The “head scratcher” in due diligence

I’ve been having a “hmmm(?!)” moments with a wee bit of the due diligence stuff in clause 27 of the Work Health Safety Bill (WHS). I’m interested to hear what you people reckon about it.

Here’s the rub: I don’t think it’s possible to get a clear idea of what it means to comply with the due diligence obligation as set out in clause 27(5)(a); in turn, this means the obligation is, for all practical purposes, unenforceable.

Below is a slab of the preliminary words and the provision, with a bit after it for context:

“(5) In this section, due diligence includes taking reasonable step

 (a)  to acquire and keep up-to-date knowledge of work health and safety matters; and

 (b) to gain an understanding of the nature of the operations of the business or undertaking…”. [emphasis added]

In the process of going through the WHS stuff to see what changes I need to look at for a client’s SMS (well in advance of the Victorian move over to the national laws) I decided to look at the due diligence stuff first.

A quick read of sub-clause (5) shows there is a whole bunch of stuff on the sort of things you’d expect a “mindful” organisation to be doing to keep senior managers up-to-speed.  There isn’t an issue with paragraphs (b) through to (e); they deal with good mindfulness stuff for their business and undertaking. It’s para (a) that has quizzical compliance issues.

It’s pretty obvious that a safety management system ain’t gunna work properly if senior managers don’t have “an understanding of the nature of the operations”, don’t have the resources and processes to manage safety, etc. 

All of those things are listed in paragraphs (b) – (e). But there is an important element to the sensible stuff in those paragraphs: they are all categorically linked to mindfulness in the context of the business or undertaking. The tricky bit about paragraph (a) is that there ain’t any nexus with the business or undertaking.

A wise counsellor passed on an excellent tip when I was having a frustrated rant about trying to get a bunch of people to see what a particular provision we were drafting actually meant.  Her tip was, if the people are having trouble understanding the law, they should read it.

It’s something I use a lot. It’s all about reading the words carefully and without any of those common legislation-reading filters that whisper “I want it to say” or “it probably means”.

Reading exactly what 27(5)(a) says I see that every defined officer of the business or undertaking has to acquire and keep up-to-date knowledge of work health and safety matters generally, not just in the context of the business or undertaking.  That is a big call.

How do I work out when I’ve taken enough “reasonable steps” to make sure my officers have enough knowledge of all sorts of health and safety matters?  How extensive should be the learning outcomes for an information or training program I might put together? Given the liability stuff that comes with due diligence, should I putting in place a very comprehensive assessment component to any training, and will it be sufficient to just use a competence measure for that assessment?

I reckon I’d spend a minimum of an hour a day, every day of the week going through stuff like Graham Dent’s excellent WHS LinkedIn blog discussions, Kevin Jones’ equally excellent SafetyAtWorkBlog, monitoring a coupla customised Google News Alerts on OHS, reading the plethora of newsletters on OHS topics, popping into Oz regulators web sites, the EU OHS sites, the ILO OHS sites etc.  Add to that all the ordinary research I’m doing as part of me work as an OHS practitioner and trainer on a day-to-day basis, and I reckon I’m making a fair dinkum effort to keep up to speed on OHS stuff generally.

But, would I stake me ute on a guarantee that, in absolute terms all that monitoring and research on OHS info ensures I have acquired, and kept right up to date on all work health and safety matters over the huge range of things that could be described as “work and health and safety matters” right around the world?  No way, I love me ute.

And what would be your reaction if you were at a safety conference and a speaker starts the presentation with “Hello, I have acquired and kept up-to-date on everything, anywhere, on every OHS matter in the entire world; I’d like to talk about that” ?  I suspect you’d be tempted to nip out and call a CAT team to take the speaker away, safely.

Draftin’ up laws has a parallel to cooking.  Despite the big range of principles, methods and rules about ingredient combinations, there is one over-arching rule that has to prevail when whipping up a dish: it has to taste good. Drafting laws has gobs of principles that have to apply to the process, but the job also has one over-arching rule: the law has to be fair and reasonable.

Is it fair and reasonable to expect an officer of a firm to acquire and be up-to-date on all knowledge about all health and safety matters that may have nothing to do with their business? I don’t think so.

Does it make sense to have such an obligation on an officer when there is a bunch of entirely sensible and good things they are obliged to know; as listed in paragraphs 27(5)(b) through to (e)? I don’t think so.

Given the difficulty in working out just what is needed to satisfy the clause 27(5)(a) obligation, will it be possible for OHS regulators to enforce it? I don’t think so.

Should there be a provision in legislation, intended to be adopted as a Principal Act, that needs to be “fluffed over” because its inferred obligation is a bit wonky and so will probably just get ignored?  Absolutely not.

Col Finnie was WorkSafe Victoria’s Principal Legislation Officer (OHS) from 1989 – 2000 he now operates his own OHS advisory and training business – fini:OHS pty ltd.  Col has contributed previous articles to SafetyAtWorkBlog.

20 thoughts on “The “head scratcher” in due diligence”

  1. …and if we leave it up to the courts to sort, that may well mean some poor soul and his lot will have to wear the brunt of that legal argument. All good for the suits but not much chop for the family – especially in a matter that includes loss of life.

    I’m with Col – laymen, workers and small business owners deserve a written law that does not leave gaping questions unanswered. Moreso, our workers deserve that much.

  2. I agree with ya Brett, the bit about people will work out a practical “work-around”. But the way I see it, there has to be a big effort put into not having a need for that in the OHS law in the first place.

    Seen this happen with regulations before. Provisions don’t quite work and 2 things occur: 1. People ignore a legislative snaffu and take the punt they wont get pinged; or 2. Firms that can’t or wont take the risk of being pinged start pumping out applications for exemptions.

    That means bureaucracies beef up their exemption-issuing teams, and that obviously means resources are taken away from what I’d consider are the most important roles of OHS agencies: constantly improving and informing the state of knowledge and enforcement.

    I’d suggest it’s illogical to work towards a harmonised, and by inference, a more efficient legislation foundation and then, through a wee oversight here, a wee oversight there create more unproductive paperwork, i.e. need for a firm to apply for, and a bureaucracy to have the resources to evaluate exemptions from the law.

    I’m hoping that WHS adopters will have a key performance indicator in place to get the jump on this: reports on frequency of exemption applications for this or that provision. Will be tricky to work out the “response trigger” because ya can safely bet that for every formal request for an exemption there are heaps of punters just winging it.

    A top-rate response would be for jurisdictions to have a reporting system on all WHS exemption applications. Two applications from 2 different firms should get the WHS requirement on an amendment schedule. The jurisdictions co-ordinate it and when they get a feel for the frequency rate, they decide on a co-ordinated timing for the legislative change to remove the need for an exemption. Legislation that is clear, enforceable and practical is good: exemptions are bad.

  3. Won’t it ultimately be left up to a judge to interperet? And wouldn’t you argue with the judge that keeping up to date knowledge of how to safely dredge silt from bays with inclement weather, when you run a printing business, really has nothing to do with the case at hand? I doubt the judge would even look at this.

    Whilst I agree it is not well written and doesn’t have a qualifier, the layman would intepret this to mean his workplace, and only the guy with a law background (Col) has spotted the gaffe and has a problem with it. That is not a stab at Col, but I would consider myself a layman and never spotted the problem but simple thought it to apply to my workplace as that is all that is indeed relevant and will ever be relevant in a court proceeding.

  4. Roger Les, the Objects are absolutely the next “go-to” if the intent of the specific provision is in question. Natch’, I checked the WHS Objects clause while preparing this piece. And I read those Objects as being very general about workplace safety. I didn’t see anything in the Objects that said duties and obligations are exclusively described in the context of the hazards or risks at the business or undertaking.

    But iron-tight Rule #1 is look at what the provision says first. Interpretative tools can only be used once you do that. Court precedents and case law can be helpful to get a sense of requirements. And the interpretative “tool” of last resort is “spirit or intent” of the legislation; I think people are tending to rely on that one to give some compliance parameters to clause 27(5)(a).

    In the legislation drafting game, relying on “spirit and intent” for interpretation is colloquially known as “scraping the bottom of the barrel”. And it is.

  5. Hi again,

    I just had another thought that underpins what I said before – When I was learning Industrial Law as part of my Bachelor’s degree, our lecturer instructed us to always read the relevant law in light of the ‘Objects’ section as this was provided by the Legislators as a means to direct the application in the event that any ‘wooliness’ arises (loosely translated).
    In the NSW Act the Objects are in Section 3 and I have included Para (1) and subpara (a) for reference:
    3 Object
    (1) The main object of this Act is to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces by:
    (a) protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work or from specified types of substances or plant, and

    Therefore I believe 27(1)(a), read in light of this, is limited to knowledge about the relevant workplace, work, plant and substance of the business or undertaking.
    Les

  6. Cheers for those comments John and Les. However, I think the fact remains the provision is too wooly. Me, I believe it’s a good rule that if ya can’t describe compliance and therefore ya not going to enforce, then ya don’t codify.

    T’will be interesting to see what the slower WHS adopters make of the provision.

  7. ‘They tell us in a nutshell, there are no major changes’ (?) and perhaps there aren’t. Not being across all state’s legislation, but I do believe the previous legisation required managers and ‘officers’ to work to industry standards and best practice etc. etc. A practical approach for me in a larger organisation where so called specialists abound at engineering and supervisory levels, is that their standard of knowledge has to be relied upon, with us advising care when dealing with those individuals that we know are ’30 years’ behind the times!

    We have to continue to focus on practicable levels of efforts, skills development and resources to be aimed at risk-rated hazards and advising management of progress, e.g. SWOT style reporting.

    If asnytihing makes it to a court of law we must have our managers and now Officers, amassing evidence of all of the entities efforts to reduce risk – ALARP. Is anything in our work different?

    At the end of the day those in safety-related professions are only advisors; leave the legal opinions to legal profession and seek their counsel on matters not understood!

    With best intentions and kind regards.

    Paul M

  8. Hi Col,
    It seems I’m getting into this a bit late but for me you don’t need to read 27(5)(a) as wider the the content of the whole of 27 – which is primarily focussed on the conduct of the business or undertaking, as is the hwole Act.
    For me, this then implies that all components of 27 are similarly focussed. Do we really need to include specific references in every subparagraph of every sub-section in order to eliminate ‘confusion’? In hindsight, and based on your question, it would seem that the anwer to this is a resounding ‘Yes!!!’. But as you indicate yourself – ‘read the law’. The whole act is about ensuring safety within the conduct of the business or undertaking. It’s not about having a vast, up-to-date knowledge of WHS.
    And I can’t see any regulator even attempting to prosecute an officer for failing to have a ‘complete’ up-to-date knowledge of WHS – even IF a serious incident was to occur. They’ll prosecute the specifics in relation to the business or undertaking.
    My approach to this is:
    1: have a clear knowledge of the key components covered in the Act and associated regs and codes – what risk issues are idenitfied?
    2: review the business or undertaking to see which of these risk issues apply
    3: identify/consider risk issues of the business or undertaking NOT covered in Acts/regs/codes
    4: manage all the identified risks.
    I reckon that if you document this approach you will be able to demonstrate that you have discharged your duty of care with regard to the business or undertaking.
    Le Henley

  9. Col. In the Act there are repeated references to the business or workplace. I believe the The Primary Duty of Care, references the workplace and makes the area of application of the Officers duty clear for me. Para 19, (3), (f) . …” the provision of any information, training, instruction or supervision that is necessary to protect all persons…………from work carried out as part of the conduct of the business or undertaking…), and Reasonably Practicable also references the Workplace. On this basis I conclude that that Para 27, (5), (a), refers to the Business and Workplace. The Officer is after all ensuring that the PCBU is doing this across the business, it’s not just a stand alone requirement just for the Officer. See Division 4, Para 27, (1). For me the Primary Duty of Care is clear.

  10. Sorry anon, but that’s categorically not what 27(5)(a) says. Paras 27(5)(b) to (e) however, categorically refer to learnings and information “…that pertain to the business…”. Para (a) stands alone; there is zero reference to that acquisition of knowledge having anything to do with the business.

  11. I had a bit of a head scratching moment reading the post.

    In a nutshell, YES, the officer should keep abreast of all OHS matters that pertain to the business that they are employed by. That, after all, is a function of their job, and what they are being paid to do. However, hearsay, and opinions do not necessarily need to be included. So to that end, there is no need to read every single OHS blog on the net, simply following the official sites should be enough.

  12. Cheers for that bunch of references John. But I gotta say that the “go-to” is the words in the legislation first and foremost. Nevertheless, it will be interesting to see if the notion of ” acquire[ing] and keep[ing] up-to-date knowledge of [all] work health and safety matters” has a big swag of case law and whether the decisions associated with that help.

  13. Hi Col well done on getting this discussion going. I’ve done some more reading. Going over the Act again was OK however that didn’t fully clarify the meaning in relation to acquiring knowledge. So I went back to my copy of Understanding the Model Work Health and Safety Act, Barry Sherriff and Michael Tooma, September 2011. CCH Australia Limited. $49.00 well spent. There on pages 32 and 33 is discussion about Duty of Officers and Acquiring Knowledge. Examples of what this might mean are given and further on pages 42 and 43 comes the bottom line stuff. There’s an explanation of how the new duty differs from the existing law and; there’s reference to case law. I wont do it justice by taking it out of context with a quote. We’re talking about the law here so clearly case law is relevant. I will say that revisiting this material has helped clarify for me what’s required. Couple this with the Primary Duty of Care and reasonably practicable obligation and it’s clearer what’s required of an officer and the PCBU.
    One of the reasons that I bought the Sherriff and Tooma book was because it contained lots of references to case law with examples. I thought that these would be useful in our Manager OHS training modules that we’re currently updating.
    On Monday I’m attending a two hour Model WHS Legislation information forum. Hopefully I’ll have the opportunity to seek some clarification. The presenters are Larry Drewsen and Michael Costello from WorkCover NSW and my colleagues tell me it’s well worthwhile!.

    1. John, one of my main criticisms of the harmonisation of OHS is the sad necessity that to understand the OHS Act et al it is necessary to look outside the Acts and Regulations to case law. To understand the case law one then needs to read a legal interpretation of a judgement in order to apply the OHS law.

      This was not the intention of Lord Robens in the 1970’s, nor Australian Governments in the 1980’s and should not be the intention now. To satisfactorily apply OHS laws and prevent harm – the major aim of the OHS laws – the laws should be readily understandable by the layman, the worker, the small business operator….

      If part of the reason for harmonisation of OHS laws was to reduce business costs, how does the increased necessity to draw on legal opinion reduce costs?

      I hope that the forty-nine dollars you spent on the book is as much legal expenditure as you’ll ever need.

  14. Ross, it’s one thing for a voluntary guidance document to include stuff like that, a different thing all together for it to be law. Reading it in context, I see all the other very good knowledge and information obligations in paras 27(5)(b) to (e) as applying to the business or undertaking’s operations. Para 27(5)(a) is unqualified. Tricky.

  15. All those things about keeping informed KJ are, as far as I can see, all the logical things that would have to be done to fulfil the stuff in paras (b) to (e) in clause 27(5). The obligation in (a) does look all the world like “an impossible” task, certainly a mongrel of a thing to explain in terms of compliance.

    And yep, I recognise there is always a limit to how precise ya can be with the law. But when you have a very specific obligation ya just gotta be real “tight”. And Rule #2 with the law drafting is: If ya can’t easily explain what constitutes compliance then you’re up against it when it comes to enforcement.

  16. Col, I love your work, but in this case I think you have contorted an ambiguous wording into a unintended interpretation.

    I take it you are reading the phrase you have quoted:

    – “to acquire and keep up-to-date knowledge of work health and safety matters”

    … as being an obligation to “acquire up-to-date knowledge of work health and safety matters, and keep it.”

    I read it the other way – that the exercise of due diligence requires an Officer to acquire knowledge of work health and safety matters, and to keep it up-to-date.

    My interpretation squares with element 4.2.2 or AS 4801, and of equivalent obligations in other management standards, to ” identify and have access to all legal and other requirements that are directly applicable to the OHS”. An organisation ought to be able to comply with this obligation by a range of means just as they do now. Large organisations employ health and safety advisers and lawyers. Small companies join their industry association and subscribe to newsletters.

    So is your problem just with the ambiguous wording, or do you see this clause as establishing a deeper and more insidious obligation? Because if the latter, I just don’t see it.

  17. Keeping a current state-of-knowledge on occupational health and safety is indeed a big ask, probably an impossible task.

    Recently I have been working with some recent OHS graduates who have not been on many construction sites. Their familiarity with construction site safety is poor but a major skill the have is to be able to find information when it is needed. It would be great for them to have all knowledge at their fingertips but that was never possible and never will be. The best we can hope for is an, initial, educated guess with the capacity to verify or strengthen their position shortly after.

    Your paragraph of questions are likely to be answered (of the regulators hope it is answered) through the obligation to consult and to establish an active dialogue on OHS matters from shopfloor through to CEO.

    The issue of competence is managed through verification. Workers with plant operator certificates still leave keys in the plant when they are on their break. And competence comes from a mixture of the minimum qualifications attained through certification plus on-the-job application of those skills.

    I am reminded of the first aid training I used to watch where students would be issued with a certificate of competence after three days of classroom CPR and bandaging. Their competence did not come from the training but from the use of those skills in a real setting, and workplace first aid skills are rarely called upon.

    I would expect a CEO or an “officer” of any company to have a basic understanding of their OHS obligations but, more importantly, be aware of the OHS expertise and resources that can be called upon, particularly, from within their own company and secondarily, from outside. I believe that a positive duty is not to retain all OHS information but, as with the graduates above, to have enough of a basic understanding to make an initial, draft, decision and then be able to verify that decision promptly.

    Hazard prevention exercises may help in honing these skills and consultative procedures but as these skills are often called on immediately following an incident, it may be worth taking some guidance from some of the workplace crisis management publications and tailor them to one’s own safety management system.

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