In The Australian newspaper on 24 November 2012, columnist Judith Sloan discussed how the harmonisation of Australia’s occupational health and safety laws are
“a present glaring example of a despot stripped bare…”
Earlier this year, in April, Sloan said harmonisation was dead so one could say she is flogging a dead horse. Some parts of her November article (only available online via subscription) do not seem to be supported by evidence and her terminology occasionally indicates a lack of understanding of occupational health and safety matters.
Sloan rehashes some of the April 2012 article including the image of crying public servants but gives prominence to the inconvenience to some companies under the Comcare scheme. Several years ago some national companies opted out of State-based OHS and workers’ compensation schemes in order to join the only national safety scheme that was available at the time. Part of the reason for this move was that it provided national coverage for national businesses. Some complained because Comcare was seen as having a much smaller enforcement team and that the OHS laws were, somehow, less than in many of the States. This option was provided under a Conservative Government to assist business. The same government instigated the OHS harmonisation process.
Many of those companies that moved to Comcare have had that option revoked as part of OHS harmonisation on the understanding that any advantages gained by being in Comcare will now be matched by the harmonised safety regime. “Come back to the State schemes, which are now virtually national, and all will be forgiven.” But the harmonisation is not a national scheme as Victoria is refusing to play and Western Australia is still thinking about it. Contrary to Judith Sloan’s article, Tasmania is implementing the new laws from 1 January 2013.
Harmonisation – Good or Bad?
Sloan is correct that the companies left “hanging” in Comcare are not being helped by the government to transition to a Plan B, because there does not seem to be much of a Plan B.
Sloan supports part of her argument by paraphrasing
“…the outgoing chairman of the Council of Australian Governments Reform Council, Paul McClintock, made the point that unless Victoria is part of the national laws, then there is not much point to harmonisation.
“My strong judgment is that the new system, without Victoria, will cost us more than we would gain,” McClintock argued.” [link added]
She fails to source the quote and SafetyAtWorkBlog is yet to find any origin for the paraphrasing. If Sloan is working from the recent article by Sid Maher in The Australian , McClintock seemed to be critical of the Council of Australian Government process and Federal-State arrangements, and not specifically OHS harmonisation.
McClintock’s 19 November 2012 speech (not yet available online), the basis for part of Maher’s article, makes no mention of Victoria’s OHS stance and, in fact, seems to support earlier calls from the then-Victorian Premier John Brumby for the establishment of a “mature federalism”, one that McClintock describes as
“…a genuine change of culture with good faith and good will as its cornerstone.”
McClintock’s comments in Sloan’s article reflect an earlier speech that was much more general and mentioned Victoria along with Western Australia and New South Wales. He said to the Australian Institute of Company Directors in April 2012:
“….several states have implemented the model legislation and regulations and we applaud their considerable efforts. However, we’ve seen Western Australia hold to its position that there are four areas of the model bill that it may not adopt. Victoria has said that while it supports the principle of harmonisation, it is assessing the costs and benefits to see whether implementation is in Victoria’s interests. In New South Wales the model legislation has been passed but a variation has been inserted by that state‘s upper house permitting union prosecution. This combination of variations means we may not to achieve the objectives and potential benefits of this reform. In fact I argue that they may lead the reform to do more harm than good.” [emphasis added]
Details of the argument have never really appeared.
It is disappointing that McClintock, and Sloan, continue to rely on dubious Victorian costings when a counter argument can be mounted by the more robust South Australian Work Health and Safety costings. Perhaps this contrast simply reflects that Victoria’s costings were produced by PricewaterhouseCoopers for a conservative Liberal government and South Australia’s were by Deloittes for a Labor government, and that people choose evidence that fits their own world view.
Sloan’s Assessment of Work Health and Safety Act
Sloan’s article attacks the WHS Act:
“My assessment is that the flaws in the model WHS Act are so grave as to warrant rejection or amendment by the states and territories. It simply fails to deliver on the pledge of low-cost, effective regulation of workplace health and safety. It has some bizarre bits, including 4000 rules dictating precisely what equipment can be used and how facilities are to be built. Some are embarrassingly self-evident, like the rule that stairwells shall be lit by “natural or artificial illumination”. In many ways, the act is the antithesis of establishing a non-prescriptive duty of care for employers to provide safe and healthy working environments, an approach that is regarded as best practice.”
Currently only one State has rejected the WHS laws outright and that is Victoria. The repercussions of this stance on WorkSafe Victoria’s enforcement strategies and the management of safety by Victorian businesses will become evident in 2013 once the reality of isolationism settles.
The Federal Government’s ideal for harmonisation was that each State and Territory take on the model WHS Act and regulations as written but there was always the provision for each State to amend those laws to meet their particular circumstances. Variation was always allowed for, just discouraged.
Sloan states there was a government “pledge” for WHS laws to be low-cost and effective. Firstly, the effectiveness of any law, particularly laws that are aimed at preventing harm, cannot be judged prior to their introduction. Effectiveness may be evident at the first anniversary or, even better, the scheduled review timetables in the original laws and reiterated or revised in the States that have signed up, such as South Australia. South Australian MP John Darley was adamant on a strong and regular review process in his amendments.
On the alleged pledge for low-cost laws, this was not the regulatory intention of the harmonisation process. Prime Minister Gillard stated in August 2009 to the 15th World Congress International Industrial Relations Association that OHS reform would generate productivity benefits, a different aim to what Sloan saw as a pledge.
“…for the first time ever, after a 25-year wait, Australian businesses and workers are close to having a uniform national occupational health and safety laws. A massive step forward in achieving a seamless national economy that Australia needs to release lasting and much-needed productivity improvements.”
In that same speech she seemed to be in sync with Brumby and McClintock
“Australians should now move beyond a focus on law changes to a new focus on cultural change in the workplace. We need to build partnerships between management and workers and their unions that operate for the benefit of all.”
Through the harmonisation process new WHS laws have the potential to lower business costs dramatically, particularly in multi-State businesses, by eliminating duplication. Laws rarely save money in themselves but if followed and applied there is a high chance that costs are outweighed by savings.
The true measure of the new WHS laws will not be in reduced fatality rates, premium rates or LTIFRs. It will appear as part of productivity increases, and this is part of the reason that the safety profession and industry needs to be actively engaged in the current productivity debate. The WHS laws will always be seen as a failed experiment if traditional measurement parameters are applied. In three years time, the opposition politicians will be given a free chance to complain if the WHS laws are gauged against fatality rates and other lag indicators but by being assessed through the contribution to productivity increases, the justification for the WHS reforms will be clearer.
Reflecting the thoughts of Gillard, Brumby, McClintock and, increasingly, Australia’s safety and HR professionals, the success of the WHS laws will be seen, also, in a changed corporate culture towards safety.
Sloan’s misunderstanding of WHS laws is probably most on show when she describes the model WHS Act as
“.. the antithesis of establishing a non-prescriptive duty of care for employers to provide safe and healthy working environments…”
Prescriptive OHS legislation died in Australia many years ago. For instance, Plant Regulations changed to self-regulation in the 1990s on the basis that owners and operators of equipment were better placed to assess the worthiness and safety of plant than were a handful of boiler and pressure vessels inspectors or scaffolding inspectors sourced from the regulatory agency.
The introduction of “reasonable practicability” also removed prescriptive controls by allowing economic factors to be included in the risk assessment and safety management processes.
During the WHS debate, it is well worth remembering the thoughts of the Chairman of the Productivity Commission from 2003 quoted by Chris Maxwell QC, in his 2004 review of the Victorian OHS Act. The Chairman “referred, in an address to the Small Business Coalition in March 2003, to the “characteristics of ‘good’ regulation”:
“To be ‘good’, regulation must not only bring net benefits to society, it must also:
- be the most effective way of addressing an identified problem; and
- impose the least possible burden on those regulated and on the broader community.”
He then identified five “design features” that regulation would need to exhibit to meet those tests:
(a) it should not be unduly prescriptive;
(b) it should be clear and concise;
(c) it should be consistent;
(d) it must be enforceable;
(e) it must be administered by accountable bodies in a fair and consistent manner, and be monitored and periodically reviewed to ensure that it continues to achieve its aims.” (pages 73 & 74)
Errors and Omissions
It has to be assumed that Sloan is critical of WHS laws rather than the Act, specifically, in her article for there is no mention of stairs in the model Work Health and Safety Act (June 2011 version) nor in the model Work Health and Safety Regulations (2011).
It is also difficult to locate the “4000 rules” that
“dictat[e] precisely what equipment can be used and how facilities are to be built.”
Sloan could just as easily complain about the cost of following Australian Standards for the influence of these standards or “rules” are far more onerous and, arguably in some areas, dreadfully outdated.
“There are however, disadvantages to the use of specification standards across the board. Some specification standards, to be effective, must be detailed to cover different aspects of hazard management, and even then, may be incapable of preventing many work injuries and diseases. Such an approach tends to result in a mass of detailed law, difficult to comprehend and keep up to date. At the same time, specification standards may fail to address behaviour or dangers involving significant risks, because the form of regulation is focused on particular problems, and can result in unspecified problems being overlooked. Moreover, because such standards are prescriptive they do not allow duty holders to seek least cost solutions and may be less cost-effective in many of circumstances. They may, for example, require too much investment in circumstances where the costs of regulation exceeds the benefits. Similarly, they inhibit innovation and do not encourage best practice.” (page 8)
Sloan should not have applied criticism of the whole raft of OHS laws, regulations, Codes and Standards to the target of her article, the “model WHS Act”.
It would appear that Sloan admires the work of Ken Phillips of the Independent Contractors Association, an outspoken critic of the WHS laws and harmonisation who now describes the WHS laws coming to South Australia as “sensible“.
Judith Sloan is the economics editor for The Australian newspaper and an influential voice in Australian politics. It is reasonable to say that her analysis of business costs is stronger than her understanding of the Work Health and Safety laws and, particularly, their application.