Focus: Occupational Health & Safety
20 November 2009
In this issue: We look at the draft Model OHS Act; principal contractors' OHS obligations to independent specialist subcontractors; the meaning of 'workplace' under sections 5 and 17 of the Occupational Health and Safety Act 1991 (Cth); the costliness of breaches of federal OHS laws; lack of training and supervision leading to prosecution; heavy penalties for companies that do not address well-known OHS risks; reduction in penalties for the improvement of safety measures; and upcoming WA reforms to mine safety regulation.
- Update on harmonisation of OHS law
- Obligations of principals towards independent subcontractors
- Telstra pit declared a workplace
- Federal Court imposes high penalty under federal OHS law
- Lack of training and supervision leads to death and prosecution
- Risk not addressed, before or after incident
- Penalty reduced for improved safety measures after incident
- WA Government considers reforms to mine safety laws
In brief: The draft Model OHS Act, based on the recommendations in the reports1 on harmonisation of occupational health and safety laws in Australia2 as approved, modified or rejected by the Workplace Relations Minister's Council, has been released and made available for public comment. While there have been significant comments, we can expect that the Model OHS Act reflects the final position of harmonised OHS laws in Australia. Senior Associate Ric Morgan reports.
How does it affect you?
- Businesses should prepare to work under a new OHS legal regime.
- The draft Model OHS Act is likely to be representative of the new regime and could be used to commence work to bring OHS systems into compliance.
- Directors and officers should introduce systems of due diligence to enable them to comply with the new positive dues that are expected to be introduced under the model OHS laws.
- The Model OHS Act generally reflects the political position of the Workplace Relations Minister's Council (the WRMC).
- While there were large numbers of submissions, many of them were from individuals supporting the union position that a union right to prosecute is necessary to maintain current OHS performance.
- The duty applying to directors and officers is broad, requiring each to exercise due diligence to ensure that the relevant body corporate complies with its duties. There is no guidance on what due diligence means for officers.
- The officers' duty as drafted could result in an officer committing an offence, even if the corporation has not.
- Unions will be able to enter a broad range of workplaces for a broad range of purposes, and the training required for those authorised to enter for OHS purposes focuses on the industrial issues that can arise, rather than on ensuring that those authorised have OHS-specific expertise.
The Federal Parliament commissioned a panel to report to the WRMC on the harmonisation of Australia's multi-jurisdictional OHS law. The WRMC considered the reports at its 18 May 2009 meeting and the report's recommendations were largely accepted. The draft Model OHS Act was open for public comment until 9 November 2009.
General comments on the draft
While the draft was open for comment, answers to specific questions were sought. These questions showed that the political decisions the WRMC made in accepting the reports were not likely to be revisited. Instead, the consultation appears to have focused on finetuning particular terms, and the nature of some obligations to be included in the Model OHS Act that had not been clearly set out in the reports or in the WRMC's approach to those recommendations.
Nonetheless, many submissions have gone further and sought to address matters not specifically requested to be addressed. In particular, it appears that a union campaign focused on the union right to prosecute has generated a significant number of submissions.
Other submissions have also revisited the earlier decisions the WRMC made.
Directors' and officers' duties
Interestingly, the drafting regarding the directors' and officers' duties, while appearing to go beyond what was required to address the recommendations the WRMC accepted, does not appear to have attracted major comment.
As drafted, officers can be liable for a breach of their duty even where no offence has been committed by the company of which they are an officer. This is because the duty imposed is to 'exercise due diligence to ensure' the relevant body corporate complies with any duty imposed on it. This means that where an officer does not use due diligence to ensure compliance, an offence will be committed, even if the body corporate, despite the lack of due diligence, has complied with its duties.
The drafting regarding who will owe the officer's duty is also surprising. The WRMC rejected the use of the definition of directors and officers from the Corporations Act 2001 (Cth), instead requiring the duty to be imposed on all persons who influence or make decisions that affect the whole or a substantial part of an entity. However, the list in the Model OHS Act of those subject to the officers' duty is simply a subset of the corporations law definition. Further, the resultant group on whom the duties are imposed excludes some that would seem to fit the WRMC's requirement for all those with the relevant influence or decision-making powers.
Unions and OHS
As expected, unions do not have a right to bring prosecutions under the Model OHS Act.
However, the right of entry provisions are as broad as could be expected. Further, the training requirements for right of entry for union representatives do not require that those with a right to enter for OHS purposes have any specific OHS training or qualifications. Instead, the requirements set out in the draft Model OHS regulations are simply that they are trained in:
- the right of entry requirements, including the overlap with the Fair Work Act 2009 (Cth);
- issue resolution requirements; and
- the duties under the Model OHS Act.
It is possible that the additional requirement to be trained in the application of risk management principles and the yet-to-be-specified guidance materials issued by the regulator will ensure that some OHS-specific training occurs.
Where to from here?
Now that public comment has closed, we can expect that the Model OHS Act will take its final form fairly quickly and make its way through Federal Parliament. The goal is to have the Act at this stage by early in 2010, to enable the states and territories to adopt the laws for implementation by January 2011. Unfortunately, there is still some risk that not all states will adopt the model OHS Act. This may mean that its expected benefits never really materialise.
In brief: A recent High Court decision3 provides guidance on the OHS obligations of a principal contractor towards independent specialist subcontractors. Lawyer Rebecca Campbell reports.
How does it affect you?
- The High Court has recognised that a principal contractor does not have a general law duty to train and supervise independent contractors in the safety aspects of their specialist work.
- Although a principal contractor's duty to independent contractors under OHS laws may be broader than its common law duty, this decision provides guidance on the scope of that duty and may also provide a defence to an OHS prosecution.
Leighton Contractors Pty Ltd was appointed principal contractor for the Hilton Sydney refurbishment. Leighton retained Downview Pty Ltd to carry out concreting works, and Downview subcontracted the concrete pumping to an experienced subcontractor. The subcontractor engaged an independent contractor, Mr Fox, to assist. In the course of cleaning the pipes of the concrete pumping equipment, Mr Fox was injured.
Leighton ran an OHS site induction that all workers were required to attend before starting work on the site, and that outlined general site and safety procedures. Leighton required Downview to provide it with a work method statement addressing such matters as the potential hazards of concrete pumping and relevant control measures. However, Leighton and Downview did not provide any activity-based safety training on concrete pumping.
Mr Fox sued both for negligence. The District Court found that the accident was caused by the negligence of the subcontractor's employees, and dismissed Mr Fox's claims in negligence against Leighton and Downview.
The Court of Appeal held that Leighton and Downview had each breached a common law duty of care towards Mr Fox. Leighton, as the principal contractor, had breached its duty by failing to provide safety induction training and activity-based safety training to subcontractors in relation to their specific work. The Court of Appeal took into account the duties it believed Leighton had under the Occupational Health and Safety Act 2000 (NSW) (the Act) and the Occupational Health and Safety Regulation 2001 (NSW) (the Regulation) when deciding what duties it owed at common law.
The High Court's decisionIn its appeal to the High Court, Leighton argued that the Court of Appeal had improperly extended the common law obligations of a principal contractor. The High Court allowed the appeal. It held that, although the common law imposes a duty on principals to use reasonable care, this does not extend to an obligation to exercise full control of safe working systems when it is reasonable to engage experienced independent contractors for specialist work4.
The High Court recognised that a principal contractor is unlikely to have detailed knowledge of safe work methods across the whole spectrum of trades involved in a major construction project. To be satisfied that a worker had undergone the general and work activity-based training required by the Regulation, a principal contractor would normally only need to obtain the worker's statement of satisfactory completion of a documented training course. The principal contractor would not generally be required to provide activity-based training to specialist contractors itself. However, the principal contractor would still need to provide site-specific OHS training.
Implications for principal contractor obligations under OHS legislation
A principal contractor's duty to ensure that work premises are safe under sections 8 and 10 of the Act may be broader than its common law duty towards subcontractors. Breaches of these provisions are strict liability offences. Defences under s28 of the Act include that it was not reasonably practicable for the principal contractor to comply, or that the offence was committed due to causes out of the principal contractor's control and for which it was impracticable for it to make provision.
This High Court decision does not specifically address whether a principal contractor could be successfully prosecuted under the Act in circumstances similar to those in this case. Nonetheless, the High Court's reasoning may assist a principal contractor in establishing a defence under s28. In particular, the decision provides the basis for an argument that it was not reasonably practicable for the principal contractor to provide safety training and supervision to all independent subcontractors carrying out specialist work at a site.
Telstra pit declared a workplace
In brief: A Full Federal Court decision5 has shed light on the meaning of 'workplace' under sections 5 and 17 of the Occupational Health and Safety Act 1991 (Cth) and the scope of an employer's duty to third parties. Law Graduate Sébastien Clevy reports.
How does it affect you?
- The decision highlights the scope of an employer's duty to non-employees and members of the public under Comcare legislation.
- Employers have a responsibility to the public, in addition to employees, to maintain a safe work environment.
- An employer may be liable if an employee, while at work, creates a dangerous situation in the workplace and a non-employee is injured as a result.
In November 2006, Mrs Kirtley was carrying her five-month-old daughter when she stepped onto a pit lid on a footpath. The pit lid collapsed and she fell in, causing her daughter's head to hit the concrete edge surrounding the pit. The pit and the pit lid were owned and used by Telstra for the purpose of accessing and maintaining telecommunications infrastructure.
Telstra notified Comcare, which conducted an investigation and concluded that Telstra was in breach of section 17 of the Occupational Health and Safety Act 1991 (Cth) (the Act), which imposes a statutory obligation on employers to take all reasonably practicable steps to ensure that persons, other than employees, who are at or near a workplace are not exposed to health and safety risks. This finding was outlined in a report by Comcare.
The Federal Court decision
Telstra rejected the validity of Comcare's report, on the basis that the pit was not a workplace at the relevant time, and sought judicial review of the report and its findings. At first instance, Justice Middleton held that:
- the pit lid and the pit itself constituted a workplace for the purposes of the Act; and
- sufficient evidence was available to support the conclusion that Telstra had breached s17 of the Act.
Telstra appealed that decision to the Full Federal Court.
The Full Court decision
The Full Court dismissed Telstra's appeal. It gave careful consideration to the concept of a 'workplace' for the purposes of the Act.
Telstra argued that a pit is not a workplace when work is not being performed in the pit. Telstra also asserted that 'before a place or premises could be considered a workplace, there must be a temporal connection between the place or premises and the doing of the work'. The court rejected these submissions, and found that the pit and pit lid were part of a workplace because:
- The purpose of the Act is to protect non-employees or members of the public who are near a workplace. That purpose would be defeated if protection were limited to the time during which the employer's employees were actually working at the workplace.
- A workplace is any place where work is performed from 'time to time'. By way of illustration, the court gave the example of a department store, which does not cease to be a workplace when it is closed overnight.
The court also confirmed the validity of Comcare's report and found that there existed sufficient grounds to establish a breach of Telstra's duty to third parties under the Act.
Federal Court imposes high penalty under federal OHS law
In brief: Breaches in the federal OHS jurisdiction can prove just as costly as breaches of state OHS laws, as the large fines imposed in a recent Federal Court decision have demonstrated6. Law Graduate Matt Baillie reports.
How does it affect you?
- Employers who admit to breaches after an OHS investigation will only receive a 'discount' on their penalty if they admit to them early.
- Even when employers have documented safety procedures in place, they must make every effort to ensure that their employees are trained in these procedures and understand their significance.
In November 2007, a team of four John Holland Rail employees was repairing rail tracks. The job involved using hot liquid metal to weld the tracks together (thermit welding), and cutting expansion joints into the tracks with a petrol-powered friction saw. Contrary to standard practice (and John Holland Rail instructions), the employees refuelled the saw while it was clamped to the tracks, and near a fresh and still-hot weld. When an employee opened the cap of a jerry can of petrol to refuel the saw, he was not aware of the pressure that had built up inside the can. As a consequence, petrol splashed out onto the weld and caught alight.
One employee suffered second-degree burns to 20 per cent of his body as a result. Comcare conducted an investigation, and then commenced civil proceedings against John Holland for failing to take reasonably practical steps to protect the safety and health of its employees.
John Holland admitted that it had breached the Occupational Health and Safety Act 1991 (Cth). In determining the penalty, the court found that, although John Holland had in place proper safety systems and procedures governing thermit welding, the fact that the employees did not follow these procedures indicated that they were not sufficiently well trained in them. In particular, the supervisor who allowed the employees to refuel the saw on the tracks would not have allowed this to happen had he been properly trained in OHS procedures.
Given this shortfall in OHS training, and the nature of the injuries suffered, the court held that this was a serious breach, and that a significant penalty should be imposed. John Holland argued that its good record, safety procedures and cooperation with Comcare warranted a discount and, therefore, a lower penalty. However, the court considered that, even taking these factors into account, the seriousness of the breach warranted, at least, a significant penalty. It imposed a fine of $124,960, rather than the $80,000-$120,000 that Comcare suggested.
The court also declined to apply a 'discount' to reduce the fine, on the grounds that the policy behind discounts was to achieve a reduction in the public resources that would otherwise be required to prosecute the proceedings. John Holland had admitted to the breach only once the matter had been listed for hearing, and the court found that such a late admission did not warrant a discount.
Lack of training and supervision leads to death and prosecution
In brief: The NSW Industrial Court7 fined an employer $99,000 for failing to provide adequate instructions, training and supervision to an inexperienced employee who suffered fatal injuries. Lawyer David Batten reports.
How does it affect you?
- Employers should ensure that new staff are adequately trained and supervised.
- Employers should conduct regular risk assessments, and provide workers with adequate training, instruction and supervision.
- The case demonstrates that cooperation with workplace safety authorities, including an early plea, may reduce the penalty imposed.
At concrete product manufacturing company Premier Precast Pty Limited (the employer), large concrete mixers were used as part of its day-to-day operation. Peter Barrett was on his third day of employment there when he was asked to hose out a concrete mixer. He was unsupervised while performing the task, despite never having hosed out a mixer before. He slipped and fell into the mixer while it was in operation, causing horrific injuries that ultimately led to his death.
The employer pleaded guilty to a charge under section 8(1) of the Occupational Health and Safety Act 2000 (NSW) (the Act) for failing to ensure the health and safety of an employee. The particulars of the charge included that there was a failure to:
- ensure the moving parts were adequately guarded;
- ensure a safe system of work;
- ensure adequate risk assessment; and
- provide necessary instruction, training and supervision.
The court found that the risk to Mr Barrett had been reasonably foreseeable, even though his superiors had not actually foreseen the risk.
Justice Backman considered a number of factors to be relevant. Mr Barrett:
- had only been working for the employer for three days;
- had no experience in the work he was instructed to do;
- was alone and unsupervised at the time of the accident; and
- was the recipient of inadequate instructions.
- Also, the mesh guard of the mixer was not affixed and could be removed while the mixer was in operation.
In these circumstances, Justice Backman found that it was incumbent on the defendant to issue precise and adequate instructions on how Mr Barrett could perform the task safely. The maximum penalty under the Act was $550,000.
Justice Backman assessed the value of an early guilty plea at 25 per cent of the maximum penalty. The absence of prior convictions, the fact that the employer cooperated with WorkCover during the investigation and prosecution, and the employer's clear remorse were all considered bases for a further reduction in the penalty. The employer was fined $99,000.
Risk not addressed, before or after incident
In brief: Courts will impose heavy penalties on employers that do not address well-known and easily foreseeable risks to health and safety, especially if they do nothing to prevent an incident recurring. Lawyer Andrew Stirling reports.
How does it affect you?
- Heavy penalties will be imposed for breaching health and safety legislation where the breach involves a failure to develop appropriate systems to minimise well-known risks associated with the relevant industry and workplace.
- Employers are responsible for their employees' health and safety, even while they are working on another company's premises.
- Employers should immediately address problems highlighted by a health and safety incident. Failure to do so leaves the employer exposed to committing future breaches.
Western Freight Management Pty Ltd provided freight services to Star Track Express (STE)8. On 2 December 2004, two Western Freight truck drivers, Mr Norman and Mr Lloyd, attended a STE depot to have their trucks loaded. The depot's design required drivers to perform a 'reverse jack-knife manoeuvre' to exit the depot once their truck had been loaded.
After Mr Norman's truck was loaded, Mr Lloyd assisted him to shut the truck's rear doors and apply security seals. Mr Norman then entered the truck and performed the reverse jack-knife manoeuvre, thinking that Mr Lloyd would be clear of the area. He could not see directly behind his truck while reversing. Mr Lloyd was fatally crushed between the trailer and the loading dock.
Western Freight was prosecuted and found guilty of breaching section 8(1) of the Occupational Health and Safety Act 2000 (NSW), which requires employers to ensure the health, safety and welfare at work of their employees.
The court was required to determine the appropriate penalty for Western Freight. In fining Western Freight $200,000, the court found that:
- Western Freight knew the reverse jack-knife manoeuvre was required, but had not undertaken a proper assessment of the risk to safety that it posed. Western Freight left their employees' safety largely in the hands of STE and the employees themselves;
- the risk of being struck by a reversing trailer in such circumstances was an obvious one and well-known within the transport industry;
- the depot had no traffic management plan, and Western Freight had taken no adequate steps to satisfy itself that STE provided and maintained a safe system of work;
- there were simple and straightforward remedial steps that could have been taken by Western Freight to avoid the risk; and
- Western Freight had not taken any post-incident steps to minimise the risk. It relied on an 'unwritten rule' that truck drivers should not stand behind reversing trucks. The court increased the penalty because of the need specifically to deter Western Freight from allowing this situation to continue.
Although the court considered the appropriate fine to be $250,000, this was reduced in light of STE's fine of $150,000 for the same incident.
Penalty reduced for improved safety measures after incident
In brief: The South Australian Industrial Relations Commission9 has imposed a lesser fine against an employer for a breach of OHS legislation because of the measures it took to improve existing workplace safety standards. Law Graduate Rachel Chua reports.
How does it affect you?
- Positive steps taken by employers to improve existing OHS standards in the workplace may mitigate penalties for breaching OHS legislation.
- The decision highlights the importance of maintaining up-to-date OHS policies.
The background and facts
In July 2009, the South Australian Industrial Relations Commission fined Trew Stone Building Contractors Ltd a discounted penalty because the company took active steps to bring its OHS practices and policies to the requisite standard after a workplace accident.
Trew Stone was nearing the completion of renovations when one of its employees fell from scaffolding. A prosecution was brought for breach of section 19(1) of the Occupational Health, Safety and Welfare Act 1986 (SA). Trew Stone pleaded guilty. When the accident occurred, Trew Stone had an old 2002 general OHS policy in place that contained no policies specifically dealing with work conducted at height (required under the Occupational Health, Safety and Welfare Regulations 1995 (SA)).
In assessing the penalty in a plea mitigation, Industrial Magistrate Adlie took into account:
- the risk of injury;
- the contrition Trew Stone showed and its guilty plea;
- Trew Stone's very good safety record;
- Trew Stone's full cooperation with investigations; and
- Trew Stone's improvements to its OHS standards.
A penalty of $14,875, plus levy and costs, was imposed, including a 15 per cent discount for the guilty plea.
WA Government considers reforms to mine safety laws
In brief: Over the coming months, the Western Australian Government will make major changes to the regulation of mine safety. Lawyer Jeremy Sher reports on some of the key proposals.
How does it affect you?
- The changes will immediately increase the resources of the Department of Mines and Petroleum to monitor OHS issues at WA mine sites.
- The State Government will adopt an industry cost recovery model to fund mine safety regulation. This will be similar to the models currently used in NSW and Queensland.
In April 2009, Commissioner Kenner of the Industrial Relations Commission of WA tabled his statutory review of the Mines Safety and Inspection Act 1994 (WA) (the Act). The review considered:
- areas of the legislation that could be improved, such as its application to rail safety, mine sites during construction, and interaction with other OHS legislation;
- the goals and strategies of the National Mine Safety Framework;
- outstanding recommendations from the 2003 review of Parts 3 and 4 of the Act; and
- the recent review of the Occupational Safety and Health Act 1984 (WA).
The review made some 119 different recommendations, including the harmonisation of standards, introducing a safety case approach on an 'opt in' basis, and increasing the size of the Resources Safety Division of the Department of Mines and Petroleum.
The State Government's response
On 4 September 2009, the Minister for Mines and Petroleum announced the State Government's response. He said, 'the recent spike in mine site-related fatalities is unacceptable and has contributed to the need for urgent action'. The minister announced that the following principles will guide the State Government's response:
- significant additional resources for the Resources Safety Division of the Department of Mines and Petroleum, including more money to increase compliance activities by mine inspectors and the appointment of more than 70 new full-time staff over the next 12 months;
- the introduction of an 'industry cost recovery' model similar to the models used in NSW and Queensland; and
- a new approach to safety management based on evidence and risk, and focused on reducing the likelihood of serious incidents, similar to the models currently used in the petroleum industry.
Over the coming months, the State Government will begin consultation with industry groups, trade unions and major resources companies to develop and implement these reforms further.
- National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Minister's Council, 31 October 2008 and Second Report to Workplace Relations Minister's Council, 30 January 2009.
- WRMC Response to Recommendations of the National Review into Model Occupational Health and Safety Laws.
- Leighton Contractors Pty Ltd v Fox; Calliden Insurance Limited v Fox  HCA 35 (2 September 2009).
- Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.
- Telstra Corporation Ltd v Smith  FCAFC 103 (31 August 2009).
- Comcare v John Holland Rail Pty Ltd  FCA 771 (20 July 2009).
- Inspector Stephen Charles v Premier Precast Pty Limited  NSWIRComm 136 (12 August 2009).
- Inspector Patton v Western Freight Management Pty Ltd (No 2)  NSWIRComm 124.
- Hillman v Trew Stone Building Contractors Pty Limited  SAIRC 48.
- Peter ArthurPartner,
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- Maryjane CrabtreeExecutive Partner,
Ph: +61 3 9613 8706
- Stephen McComishPartner,
Ph: +61 8 9488 3767
- Jamie WellsPartner,
Ph: +61 7 3334 3268
- Ric MorganSenior Associate,
Ph: +61 2 9230 4093