Insights

In brief - Implement a due diligence system to avoid fines and prosecution

The new work health and safety (WHS) laws in most Australian states and territories have expanded the safety obligations of companies and individuals. Both are likely to be pursued by safety regulators over breaches related to a single incident.

Worker injured in fall at construction site

The NSW safety regulator has recently finalised its last case against one of the seven parties that were pursued for breaches of the then Occupational Safety & Health Act for a fall at a construction site in 2009. (See Inspector Spence v Austar Constructions Pty Ltd [2012] NSWIRComm 114 and Inspector Spence v Multiplus Group Pty Ltd (ACN 132 085 824) [2013] NSWIRComm 69.)

Three workers at the site were moving a number of floor sheets from a ground floor concrete slab area to other persons on the second storey of a town house development. While moving a compressed fibro sheet which had been covering a penetration, one of the workers stepped forward and fell 3.7 metres to the concrete floor of the carpark basement below. He suffered serious injuries.

A construction project safety plan managed health and safety for the site. One of the construction companies used a safe work method statement (SWMS) which required the erection of a temporary handrail at the edge of the penetration. It was apparent that the penetration was covered by a temporary cover of compressed fibro sheet prior to the incident.

WorkCover NSW prosecutes both companies and individuals

WorkCover NSW commenced prosecution proceedings against two construction companies, a director of each company, the individual site manager, the project manager and a small construction company. All parties had some degree of control over construction activities at the site.

The three companies pleaded guilty before the Industrial Court of New South Wales and were convicted and fined. The individual site manager and project manager also pleaded guilty and received convictions and fines of $12,000 each. The directors of the two companies were convicted and fined $11,000 and $15,000 respectively. The total amount of fines imposed against all parties totalled approximately $330,000.

Although the above prosecutions arose out of the now repealed OHS Act of NSW, these decisions will be used as guidance where breaches of the current WHS acts are considered by the safety regulators and the courts.

Several parties can be pursued over one incident

The new work health and safety laws implemented in the bulk of the Australian states and territories have expanded the safety obligations upon both companies and individuals. The obligations under the WHS laws have expanded outside the traditional workplace to reach as far as your business or undertaking extends. The laws implemented in NSW now require "reasonably practicable" steps to be taken to manage safety.

This is a significant step back from the absolute obligation under the previous OHS laws in NSW. However, what has not changed is the policy of the safety regulator to pursue a number of parties for the one incident. The new WHS laws provide a wider scope for those persons conducting the business or undertaking (PCBUs), their officers and workers to be pursued for breaches of the WHS laws where they have allegedly failed to take reasonably practicable steps to manage safety at the work site.

What level of fines can be expected under the new WHS laws?

The fines under the WHS laws have certainly increased in comparison to the maximum fines that were in place under the previous OHS laws in NSW and other jurisdictions. Is it expected that as alleged breaches of WHS laws in NSW are presented to the District Court, the court will be taking guidance from similar laws which exist in Victoria. The WHS laws were based upon the Victorian Occupational Health and Safety Act. The current maximum penalty for a corporation under this act is approximately $1 million.

Recently in Victoria a company was fined $330,000 in the County Court following an incident on the West Melbourne docks where a worker suffered fatal injuries from a falling metal beam. The incident occurred when a number of workers were utilising a gantry crane to unload a 27 tonne steel drum from a truck at the dock.

Due to a failure to reconnect a number of pressure hoses on the gantry crane, one of the lifting rams did not operate, which resulted in a steel beam falling on one of the workers. The company received the conviction and fine because it had failed to take reasonably practicable steps to manage the risks of the crane operation.

What steps can a PCBU and its officers take to avoid a prosecution?

The WHS laws implemented in Queensland, NSW, Tasmania, SA, ACT and the Northern Territory have considerably expanded the obligations upon PCBUs, officers and workers. You should have an active safety management system which engages your workforce and has clear links through corporate governance arrangements to enable you to demonstrate that you have taken all reasonably practicable steps to fulfil the safety obligations relevant to your business or undertaking.

Within NSW the safety regulator has not varied its policy of pursuing individuals as well as the PCBUs involved in the one business or undertaking at the same worksite. A reasonably practicable due diligence system should be implemented to protect officers, relevant to the officer's capacity, position and experience. Having an active and well recorded due diligence system will help you to demonstrate a due diligence defence and avoid a possible criminal conviction and fine.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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