Category: law

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

OHS – time to grow up or get locked in the attic

In OHS law in Australia, the employer/employee relationship is dead or, at least, coughing up blood.  OHS law is to be based on “people conducting a business or undertaking” (PCBUs have been discussed briefly elsewhere) and not a worker working in a workplace, even though the recently changed industrial law, the Fair Work Act, maintains this relationship.

This morning in a staff seminar at a large multinational business in Australia a regional CEO revealed a considerable level of financial detail to his employees, much more so than any of the staff had seen before.  His reason for this was that he was talking with “adults”.  He employs adults and expects his workers to act like adults.  He also said that he cannot understand why, for so long, employees have been treated as children or act like children.

Past occupational health and safety law seems to reflect this relationship.  Employees have expected someone else to fix a problem because the employer has the principal responsibility for everyone’s safety.  The employee has had a legislative responsibility to look after their own safety and that of others for decades but it was rarely emphasised and only occasionally did it appear as a reason for a prosecution.

To be simplistic for a moment, parents set the house rules for when children are in the  house.  As children grow, the rules are amended and new rules are created as the child becomes more mobile, curious and intelligent.  In many circumstances, the children are given a fair degree of flexibility in meeting the house rules but every so often the rules need to be enforced and children reminded of them.  A penalty of some sort is applied.

At a WorkSafe seminar on 26 October 2009 in relation to the proposed Safe Work Bill, there was a tone to the panelists’ comments that seemed to be calling for a new “maturity” in OHS management.  It was as if the last thirty years has been the learning phase where the house rules have been clearly established and the children have reached a point where the house rules are to be self-policed.  It could also be put that the children are expected to extend these rules to any guests to the house.  But the analogy of a house as a workplace and business should stop there before it becomes silly.

What the new/proposed OHS laws are looking for is a responsible approach to staying safe.  The emphasis on “reasonably practicable” in the legislation is a plea and an expectation for people in a workplace to behave reasonably.  The impression is that if the test in law is to be of a “reasonable person” then the OHS law should be encouraging people in a workplace, whatever their status, to act reasonably.

In short, the Australian Government is asking businesses and workers to “grow up”.  The test will be who chooses to be sitting at the family meal table and who becomes the mad uncle locked in the attic that everyone feels embarrassed by.

Kevin Jones

Australian Standards and OHS harmonisation

This morning in Melbourne, WorkSafe Victoria conducted a three-hour seminar on the harmonisation of Australia’s OHS laws.  The speakers and panelists were John Merritt of WorkSafe, Tracey Browne of the Australian Industry Group and Cathy Butcher of the Victorian Trades Hall.  Tripartism at its best.

The large auditorium was filled with hundreds of attendees, very few were the familiar faces of the OHS professionals who can often dominate such events.

A question was asked to the panel about the application of the Australian Standard for Plant.  The question was, basically, will the Australian Standards be referred to within the upcoming OHS regulations?  The panel unanimously said no.

This was the clearest indication yet that the rumour about Australian Standards not being given legislative legitimacy through legislation is correct.  Tracey Browne however provided the rationale.  She said

“The important thing is that as soon as we incorporate an Australian Standard in a regulation, we create a whole different legislative status of something that was never designed to be a safety regulation….

This doesn’t change the fact, though, that it is the “state of knowledge” and when you look at what you are doing in relation to what is reasonably practicable, you need to take into account all the things you know or ought to know.  So if you are [for instance] bringing plant into Australia, and that is your business, then you need to know what the Australian Standards are and make sure that’s part of your consideration.”

Standards Australia is undergoing a considerable rethink due to a big loss of funds and in response to the changing regulatory structure in all sorts of industry and financial sectors.  The challenge is acknowledged by the CEO of Standards Australia, John Tucker ,when he discusses a “new way of operating“.

Kevin Jones

Employer concerns on OHS law review

In support of the Safety Show mentioned in a previous article, the organisers have issued a media release which provides illuminating quotes on the issue of the Australian Government’s program for review of OHS laws:

One of those keen to comment is exhibitor at The Safety Show and chief executive of the Australian Federation of Employers and Industries, Garry Brack [significantly NOT a speaker at the Safety Conference ED.].

“We are concerned about the content of the model laws,” Mr Brack says. “New South Wales’ OHS Act is the most difficult piece of legislation in the developed world and we believe this is a lost opportunity to wind up with more balance.”

“If an employee does the wrong thing, the employer is found guilty. We’re not arguing that employees should be prosecuted but reject the notion that employers should be liable when employees fail to meet safety requirements.”

Clearly Brack has not compared the NSW OHS Act to the Federal Taxation legislation.

Brack reflects many of the perspectives of those who deal with OHS in the State of New South Wales.  The pent-up frustration is clear and the employers do not believe the reassurances from the Federal Government.

Brack also illustrates the desire for prescription in OHS law.  If people, in this case employers, know how to comply with a law, they are more likely to do so.

“Smaller employers don’t have the financial resources and in-house expertise to interpret what is ‘reasonably practicable’. They say ‘Tell us what we have to do’. They don’t wanted to return to the lunacy of years ago where every nut and bolt was defined but they do need a more prescriptive approach and help from regulators.”

He highlights a concern about the OHS laws shared by SafetyAtWorkBlog, small business has always struggled to provide an appropriately safe workplace.  “Reasonably practicable” does not help.  However, Brack’s desire for prescription is nostalgic at best, some would say fantasy.  This government has no intention of taking a seemingly regressive step to prescription and Brack has been aware of this for years.  At some point one has to accept reality and work with what is being offered.

Variations

Another exhibitor discussed the expectation that States will still add their own variations to the model OHS laws.  This option has never been hidden by the government or the various review panels.  In fact, this flexibility has been a major point in the government’s choice on harmonisation rather than uniformity.

“National legislation is highly desirable to avoid the massive duplication of work for national organisations,” Mr [Bill] Henman [of the College of Warehouse Training] says. “Unfortunately, the legislation will be enforced by various state jurisdictions and this will result in variation between states in interpretations, penalties and the finer points of the legislation. The devil is in the detail. [ED. please kick the next person who uses this cliche] Different penalties in different states currently affect the priorities of safety managers and standardised penalties would provide better outcomes.”

Henman needs to read the legislation and supportive documents to see that standardised penalties are proposed.  Though Henman is considering one of the most important issues that does not seem to be in consideration in much of the commentary on the legislation to date – improved safety.

“It’s very hard to say whether these new laws will make workplaces safer. The culture of those less safety conscious workplaces where the employer bends the rules has to change. One would hope the new laws will help engender better safety cultures.”

The Master Builders Association of NSW‘s OHS risk management officer, Tim Stootman, echoes the perspective of Garry Brack, looking at the  legislation through the experience of a New South Wales employer:

“Master Builders supports the review of OHS laws and believes that this is an opportunity for better, rather than greater, OHS regulation,” Mr Stootman says.  “Better, rather than greater, regulation will assist to improve OHS performance in the construction sector.

Master Builders supports the rejection of what could be called a ‘highest common denominator’ approach to OHS duties.  Essentially, this approach would have seen an absolute duty of care on employers to ensure the health and safety of their employees and provides unions with the right to bring a prosecution for a breach of the OHS law, the latter a provision adopted in recent changes to the law in the ACT.

The Draft National Model OHS Act is a positive step towards harmonisation of OHS laws in this country.”

Submissions to the government on the draft Safe Work Bill are being regularly posted at the Safe Work Australia website.  SafetyAtWorkBlog is watching the submissions and will draw attention to some of the more useful comments in the submissions.

Kevin Jones

Getting the OHS message out there

Next week in Australia is Safe Work Australia Week in which each State jurisdiction undertakes information and promotional activities in support of occupational health and safety.

In Sydney, the Safety Institute of Australia (SIA)  is hosting a Safety Conference.  A major theme, understandably, is Australia’s OHS law harmonisation and there are excellent speakers at the conference on the topic.

There has always been an operational tension between the conferences and the trade shows that accompany most of the Safety Institute conferences even though there is a contract between the SIA and Australian Exhibitions & Conferences, the trade show owners.  The tension is over which event gets priority in promotions.  Effectively this differs depending on promotional target but for years it has been possible to attend a trade show without having any idea that a conference may be in the room next door.

This year the trade show, technically “The Safety Show“, is offering free workshops on the harmonisation laws to show attendees with speakers from a law firm, amongst others, who is also hosting a panel discussion in the conference .  Why would one run a free event that competes with a partner’s conference for which the daily attendance fee is $A500???!!!

Admittedly, the conference is likely to include more detailed examinations of the laws as there is more time and many of the speakers are lawyers or academics specialising in the area but if one’s charter is to promote health and safety awareness and to advance the science and practice of safety, as the SIA states, is this appropriately met by speaking to a group of maybe 400 conference attendees or a potential 10,000 trade show visitors?

Kevin Jones

Prosecution results from fall through roof

On 22 October 2007, a commercial premise in Southbank, Victoria, was to undergo renovations which included replacing the asbestos roof with an iron roof.   Two men were employed as project managers and during the roof replacement, according to WorkSafe Victoria.

“…the dogman fell [through an unguarded shaft] a total distance of 8 metres and as a result he broke 3 bones of his right wrist and a fractured scapula as well as sustaining bruising to the body and serious lacerations to the head.”

On 16 October 2009, the Magistrates’ Court fined the specialist roofing company contracted for the task $A15,000.  The prosecution summary says that as the company specialised in roofing, the hazards of working on an asbestos roof, and unprotected edges, would have been well-known.

The two project managers were fined $A7,500 each as they were not sufficiently experienced for their project management roles.  The lack of fall protection for those working on the roof was of particular note according to the Prosecution Summary from WorkSafe Victoria.

More details on the prosecution are available from the WorkSafe hyperlinks in this article.

It would be interesting to run this prosecution summary as a hypothetical under the proposed National OHS Model law to provide a contrast between the old and new laws particularly on the following matters, although many more could be considered if further details were available:

  • who controls the workplace
  • competence
  • suitably qualified
  • role and enforcement of JSA’s
  • contractor management

Kevin Jones

Peek-a-boo safety – Oh Dear!

The Australian Model OHS laws do not have duties and responsibilities that focus on the employer.  The focus is now on  a “person conducting a business or undertaking” or a PCBU.  In a legal seminar in Melbourne on 20 October 2009, this acronym was spoken as a “peek-a-boo”.  Throughout the next 60 minutes, prominent Australian OHS lawyers repeatedly mentioned the OHS responsibilities of the “peek-a-boos”.

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If OHS law has not been taken seriously by some sectors now, there is no hope if this absurd terminology continues.

How will regulators and safety professionals “sell” safety in a small business person is described as a peek-a-boo?   If we’re lucky, the employer will think of a game played with young children.  If we are not lucky, they may think of diaphanous female lingerie tenuously constructed with ribbons.  If the employer is a goth, one may get away with a cool reference to a Siouxsie & The Banshees song.

One could speak PCBU phonetically as “pissy-be-u” but even that is dubious. Please delete this term from one’s vocabulary and recommend to the Australian Government that its bill-drafters look for another acronym.

Kevin Jones

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