Election failure, missed opportunities on bullying

Within the last week, Victoria’s State Premier, John Brumby, lost an election allowing the conservative parties in the Australian State to gain power, narrowly, after over a decade in isolation.  Election pledges are now only of historic interest but let’s look at a couple.

The crime of workplace bullying

According to the Australian Financial Review on 2 November 2010 (not available without subscription), John Brumby pledged to have a legal review into the “creation of the offence of bullying under the Crimes Act”.  The Victorian Chamber of Commerce & Industry‘s (VECCI) Steven Wojtkiw opposed the pledge because existing OHS laws were sufficient.  Taking the election context away for a moment indicates a  challenge for those anti-bullying advocates.  Wojtkiw is quoted as saying

“To introduce a greater level of legislative prescription in the area may only add to the increasing complexities already being confronted by employers in managing a modern workplace.”

It could be argued that if industry had already introduced an appropriate approach to reducing the likelihood of bullying in the workplace John Brumby would never have felt the need to make such a pledge.  In many cases, anti-regulation laissez-faire business lobbyists could reduce the “insidious elements of the nanny state” by doing right by their workforce in the first place.

Bullying and harmonisation

Michael Tooma of Norton Rose is quoted in the same article but Tooma uses Brumby’s pledge as an example of another but different nail in the coffin of Federal OHS reform.   Continue reading “Election failure, missed opportunities on bullying”

Australian business is outraged over OHS changes but is it all piss and wind?

Australian business groups have written an open letter to the New South Wales Government protesting about the decision to continue with some OHS processes specific to New South Wales regardless of previous commitments to support the harmonisation of OHS laws.  As the letter was published as an advertisement  (Page 6 of  The Australian on 20 October 2010), it is not readily available online but the letter needs a little bit of deconstruction to better understand the politics and ideologies behind the letter and the business associations.

The letter says Australian industry signed on to the national harmonisation process because of the need for an effective way of improving safety, fair legal processes and national consistency.  Yes, to some extent but more often industry groups have been calling for a reduction of red tape for the purpose of reducing administrative costs.  Reducing the injuries and fatalities of workers is not the same as “improving the safety of Australia’s workplaces”.

The ideological gap is shown in the argument against the national imposition of “reverse onus of proof”.  The letter uses Victoria as an example of a jurisdiction without the reverse onus of proof and says

“Victoria, which was used as the model for the new national laws and which does not have union prosecutions or reverse onus, has between 30% and 50% better safety outcomes than NSW depending on the measurement used“. (my emphasis)

What is a “better safety outcome”?  Less deaths?  Less cost to business?  Is it fair to compare NSW to Victoria?  And can the variation in “safety outcomes” be directly related to reverse onus of proof?   Continue reading “Australian business is outraged over OHS changes but is it all piss and wind?”

Radio National OHS program

On 21 September 2010, Radio Australia’s regular program Australia Talks conducted a live interview concerning occupational safety and health.

For those who have been listening to the show for some time would have been surprised that the program covered much of the same old OHS ground.  Similar statistics, similar questions of what are the most dangerous occupations, similar assumptions and the same misunderstanding that discussions about OHS law are the same as discussions on safety management. Continue reading “Radio National OHS program”

Where’s the Sarbanes-Oxley for workplace safety?

In 2002, after several corporate collapses, the United States government signed in the Sarbanes-Oxley Act which was intended to establish business practices on accounting and auditing among other aims.  The Western world watched the introduction of this legislation and echoed many of the requirements in their own legislation and corporate oversight agencies.

It is likely in the wake of the global financial crisis that the United States (and Europe to a lesser extent) is entering another wave of corporate regulation or interference, depending on one’s politics.

These laws introduced substantial change to the management of businesses, the disclosure of information and the role of corporate executives.  When will this type of change include occupational safety and health?

Firstly, the United States’ safety professionals and regulators need to accept that their system of OHS legislation and enforcement is not “world’s best practice”.  There are major deficiencies in high-risk organisations and a misunderstanding of safety obligations at the shopfloor level.  These problems exist partly because of the structure and population of the country itself and also because there is so much baggage in its legal system that new perspectives in law are difficult to imagine.

A significant change in OHS law outside the United States is the issue of personal accountability for safety-related decisions.  There are few who complain about the jailing of CEOs and executives for the loss of money (their own and that of others) but there is a real barrier to jailing those same people when their management decisions led to a loss of life. Continue reading “Where’s the Sarbanes-Oxley for workplace safety?”

OHS debate is over, says Deputy PM

Deputy Prime minister and Workplace Relations Minister, Julia Gillard, has told the Australian Financial Review (only available online to subscribers) that the OHS law changes were finalised at the recent Workplace Relations Ministers’ Council.

Gillard again rejected the trade union movement’s concerns about weakened worker protection.  The Minister emphasised that substantial economic benefits would flow to business as a result of increased administrative efficiencies.

However, the likelihood of a nationally harmonised OHS system seems as far away as ever with the West Australian Government continuing to refuse to apply the new laws which it sees as too friendly to the unions.

Significantly, the Australian Government has backed down from its earlier threat to penalise any governments that do not support the changes.  This lets the WA Liberal Government off the hook and provides the New South Wales Liberal Party with an easy platform option for the 2010 State election.

The conservative forces in Australia can take heart but Minister Gillard’s position has the union movement facing difficult decisions.  It has strongly funded a campaign against elements of the OHS laws and branded the laws as “second-rate safety”.  It now needs to decide whether to give up the campaign totally as a lost cause or to pare it back so that, over time, the campaign fades away, as did the industrial manslaughter campaign of around five years ago.

The ACTU has expressed disappointment but must have realised, privately at least, that some union powers, considered to be extreme by business and industry groups and over which the business complaints have been load and long, were going to be sacrificed in any harmonisation process.

Former Prime Minister and ACTU President Bob Hawke achieved many industrial relations reforms in the early 1980’s by pushing “consensus”.  This negotiation process had strong similarities to the current OHS harmonisation however big C Consensus is now rarely spoken by the Australian trade union movement.  One of the few contemporary outings was when current ACTU Secretary Jeff Lawrence, who expressed the disappointment above, speaking about industrial relations said on 14 June 2007:

“I’m tough enough but I’m also a person who likes to work by consensus”.

To operate constructively at the big tripartite table of OHS, the unions will need to accept a defeat and gain whatever they can from the new rules.  This is doubly important in the lead-up to the planned harmonisation of workers compensation.  Australia will see some fiery union rhetoric when harmonisation threatens to reduce the income and entitlements of workers who are already injured.

Kevin Jones

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

Corporate manslaughter and accountability

Corporate manslaughter, or industrial manslaughter as it is referred to in Australia, was not allowed to gain traction in Australia, except for in the Australian Capital Territory.

3i14 coverThe policy has been allowed to fade from the books of most of the Australian left-wing parties but for a while, corporate manslaughter was THE issue.  In fact over the last 10 years, it has been the only time that directors and CEOs from thousands of companies have paid serious attention to safety management.

The offence of corporate manslaughter seems to have lost little of its momentum in England.  Recently England instigated its first prosecution for corporate manslaughter.

It reminded SafetyAtWorkBlog of an interview we conducted with David Bergman on the issue in April 2002.  David Bergman has been the Executive Director of the Centre for Corporate Accountability for ten years and, only last week, was part of a conference in London on “Directors’ Duties, Corporate Manslaughter and Safety Enforcement“.

Below is the text of that 2002 interview

Manslaughter Lobbying – 2002 Interview with David Bergman

David Bergman is the CEO of the Centre for Corporate Accountability (CCA) located in London, England.  He spoke exclusively to [Safety At Work magazine] about the issue of “corporate killing” legislation and the activities of his organisation.

SAW: Can you provide an outline of what the CCA does?

DB: The organisation is a not-for-profit organisation. Its core purpose is to promote worker and public safety and it does this by focussing on two ideas – improved law enforcement and greater corporate accountability. We have three main activities, we run a work-related death advice service which is a core of our work whereby we provide free, independent and confidential advice to families bereaved from work-related death on how to ensure that an adequate criminal investigation is undertaken into the death and that the evidence is subjected to proper scrutiny by prosecuting bodies who have the duty to determine whether criminal offences have been committed.

We give that advice because, traditionally in Britain, lawyers whom families may go to are often only concerned with issues of compensation. We are concerned with issues of corporate criminal accountability.

We also undertake research into the role of the criminal justice system in the investigation, prosecuting and sentencing of companies and those who control them.

Finally we undertake some lobbying work. We try to lobby for appropriate changes to Law and practice in this area.

SWA: Is you lobbying receiving a sympathetic ear?

DB: There are two focuses of our lobbying. There’s the central Government and there is an organisation that is at arm’s length of the central Government, the Health and Safety Commission and Executive. Different departments of the central Government are responsible or different activities.

In Britain we lobby two Government departments. The Home Office is responsible for traditional criminal law and therefore the whole issue of the offence of manslaughter and how it applies to companies. The other department is Transport, Local Government and Regions which is responsible for general safety issues and has an oversight role of the Health and Safety Executive and Commission.

The Government has promised reform on the law of corporate manslaughter and on the sentencing of companies. In relationship to that we lobby the Home Office. It is difficult to say whether we are effective or not as the Government has committed themselves to making this change but it has been a long time coming and there is no Bill before Parliament and it clearly is not a priority of the Government which is why, of course, we need to lobby.

SAW: Sometimes there are activities in the justice system which can work counter to your lobbying or the will of the people. Have you seen evidence of that?

DB: The Courts can only apply the current Law as it stands. If you want change, this will come through changing the Law or changing the policy of the investigation and prosecution bodies to ensure that more cases come to the Courts. It is true to say that in terms of levels of fines there has been the traditional problem in ensuring that the Courts impose sufficiently appropriate fines commensurate to the offences committed when that offence has been committed by the company or individuals who control them. That would be the main criticism of the Courts, but beyond that the Courts can only apply the Common Law and also can only deal with cases that come before it.

So if there are deficiencies in the Law, that’s not the fault of the Courts, that’s the responsibility of the Government to change. And if there is a failure on the investigation or prosecution bodies to investigate appropriately or fail to prosecute particular companies or individuals; that is a failure on their part and that is where we need to change practice.

I wouldn’t saw that the Courts are a core part of the problem.

SAW: What has been the response to your lobbying from some of the employer and business representative organisations?

DB: We have been involved in establishing coalition campaigns on safety law and corporate accountability that bring together safety organisations, trade unions and families bereaved from work-related deaths. There are two core issues – the reform of the law of manslaughter and the enactment of this new offence of “corporate killing” as it is referred to in Britain, which the Government is committed to but to which no priority is being given.

Secondly there is the imposition of safety duties on company directors. At the moment under British Law, there are no clear safety duties imposed on company directors, safety obligations are placed on employers or manufacturers. Directors, as separate legal entities from the companies, have no clear legal obligation to ensure that the company complies with safety law.

The two groups mainly in opposition are the Confederation of British Industry (CBI) and the Institute of Directors. There is recognition by industry that a new offence of corporate killing will be enacted and there is a sort-of acceptance. What they’re doing is lobbying to make it more difficult for companies to be convicted of the offence.

The Institute of Directors is lobbying against legal obligations on company directors. Although the Labour Government can well be said to be more interested in safety than a Conservative Government they do listen carefully to what industry says.

SAW: Recently the Australian Industry Group had some concerns with the Industrial Manslaughter Bill that is currently in the Victorian Parliament in Australia. One of their concerns is there needs to be an emphasis on education and not retribution. They don’t believe that such an Act will promote safety, it will only penalise

DB: Our response to that sort of argument is that, first of all, under current law companies escape any form of accountability, even for very serious failures on the company management’s part. Normally there is a situation of immunity and companies don’t get prosecuted for serious offences. That has two effects – a lack of moral justice and a sense from bereaved families and the community that there are some legal entities that are not accountable. There is a problem in the social fabric.

Secondly, if there is immunity under Common Law, and companies know that they can escape accountability, there is inevitably going to be a lack of deterrence in the system so that some companies will feel that we don’t need to change our safety management systems because it is unlikely that there is any serious impact if something goes wrong.

Companies, of all legal entities who get caught up in the criminal justice system, are rational beings. If there is a sense that there will be more cost for them by taking a particular action than if they don’t take a particular action, they won’t take that action. Individuals commit offences for all sorts of reasons which are irrational while corporations operate from a much more rational base. So they are much more likely to be deterred.

In our view, these changes are important for accountability issues which the argument that you mention does not deal with. They are also important for deterrence which links directly back to safety. That is not to say that, hand-in-hand with other approaches for change in criminal law, there ought not to be attempts to ensure that companies are able to comply with safety law so that offences aren’t committed.

SAW: The AI Group says that Government has failed to provide any evidence that such a law will reduce the level of workplace death and injury.

DB: If you look at any reform in Criminal Law, there is never any evidence to say that if we change the law in this particular way there will definitely be a reduction in the number of deaths, or whatever. The fact that you may reform the law of murder in one particular way doesn’t necessarily mean that there is a reduction in murders.

You ask industry to show in any research in relation to any other Criminal Law reform that says “we’re going to change the law because if the law is changed there is evidence to suggest that fewer offences will be committed or fewer deaths will take place.” It just doesn’t happen. That’s not the way that Criminal Law reform happens.

Criminal Law reform takes place because there is a perception of a lack of justice.

This argument doesn’t carry any weight because there is never any evidence that a particular legal reform is going to cause a particular change but what you can be sure of is that there will be greater accountability and you can speculate that there will be greater deterrence.

SAW: Some people assert that an Industrial Manslaughter offence will encourage a change in workplace culture.

DB: The thing about changing corporate culture is that you are more likely to change it when you change the Law. That’s the important effect that law reform has, it changes the perception about a particular conduct. I would argue that changing law would have an important effect upon the corporate culture. There is no question about that.

The problem with a lot of the corporate social responsibility arguments is that they are all about voluntary codes and about trying to get companies to do particular things. There will always be some good companies that will comply with them. Compliance with those codes doesn’t get to the companies who will commit offences anyway.

SAW: The UK has had some high profile cases that generate discussion on corporate manslaughter. We have covered some of those in the last few years. But one that seems not to be going away is some of the issues associated with Railtrack, the privatised rail transport company, after some very public fatalities and incidents. Are they incorporating accountability into their new organisational structures?

DB: Clearly, after the Paddington disaster and others, rail safety became a priority in this country. I would say that this was a very good thing but it also subsumed attention to other industries where there is a far higher level of death and injury, like the construction and manufacturing industries.

Those disasters were partly responsible for increasing the debate on the need for a new offence on corporate killing, for Directors’ safety duties and also, the reason why the Government decided to take Railtrack out of private ownership.

Families of victims from the Paddington disaster are still pushing for the application of corporate manslaughter against Railtrack. The Crown Prosecutor initially refused to prosecute for manslaughter however the families have got the Crown Prosecutor to reconsider that decision.

SAW: Have you had any interest in the moves on corporate killing from outside Britain?

DB: Australia is the one country where it has been addressed. Canada has put in some important reforms in this area recently.

If there is reform in the area of corporate killing in the next few years, there might be an impact on other jurisdictions.

Kevin Jones

This interview appeared originally in Safety At Work magazine Vol. 3 Issue 14 on 30 April 2002.  It remains Copyright – Workplace Safety Services P/L