“Due diligence” is an established business management concept that only recently came to be applied to occupational health and safety (OHS) in Australia through the Work Health and Safety (WHS) harmonisation process. It’s credibility comes from the Corporations Act, principally, but also Consumer Protection and, partly, Environmental laws.
The attention given by OHS/WHS professionals and senior executives to due diligence is already changing how workplace safety is managed in a positive way but recently the Australian Institute of Company Directors (AICD) proposed weakening the broad due diligence obligations. If this proposal is accepted and implemented by the Australian Government that is sympathetic to business, could these changes diminish the growing attention to OHS/WHS due diligence? More…
There is a constant tension between occupational health and safety (OHS) and workers compensation. OHS is intended to prevent harm and workers compensation is available for when harm cannot be, or has not been, prevented. In Australia, these two elements of safety are administered by different organisations under different legislation but it is a distinction that baffles many. The recent discussion about a sex-related workers compensation claim illustrates this bafflement to some degree.
This time last year Comcare filed an appeal over a Federal Court decision regarding
“A Commonwealth employee is seeking workers’ compensation for injuries sustained after a light fitting was pulled from the wall of a motel during sex, on a business trip.”
(A good summary of most of the legal proceedings is provided by Herbert Geer.)
The case has received wide media attention mostly for the salacious matter of the case, and some political attention, but the purpose of the appeal, according to Comcare, was
“… to seek a High Court ruling on the boundaries between private More…
One of the most discussed posts on this blog concerned an insurance company that paid the fines awarded against a company director. The company director had been found guilty of OHS breaches that led to the death of a worker. Yesterday, South Australia’s Deputy Premier and Minister for Industrial Relations. John Rau, said that he will be taking action to close the loophole that allows for this situation. But this is unlikely to succeed and may be a distraction from the more significant issue of new penalties for deterrence.
In a media release, not yet available online, Rau states that
“Insurance should not be the preference over safe equipment and safe workplace standards….
Whilst most employers do the right thing, this dodge effectively means that the incentive for a company to provide a safe environment for its workers is diminished or eliminated.”
Rau’s current strategy for closing this loophole, which is not really a legal loophole at all, is weak. Rau, a Labor Party politician, says that he will bring the matter to the attention of the Federal Minister for Workplace Relations, Bill Shorten. However, Australia is ten days away from an election that the current (Labor) government is tipped to lose.
Victorian Workcover Authority (VWA),was in the pages of the Australian Financial Review in July 2013 over several issues -
- CEO Denise Cosgrove told staff of her wonderful holiday in Daylesford in the same email in which she advised of a review of operating budgets “including people costs” and of job losses,
- Former Minister for Workcover, Roger Hallam, has been appointed to undertake a review of the Victorian Workcover Authority ,
- Hallam is said to have been on the panel that appointed Cosgrove recently to the CEO post,
- Cosgrove has pushed for a change in common law (Common law was controversially dropped during Roger Hallam’s time as Minister).
There seems to be many issues bubbling away at VWA – common law, declining profitability, “dividends” and a secret review. More…
In response to proven breaches of occupational health and safety laws, judges usually apply financial penalties to companies and individuals. These penalties, like all court-ordered punishments are to deter the offenders from re-offending but also to show others the consequences of their actions. But what if an insurance company would pay for that penalty in return for regular premium payments? If the offender does not pay the penalty, deterrence is gone.
On 27 June 2013, a company and its director were fined $A200,000 each in relation to workplace incident that resulted in the gruesome death of one man and a near miss for another but the director had taken out a general insurance policy and the insurance company paid out!!??. A fine of $A200K awarded but the offender may pay no more than $A10K. More…
In May 2013, Workcover Queensland supported the government’s intention to change the definition of worker to match that of the Australian Taxation Office (ATO). The definition re-emphasises the significance of the employer/employee relationship. Workplace health and safety laws through most of Australia have recently changed to remove the reliance on the employer/employee relationship with the intention of clarifying the lines of responsibility for preventing harm. The diversity between workers’ compensation and OHS definitions unnecessarily complicates the management of a worker’s health through the linear experience of employment.
The government believes such changes will reduce “red tape” but only in the narrow context of workers compensation. The Work Health and Safety Act expands the definition of worker but another piece of legislation in the same State restricts it. Inconsistencies of concepts are likely to lead to duplications, confusion and arguments that may generate as much unnecessary business and legal costs as the initiatives were intended to save. More…
The Australian Government has released its report into a review of its national workers’ compensation scheme, Comcare, and the Safety, Rehabilitation and Compensation (SRC) Act. Some of the media (and politicians), as it often does, has focused on the seemingly absurd compensation claims. Few cases have gained the same degree of national and international attention as the sex case for instance, and although most workers’ compensation reports focus on post-incident treatments, there is a glimmer of hope on occupational health and safety (OHS) in this latest review.
The report, the latest undertaken by Peter Hanks QC, states that one of the guiding principles of the SRC Act should be an acknowledgement that
“The benefit and premium structure should promote incident prevention and reduce risk of loss.” (page 25)
This would be a wonderful benchmark to apply but is likely to be overshadowed by the compensation and rehabilitation issues of the review, unless OHS professionals and practitioners continue to remind regulators that prevention is better than cure.
Peter Hanks admits in a 2012 video interview on his review that injury prevention is not part of the terms of reference but there are elements of his report that require serious consideration by OHS professionals in consultation with their Human Resources (HR) colleagues. More…
Neil Foster of the University of Newcastle is known to SafetyAtWorkBlog for his work looking at the legal liabilities of company directors and officers. Recently Foster released a paper called “You can’t do that! Directors insuring against criminal WHS penalties” which provides an additional legal context to an earlier blog article.
Foster acknowledges that
“…provisions of the criminal law imposing personal liability for company breach of workplace health and safety provisions provide one of the strongest ‘drivers’ for company officers to use due diligence to see to the implementation of company safety policies.”
“… what if the officer knows all along that, should they be subject to such a penalty, the company, or an insurance policy, will come to the rescue?”
This is a concern that relates to insurance policies or indemnities that are being offered in some industrial sectors. Insurance could dilute the diligence of officers and directors on a range of matters including workplace safety. More…
In August-September 2012 a media release was circulated in Australia promoting an
“…an Australian industry first – leading construction & mining workplace safety provider RIS offers to indemnify operators against non compliance prosecution.”
This may be a first for RoofSafe Industrial Safety (RIS) but not for Australia. SafetyAtWorkBlog has reported on a smaller but similar system that originated in the automotive repair industry.
RIS’ Syncron system has several steps to compliance
- Safety Audit
- Assessment and Priorities
- Coordinated actions aimed at maximum cost savings
- Ongoing Monitoring and Continuous Improvement
It seems to be popular in the mining sector, according to the RIS website and clearly, from the media release, RIS is expanding its application from its fall-protection base into construction.
There are lots of issues of concern in the media release, if not in the Syncron system itself. The indemnification is of particular concern and although these sorts of safety management systems are apparently cleared through legal advisers they need a great deal of explanation in order for businesses to feel comfortable.
One of the potential traps of these systems is that indemnification only exists when the assessment and management system is followed absolutely, as highlighted below. Although the advisory resources exist outside the customer’s business, checking and monitoring still comes from the customer and adequate resources are required.
The legalese through all Syncron brochures and statements needs forensic analysis. More…
In a recent edition of Safety Express, a newsletter from WorkSafe Victoria, Clarke Martin outlined the benefits of WorkSafe’s Owner Visit program to one regional company. This good news story needed more depth and detail so Clark Martin provided SafetyAt WorkBlog with additional information.
The Safety Express article outlined that a company of over 200 employees gained advice through WorkSafe’s free 6-hour consultancy service and has
“…made significant savings in insurance premiums over a two-year period. The financial and safety benefits are continuing today.”
“The company agreed to make significant changes to the way the business managed its OHS and RTW, and the financial management of premium costs.”
“WorkSafe worked with the company for two years and in this time the EPR dropped to just 34 per cent above average and work is continuing to further improve its performance. The company advised WorkSafe that savings achieved from reduced insurance premiums was equivalent to the profits on producing and selling an additional $16m of product.” More…