lawyers – Page 35 – SafetyAtWorkBlog

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

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”.

iStock_000002473027Small

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

OHS model law remains divisive

An article in the Australian Financial Review (not available on line) on 16 October 2009 provided some additional legal opinions on the implementation and aims of Australia’s draft Safe Work Bill.

Other than Michael Tooma’s well established thoughts on the draft law, Liberty Sanger of Maurice Blackburn, a law firm with strong trade union links, is said to support the capacity for jurisdictional variations in the harmonisation process. She is quoted as saying there

“need to be regional difference in a country as vast as ours and with such a different industry composition as ours…”

This position is supported by a call from the CFMEU’s General Secretary, Andrew Vickers. In a media statement released on 15 October 2009, Vickers uses the aftermath of the Gretley mining disaster of 1996 as an indication of the need for OHS laws specific to the mining industry. He says

“Under the Federal Government’s National OH&S Harmonisation Review, there is a growing view among lawyers and bureaucrats that industry specific safety laws – laws that protect coal and metalliferous miners for example – ought to be scrapped.

The trouble is miners and their families and their union have been left in the dark. We still do not know if the new laws will be tailored to meet the safety needs of our industry. Despite this, the Federal Government is pressing on with its changes.

Yet the reality remains that the safety of miners and their families and the future of our mining communities are too important to ignore. And we have fought too long and too hard for tough safety standards in our industry to give them up now.”

The AFR article also quotes Miles Bastick of Freehills. The article says Bastick believes that the jurisdictional changes that have so alarmed some are likely to relate to only peripheral issues. The article says that although Bastick generally supports to the Safe Work Bill

“….he said, that in practical terms, OHS laws were likely to be enforced differently across Australia, even if laws were nationally consistent because of the different prosecution policies of OHS authorities and the approaches of different courts and tribunals that would hear prosecutions.”

SafetyAtWorkBlog would argue that the variations Bastick identifies provide very strong reasons for the Government to take the big step forward of one national OHS law supported by a nationally consistent enforcement policy through a single national safety authority and a coordinated court system. This may be a fantasy but it remains an option for the Federal government. Some lawyers believe the Government has not dismissed the application of the Corporations Act in the OHS field as it has already unified the IR system through a similar process.

Such a national system would achieve many of the aims of the government by

reducing red tape across States, businesses and Courts,
reducing the number of OHS regulatory authorities saving considerable expenditure from many areas of duplication from administrative staff to publications and advertising,
providing a single focus to business for clarity and consistency of information; and
still allowing for industry-specific variations that can be coordinated consistently with the general OHS principles.

If Australia is looking for an OHS regulatory system that it expects to last as long as the previous system, all stakeholders may need to look in a slightly longer term and broader perspective than they are currently.

Kevin Jones

OHS is becoming criminal law in a social context

On 14 October 2009, Australian law firm Deacons hosted a breakfast seminar of the draft OHS model law proposed by the Australian Government. The speaker, Mike Hammond, expressed concern about many sections of the draft laws because they do not seem to fit how OHS law has been structured in Australia and the UK for over thirty years.

This is not to say the clauses and sections are worthless, useless or wrong, but the Government has not provided enough information on the rationale for the changes or the context for those changes so that those who need to use the law understand the law.

Hammond had five major concerns with the proposed law in the Victorian context:

Person conducting business or undertaking vs employer

Officers’ duty to exercise due diligence

Failure to acknowledge “Control” as issue of first principle

Abrogation of right to silence and privilege against self-incrimination for individuals

Unions able to cause work to cease

Hammond is, of course, looking at the laws from a lawyer’s perspective and not that of a safety professional or business operator but he raised some excellent points, some of which have been discussed previously in SafetyAtWorkBlog.

The coverage of the proposed OHS laws is so broad as to include anywhere where work is conducted. Tooma, a partner of Hammond at Deacons, touched on this impractical definition in some of his statements. The way some work is done in 2009 is radically different from 1985 for example, mainly due to technology.

This blog article could be written on a kitchen table, in a cafe, on a park bench or a desk in an office. Each of these would be workplaces because work is being undertaken however if the article is being written on a laptop in a cafe, at the moment, the cafe owner would have no OHS obligations on my actions. There would likely be public liability and safety issues, particularly if the laptop was also plugged into the cafe’s power supply, for instance, but the cafe is only a workplace for the employees of the cafe. Under the draft Safe Work Act (or Bill), if the customers are working there, the cafe owner would have OHS obligations for them. The customers, the workers, of course would have their own OHS obligations as they do now.

Hammond made the point that the new proposed laws dispense with the legal relationship of employer and employee. This fundamentally changes the coverage of OHS legislation. As I put it to Hammond at the seminar, the changes remove the “occupational” from the OHS law. It has become a criminal law in a social context.

Hammond sees no reason to change the employment relationship to the extent proposed if the aim is to encompass the new varieties of work activity and workplace. He believes that these circumstances can still be met specific provisions to deal with the new varieties of work whilst maintaining the fundamental employer- employee relationship. Business and society would then be able to better understand some of the changes because the context would be within what has been understood for decades as “work”.

The proposed Safe Work Bill is trying to be too much too quickly and will set back OHS gains a long way. OHS has accrued considerable social awareness and acceptance. The legal principles of a safe workplace and safe work have been largely embraced by the community. Australia has not experienced the “OHS has gone mad” campaigns waged in the United Kingdom but if this law proceeds as it is, government will not be able to manage it, business will dismiss it through frustration, and the community will think (rightly) that OHS is a joke. Safety professionals and OHS regulators will be seen as sucking the sense out of what used to be sensible.

Mike Hammond has seen criminal law reacting to changing social circumstances. He said that this proposed law is attempting to set a social agenda and a dangerous precedent.

Kevin Jones

Perhaps a step too far on homes as workplaces

According to an AAP report released on 8 October 2009, Australian homeowners could be liable for the injuries of workmen on their premises. According to Michael Tooma of Deacons law firm, the breadth of the proposed OHS model laws could cause big legal problems for homeowners (as if interest rate rises and balcony collapses were not enough).

“..if I call out a tradesperson to do some work at my home, my home is their workplace and I would be a person at their workplace. As such, I would have a duty to take reasonable care for my own safety and the safety of others and to cooperate with their reasonable instructions in my own home. If I breach that duty I could be liable for a criminal offence.”

The duty of care applied regardless of whether the worker was injured or not, Mr Tooma said. “If the person is exposed to risk, then potentially you’ve committed a criminal offence. Previously, there were clear boundaries around a home that really made it sacrosanct.”

The crux of Tooma’s argument is that

“The definition of a workplace in the legislation is so broad that any place where a worker works is deemed a workplace”.

Many corporations have struggled with their OHS obligations for staff who telecommute. Home-based businesses have a clearer legislative responsibility even if many of them are unaware of the responsibility.

The Model Safe Work Provisions Exposure Draft’s defines a workplace as follows

“(1) A workplace is a place where work is carried out for a business or undertaking and includes any place where a worker goes, or is likely to be, while at work.
(2) In this section, place includes:

(a) vehicle, ship, boat, aircraft or other mobile structure; and
(b) any installation on land, on the bed of any waters or floating on any waters.”

In the Discussion Paper there is an example provided of what is not a business

“A householder hiring an electrician to repair a faulty electrical socket in their home (however the electrician will either be a worker for a business or undertaking or a business or undertaking in their own right if they are self employed).”

Tooma’s point would be what if the electrician was undertaking the work in a home office (if designated) or the whole house/workplace.

Of all the “modern working arrangements” listed in the Discussion Paper, working from home is not listed. If it had been, Tooma’s comments would have seemed less alarmist, probably because their would have been more general alarm as perhaps hinted at in the AAP article.

In that article, Tooma also says

“We’re talking about the Occupational Health and Safety Act intruding on the family home and imposing criminal liability on individual home owners under legislation that is supposedly aimed at safety in the workplace.

“It’s really a quirk of the way the definition works in that everywhere a worker goes, so goes the workplace.”

AAP does not treat the issue as “a quirk”. Not with a headline in The Canberra Times of “Home owners ‘could be liable'”.

Tooma may have raised a valid point but the AAP article shows how the media can “ice the cake” of an issue. It may have been better to present this quirk to the Government through the Public Comment process (and I am sure Tooma will) but it is also on all OHS advocates to bring the relevance of OHS matters to the attention of those who may not understand the risks they could be exposed to. This blog article could be considered an example of this.

The Public Comment phase on the draft documents is still young. If Tooma’s intention was to stir debate (and not alarm) he has raised an interesting issue that should be discussed. Whether the wider community of homeowners, home-based businesses and telecommuters take this perspective, we’re yet to see.

Kevin Jones

Contractor management in Australia’s new OHS laws

When reading the draft documents for Australia’s harmonised OHS laws, it is very useful to run various scenarios or hazards through one’s mind and see how these could be affected or managed. The most challenging hazards are the psychosocial hazards (or bio-psychosocial as they were referred to at the recent Comcare conference in Canberra) of stress, mental health and all their varieties. If the laws are truly to be for the modern world, they need to incorporate modern hazards and maybe suggest ways of managing them.

An older but often more persistent hazard involves the management of contractors on one’s site. Many hours are spent each year by companies on the selection of contractors, induction, monitoring, arguing and legal action (often in that order). Regardless of the quality of one’s experience, managing contractors can be challenging.

Will the new OHS laws proposed by the Australian Government make it easier to manage contractors?

According to Andrew Douglas, a workplace lawyer based in Melbourne, at the moment, the employer of contractors is directly responsible for the safety of the contractors. If the contractors work off-site, then that responsibility may extend to the principal.

Douglas believes that under the new national regime, based on the current draft papers, the relationship will be different. He says

“The key change is the imposition of broad, non-delegable and concurrent duties on persons who conduct a business or undertaking. The duty is owed to any persons or workers who the business or undertaking exercises control or influence over.

As a result, principals owe a primary duty to contractors and contractors’ employees working onsite. Further, directors and senior managers owe a positive duty to exercise due diligence to ensure the business complies with the OHS legislation.

By December 2011 , there will be no doubt that businesses will owe an identical duty to any worker on site as they does (sic) to their own employees.”

It may be well worth reading the draft document repeatedly with a different hazard group with each reading or, even better, use one’s colleagues or staff to read the drafts with a particular hazard in mind and then workshop the results.

Kevin Jones

Part of Andrew Douglas’ paper on contractor management is available HERE

Harmonised OHS laws – winners and losers

Andrew Douglas, an Australian OHS and employment relations lawyer, has followed up some his points made in a podcast on 2 October 2009 in an article available on his firm’s website.

Part of the article says

So what is different about the Model Act and how will it be interpreted? When interpreting an Act you always turn to the objects of the Act. Courts look at the provisions in dispute through the lens of the objects. For example, the Victorian OHS Act merely looks towards providing a safe place of work for workers and the public and makes it clear that interpretation should be directed by the principles of OH&S. It includes an object to work together without specific mention of the unions. Contrast this with the Model Act (MA). The objects include:

The primacy of a safety management system

Consultation including unions

Rather than being compliance focussed the objects are expansively drafted to include:

“The principle that workers…should be given the highest level of protection.”

As a result – all interpretations of the MA should be considered “aspirationally” rather than “compliance focused”.

The third dot point will be manna for those “best practice” advocates but clearly it will be very difficult to “comply” with this legislation. That raises the question of whether one of the major political aims of the harmonisation processes – to cut red tape and thereby reduce compliance costs – can really be achieved. Or is the compliance cost being made easier for the corporate few at the cost of the small business “many”?

A small but significant omission in the MA aims is “to eliminate hazards, at the source…” This aim in the Victorian Act was extremely useful in advising companies to keep analysing risks in order to get to the core contributory factors on incident and hazards. This motivation disappears in the MA with its focus on “reasonably practicable”.

“Reasonably practicable” allows business operators to consult on whether the control measure reaches what stakeholders feel is adequate and then stop. “Close enough is good enough and, if not, WorkSafe will tell us. If it is way off, WorkSafe may prosecute.” This is lazy safety management.

Looking for the source of the hazard to eliminate it keeps business improving its state of knowledge on safety, looking for new solutions for difficult hazards.

Douglas identifies the winners and losers with this new proposed legislation:

Winners

“Business that crosses borders will have one regime to comply with. That is simpler, cheaper knowledge and easier to train operational staff/increased flexibility.

Unions – expanded rights of entry, locked into consultative mechanisms and cheaper to train in OH&S – across Australia flexibility.

Regulators – shared knowledge, resources, and training.

Losers

Small to middle size businesses who cannot afford the new documentation boom that follows duty compliance and whose officers will lack the knowledge and time to positively comply.”

It will be interesting to see the submissions from the small business sector, if available, over the next few weeks. Similarly, the employer and industry associations will need to show how they represent the range of business interest of all their members and not just the multi-state companies.

The recent stats quoted by SafetyAtWorkBlog that showed a high degree of ignorance on harmonisation changes by most businesses are understandable because if you operate in only one State, why would harmonisation bother you? Now the MA is out, the state impacts of the national program are becoming clearer and more worrisome.

Kevin Jones

[Please note that in this article WorkSafe is used as a generic term representing OHS regulators across Australia]

Category: lawyers

New approaches on OHS fines and penalties

Penalties as a Percentage of Turnover

Publicity Orders

Like this:

Peek-a-boo safety – Oh Dear!

Like this:

OHS model law remains divisive

Like this:

OHS is becoming criminal law in a social context

Like this:

Perhaps a step too far on homes as workplaces

Like this:

Contractor management in Australia’s new OHS laws

Like this:

Harmonised OHS laws – winners and losers

Like this:

Penalties as a Percentage of Turnover

Publicity Orders

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this:

Share this:

Like this: