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Focus: Occupational Health & Safety

22 August 2013

In this issue: We look at the Queensland State Coroner's findings into the deaths of workers under the Federal Government Home Insulation Program; an unresolved debate around drug testing in the workplace; the New Zealand Good Governance Practices Guideline for Managing Health and Safety Risks; federal legislative amendments that create a new bullying jurisdiction; and New Zealand's most significant reform of its workplace health and safety system in 20 years.

Workers' deaths referred to safety regulator

In brief: The Queensland State Coroner has released its findings into the deaths of workers under the Federal Government Home Insulation Program, with recommendations that may result in prosecutions for two company directors and a supervisor. Partner Simon Dewberry and Lawyer Dan McDonnell report.

How does it affect you?

  • Safety breaches that result in prosecution may be subject to further investigation and prosecution following a Coronial inquest.

Background

Arrow Property Maintenance Pty Ltd employed Rueben Barnes, and QHI Installations Pty Ltd employed Matthew Fuller, who both died while installing insulation as part of the Home Insulation Program. Arrow and QHI were convicted of breaches of safety obligations relating to the deaths.

Coronial inquest

Under the Coroners Act 2003 (Qld), if a Coroner reasonably suspects that a person has committed an indictable offence, the Coroner must refer the information to the Director of Public Prosecutions or to the regulator.

Lawyers for Mr Barnes' family made a submission at the Coronial inquest that the two directors of Arrow should also be prosecuted for possible safety breaches. The Coroner referred the submission to Workplace Health and Safety Queensland, to consider whether further prosecutions should occur on the basis of alleged breaches by the directors of Arrow. The Coroner also referred to the regulator his findings on the culpability of a QHI supervisor, to consider whether the supervisor should be pursued for possible breaches.

Recent developments in drug testing

In brief: The imposition of drug testing in the workplace involves balancing the employee's right to privacy with the employer's obligation to ensure the safety and health of its workers. This balancing exercise has resulted in an unresolved debate over whether urine testing or oral fluid testing is most appropriate. Lawyers Dan McDonnell and Arlou Arteta report.

How does it affect you?

  • When introducing a new drug testing policy or amending an existing policy, the availability of reliable oral fluid testing must be considered carefully.
  • A refusal to comply with a drug policy will generally provide a valid reason for dismissal.

Urine testing versus oral fluid testing

Industrial tribunals accept that employers may conduct random and targeted drug testing to manage the risks to safety posed by drug use.

The industrial tribunals have long approved urine testing, on the basis that on-site urine screening devices are more reliable than those available for oral fluid.1 However, recent developments – notably, the development of an Australian Standard for oral fluids testing (AS 4760) – have increased the credibility of oral fluid testing.

In Endeavour Energy v CEPU & Ors,2 the employer wanted to implement a new drug and alcohol policy involving urine testing. The Fair Work Commission (the FWC) was concerned that urine testing may show a positive result even though it had been several days since the person had ingested the substance, meaning that their having done so did not affect their capacity to do their job safely. In finding that the employer should use oral fluid testing, in accordance with AS 4760, the FWC held that if oral fluid testing is readily available, it would be unjust and unreasonable to impose urine testing for drugs.

Failure to comply with the policy

The decision in Endeavour Energy v CEPU & Ors can be contrasted with the recent decision of Raymond Briggs v AWH Pty Ltd3, which considered whether an employee was unfairly dismissed when he refused to provide a urine test. The employee offered instead to provide an oral fluid test, on the basis that his employer's policy was unreasonable, unlawful and not best practice.

The FWC referred to the competing scientific merits of urine and oral fluid testing, and determined that there was no clear consensus as to which was the most appropriate method. They found that oral testing is less invasive and better at confirming acute impairment from very recent drug use, but that urine testing can uncover patterns of drug use that may lead to safety concerns.

The employer argued that the employee was dismissed because he failed to comply with a lawful and reasonable direction to undertake the test, breaching its alcohol and drugs misuse policy. It claimed the employee was aware of the consequences of failing to comply with the policy and had been given an opportunity to respond to the alleged breach.

The FWC found that the imposition of urine testing was reasonable, and fell within the employer's right to make decisions and introduce workplace policy. That is, a workplace's drug and alcohol testing policy will not be unreasonable just because an employer could have adopted a different approach to testing that an employee might prefer, and that, in some circumstances, might result in different outcomes for employees' tests.

Lessons for directors from across the Tasman

In brief: The New Zealand Government and the New Zealand Institute of Directors have released the Good Governance Practices Guideline for Managing Health and Safety Risks, as a response to the Royal Commission on the Pike River Coal Mine Tragedy. Senior Associate Veronica Siow and Lawyer Michael Whitbread highlight some key recommendations in the Guideline.

How does it affect you?

  • Under Australian work health and safety (WHS) laws, directors and other officers can be personally prosecuted for breaches. The Good Governance Practices Guideline for Managing Health and Safety Risks provides useful suggestions of how company officers might exercise due diligence and avoid prosecution.
  • Officers who have a passive involvement in WHS risk management are putting themselves at risk of prosecution. The Royal Commission's findings were critical of the directors of the Pike River Coal Mine for assuming that everything was under control unless they were told otherwise.

Practical steps towards satisfying due diligence requirements

The Guideline outlines some practical steps that officers should consider taking as part of their due diligence, which apply equally to officers in Australia generally. Below is a checklist, drawn in part from the Guideline, of some of the questions that officers can ask themselves to assess whether they are discharging their due diligence obligations:

  • How do I demonstrate my commitment to WHS?
    • How aware am I of the risks facing our workers?
    • What measures are in place to inform me? Am I asking the right questions?
    • Do I need training on WHS matters? Do others in the company need training?
    • When did I last attend a WHS compliance/committee meeting?
    • Do I proactively identify risks and anticipate incidents?
  • How do I ensure our health and safety management system is fit for purpose?
    • Am I satisfied that the company has allocated sufficient resources to WHS issues?
    • Do our managers and safety officers have the requisite skills, qualifications and experience to effectively manage the safety management system?
    • Am I satisfied that our employees are consulted about WHS issues? Are there processes in place that allow employees to express their concerns openly?
  • How do I track management's performance and hold management to account for implementing our safety management system?
    • What data do I receive about our risk management and WHS performance? What data should I be receiving?
    • Am I receiving the right information? Is the information current, relevant, accurate and complete?

Bullying in the workplace: what should employers do about it?

In brief: A rise in bullying complaints, a Parliamentary inquiry and greater public scrutiny has led to amendments to the Fair Work Act 2009 (Cth) that create a new bullying jurisdiction. Partner Simon Dewberry and Lawyer Emily Harvey report.

How does it affect you?

  • Amendments to the Fair Work Act will enable individual employees to apply to the FWC for an order to stop bullying.
  • Employers should implement measures to minimise the risks associated with workplace bullying.

Background

While, in light of increasing numbers of bullying complaints, regulatory authorities have expressed serious concerns about bullying at work, there is limited data on the prevalence of bullying in Australian workplaces.

Following an inquiry, a Parliamentary report recommended that the Federal Government take action to address workplace bullying. In response, the Government has sought to adopt many of the recommendations, in its proposed amendments to the Fair Work Act. (We discussed the proposed amendments in our Client Update: Key changes to bullying laws.)

FWC General Manager Bernadette O'Neill has stated that 'our working hypothesis was that in the order of 3,500 applications would be lodged per year' under the new bullying provisions.

What is bullying?

There is no statutory definition of bullying. However, the courts have provided the following guidance on what constitutes it:

  • persistent, offensive, abusive, intimidating or insulting behaviour, abuse of power or the imposition of unfair penal sanctions;
  • that makes the recipient feel upset, threatened, humiliated or vulnerable; and
  • undermines their self-confidence.

The alleged bully's intention or motive is irrelevant. The test to be applied is whether a reasonable person would have anticipated that the recipient would feel bullied and harassed.

Unlike sexual harassment, bullying must be persistent. Bullying is a course of conduct of a particular kind.

The model Code of Practice

In May 2013, Safe Work Australia released the Draft Code of Practice on Preventing and Responding to Workplace Bullying. The Code provides that the following steps should be implemented to manage the risk of workplace bullying:

  • a workplace bullying policy that provides a definition of workplace bullying, expected behaviours and the consequences of non-compliance;
  • a reporting procedure, so that employees know how they can report allegations of bullying;
  • procedures to respond to bullying complaints in a reasonable, timely and confidential manner, including how investigations will be conducted and how individuals can respond to workplace bullying; and
  • training for workers, including supervisors and managers, about these policies and procedures.

Employers should consult with their employees, and/or their health and safety representatives, to develop and implement these measures before the new anti-bullying laws come into effect. Employers should then monitor and review the measures to ensure they are working.

New Zealand joins in with Work Health and Safety harmonisation

In brief: On 7 August 2013, the New Zealand Government announced the most significant reform of its workplace health and safety system in 20 years. Partner Simon Dewberry and Lawyer Dan McDonnell report.

How does it affect you?

  • The reforms will require leadership and action from business to ensure compliance with the new Act and supporting regulations, which are expected to commence at the end of 2014.
  • The new Act is based on the harmonised WHS Model Acts in Australia, and makes changes to the NZ framework, including stronger penalties, more enforcement tools, stronger court powers and new directors' duties.

Background

The NZ Government has published its plan for WHS reform, entitled Working Safer: a blueprint for health and safety at work, in response to the recommendations of an Independent Taskforce on WHS, set up partially in response to the Pike River Coal Mine disaster. The reform will see the Health and Safety at Work Bill replace the Health and Safety in Employment Act 1992 (the HSE Act). The Bill is set for introduction into Parliament in December 2013, with the objective of the legislation coming into force by December 2014.

New concepts

The Bill is based on the recently developed Model WHS Acts in Australia. It introduces several new concepts, such as a person conducting a business or undertaking (PCBU) as the primary duty holder, which is broader than the 'employer' category under the HSE Act. Additionally, the 'reasonably practicable' test will replace the 'all practicable steps' test in the current HSE Act. Importantly, there will be a due diligence duty for directors, chief executives and others in governance roles.

Due diligence

Under the HSE Act, directors, officers and agents are only exposed to personal liability if they have participated in, contributed to, or acquiesced in any failure of the company to comply with the HSE Act. The Bill imposes a positive due diligence duty, so that those with governance roles must actively manage workplace health and safety. The penalties for failing to perform the duty include imprisonment where the officer's failure or recklessness exposed a person to risk of death or serious injury. The extent of the due diligence duty will be defined to match the officers' particular roles.

Before the introduction of the new laws, company officers should consider seeking legal advice on how to comply effectively with this more onerous duty.

Penalties

The Bill contains the following tiers of maximum penalties.

  • general failure to comply with WHS duties – maximum fine of NZ$500,000 for a corporation and NZ$100,000 for an individual;
  • failure to comply with WHS duties exposing an individual to serious risk – maximum fine of NZ$1.5 million for a corporation and NZ$300,000 for an individual; and
  • reckless conduct – maximum fine of NZ$3 million for a corporation and NZ$600,000 and/or five years' imprisonment for an individual.
Footnotes
  1. CFMEU v HWE Mining [2011] 214 IR 194 at 206.
  2. [2012] FWA 1809; this decision was upheld on appeal in Endeavour Energy v CEPU & Ors [2012] FWAFB 4998.
  3. [2013] FWC 2017.

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