Miserable failures in OHS of labour hire workers

Two recent occupational health and safety (OHS) prosecutions in South Australia related to labour hire employees and providers indicate changes in enforcement approach and clues for change as they illustrate how some people and companies have almost no regard for the safety of its employees.

According to a SafeWorkSA media release dated 28 May 2016 (not available online at the time of writing):

“The Industrial Court convicted Queensland based labour hire company, Fix Force (Qld) Pty Ltd, and imposed a penalty of $150 000 plus court costs.

On 22 October 2012, Mr Clinton Benson, a contracted employee on the South Road Superway project, suffered life threatening injuries when his head was crushed between a lifting arm and welding table.

Following investigation by SafeWork SA, Fix Force (Qld) Pty Ltd was charged with offences under the then Occupational Health Safety and Welfare Act 1986 (SA), for failure to ensure its employee was safe from injury and risk to health whist at work, as far as was reasonably practicable.”

Prosecuting labour hire companies has been problematic because of the legal maneuvering and contractual structures that many companies implement but OHS responsibilities are reasonably clear that a duty of care is expected and required.  A worker dies or is injured and an investigation identifies the decisions taken by whoever that may have contributed to the incident.

According to SafeWork SA Executive Director, Ms Marie Boland this case illustrates that

“It is the responsibility of the labour hire company to ensure hazard identification and risk assessments are completed at the host workplace before allowing employees to work in and around items of plant… This conviction reinforces that a labour hire company has a work health and safety duty to employees which cannot be delegated to others including joint venture partners.”

It should be noted that Fix Force (Qld) P/L applied for insolvency in September 2015, so how likely it is that the fine will be paid is unclear.

A month earlier another prosecution occurred in South Australia:

“The Industrial Court convicted labour hire employer, Big Mars Pty Ltd, this week for failing to provide a safe system of work and failing to provide information, instruction, training and supervision.

On 6 November 2013, a temporary migrant from Taiwan, Yu Hsiang Hsiao, fell into a bath of caustic soda. Mr Hsiao suffered severe burns which left him hospitalised for more than three months.

Following a thorough investigation by SafeWork SA, Big Mars Pty Ltd was charged with offences under the Work Health and Safety Act 2012 (SA), for failure to comply with their health and safety duty which exposed Mr Hsiao to a risk of death or serious injury.”

The significant difference in this prosecution was that it occurred under the more recent Work Health and Safety (WHS) legislation so not only is it a safety warning to labour hire companies around Australia, it may also indicate how prosecutions and penalties apply under revised OHS laws that most States have implemented.

The size of the financial penalty is also a point of difference with the penalty imposed under WHS laws being double that of the prosecution under the OHS laws. Although the magistrate had the discretion to apply a fine of $A1.5 million.  If deterrence is intended through the application of a substantial fine, an amount closer to the maximum could change the labour hire industry very quickly.

Holding Redlich’s take on the case is here.

The judgement in this case should be obligatory reading for OHS professionals as it provides an important case study in OHS duties to labour hire workers.  For instance:

“As a labour hire business Big Mars had a duty to assess the abattoir, including the Hook Room, before it sent Mr Hsiao to work there. It had a duty to provide an appropriate safety induction in Mr Hsiao’s language. It had a duty to take all reasonable practicable steps to ensure that risks to safety were controlled, and it had a duty to regularly monitor and review the workplace’s safety standards. It was also obliged to consider the safety aspects of Mr Hsiao’s youth and language barrier.

Identifying the large floor level bath of caustic soda solution in the Hook Room, and then checking the safety measures in place and how these were to be conveyed to its employee, were simple tasks for the labour hire business. Big Mars was well placed to do this due to its familiarity with the abattoir from having about 40 employees placed there.

While Big Mars was not responsible for the configuration of the Hook Room or the design of the work tasks, there were many reasonably available inexpensive steps it could have taken. Big Mars should have obtained details of the tasks that its worker would be required to carry out. It should have obtained information from Thomas Foods or made its own enquiries, about all specific foreseeable hazards and resulting risks of injury, together with the adequacy of hazard control measures. Big Mars should have ensured that Thomas Foods provided and maintained appropriate written safe operating procedures that referred to and required maximum use of the gates, and use of an aid to move the hook tree along the rail over the bath. If all this was not provided Big Mars should not have placed its employee in that role. Big Mars should have provided a written translation of all relevant safety and work instructions, and it should have ensured that Mr Hsiao was told of the dangerous chemicals he was to work with, and of the appropriate first aid measures. Big Mars should also have had some system to assess the effectiveness of the training and supervision provided by Thomas Foods to Mr Hsiao.

As indicated above, Big Mars took none of these straightforward steps. It failed miserably to carry out any of its fundamental safety responsibilities. If it had done so Mr Hsiao is highly unlikely to have been injured.”

Particular points have been emphasised in this quote but the most significant statement is

“If all this was not provided Big Mars should not have placed its employee in that role.”

This supports the core OHS principle and the top priority of the hierarchy of controls – to eliminate the hazard. It is an easy activity in theory but the labour hire cases in this article show the personal and financial consequences of not making the right decision, thereby making safety decisions so much easier in practice.

Inquiries

Victoria is one of the two remaining Australian States that have not implemented WHS laws, for various reasons.  But it is also one of the States undertaking an “inquiry into the labour hire industry and insecure work.”  Recently that Inquiry conducted an academic roundtable discussion to seek additional and more current information beyond that provided in the various submission.  It is expected to be the last consultation session prior to the completion of the inquiry’s report on July 31 2016.

Workplace safety has featured in many of the discussions and submissions, after a slow start.  This is refreshing given the dominant attention to industrial relations and wage rates in previous inquiries into this sector, and the continuing controversies over the financial exploitation of workers in cases like that involving 7/11 employees. The South Australian prosecutions will help maintain attention on OHS risks from labour hire arrangements.

The SA prosecutions also illustrate the importance of having a court that specifically addresses OHS matters.  South Australia’s Industrial Relations Court provides clear indications of the importance of maintaining safe workplaces but, perhaps more importantly, allows its Magistrates to continuously improve their knowledge of and familiarity with OHS issues.  Some States, like Victoria, almost always run their OHS prosecutions through the regular Magistrates Court and miss out on the benefits of a specialist judiciary.  It also restricts the amount of information publicly available to the community about the OHS prosecutions.

Labour hire services are seen as a special case because of the presence of vulnerable workers, migrant labour, backpackers and other issues.  In terms of OHS, there is no special case as the OHS principles and laws are crystal clear on the duty of care deserved by all workers.  What inspection of Labour Hire practices seems to do though is provide extreme examples of how businesses are willing to exploit workers and how the health and safety of workers is ignored not through ignorance but by purposely deciding a worker’s safety is not important or less important than their labour.

It may be useful to quote Justice Lieschke on the Big Mars prosecution.  These quotes are no surprise to those who have dealt with or worked in the Labour Hire sector but are astonishing to many OHS professionals:

“Neither Ms Rong [Big Mars’ owner and director] nor any other officer of Big Mars attended the sentencing hearing. No statement of regret or contrition was made by Big Mars’ lawyer. No reparations were made by Big Mars to Mr Hsiao for his uncompensated losses. The only support offered was that Mr Zhu [Big Mars’ onsite supervisor] attended on Mr Hsiao while he was in hospital……..

After considering Big Mars’ submissions in mitigation of penalty, and the further material it submitted after the hearing, I have little confidence it will comply with its work health safety obligations in the future.”

Kevin Jones

3 thoughts on “Miserable failures in OHS of labour hire workers”

  1. mark, my own son was employed by a group training scheme and when he died at work, there were 2 entities that played ‘handball the safety stuff’ off onto the other. Meanwhile, there was a beautiful young man whose life was cut short in the most horrific way imaginable.

    Labour hire businesses cannot pretend it has no role to play here. They are the direct employer so immediately they owe a duty of care. Each party has a degree of control over its worker – sometimes the roles overlap but you cannot send an employee into a hell hole and then pretend they had no more to do.

    Kevin, I believe the objectives of ‘marginal general deterrence’ (increasing sentences to deter others from committing that crime) are no longer regarded as effective grounds for punishing offenders. There is a mountain of scholarly material disputing its worth in favour of other principles of punishment (dare we go down that theoretical path…guffaw).

    That said, the termed ”absolute deterrence” is seen as being absolutely effective in deterrence. They say we should be focusing on this form of deterrence – meaning that what actually works is increasing the likelihood of the offender getting caught and ensuring the sentencing process occurs in a timely manner so that it is actually still relevant to the offence itself. I can’t disagree with that logic since empirical evidence supports that theory.

    Here’s a question I would love to get your thoughts on Kevin (et all…)

    How many category 3 offences have we seen prosecuted around the harmonised states thus far?

    A recent analysis on this subject. A death results in an investigation recommending a category 2 prosecution. The Crown decided to drop all charges on account evidentiary onus in proving causation. No downgrading to a cat 3 offence where causation is not even an element of the offence. The reason? …apparently because they would never get out of the courtroom if they decided to prosecute this low-end provision!

    Sounds hard to believe doesn’t it?

  2. I do not agree the labour hire company should have the responsibility to ensure hazard identification and risk assessments are completed at the host workplace before allowing employees to work in and around items of plant…this is clearly the responsibility of the principle contractor as all workplaces are different.

    1. Mark,
      While I understand your sentiment, safety cannot remain the responsibility of any one entity. This has been an ongoing issue over the last 15+ years and it has been made very clear on a number of occasions that labour hire companies have very well defined obligations when they place workers. The expectation is that all parties have obligations in this regard and you cannot simply “wash your hands” of these obligations.

      Andrea,
      My sympathy on your loss. There has been too much focus on legal definitions rather than what is right!

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