In brief - Organisations must have a robust safety management system in place to reduce likelihood of incidents and manage their risk

The NSW Parliament introduced a Bill on 12 November 2019 proposing to increase penalties and widen the investigative powers of inspectors, and to ban insurance coverage for a monetary penalty under the Work Health and Safety Act of NSW. Meanwhile, Western Australia has introduced a Work Health and Safety Bill and the Northern Territory has just passed legislation which creates the offence of industrial manslaughter.

Gross negligence

The proposed amendments to the Act will amend section 31(1)(c) to insert that if the person engages in conduct with gross negligence (without reasonable excuse), which exposes a person to risk of death or serious injury or illness, that person will commit a Category 1 offence.

The Bill notes that in certain circumstances, the death of a person at work may also constitute manslaughter under the Crimes Act 1900 and may be prosecuted under that Act. The offence of manslaughter is punishable by imprisonment for 25 years.

Penalties increased through penalty units

The Bill has also introduced a concept that the fines for the penalties set for offences will be determined by a number of penalty units. This allows for the increase of a penalty unit on an annual basis following the consumer price index. This is the process that is applied in a number of other jurisdictions around Australia.

The use of the penalty unit systems will see the bulk of the maximum penalties increased by at least 15%. 

Prohibition on monetary penalty insurance arrangements

A prohibition on certain insurance and indemnity arrangements has been outlined in the proposed new legislation. This will mean that any insurance for a penalty under the Work Health and Safety Act is banned. Any indemnity arrangements similar to insurance are also banned.

Where a person without reasonable excuse enters into a contract of insurance or other arrangement under which the person or another person is covered for liability for a monetary penalty under the Act, or provides insurance or a grant of indemnity for liability for a monetary penalty under this Act, or takes for benefit of a contract of insurance or other indemnity, that person is exposed to significant penalties. In the case of a body corporate, 1,250 penalty units increasing to 2,500 penalty units, which equates to $250,000.

The liability of officers of those corporations that breach the above insurance arrangements will face a maximum penalty of 1,250 penalty units. 

The new laws will not apply to any existing insurance arrangements prior to the Bill becoming legislation.

Increased investigation powers

Section 155 of the Work Health and Safety Act allows for a notice to be served upon a person for the provision of information and documents as part of an inspector's investigation.

The government has already increased the extraterritorial application of a section 155 notice noting that it can be served anywhere outside the state of New South Wales. The new Bill sets out the provisions so that when section 155 notices are served they can be served electronically or be left at a person's last known residence and left with a person over the age of 16 years. 

This increases the reach of a section 155 notice, expressly allowing it to be issued to a person at their home.

Further, where an inspector enters a workplace under section 171 of the Work Health and Safety Act, the section has been amended so that if an inspector has entered within the last 30 days, the inspector can require persons at that workplace to provide documents and answer questions. 

Directors and officers should manage their risk by checking that their safety management systems ae compliant

The Bill proposes significant changes to the Work Health and Safety Act in New South Wales. These changes bring serious consequences for organisations and/or officers who may be prosecuted in relation to a work health and safety incident. 

While every organisation should have in place an incident response plan, the best way to mitigate WHS legal risks is to prevent incidents from occurring. 

The implementation and maintenance of a robust safety management system is the ultimate means to manage WHS risk. A robust safety management system is one that effectively manages risk assessment, vertical and horizontal consultation, contractor management, audits and reporting and incident management and investigation.

To manage the risks of your business, now is a relevant time to consider conducting a health safety check of your safety management system to ensure it complies with the current Act, Regulations and Codes of Practice. 

Western Australia introduces Work Health and Safety Bill while Northern Territory passes legislation  

In other national developments, Western Australia has introduced a Work Health and Safety Bill to mirror the national model work health and safety laws. The Bill includes a two-level industrial manslaughter offence—crime and simple offence—and a new duty of care for "WHS service providers". The crime offence carries maximum penalties of 20 years' jail and $5 million for individual PCBUs, and $10 million for bodies corporate. The simple offence carries lower maximum penalties of 10 years' jail and $2.5 million for individual PCBUs, and $5 million for bodies corporate. 

The Northern Territory's Work Health and Safety Amendment Bill passed Parliament on the 27th November 2019. This creates the offence of industrial manslaughter which carries maximum penalties of a life sentence for individuals and 65,000 penalty units, equating to $10,205,000, for bodies corporate.  

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.