Category: law

PCBUs have begun appearing

A reader has drawn SafetyAtWorkBlog’s attention to one State regulator in Australia who has already begun to apply the broader definition for “employer” in their OHS guidance material.

In September 2009, the ACT Safety Commissioner published a Guidance on “Safe Structures, Systems and Workplaces“.  In that guidance, the Commissioner refers to

…”New general duties to ensure work safety by managing risk apply to a person:

…carrying on a business or undertaking;…”

This anticipates the definition put forward in Australia’s OHS model Act in relation to PCBUs (Peek-A-Boos).

The matter of a “business or undertaker” was also used in the ACT’s Work Safety Act 2008 (effective from 1 October 2009) throughout the document but with slight variation.  Of most interest here are the definitions of employer, worker and “business or undertaking”:

“employer, of a worker, includes a person who engages the worker to carry out work in the person’s business or undertaking.”

“worker means an individual who carries out work in relation to a business or undertaking, whether for reward or otherwise, under an arrangement with the person conducting the business or undertaking.”

“business or undertaking includes—

(a) a not-for-profit business; and

(b) an activity conducted by a local, state or territory government.”

The logic of such an inclusive term is understandable but needs greater clarity which is likely to some from regulations or supportive documents.

Having a Peek-A-Boo is one thing, let’s just hope that the jargon does not develop to start referring to “undertakers”.

Kevin Jones

Justice in workers’ compensation reforms

A South Australian colleague has pointed out some interesting elements in WorkCover SA’s review of employer incentives discussed earlier.

The following text are some of the aims of South Australia’s Workers Compensation and Rehabilitation Act.

(1) The objects of this Act are—

(a) to establish a workers rehabilitation and compensation scheme—

(i) that achieves a reasonable balance between the interests of employers and the interests of workers

(iv) that reduces the overall social and economic cost to the community of employment-related disabilities

(2) A person exercising judicial, quasi-judicial or administrative powers must interpret this Act in the light of its objects without bias towards the interests of employers on the one hand, or workers on the other.

My colleague points out that a review of employer incentives is well and good but what are the incentives for employees, given the objects of the Act concerning balance and bias?

She also criticises

“…the current incentive for employers of paying the first two weeks of the injured workers income payments if the employer supplies the claim agent with the employer section of the injury/incident report goes against the intent as outlined in Objects of the Act, as there is not any corresponding incentive offered to the injured worker.”

Whether the injury report is valid or useful is irrelevant to the incentive as it is the lodgment of the form that generates the incentive rather than any rehabilitation action for the injured worker.

There is no doubt that the workers compensation scheme needed a review.  The recent Return-To-Work (RTW) conference in Adelaide had an atmosphere of hope after the introduction of the RTW coordinator requirements for businesses.

South Australia is different from most other Australian States where a single company handles workers compensation insurance, Employers Mutual.  Not only is there a huge lack of competition in South Australia but the government and the insurer are close.

There is also a political element with Paul Caica being given the portfolio in order to fix it.  In June 2009, the Minister announced a range of projects from a fair pool of funds but many of them are focused on the workers rather than providing structural change to the system.  It is hard not to speculate how workers may benefit if the insurance industry in the State had competition.

The need for reform was clear as the South Australian workers’ compensation scheme was bleeding money but it must have been politically attractive to try to postpone an analysis of the system until the Federal Government started its national review of workers’ compensation system in a few years’ time.  It may have been that such a strategy was planned until the global financial crisis changed the public’s tolerance for government debt forcing the SA government had to act.

Kevin Jones

Coincidence or unique perspective?

Since the end of the end of the public comment phase on Australia’s national model OHS laws, Safe Work Australia has been daily uploading submissions to their website.  Within the last lot of uploads was a block of around 100 submissions, all of which are marked confidential and have, apparently, been submitted by individuals.

One confidential submitter shares his name with a person who has been associated with some peculiar industrial relations behaviour.  In August 2009, during a heated industrial dispute concerning work on the West Gate Bridge, a trade unionist pleaded guilty to dangerous driving and to carrying a piece of pipe without lawful excuse, according to one media report.

A person with the same name is also listed in an order issued by the Federal Court of Australia in March 2009 that places restrictions on several people in relation to the West Gate Bridge project and the premises of contractor John Holland.

It is not possible to determine if this is a coincidence because the submission is confidential and submissions do not include contact details.  But if it is the same person, it is a shame that the OHS submission is not publicly available because a person who may have been involved in an intense industrial dispute and who may have been legally restrained would surely provide an interesting perspective on the relationship between OHS and industrial relations.

It is relatively easy to determine the politics of organisations that make submissions but when lodged by individuals political perspectives or professional connections cannot be determined, even when the submission is not confidential.  That such a large number of confidential submissions have been lodged is curious but due to due process, it is likely to remain so.

Kevin Jones

Where is the evidence of OHS misuse for IR purposes?

The mainstream press has dipped into some of the submissions to the Australian Government on its harmonisation of OHS laws.  Kirsty Needham reports on the submissions in the Sydney Morning Herald.

Needham reports on basically the submissions of the Australian Chamber of Commerce & Industry and the Australian Council of Trade Unions – the ideological opposites on safety regulation.  She quotes ACCI’s David Gregory:

“There is no doubt that health and safety has been used as an industrial relations issue on plenty of occasions … we want to put reasonable boundaries around those entitlements.”

cover V01Summary_PressFinalThis position is always attached as a myth by the unions but it is an accepted fact in the minds of employers, OHS professionals and many workers.  The Royal Commission into the Building and Construction Industry in 2003 found that

“in the building and construction industry throughout Australia, there is…..widespread use of occupational health and safety as an industrial tool.”

“The types of inappropriate conduct which exist throughout the building and construction industry include….the use by a union of occupational, health and safety (OH&S) issues as an industrial tool, intermingled with legitimate OH&S issues;”

“Occupational health and safety is often misused by unions as an industrial tool.  This trivialises safety, and deflects attention away from real problems.  Unions have a legitimate interest in the safety of their members.  This should not be altered.  However, the scope for misuse of safety must be reduced and if possible eliminated.”

“Misuse of non-existent occupational health and safety issues for industrial purposes is rife in the building and construction industry.  Genuine occupational health and safety hazards are also rife.”

A major source of evidence for the repeated statement of fact is mentioned in the final report from February 2003 was an “OH&S case study (Tas).”.  SafetyAtWorkBlog is trying to obtain more details on this.

One example of the evidence that is readily available relates again to the Royal Commission.  The Commission undertook an investigation into industrial disputes a the construction site of The Age newspaper in Tullamarine.  The Commission reports

“the evidence from Mr Judson [Wayne Judson is a Director of Probuild] will be that during the negotiation of the project agreement (which was a period where any industrial action between Probuild and the unions would have been unprotected) there were many occasions when safety walks and OH&S issues were used as a device by the unions to pressure Probuild and Fairfax to agree to the project agreement and nominated shop stewards.

The potential misuse of OH&S raised, not of course for the first time in this Commission, is a very serious matter. To misuse OH&S debases the currency of safety. ‘Crying Wolf’ often enough on enough sites creates the risk that no one knows whether a safety claim is about something real and important or whether it is simply a means of supporting the latest industrial demand.”

Some of Commissioner Cole’s comments on the debasement of safety are sound but the “evidence” is from the builder and may not constitute the reality, only opinion in a submission to an investigative body.  The Commissioner carefully labels the issue “a potential misuse”.

SafetyAtWorkBlog would say that the fact of misuse of OHS issues for industrial purposes may be an example of the establishment of a fact through “crying wolf”, to use the Commissioner’s term.  The frequent statement of a belief does not establish a fact.

Also, to some extent, the construction industry hogs the OHS limelight in much of the tripartite consultation.  This is because of the industrially charged nature of construction in Australia and the fact that construction sites are usually highly visible to public.  The construction industry is an important economic driver but perhaps this prominence is masking some of the other OHS issues that the Government needs to consider.

As the Australian Government proceeds in its harmonisation of OHS laws and as it reads the hundreds of public submissions, there should be a red flag on each mention of the misuse of OHS for industrial purposes so that assertions are not misread as facts.

Kevin Jones

Australia’s employers’ thoughts on OHS law

The public submission period for commenting on the Australia’s OHS model laws has closed and the submissions are gradually being made available on the Safe Work Australia website.

At the time of writing there are around 15 submissions listed and Safe Work Australia has indicated that there are many more that are being sifted through at the moment.

Each submission had the option for the comments to be confidential.  Confidential submitters told SafetyAtWorkBlog that one reason for confidentiality was so that their comments did not reflect on their current employer.  This is understandable but also adds an allure to the submission.  It will be interesting to note which of the large associations apply confidentiality to their submissions.

One employer association who is “loud and proud” of their submission is the Australian Chamber of Commerce and Industry.  The ACCI submission is currently available only from its website.  Below is what the ACCI’s Director of Workplace Policy, David Gregory,  says in a media statement that accompanied the release of the submission

“…[Gregory ] has rejected union claims that business groups are pushing for changes that would reduce health and safety rights for workers.

ACCI also urged Australia’s governments to work towards a truly uniform national OHS system with respect to the approach by OHS inspectors, regulators and the courts.”

“Employers want a model Act that delivers both improved workplace safety outcomes and an effective legislative framework that will encourage employers and workers to be proactive and collaborative in improving the safety of their workplaces.  Unnecessary prescription will ultimately serve only to distract and discourage both employers and employees from delivering safer workplaces.  ACCI has provided some positive suggestions in its submission that should be adopted to improve the operation of the Act.”

ACCI has strongly backed the reinstatement of a definition of ‘due diligence’ in the model Act, as the absence of a definition will mean that company officers will be unclear about their duty and how compliance may be achieved.

Employers have also identified a number of aspects of the model OHS Act which are open to potential misuse such as union right of entry, persons assisting health and safety representatives, and procedures for establishing multi-employer workgroups, which require redrafting to ensure that they are fair and balanced and do not undermine the safety objectives of the Act.

ACCI in its submission advocates that the maximum penalty for a corporation under the Act should be set at the current Australian maximum of $1.65 million, arguing that the proposed $3 million maximum will simply fuel a litigious and compliance-based approach to OHS.

Gregory’s first point addresses ideology more than anything else.  The trade union movement will always be suspicious and uncomfortable with any organisation that is willing to put productivity before safety.  The introduction of  the ACCI submission makes it clear that the focus of the submission is not on improving safety but on improving the management of safety, two very different OHS approaches.

Queensland labour history coverRecently a new book from Federation Press, “Work and Strife in Paradise“,  a history of labour in Queensland illustrated how industrial harmony existed in that state for decades prior to the introduction of Robens-style legislation.  For a long time unions and employer groups knew where they stood ideologically and therefore could anticipate responses and could negotiate from stable philosophical platforms.  The industrial relations changes from the 1960s onwards complicated negotiations which did have some impact on OHS in that State.

[For the first time, to SafetyAtWorkBlog’s knowledge, a chapter is included in a labour relations book on research into employer associations.]

One would have to expect a definition of “due diligence” to be included in the upcoming OHS Act is the employers are in favour of this.  The consensus in many OHS seminars is that such a definition is required.

The concerns over union rights is a hoary chestnut that has not been seen as a problem in Victoria where many of the suggested legislative features have originated.

The issue of penalties is a little hollow.  Many corporate executives are covered by Directors’ & Officers’ Liability insurance as much as is possible.  And fines do not generate litigation. The neglect of obligations and duties lead to prosecution and then penalties.

The ACCI submission states more clearly that

“…OHS breaches should generally be subject to civil rather than criminal penalties. Such an approach should be taken for the entire model OHS Act and not just selectively applied to aspects such as breaches in relation to union right of entry.”

It would interesting to know what ACCI’s position is on non-financial penalty options.

The impression obtained from the ACCI statement and submission is that they were principally intended for the audience of the ACCI membership.  ACCI has a seat at the Safe Work Australia Council discussion table through its representative Annette Bellamy.  It is suggested that it is here where the conservative and capitalist arguments on OHS laws will be put.

Kevin Jones

All for the want of ….. the right decision

Recent a colleague was explaining to me how the cost of a project is ballooning and the project is generating a toxic workplaces by some managers not talking to other managers.  The disharmony is doing nothing to control the costs and the juvenile conduct of the managers is spreading the damage throughout the organisation.

My colleague told me that if only the existing, long-standing purchasing and project policies had been followed this situation would not have occurred.  One person did not do their job properly and made a decision that was not substantiated by the policy.  The decision was not checked, for whatever reason, and the project is in serious jeopardy.

Many readers may recognise a similar scenario but often these become very muddy due to office politics, office allegiances etc.  But it is often easier to understand big issues by looking at small cases.  Douglas Law firm posts small court decision reports every so often that summarise OHS matters well.  One of the latest concerns

“In Inspector Phillip Estreich v Hannas Civil Engineering a contractor suffered electric shock when cutting through a conduit pipe which was supposedly empty.

There was a documented safety system where before performing excavation work, a number was to be called which provided information on underground pipes and cabling.  On the day in question the number was not called and the supervisor merely visually inspected the area.  The risk of harm was reasonably foreseeable as electric cables were usually found in orange conduit pipes.  The contractor was left unsupervised to cut the pipes, and had no experience in the area.”

This case is a useful thumbnail that illustrates the consequence of small decisions.

Perhaps, OHS professionals should look to ancient wisdom for current enlightenment.  An old rhyme that I learnt as a child regularly pops into my head when I read about OHS problems.

“For want of a nail the shoe was lost.

For want of a shoe the horse was lost.

For want of a horse the rider was lost.

For want of a rider the battle was lost.

For want of a battle the kingdom was lost.

And all for the want of a nail.”

Kevin Jones

OHS must raise its profile in the debate of directors’ liability and accountability

The global financial crisis has highlighted many business management issues.  Probably one of the most contentious is executive remuneration which is based on the question “should executives receive performance bonuses when the company is not performing well, ie. not returning profits to shareholders?”  But underpinning even this question is one of accountability.

Business leaders, commentators, lawyers and politicians are comfortable in discussing financial and corporate accountability but extend that discussion to other areas of business and they respond with a confused stare or outright dismissal of the proposal.

This week, the Australian Financial Review newspaper ran a page one story: “Revealed: directors face harsher liability penalties.”  [None of the AFR articles are freely accessible online] The article revolved around Australian Government plans to “break an impasse between state governments over proposals to harmonise conflicting commonwealth and state directors’ liability laws.”

As should not be surprising from a business paper, the discussion centred on financial and corporate governance issues but OHS obligations were floating behind all of the business-speak.  This was particularly obvious with this paragraph:

“Federal ministers have expressed concerns that onerous directors’ liability rules increase the cost of directors’ insurance and discourage them from taking board seats.”

This paragraph shows that the first response to any corporate trouble is insurance.  This cowardly response is short-sighted and contributes to the unnecessary growth in litigation which the directors regularly complain and which increases the cost of liability insurance premiums.

It is also an acknowledgement that the introduction of new rules does not address the behaviour intended, it leads to investigating ways of avoiding accountability for one’s actions.

The second point of that paragraph is that people are more likely to refuse to participate than to undertake sufficient education that would allow them to perform the job better and with less risk.  The response should not be “it’s too risky so I won’t do it” but “let’s get better informed so that my decisions are more valid and the risk is reduced”.

It is clear that lawyers are running the agenda when semantics enter the argument.  The AFR article goes one to say “there are fears about confusion over the distinction between executive and non-executive directors”.  This confusion comes from the main concern of directors being to cover one’s arse rather than focusing on the job at hand and the corporate purpose.

The AFR article makes no mention of OHS but the accompanying article “Duty weighs heavily” by reporters James Eyers and Annabel Hepworth does.  Eyers and Hepworth look back through several decades of law reform investigations and reviews to show the history of similar director concerns.

But it is a more recent statistic that is the nub of the article.  A Treasurysurvey of directors from top Australian listed companies, in conjunction with the Australian Institute of Company Directors, found that

“…71 per cent of those surveyed had declined taking board seats mainly because of their fears of personal liability, while 46 per cent had resigned from a board position because of the issue.”

These concerns largely deal with false market rumours, manipulating securities prices, criminal cartels, consumer protection laws and others.  It is this company that the importance of taking responsibility for OHS should be pushed by the safety advocates but it seems that the business and corporate contexts of OHS are only ever discussed by the corporate lawyers.  And yet, OHS professionals complain about not getting heard at Board level.  Perhaps what is needed is one of these OHS professionals to take a business degree so that OHS can be described in terms business understand.

Of course the risk is that OHS may be found to be contrary to all the basic capitalist concepts and that the only way it can be applied in a business is for the application of legal “wriggle room” from the concept of reasonably practicable.

On 6 November 2009, Bob Baxt (a partners with law firm Freehills and the chair of the law committee with AICD) responded to the Eyers and Hepworth article with a personal opinion describing directors and senior managers already in the “firing line” from the corporate regulators.  He seems to see this as unfair but those executives are in the “firing line” because they are suspected of doing the wrong thing.

Baxt describes the “reverse onus of proof” as an “obnoxious device” and he may be right but he needs to consider why such a provision was introduced in the first place – business managers were not complying with their legislative obligations, they were avoiding responsibility, taking short cuts for personal wealth, having workers die and then winding up the company to avoid prosecution.

Too many business professionals focus on “cause and effect” and see injustice.  Yet if they looked a little further back and analysed the “causes” a bit more carefully they may just see that in many cases the regulatory changes have come about as a result of their own misdeeds.

The analysis of capitalism that resulted from the global financial crisis has faded very quickly as the markets rebound.  Companies are applying the same behaviours that led to that crisis.  Most business analysts and executives talk about leadership as the be-all and end-all but we should not be lead in the same direction as in the past as we are likely to end up in the same place.  True leadership is about accepting mistakes and heading in a fresh direction where such mistakes cannot be repeated.

Those who are bleating about how corporate executives are being bludgeoned by regulation and accountability need to get out of the leafy middle-class suburbs and the office buildings with bayside views and take some time to reflect on how we came to be in such an economic mess and why workers continue to get injured, maimed and killed.  It may just be that accepting responsibility is the new foundation required to build a humaneand profitable future.

Kevin Jones

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