the acknowledgment?
• Are hire invoices processed through your payment claim system?
• Have you ever on-hired a machine you do not own without written consent?

The short version

• The docket is the contract, and the terms were usually agreed at account opening. Negotiate there, once.
• Wet or dry changes far more than who supplies the operator — it changes insurance, safety duties, heavy vehicle duties and possibly labour hire licensing.
• If you pay for time and direct the work it is hire. If you pay for an outcome and they direct their own work it is a subcontract.
• Almost every risk a civil job encounters — wet weather, access delay, breakdown, early finish — sits with the hirer of the plant under standard terms.
• Hired-in plant is the most common gap between contractual liability and insurance. Check the cover and the sum insured.
• Damage waivers commonly exclude operator error, submersion, tyres and undercarriage — most of what actually happens.
• On wet hire you still hold safety duties over the work and the site. Treat the supplied operator as a worker on your site.
• Plant hire may be within the security of payment regime. Process hire invoices through your payment claim system.
• Do not on-hire plant you do not own without written consent.
• Price float movements, minimum hire, standing time, attachments and wear items — these are the lines that get missed.
• Buy against committed work, not expected work. Hire is the flexibility premium and flexibility is worth paying for in a cyclical business.
• Off-hire and damage are what the arguments are about. Photograph on arrival and departure, and off-hire in writing with an acknowledgment.

Sources and further reading

This guide is general information for Australian civil construction businesses and is not legal, safety, insurance or accounting advice. Plant hire terms and conditions differ between hire companies and are set by the individual agreement; the clause patterns described here are common industry practice, not a description of your contract. Work health and safety duties, labour hire licensing schemes, heavy vehicle law, security of payment legislation and personal property securities law differ between jurisdictions and are amended from time to time. Whether a particular arrangement is hire, subcontracting, labour hire or employment, and whether a particular hire falls within the security of payment or personal property securities regimes, depend on the substance of the arrangement and the applicable law. Insurance coverage, sub-limits, conditions and exclusions differ between policies. Always work from the actual hire agreement, your policy wording, the executed head contract, and current advice from a lawyer, insurance broker and accountant.

• Australian plant hire industry terms and conditions as commonly used in delivery dockets, credit account applications and negotiated hire agreements, referenced throughout §01 and §03. Terms differ between hire companies; the clause patterns described — minimum hire, standing time, breakdown suspension, wear items, damage at replacement value, consequential loss exclusions, off-hire on notification and suitability warranties — are typical of the industry rather than universal.
• Australian work health and safety legislation, including the duties of persons conducting a business or undertaking who supply plant, the duties of those with management or control of a workplace, and the duty to consult, cooperate and coordinate with other duty holders. Referenced in §05 as the basis for the claim that more than one business can hold duties over the same plant simultaneously. Sourced in full in our guide to WHS management plans and SWMS for civil tenders.
• State and territory labour hire licensing legislation referenced in §07, under which supplying labour hire services without a licence and using an unlicensed provider are both generally offences. Whether a wet hire arrangement falls within a particular scheme depends on that scheme’s definitions and exclusions and on the substance of the arrangement. Sourced in full in our guide to modern slavery and supply chain compliance in tenders.
• Security of payment legislation across the Australian states and territories, referenced in §08, which generally extends to the supply of related goods and services including plant supplied for use in carrying out construction work. Coverage of a particular hire arrangement, and the treatment of plant supplied with an operator, differ between jurisdictions. Sourced in full in our guide to security of payment in Australia.
• Australian personal property securities legislation referenced in §09, under which certain longer-term hire arrangements may give rise to a registrable security interest in the hired plant. Whether a particular arrangement does so, and the consequences of dealing with the plant, are matters for legal advice.
• The Heavy Vehicle National Law and the separate heavy vehicle legislation in Western Australia and the Northern Territory, referenced in §06 for the allocation of operator, loader, consignor, scheduler and prime contractor duties on float movements. Sourced in full in our guide to chain of responsibility for civil contractors.
• Related TenderBuilt guides carrying the primary-source detail referenced above: plant and equipment schedules in tenders, preparing civil works cost estimates, insurance requirements, making an insurance claim, demonstrating financial capacity, cash flow in civil construction contracts, scaling a civil contracting business and contract administration for civil SMEs.