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New approaches on OHS fines and penalties

At the moment Australian OHS professionals, lawyers and businesses are preparing submissions to the Government on the harmonisation of OHS laws. One of the areas that the Government is seeking advice on is penalties. The Discussion Paper asks the following

Q17. Are the range and levels of penalties proposed above appropriate, taking account of the levels set for breaches of duties of care by the WRMC?

Q18. What should the maximum penalty be for a contravention of the model regulations?

Q19. The intention is that all contraventions of the model Act be criminal offences. Is this appropriate or should some non-duty of care offences be subject to civil sanctions e.g. failure to display a list of HSRs at the workplace, offences relating to right of entry?

The amount of any fixed financial penalty is not a big issue in my opinion. There is an assumption that the threat of a large financial penalty imposed on one company will encourage other companies to improve safety. Is anyone seriously saying that all of the financial penalties imposed over the decades are in some way responsible for an improving level of safety in workplaces? The motivation to improve safety comes from elsewhere.

The threat of large financial penalties send companies to seek ways of insuring against having to pay a fine. Often it is cheaper to pay an insurance premium on the slim chance of being prosecuted and fined. I acknowledge that this has been a corporate and risk management approach primarily but there are cases where such options are being offered to small business.

Large financial penalties, such as the then record fine to Esso over its Longford gas explosion, are easily paid with little OHS improvement resulting from the fine. It can be argued that the negative corporate exposure from the resulting Royal Commission, a reulting class action and the media coverage resulting from its unforgivable treatment of Jim Ward were stronger motivators for improvement.

In most Australian States, there is not a crime of industrial manslaughter. This issue has faded from the political agenda but it remains very much alive in England. On 27 October 2009, the Sentencing Guidelines Council wrote the following:

“Companies and organisations that cause death through gross breaches of care should face punitive and significant fines, a consultation guideline published by the Sentencing Guidelines Council proposes today.

Fines for organisations found guilty of the new offence of corporate manslaughter may be measured in millions of pounds and should seldom be below £500,000.

The new sanction of Publicity Orders forcing companies and organisations to make a statement about their conviction and fine introduced under the Corporate Manslaughter and Corporate Homicide Act should be imposed in virtually all cases.

The consultation guideline proposes that the publicity should be designed to ensure that the conviction becomes known to shareholders and customers in the case of companies and to local people in the case of public bodies, such as local authorities, hospital trusts and police forces. Organisations may be made to put a statement on their websites.”

The Council recommends a minimum financial penalty and a publicity order that has teeth. More on the publicity order is below.

Council member Lord Justice Anthony Hughes clearly states the purpose of financial penalties and it is not preventative. He said in a media statement

“Fines cannot and do not attempt to value a human life – compensation will be payable separately in these cases. The fine is designed to punish and these are serious offences so the fines imposed should be punitive and significant to reflect that.”

Penalties as a Percentage of Turnover

Hughes says that the Council rejected a Sentencing Advisory Panel proposal that I believe should be floated in the current debate on penalties in Australia, even though it is likely to be similarly rejected.

The Panel recommended the following

“In order to achieve an equal economic impact on offending organisations of different sizes, the proposed starting points and ranges for offences of corporate manslaughter are expressed as percentages of the offending organisation’s average annual turnover during the three years prior to sentencing. The relevant turnover is that of the company convicted of the offence or, where the offending organisation is a holding company, the consolidated turnover of the group of companies of which it is the holding company.”

Here is the penalty table

Manslaughter table

Lawyers argue extensively about the use of manslaughter in relation to deaths in workplace but the public jumps across the legalese by repeatedly asking how the death of their loved one is not manslaughter when the actions of a director or company led directly to the death? No level of legal explanation is going to counter this need for accountability, some would say revenge.

Similarly the penalty rate listed in the table above is easier for the public to understand conceptually compared to a judge’s or lawyer’s explanation of why a financial penalty for a workplace death was less than the maximum.

Sentencing options are complex and SafetyAtWorkBlog has no legal contributors but on 30 October 2009 within a public discussion period on national OHS laws and at the end of Safe Work Australia Week, it seem thats penalties imposed from a percentage of turnover may be an attractive concept to many safety advocates and one that needs to be considered in the Australian context.

Publicity Orders

On the issue of publicity orders, many Australian jurisdictions have had this option for a while. Indeed, the issue of enforceable undertakings is getting a broader hearing after some of the recent actions by Comcare against John Holland Group and others.

It is always important to look at the most recent actions and decisions in OHS law and regulation from outside one’s own jurisdiction so that innovations are not overlooked. It seems that the Sentencing Advisory Panel has looked at lots of jurisdictions in making the following requirements.

The Sentencing Advisory Panel listed specific requirements of a publicity order to be applied within a specified timeframe:

a quarter-page advertisement in a local or regional newspaper, in the case of an organisation operating in one area; or

an eighth-page advertisement in three specified national daily newspapers, in the case of an organisation operating nationally; and

an eighth-page notice in a relevant trade publication; and

a prominent notice in the organisation’s annual report (also in electronic format where applicable); and

where applicable, a notice on the homepage of the organisation’s website for a minimum period of three months.

The panel also closed a possible (out) for offending companies.

” The making of a publicity order does not justify a reduction in the level of fine imposed on an organisation for an offence of corporate manslaughter.”

The ads on home pages, local newspapers and trade publications (if there are any) seems very reasonable but the media option that may be most influential is the inclusion in the company’s annual report. Acknowledging a workplace death and expressing regret in an annual report is admirable but “a prominent notice in the organisation’s annual report” goes straight to the shareholders who often have the ear of the corporation. Just look at the influence being applied by them at the moment on executive salaries.

Now is the right time for Australia to consider alternative OHS penalty options.

Kevin Jones

Union opposition to Australia’s OHS laws – new radio campaign

On 14 September 2009, the Australian Council of Trade Unions (ACTU) released a series of radio advertisements that call on the government to not reduce the occupational health and safety conditions of Australian workers.

An article about the ads with interviews with the major political players is available on ABC Radio for a short time.

Conflict

There are several issues raised by the ads and the interviews. Jeff Lawrence of the ACTU says that the new harmonised OHS laws will reduce conditions across Australia. For “across Australia” read “New South Wales”. The proposed OHS laws will create the most change for unions in New South Wales. This state had the most extreme duty of care in any State and always had the most to give up. This was always going to be the point of conflict.

Consultation

The ads can also be seen as an admission that the in-house tripartite negotiations are not going the way the union movement wanted. The Australian Government has persisted with the tripartite consultative structure for OHS. Each party – government, unions and employers – are supposed to have an equal(ish) say in changes to the OHS law. The new radio ads, and the recent street protests, could indicate that the unions are not being listened to to the extent they wanted.

It could be that the union movement want to add colour and movement to the negotiations but it is an expensive method and one that does not have the same traction as their Your Rights At Work campaign that contributed to the fall of the conservative governemtn of John Howard, regardless of what the advertising sellers say.

The government of Prime Minister Rudd was always seen as sympathetic to big business. This is a legacy of the consensus politics of the Hawke/Keating period. The traditional voter base for the Labor Party has been eroding for years and the only way it has been able to retain or regain government over the last 25 years has been to broaden its appeal to the middle classes.

A great example of this was the fall of the government of Jeff Kennett in Victoria. The Labor Party began wooing the rural conservatives, a sector that Kennett had almost dismissed (except for the occasional search for the best vanilla slice). This action undercut the Liberal Party and National Party heartlands.

The ACTU is also trying to talk with the heartlands of workers but it needs to assuage concerns about the industrial relations changes. The community is fearful that the unions are asking for too much. The Government is aware of this and that is why the mantra of the Prime Minister and Industrial Relations Minister, Julia Gillard, is all about “restoring the balance”.

Reporting

The radio report this morning also indicates a deficiency in the Australian media. There are no reporters in the mainstream media who specialise in OHS. That’s understandable as OHS is often a niche area, a subset of industrial relations. But this also means that OHS is always considered in terms of industrial relations because this is the information base from which reporters and journalists draw.

This is noone’s fault, in particular, but as you listen to the radio podcast, the IR “tone” is always there, both in the journalists and the subjects interviewed.

Perhaps the media sees no value in OHS without the IR perspective. Perhaps it is because today’s report was always going to be about industrial relations with an OHS twist. If this is the case, where are the OHS advocates who can comment without industrial relations baggage? Where are the humanists, the realists, where is the OHS voice?

Kevin Jones

New safety campaign – making the invisible visible

The last week of October each year is Safe Work Australia Week. This theme is enacted in each State with their own resources and events. WorkSafe Victoria is one of the more active of the state regulators and 2009 seems no different.

On 13 September 2009, WorkSafe Victoria will launch a new campaign of graphic advertisements but what makes these different is the injuries result from “simple” work activities. They are not in high-risk industries where workers may perform high-risk tasks. These ads concern the (mis)use of an office chair, lifting a bag from a pallet, not using the stairs, slipping on a wet floor and lifting a person.

There has always been the challenge of how to generate interest in manual handling injuries as they are internal or invisible, and cumulative. WorkSafe has done well by illustrating the physical consequences of what many dismiss as “taking a fall”. In fact, the images that are less confronting than the noise of the bones breaking or the hernia appearing.

WorkSafe’s Executive Director, John Merritt, describes the campaign this way

“There’s no ‘blood on the floor’ or spectacular images on the nightly TV news or in the morning paper, yet the consequences of these injuries are enormous for individuals, their loved ones and their employers.

“For business, the average cost of treating these people through Victoria’s workers compensation system averages $45,000 per claim.

“Individuals lose quality of life and many, the capacity to work for at least a short period, some require surgery or have permanent pain and never fully recover.

“For employers productivity is cut, there may be staff replacement costs, retraining and safety improvements to be made after the event. Industries lose people permanently.

“Identifying and preventing these issues has benefits for all.”

Merritt also provides the statistic that 60% of all reported workplace injuries* – more than 17,000 a year in Victoria – involve manual handling.

The new campaign is graphic but it is hard to see how the total costs – social, personal and business – could have been described better. Having a worker clutch their lower back and grimace with pain has been seen in campaigns and images repeatedly for decades and a new approach was needed. Making the invisible visible should help.

Kevin Jones

* Based on Victorian Workers compensation claims where people are off work 10 days or more and / or medical treatment costs in excess of $520.

OHS crime alert

In late June 2009, WorkSafe Victoria tried a new approach to raising the awareness of the criminal status of OHS breaches through producing a formatted media alert and placing an ad in the daily newspapers.

It is unclear how else the “flyer” will be distributed other than through the WorkSafe website. Indications are that a hard copy of the alert for distribution through WorkSafe offices is not planned.

The ad, pictured right, refers to the prosecution of Rapid Roller over the second serious lathe incident at that workplace in 12 months, the most recent resulting in a death.

Kevin Jones

“Homecomings” safety ads reach the US

As mentioned last month in SafetyAtWorkBlog, the Victoria-designed “Homecomings” advertisements are to be launched on United States television. The Department of Labor & Industries for Washington State announced the ads on 19 May 2009. According to the DL&I media release

“These ads are particularly effective at bringing home the importance of safety in the workplace and the effects it can have on so many people,” said Don Brunell, president of the Association of Washington Business. “When an accident happens at work, it affects everyone – family, friends and co-workers.”

One ad is available for viewing at http://www.lni.wa.gov/main/worksafe/

[It looks like parts needed to be re-filmed to show left-hand drive vehicles and obviously the music rights for Dido’s song couldn’t apply in the US]

Kevin Jones

WorkSafe Victoria’s plans for the future

At the Safety In Action Conference in Melbourne last week the CEO Of WorkSafe Victoria, John Merritt, told the delegates that over the coming weeks and months we will see the following:

The “Homecomings” series of workplace safety ads have been purchased by Washington State and will be broadcast shortly. Merritt expects the campaign to spread across the United States and, maybe, into Canada;
WorkSafe has developed fake vending machines for use at exhibitions and trade displays which display replacement body parts, fingers as USB sticks (pictured below);
WorkSafe will be introducing an advisory support scheme for the medium-sized businesses, modelled on the Small Business scheme;
A team of advisers is targeting poor-performing large employers. Merritt said that “50 large employers account for 11% of all injuries WorkSafe sees”;
A major street art campaign will be launched by the end of April 2009
A new series of ads to be run on regional and rural television based on local sporting legends as part of the country football and netball sponsorship;
The graphic young worker advertisements will be re-run at appropriate times. Merritt acknowledged that the ads have generated many complaints but are transmitting the right message to the target audience.

WorkSafe will also maintain their focus on the “jugglers” those business people or administrative staff that are essential to each organisation because they are in charge of dozens of business processes. WorkSafe surveys of the jugglers have shown that less than 10% of their time is spent on OHS matters, around 30% of them are trained in their tasks and most operate without support.

Kevin Jones

Safety Awards

Awards for safety have always been an odd beast. Any award is an acknowledgement for effort and should be valued but frequently eligibility and the judging criteria are not clear.

Last year WorkCover NSW released this criteria in the booklet that they produced about the award finalists and winners. This provided the winners with a clear indication of why they won, not just the fact that they did win.

Anyone who doubts that a lot of effort goes into nominating for these awards should be reminded of the dance that Joe Jurisic made across the stage years ago in Victoria or the long kiss that one of the award winners shared on stage in New South Wales last year.

The awards are important and are valued. However an assessment process that is not open and accountable calls into question this value.

Today the Construction Forestry Mining & Energy Union released a statement “celebrating” the disqualification of John Holland Rail from the Safe Work Australia Awards. The statement reads

“John Holland Rail Pty Ltd was listed among nine finalists for one of Australia’s premier national awards for workplace safety, the Safe Work Australia Awards. But Federal Court proceedings against John Holland Pty Ltd over the death of an employee on a Queensland site last year meant the company was disqualified at the last minute.

Mark McCallum, 34, died after being run over by machinery while working at the Dalrymple Bay Coal Terminal in north Queensland, when his foot became trapped under wooden scaffolding planks while moving precast concrete decks.”

The inclusion of John Holland Rail did always seem peculiar.

The rest of the media release covers the ongoing dissatisfaction of the trade union with the legally legitimate business decision for John Holland to move to the Federal workers’ compensation system

Award Ceremonies

The question about safety award ceremonies should also be reconsidered in the light of the move to a nationally harmonised system of OHS regulation.

Over the years, many of the State awards nights have become huge and glamourous affairs with well over 1000 attendees. They are also costly affairs that have a remarkably short shelf life. It will be very interesting to see which OHS regulatory agency will cut back on their awards expenditure first in this economic climate that questions the duplication of events.

It was also odd that such a small country like Australia had so many safety award processes. State awards are principally a marketing tool to promote the local OHS agency with the added benefit of being able to talk about safety in a positive, preventative light rather than through fatalities and the annual counting of the dead. Interestingly the 2009 national awards ceremony is scheduled for World Day for Health and Safety at Work on 28 April 2009 – a day the union movement commemorates as International Workers Memorial Day.

Safety awards tend to generate very little media attention, partly because the media is unsure of which awards they should cover – State or National. Award winners are lucky to get a paragraph in the next edition of a daily newspaper. Local media attention is better as local business makes good and the direct benefit to the community is easier to see.

Running such events are always a balance between cost and benefits that should be reviewed each year. Let’s see if the OHS regulators review the awards on both a state and federal level so that there will be a future for such events that we can all support and value.

[It may be useful to note that the CFMEU has received several OHS awards over the years. I seem to recollect one award for a safety colouring book over a decade ago in Victoria]

Kevin Jones

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