“Enforceable undertakings promote the introduction of long-lasting and more wide-ranging safety changes that would not have occurred under the prosecutorial system that imposes fines after the event.”
Enforceable Undertakings can be a powerful force for improving occupational health and safety (OHS) but they could also be used by employers to forestall investment in OHS and minimise the financial penalties should an incident occur.
Australian law firm Sparke Helmore has released a prosecution summary of legal proceedings by SafeWorkSA about the application of an Enforceable Undertaking to Adelaide Resource Recovery Pty Ltd (ARR) over the severing of a thumb tip in May 2015. The company had no previous record on occupational health and safety (OHS) breaches and, although the company had plenty of the standard OHS policies and procedures, the conveyor machine mechanism was inadequately guarded – (OHS-101). ARR has spent over $A215,000 on rectifying the workplace in return for the dismissal of legal proceedings.
Taking this case as a discussion point, a company could avoid a prosecution and potential fine for an OHS breach by suggesting it fix the causes of the breach/incident through an Enforceable Undertaking. It may be argued that by suggesting an enforceable undertaking a company can turn a potential (large) fine into the (lower) cost of improving OHS at their workplace that, if it had spent that amount already, could have prevented the incident. A company could risk safety incidents by under-resourcing on OHS and wait for an incident (hopefully not life-threatening) at which point it can spend the money on the safety resources that it should already have had in place.
It is worth looking at the commitments that ARR has made in its enforceable undertaking. Almost all of them are the actions and resources that an OHS regulator would expect companies to have already, in order to comply with OHS laws:
- “installing appropriate guarding to the machine,
- upgrading lighting in the area,
- hiring an additional construction and demolition shed supervisor,
- employing a site safety supervisor.
- committing that the behaviour leading to the alleged contravention had ceased and would not reoccur
- committing to ongoing effective management of WHS risks
- committing to disseminate information about the undertaking to relevant parties
- committing to participating constructively in all compliance monitoring activities of the undertaking
- retaining the additional construction and demolition shed supervisor, and ensuring they conduct spot audits, site safety walks and revising the Safe Work Method Statements in consultation with workers
- retaining the site safety supervisor
- publishing a safety hazard alert for its industry on the importance of adequate guarding
- having a representative speak at a forum conducted by SafeWork SA
- assisting in running a training program conducted by Mission Australia, and
- paying SafeWork SA’s costs associated with the undertaking.”
(More details, and costs, of actions undertaken are available in ARR’s Enforceable Undertaking)
The use of Enforceable Undertakings is a positive move in OHS penalty options in Australia but it may also provide opportunities for exploitation for which OHS regulators need to watch.
ARR’s use of the undertaking makes economic sense. As Sparke Helmore point out, the company could have faced a maximum penalty of $A1.5 million for the incident but instead has reinvested over $A200K into its own operating and OHS systems. The Enforceable Undertaking has saved ARR a lot of money and avoided a prosecution.
The update of the OHS resources by ARR is to be applauded, but it should not be forgotten that all of this activity seems to be bringing the company to the level of OHS compliance that all employers are expected to already have.
More information on Enforceable Undertakings in South Australia is available HERE