Client Update: NSW Bill to make immediate changes to OHS duties and directors' liability
6 May 2011
In brief: The NSW Government yesterday introduced in Parliament the Occupational Health and Safety Amendment Bill 2011 which, if passed, will remove the reverse-onus duty provisions in the Occupational Health and Safety Act 2000 (NSW) and substantially modify the personal liability of directors. These changes are proposed to commence ahead of the Model Work Health and Safety Bill on 1 January 2012. Partner Peter Arthur (view CV) and Lawyer Jonathan Adamopoulos report.
- Reverse-Onus provisions to be replaced with Qualified Duties
- Directors' liability to be replaced with a Positive Duty
- Unions' prosecutorial rights to be removed
Currently the Occupational Health and Safety Act 2000 (NSW) (the OH&S Act) imposes a duty on employers to ensure:
- the health and safety of employees while they are at work; and
- that persons (other than the employer's employees) are not exposed to health and safety risks as a result of the employer's business.1
The duty to 'ensure' has been interpreted as an absolute duty, subject to two defences:
- it was not reasonably practicable for the employer to comply with its duty; or
- the breach was caused by factors outside the employer's control and it was impracticable for the employer to make provision against such factors.
Unlike in most jurisdictions in Australia, an employer in New South Wales bears the burden of proving these defences (hence the 'reverse-onus' duty). Despite the High Court's ruling in Kirk v Industrial Court of New South Wales,2 which held that a charged employer is entitled to be provided with details of what measures it should have taken to prevent a breach, employers continue to have great difficulty in establishing these defences.
The proposed changes
The Occupational Health and Safety Amendment Bill 2011 (the Amendment Bill) will bring NSW in line with the other states by removing the reverse-onus provisions of the Act. The employer's duty to ensure health and safety will no longer be absolute. An employer will be required to take preventative measures only insofar as it is 'reasonably practicable' for it to do so.
Currently directors (including shadow directors) and persons concerned in the management of a corporation are deemed to be liable for the same offences that the corporation commits, unless they can prove that:
- they had no influence over the corporation in respect of the contravention; or
- they used all due diligence to prevent the contravention.
The Amendment Bill will abolish this deemed liability of directors. Instead all company officers will have a positive duty to exercise due diligence to ensure that their corporation is complying with the OH&S Act. This duty is the same as the duty proposed under the Model Work Health and Safety Bill (the Model Bill) and in particular requires an officer to:
- acquire up-to-date workplace safety information;
- understand the safety hazards and risks associated with the corporation; and
- ensure that the corporation has sufficient resources, processes and mechanisms in place to eliminate or control safety risks.
The duty will extend to all persons who make decisions which affect a substantial part of the corporation's operations and affairs, and includes the officers of government-owned corporations.
As a result of this change, an officer may commit an offence by failing to exercise the requisite due diligence, despite the fact that the corporation itself is complying with its safety duties. It is therefore paramount that officers understand their workplace safety responsibilities before the changes commence.
Another significant reform proposed in the Amendment Bill is the removal of the right of unions to prosecute employers for a breach of the OH&S Act. The right to commence proceedings will be limited to WorkCover inspectors.
The Amendment Bill is a stepping stone towards OH&S harmonisation, since its changes reflect the key features of the Model Bill. The Model Bill, which is expected to commence in each state and territory on 1 January 2012, was introduced into the NSW Parliament at the same time as the Amendment Bill.
- Peter ArthurPartner,
Ph: +61 2 9230 4728
- Leighton O'BrienPartner,
Ph: +61 2 9230 4205
- Anthony ArrowPartner,
Ph: +61 3 9613 8723
- Jamie WellsPartner,
Ph: +61 7 3334 3268
- Tim FrostPartner,
Ph: +61 2 9230 4930
- Stephen McComishPartner,
Ph: +61 8 9488 3767
- Maryjane CrabtreeExecutive Partner,
Ph: +61 3 9613 8706
- Dan YoungPartner,
Ph: +61 7 3334 3143