Company directors and OHS obligations

Free Access

Since the final report of Australia’s Review into Model OHS Law, discussion has been remarkably quiet.  The ACTU was scheduled to meet for discussions on the report last Monday and no public statements have been made.  Most of the labour law firms have been quiet also.  It is fair to say that most are trying to digest the 480 page report.

But one employer group has provided an opinion piece in the business pages of The Age newspaper on March 2 2009.  The article says little that is new but it is mischievous in some of its comments. 

John  Colvin, CEO of the Australian Institute of Company Directors, writes of his concerns about increased exposure for the Institute’s members.  Colvin is concerned that upcoming OHS laws may be unprincipled and counterproductive.

The Model OHS Law report has said that it supports the statement of OHS principles as are already in place in the Victorian OHS legislation.  According to WorkSafe Victoria

“The Act sets out the key principles, duties and rights in relation to occupational health and safety. The general nature of the duties imposed by the Act means that they cover a very wide variety of circumstances, do not readily date and provide considerable flexibility for a duty holder to determine what needs to be done to comply.”

These principles are

4. The principles of health and safety protection

(1)    The importance of health and safety requires that employees, other persons at work and members of the public be given the highest level of protection against risks to their health and safety that is reasonably practicable in the circumstances.

(2)    Persons who control or manage matters that give rise or may give rise to risks to health or safety are responsible for eliminating or reducing those risks so far as is reasonably practicable.

(3)    Employers and self-employed persons should be proactive, and take all reasonably practicable measures, to ensure health and safety at workplaces and in the conduct of undertakings.

(4)    Employers and employees should exchange information and ideas about risks to health and safety and measures that can be taken to eliminate or reduce those risks.

(5)    Employees are entitled, and should be encouraged, to be represented in relation to health and safety issues.

The article is mischievous in a number of areas.  Colvin mentions how the current laws vary from state to state.  He mentions that

Some carry personal criminal liability for directors, even where they may not have had any personal involvement in a breach. In some states, they reverse the onus of proof, removing the presumption of innocence, and offer narrow legal defences and limited appeal rights.” (my emphasis)

Colvin is talking primarily about New South Wales, the State that everyone agrees has the OHS law that is most onerous for employers.  However, the New South Wales union movement has been remarkably quiet and flexible on the issue of its OHS laws.  There has been some rhetoric for the benefit of its members and to retain some ideological “face” but the union movement across Australia is coming to accept the reality of better OHS outcomes from nationally harmonised legislation.  

Repeatedly the National OHS Law Review panel stated that it has based its decisions on the structure of the Victorian legislation as, for one reason, it has undergone the most recent legal review.  Colvin’s focus on New South Wales OHS law is outdated, reflective, and unhelpful.

Colvin mentions a survey that found

“..more than 65 per cent said the risk of personal liability occasionally made them take an overly cautious approach in the boardroom and another 13 per cent said this happened frequently. Almost two-thirds felt this had inhibited an optimal business decision to a medium to high degree.”

This indicates that the risk of being prosecuted on OHS breaches is being discussed at board level – great result.  Whether this translates to the board improving the OHS performance of their company is doubtful as Colvin’s article implies that directors are looking at ways of avoiding responsibility and liability rather than accepting the reality of their OHS obligations and working to improve them.

Colvin says that

“Directors should not be held criminally liable for a company’s misconduct simply because they are a director.”

Directors are not prosecuted for OHS breaches because of their status or position.  They are prosecuted because of the decisions that they make and the ramifications of those decisions.  If a director is dismissive of OHS issues and palms them off to someone else in the organisation and an incident occurs, should not the director be called to account for why they considered the safety of their workers to be unimportant, even when for over thirty years directors and executives have had responsibility for OHS compliance?

Colvin believes that holding directors accountable implies that directors have more control over the actions of their employers than they do.  Current business and management theories promote the position that directors should be more in touch with what is happening on the shopfloor.  The theories promote informed leadership and an increased awareness of how the company and its people work, they promote a level of engagement that creates a positive workplace culture and displays leadership.   Colvin seems to be encouraging the opposite.

He ends his article with

“More fundamentally, it unfairly treats directors more harshly under the law than the rest of the community.”

He misunderstands the application and aims of OHS law.  All people in a workplace have a responsibility to ensure a safe and healthy workplace for themselves, for employees and for members of public on and off their worksites.  Directors have more detailed obligations, but not less, because they have control of production and benefit more from the success of the company than do the employees. 

Ultimately, Colvin’s article reflects the misunderstanding of OHS that directors and companies have had for decades.  Companies need to realise that the best performing companies in OHS, and those with the best productivity, are those that have embraced their obligations for safety and have incorporated the principles within their own culture. 

The review into model OHS law has indicated the way of the future and company directors would be well-served to realise this and get on board.  Being left behind will benefit no one, especially the shareholders.

Kevin Jones

CEO loses job over safety failures

Free Access

Health funding and management is a constant political issue.  The attention increases hugely during election campaigns like the one that is currently occurring in the Australian state of Queensland.

This week the leader of the opposition parties, Lawrence Springborg, called for the release of a government report into the sexual attack on a nurse and security in Torres Strait islands.  SafetyAtWorkBlog has written repeatedly on OHS issues associated with the attack in February 2008.  Springborg has pledged increased safety resources for remote area nurses.

Queensland Health reports on 25 February 2009 that the CEO of the Torres Strait District’s health service CEO has been stood aside as a result of the government’s investigation.  The statement reads

“Director-General Michael Reid said the Crime and Misconduct Commission had reviewed the report by the Ethical Standards Unit and was satisfied with the investigation.
“Some allegations that members of the Torres Strait and Northern Peninsula Health Service District executive did not act appropriately were upheld by this investigation,” he said. “We accept this investigation has found serious faults in the way Queensland Health staff responded to this critical incident and we are taking immediate action.”
The CEO of the Torres Strait-Northern Peninsula District has been stood down, effective immediately, while her role with Queensland Health is under further consideration.”

Many of the issues raised relate to possible corruption and improper behaviour by the Queensland Health and others.  These are the political points that Springborg is likely to chase.  

In terms of occupational health and safety, the focus of this blog, Queensland Health says

“There is substantial evidence that there has been a systemic failure by the Torres Strait and Northern Peninsula Health Service District to acknowledge and address workplace health and safety issues within the District over a long period of time.”

“There is sufficient evidence to conclude, on the balance of probabilities, that members of the Torres Strait and Northern Peninsula Health Service District (TSNPHSD)
Executive responded inappropriately and insensitively when notified of the alleged rape of a Remote Island Nurse on Mabuiag Island on or around 5 February 2008.”

“Further, there is sufficient evidence exists to find, on the balance of probabilities, that the repatriation of the remote area nurse from the outer islands as not managed or coordinated at a level cognisant with the seriousness of the events which had occurred.”

It is no wonder the CEO of the health service has lost her job.  It is a little surprising that more, and more prominent, heads have not rolled.  It is suspected that this may be one of the aims of the opposition politicians during the current election campaign.

To return to our core issue of OHS and accountability, this result clearly indicates that senior executives, particularly in the public sector in this instance, must take a preventative approach to the health, safety and security of their staff, wherever the employee is located.

Kevin Jones

Beaconsfield Mine Collapse – Coroner’s Report Released

Free Access

On 26 February 2009, the Tasmanian Coroner, Rod Chandler, released his findings in to the death of Larry Knight in the Beaconsfield mine collapse of April 2006

The Coroner found that 

“the evidence does not permit me to make a positive finding that any person, corporation or other entity, by their conduct, directly contributed to Mr Knight’s death.”

The report is available for download HERE

SafetyAtWorkBlog will bring more information on this important decision over the next few days.

UPDATE

The brother of Larry Knight, Shane, and union representative Paul Howe, have expressed their disappointment with the findings of the Tasmanian Coroner.  In an interview with journalists there was mention of the inadequacies in the risk assessment process, the poor resources of Workplace Standards Tasmania, the lack of attention given to safety advice from multiple consultants.

Shane Knight continues to believe that the mine management was responsible for the death of his brother.

Paul Howes called on the government to end the approach of self-regulation and called on business to not put profit before safety.

Safety Awards

Free Access

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

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

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

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

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

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

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

The inclusion of John  Holland Rail did always seem peculiar.

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

Award Ceremonies

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

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

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

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

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

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

Kevin Jones

Ethics & Safety

Free Access

Ethics is gaining an increased level of attention in the safety profession in Australia but remains way behind other professions and the business community in general.

The UK’s Ethical Corporation Institute has made available a “pubcast” with one of the authors of a report entitled “Best Practices for Designing Effective Ethics Programmes”.  The report itself is only for sale so I recommend you gain as much information from the podcast as possible or request a summary.

Howard Whitton
Howard Whitton

Interestingly a world-class ethics expert has returned recently to Australia after many years on the international stage.  Howard Whitton will be conducting a workshop in Melbourne on 30 March 2009 concerning “Managing Ethics and Values: Beyond the Code of Conduct”.  Below is an article I wrote about a seminar I attended early in 2008

Kevin Jones, BA, FSIA

Howard Whitton is one of those Australians who are obscure but when brought to one’s attention you feel guilty that you did not know of him. I first heard Howard speak at an ethics seminar in Melbourne in early 2008.
I attended from curiosity because the safety profession, by and large, in Australia has paid lip-service to professional ethics, and still does. I attended an Ergonomics Society conference almost ten years ago in Sydney where one of the speakers, a member of the society, spoke about professional ethics. Apparently that it was the first time that the Ergonomics conference had ever “discussed” ethics.

Other organizations profess to have an ethics procedure but this is shrouded in secrecy making it difficult for members to know the ethical parameters of a profession. Professional ethics come from open and active discussion of issues such as conflict of interest, confidentiality, whistleblowing, rather than developing a few sheets on professional conduct and thinking the process has ended.

Howard’s presentation in Melbourne surprised. It was in plain English, and overwhelmingly relevant. Howard had a professional film scenario that he based his presentation on. The film involved all the elements of a road construction program from political pressure, safety compliance, environmental considerations, resource allocation, and personal choice. It showed the decision-making processes that safety professional frequently face themselves or have an active role in. It was a microcosm of the project manager’s contemporary role.

The moments I remember are when bones are discovered in the construction project. This echoed the need to manage a project in sensitive environmental areas. One of the workers takes photos of each stage of the project as a hobby, without realizing the photos could be evidence. The project manager is already working within the project parameters when a political (undocumented) element appears that substantially affects the project.

I had half-expected a dry academic discussion and ended up in a fascinating safety-themed debate. If there was one SIA seminar that I would attend this year it would be one of Howard’s workshops being held in late-March in Melbourne, prior to the Safety In Action Conference.

For those members who, like me, weren’t aware of Howard Whitton, I would strongly recommend you look at the online resources listed below.

According to the Ethicos website:

“Following a career as a public servant in Australia, Howard has worked since 1999 in 11 countries as a specialist consultant on Public Sector Ethics, Conflict of Interest, Whistleblower Protection, institutional integrity systems, ethics codes, disciplinary investigations, and training/capacity-building in ‘Ethical Competence’, both for public services and international organisations. After completing a three-year term at the OECD’s Public Governance and Territorial Development Directorate in Paris, Howard was asked to serve as one of two independent specialists helping to establish the new Ethics Office for the UN Secretariat. Since 2006 Howard has been Team Leader on various Ethics/Integrity/Anti-corruption capacity-building projects for national governments, UN specialist agencies, and international NGOs.”

Lucky for us Howard is spending some time at home in Queensland.