Director’s Briefing 101: WA Safety Law – The top 5 mistakes Directors make when it comes to health and safetyOctober 5, 2018 1:00 am
IN THIS ARTICLE WE DISCUSS THE TOP FIVE MISTAKES DIRECTORS MAKE WHEN IT COMES TO WORK HEALTH AND SAFETY (WHS) MATTERS IN WESTERN AUSTRALIA.
#1: NOT KNOWING THE LAW AFFECTING THEIR ORGANISATION
As a director, it is your job to know the health and safety obligations that apply to you and your business.
In WA, the health and safety legislative review process has had more twist and turns than a cheap garden hose. Six years after “harmonisation” in all but two jurisdictions in Australia (WA and Vic) we have seen various green bills and consultation periods – discussing the impending introduction of the model Work Health and Safety laws (Model Laws). The introduction of the Model Laws was most recently thwarted by the need to harmonise WA’s mines/resources legislation before introducing the Model Laws in the general safety jurisdiction.
We are now waiting on the introduction of a new WA WHS Act to cover all workplaces in WA including mines, petroleum and general workplaces, with specific regulations for each industry sector based on national model WHS laws.
A consultation paper was released in April this year, inviting WA stakeholders to comment on the recommendations in the paper or any other aspect of the model WHS laws. The consultation period ended in August 2018. Despite many false starts over the past six years it is likely that this legislative reform will be successful, and we will finally see the introduction of a modernised WHS legislation in mid-2019.
What does this mean for you as a director? It means that you need to stay on top of the developments, so you firstly understand what law applies to you now, but also that your business has mechanisms and plans in place to get your organisation ready for when (and if) the new WHS Laws are enacted – in the least disruptive and practical manner possible. In practice, this means recognising that the model WHS laws are, on a practical implementation level, not really that different to the practical administration of the current OSH Act regime; however, there are subtle differences and you can use the lead up time to put systems and mechanisms in place to ensure that you personally and your organisation complies with the law (both current and impending).
#2: NOT UNDERSTANDING THAT THROWING A CONTRACTOR ‘UNDER A BUS’ WILL NOT SAVE THEM FROM A PROSECUTION
Playing the “blame game” or attempting to throw a contractor ‘under the bus’ will not help you avoid a WHS prosecution.
Safety duties imposed by the WA legislation are non-delegable duties. They cannot be contracted out of. However, from a practical point of view you can create a contract management system that assists you and your organisation to satisfy and/or practically manage your responsibilities under the law. This includes, contractor engagement and tendering review processes, carefully drafting the terms and conditions of contracts and policies and finally, the practical management of the contractors in the field. What this will look like in practice will depend on the circumstances of each engagement, the contractor involved and your ‘proximity’ to what is commonly referred to as the ‘sphere of influence’ or ‘locus of control’.
In each case, however, principals should create a contractor management system that provides them with the powers and protections that they need to limit legal liability so far as is practicable. This may include, for example, contracts with clear definitions of WHS obligations (which are future proofed to deal with potential changes) or contracts with clear control and supervision provisions.
A recent example of a contractor’s unsafe practices resulting in a principal being prosecuted arose in May this year when Rand Transport Pty Ltd was convicted as the principal who failed to ensure that employees of a contractor were not exposed to the hazard under its control. In this case, Rand had engaged a contractor to install a wall in a refrigeration unit at Perth Airport. Due to insufficient space within the refrigeration unit, a worker accidentally stuck an ammonia line with an elevated work platform and sufferance burns to his eyes and airways. Rand was prosecuted for failing to provide the victim with such information, induction, instruction and training as was necessary to enable him to perform the work in a manner that reduced his risk of exposure to the ammonia, and/or failing to install of labelling and signage to warn all workers of the presence of ammonia.
At sentencing, the Court carefully reviewed Rand Transport’s contractor management system – particularly those matters related to the changes made to it post incident namely:
- amendments/changes and improvements to its:
- ‘Contractor Management Standard’ to add a more detailed explanation of the roles and responsibilities of its management in relation to engaging and supervising contractors;
- ‘Visitor / Contractor Induction Brochure’ to add information on the presence of anhydrous ammonia at the Workplace and to include an induction checklist, the completion of which by maintenance and construction contractors would ensure that they were made aware of ammonia hazards and controls at the Workplace;
- existing contractor approval process;
- contractor risk management training program;
- contractor induction procedure to include ammonia awareness points;
- generic company-wide safety risk profile; and
- training conducted in relation to
- safety leadership; and
- contractor risk management (retraining ¬70 supervisors and workers).
Rand Transport was fined $45,000 plus costs. However, should Rand have had a robust contractor management system in place at the time of the Incident – it is more likely that any fine imposed would have been significantly less and/or, it may have been able to avoid a prosecution at all. Notably, the contractor was not prosecuted in relation to the incident.
#3: ASSUMING THAT ONLY THE ‘BIG’ SAFETY ISSUES, FATALITIES AND SERIOUS INJURIES ATTRACT PROSECUTIONS / REGULATORY ATTENTION
Recently, we have seen a variety of trends from the Department of Mines, Industry, Regulation and Safety (DMIRS) investigations and prosecutions including:
- Increased attention and investigation from the prosecutions branch following potential breaches;
- The prosecution and conviction of a company for an incident where no individuals were harmed or injured;
- The prosecution of a transport company in relation to breaches of the Occupational Safety and Health Regulations1996 (WA) (the OSH Regulations);
- An increased number of prosecutions;
- A collaborative approach between Government Agencies to obtain evidence in relation to information sharing as to potential breaches of the Occupational Safety and Health Act1984 (WA); and
- Increased rates of appeal of sentences, where the prosecution considers that the initial sentence imposed by the Magistrate’s Court was inadequate.
By way of a recent example: A commercial haulage transport company based in South Australia that transported goods to WA (and had a depot in Welshpool), was prosecuted for:
- 9 offences of breaching reg 3.134(1) of the OSH Regulations, by failing to ensure that current records were kept by 9 of its commercial vehicle drivers in respect of work time, breaks from driving and non-work time (Record Keeping Offences); and
- 6 offences of breaching reg 3.131(1)(a) of the Regulations, by failing to ensure that a particular commercial vehicle driver, who drove without a relief driver, drove the vehicle in accordance with reg 3.132, relevantly by not driving for more than 17 hours without at least seven consecutive hours of non-work time (Work Hours Offences).
The breaches were discovered in the course of a collaborate operation conducted by three Western Australian government agencies – the Department of Main Roads, WA Police and WorkSafe – in Northam, the purpose of which was to identify heavy vehicle drivers who may be impaired by drugs, alcohol or fatigue.
After entering a plea of guilty to the offence and initially being fined $27,000 – the Prosecution appealed to the Supreme Court of WA to have the fine increased.
Finnaca J granted the appeal and on 15 January 2018 imposed new penalties of $30,000 in respect of the Record Keeping Offences (~2/3 of the total for individual fines) and $28,000 (~75% of the total) for the Work Hour Offences.
#4: ASSUMING THAT ANY LAWYER CAN HELP THEM
We often meet with Directors who have called their “corporate lawyers” for help following an incident. In our experience, this approach is fraught with potential issues. Before appointing a lawyer, consider – what do they actually know about criminal prosecutions and/or health and safety law? Have they ever successfully defended a prosecution? What do they know about your business, your industry and your jurisdiction (e.g. WA)? Have they (considering the entire team and not just the Partner in charge) acted for clients in health and safety prosecutions before? What outcomes have they been able to achieve for those clients? How can they add value to your business in its moment of need?
In our experience, having attended numerous sites following serious incidents and fatalities, we often encounter lawyers who have been appointed to help other companies and contractors on site who are insurance lawyers or employment lawyers with no particular experience or expertise in health and safety. Just as directors take care to appoint the right specialists to manage their accounts and other areas of their business – safety is no exception. Clients should find the right WHS counsel to assist them and keep those contacts as part of their critical risk teams to ensure that the lawyers who they contact in an emergency, know safety, know their business and are easily contactable if disaster strikes.
#5: ASSUMING THAT THE FINES IMPOSED WILL BE AT THE LOWER END OF THE SCALE
Often, Directors wrongly assume that any fines imposed will be at the lower end of the scale.
In May this year, a Perth Magistrate imposed fines of 50% of the maximum fines available against FGS Contracting Pty Ltd and the Director Ryan Wayne Franceschi. FGS and Mr Franceschi were prosecuted by WorkSafe for failing to meet their duty to provide a safe workplace and for failing to ensure the correct high risk work licence was in place after Mr Franceschi alighted frm a telehandler while it was in operation causing a steel truss to fall and strike a 17 year old worker who fell and suffered severe injuries to his skull, jaw, shoulder and chest.
The 17 year old worker did not have a construction induction training certificate – white card and had received no proper training to perform the role.
FGS was fined $225,000 and Mr Franceschi $102,500.
These high penalties of 50% of the maximum penalty available highlight the need for employers to carefully manage prosecutions even when entering a guilty plea.
In October this year, the McGowan Government successfully enacted legislation dramatically increasing penalties for safety offences under the Occupational Safety and Health Act 1984 (WA) and the Mines Safety and Inspection Act 1995 (WA) in WA and to a level that is approximately 14% above the Model Laws that have been in other states and the federal jurisdiction since 2011. See the changes in penalties set out in the table below.
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Penalties for individuals also increased from: $250,000 to $550,000 (for a first offence) and from $312,500 to $680,000 (second and subsequent) plus increased potential imprisonment terms which increased from 2 to 5 years.
The 2017 OSH Amendment Bill was read for the second time before the Legislative Council in November 2017.
In the Second Reading Speech, the Minister for Commerce and Industrial Relations WA, in reference to penalties imposed recently expressed that the Government considered that current penalties are:
‘inadequate’ and ‘do not adequately penalise those who put employees and the general public at risk. They do not send an appropriate message to employees about the value of their health and lives. They do not send the right message to the families of employees who do not return home safely at the end of their day’.
Such expressions are likely to be relied upon by Prosecutors in sentencing proceedings to attempt to persuade the Magistrate to increase the penalties imposed to as high as possible under the new maximums.
While these new penalty levels do not apply retrospectively, they are certainly a wakeup call to all Officers on what is potentially coming their organisation’s way in the future. Arguably, there are $3.5 million reasons to put safety on the top of your Board Agenda.
5 QUESTIONS FOR DIRECTORS TO CONSIDER
#1: Do you know the WHS law and any potential changes impacting your operations?
As a Director, it is part of your role to know what your and your organisation’s legal obligations are and what that actually means in practice.
To sign up to our “Black Label Series: WHS for Directors” email alerts with tips from Simon Billing, please email firstname.lastname@example.org.
#2: Do you know your business and the safety risks arising from it?
The understanding of the WHS laws applicable to your organisation should not exist in a vacuum. As part of your role, you must take steps to gain a practical understanding of the key aspects of your business operations and the primary risks arising from it.
#3: Do you have effective systems in place to effectively manage your contractors?
Contractors are your problem. Establishing a robust contractor management system will help you mitigate the risks arising from your relationship to help you manage them effectively from day one.
#4: Do you have to treat all safety incidents/breaches etc seriously?
Breaches of the WHS Laws – serious, major or minor can all potentially result in the same legal consequences – litigation and liability. Legal risks arising from safety should be managed strategically and practically – even if your company is intending to enter a guilty plea.
#5: Do you have the right people for the job, on standby, when you might need them?
You wouldn’t ask a GP to perform brain surgery on you – so don’t get generalists lawyers to manage health and safety matters. Make sure that your representative knows their stuff and has a proven record of getting the best outcomes for their clients.
For further information, please contact Simon Billing, Director on 0419 859 314.
Tags: Black Label Series, director's liability, directors duties, occupational safety and health act, OHS, safety, safety breach, WHS, WHS for Directors, workplace deaths, workplace fatalities, workplace injuries