Liability under the Workplace Health and Safety Act 1995: Select issues for Management

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1 Liability under the Workplace Health and Safety Act 1995: Select issues for Management Kristy Richardson School of Commerce and Marketing, Faculty of Business and Informatics, Central Queensland University, Rockhampton, Australia 1

2 Liability under the Workplace Health and Safety Act 1995: Select issues for Management ABSTRACT Occupational health and safety is an increasingly important aspect of management and to the role of managers in all businesses regardless of the businesses size or industry in which the business operates. The impact of the legislation and subsequent prosecutions arising from workplace incidents highlights the need for management to have a systematic approach to occupational health and safety issues and prioritise occupational health and safety issues in the workplace. This paper focuses upon the core issue of how liability is imposed under the provisions of the Queensland Workplace Health and Safety Act 1995 and how some select issues under the Act have been interpreted by the Queensland Industrial Court. INTRODUCTION Keywords: occupational health and safety, management, liability Work related injuries and diseases have an effect upon not only upon those who suffer the work related injuries and diseases but also have an effect upon the businesses in which the work related injuries and diseases occur. The Workcover Queensland Annual Report for notes that there were statutory claims registered during that period. The Queensland Department of Industrial Relations noted in its Annual Report that the Workplace Health and Safety Queensland program had a 30 per cent increase in the number of successful prosecutions proceeded with under the provisions of the Workplace Health and Health Act (Qld) 1995 and $3.3 million awarded in fines by the courts. The Annual Report also noted that in the period, there were 156 prosecutions, with the average level of the fine imposed upon the defendant being $21,435. This average fine of $21,435 represented a 27 per cent increase on the average level of fine from the previous financial year. Given these figures it is important that those in management are aware of their occupational health and safety obligations and that the management of occupational health and safety issues in the workplace forms a part of good corporate governance. This paper aims to detail the statutory obligations that are imposed upon obligation holders under the Queensland Workplace Health and Safety Act 1995 and how these obligations have been interpreted by the Queensland Industrial Court. In canvassing these issues it is hoped to highlight that occupational health and safety in any workplace should be a priority. 2

3 The focus of this paper is specifically narrow i.e. an examination of the Queensland legislative regime. However the occupational health and safety legislative regimes which operate at all state and territory levels in Australia are generally the same with respect to the obligations for occupation health and safety that are imposed. This paper will conclude by suggesting that further research needs to be conducted in examining management behaviours and attitudes towards the legislative requirements and how compliance with the obligations are implemented in business. Particularly, in terms of the Queensland legislative regime there is no research in this area. THE WORKPLACE HEALTH AND SAFETY ACT (QLD) 1995 Sections 28 to 35 of the Workplace Health and Safety Act 1995 provide that obligations are imposed upon the following people with respect to preventing workplace injury and disease: persons conducting business or undertaking, persons in control of workplaces, principal contractors, designers of plant, manufacturers of plant, suppliers of plant, erectors and installers of plant, manufacturers of substances for use at workplace, suppliers of substances for use at workplace, designers of structures used as workplaces, a person in control of relevant workplace area, a person in control of fixtures, fittings or plant included in relevant workplace area and owners of plant. The Department of Industrial Relations Annual Report for highlights that the most common obligation prosecuted is the obligation imposed under section 28 of the Act. As section 28 of the Act is the most litigated obligation a body of case law which has developed relating to its interpretation. This interpretation should be drawn to the attention of managers and management so that a greater understanding of the occupational health and safety legislation can be made at a business-wide level. Drawing attention to the court s interpretation of occupational health and safety legislation should also assist managers and management to focus upon complying with their statutorily imposed, and near absolute, occupational health and safety obligations at a business-wide level. Section 28 of the Workplace Health and Safety Act 1995 Section 28 of the Workplace Health and Safety Act 1995 was amended at the end of Section 28 now imposes the following obligation: 3

4 (1) A person (the relevant person) who conducts a business or undertaking has an obligation to ensure the workplace health and safety of the person, each of the person's workers and any other persons is not affected by the conduct of the relevant person's business or undertaking. (2) The obligation is discharged if the person, each of the person's workers and any other persons are not exposed to risks to their health and safety arising out of the conduct of the relevant person's business or undertaking. (3) The obligation applies-- (a) whether or not the relevant person conducts the business or undertaking as an employer, self-employed person or otherwise; and (b) whether or not the business or undertaking is conducted for gain or reward; and (c) whether or not a person works on a voluntary basis. The amendment of section 28 consisted of amending the wording of the section to impose the obligation upon a person not upon an employer. This obviously widens the application of the obligation. By virtue of the operation of the Acts Interpretations Act 1954 (Qld), a person can mean either an individual or a corporate entity. By widening the application of the obligation to a person, there is no longer therefore the requirement for the State in prosecuting an offence under the Act to establish an employment relationship between the employer as the obligation holder and the injured worker. The obligation imposed the person is to ensure the workplace health and safety of the person, each of the person's workers and any other persons is not affected by the conduct of the relevant person's business or undertaking. Managing exposure to risks is defined by section 27A of the Act and provides that: (1) To properly manage exposure to risks, a person must: (a) identify hazards; and (b) assess risks that may result because of the hazards; and (c) decide on appropriate control measures to prevent, or minimise the level of, the risks; and 4

5 (d) implement control measures; and (e) monitor and review the effectiveness of the measures. (2) To properly manage exposure to risks, a person should consider the appropriateness of control measures in the following order-- (a) eliminating the hazard or preventing the risk; (b) if eliminating the hazard or preventing the risk is not possible, minimising the risk by measures that must be considered in the following order-- (i) substituting the hazard giving rise to the risk with a hazard giving rise to a lesser risk; (ii) isolating the hazard giving rise to the risk from anyone who may be at risk; (iii) minimising the risk by engineering means; (iv) applying administrative measures; (v) using personal protective equipment. In interpreting the interaction between the obligation in section 28 and the requirement to manage risks, the word ensure has been interpreted by the Queensland Industrial Court in the decision of Bow Park v Williams [2003] 174 QGIG 531 as meaning to make certain or make sure. Indeed, the Industrial Court confirmed in that case that the requirement to ensure workplace health and safety was not limited by the notion of foreseeability. In other words, the Act does not regard as an issue in establishing liability for an offence under the Act whether or not a reasonable person would have considered that the incident giving rise to the injury or disease was likely to occur. Given this interpretation of the word ensure the obligation imposed upon a person is regarded, in practical effect, as an offence of strict liability. In other words, if someone has been exposed to a risk, and suffered and injury or illness arising from the person s conduct of their business or undertaking then an offence will have been committed by the person under the Act. It could be suggested that the resultant affect of this interpretation is one of absolute liability. However, the legislative arrangement 5

6 does not act in an absolute way. Rather, the notion of the offence as one of strict liability is supported by virtue of section 29 of the Act and the restricted defences available under section 37 of the Act. Section 29 of the Act provides that: Without limiting section 28, discharging an obligation under the section includes, having regard to the circumstances of any particular case, doing all of the following: (a) providing and maintaining a safe and healthy work environment; (b) providing and maintaining safe plant; (c) ensuring the safe use, handling, storage and transport of substances; (d) ensuring safe systems of work; (e) providing information, instruction, training and supervision to ensure health and safety. On this basis, a person has a number of options to which they can have regard to in order to discharge the obligation under the Act. Further, support for the notion of offences under the Act as strict liability offences and not absolute liability offences is contained in section 37 of the Act which provides the defences that can be raised in by a person charged with failing to discharge their obligation the Act. Section 37 provides that: (1) It is a defence in a proceeding against a person for a contravention of an obligation imposed on the person under division 2 or 33 for the person to prove-- (a) if a regulation or ministerial notice has been made about the way to prevent or minimise exposure to a risk - that the person followed the way prescribed in the regulation or notice to prevent the contravention; or (b) if a code of practice has been made stating a way or ways to manage exposure to a risk-- (i) that the person adopted and followed a stated way to prevent the contravention; or 6

7 (ii) that the person adopted and followed another way that managed exposure to the risk and took reasonable precautions and exercised proper diligence to prevent the contravention; or (c) if no regulation, ministerial notice, or code of practice has been made about exposure to a risk - that the person chose any appropriate way and took reasonable precautions and exercised proper diligence to prevent the contravention. (2) Also, it is a defence for the person to prove that the commission of the offence was due to causes over which the person had no control. Given the nature and interpretation of the extent of the obligation a person trying to bring their action within the defence, it is acknowledged is difficult. Given the statutory interpretation of the offence and the limited defences available is it imperative that managers and management view occupational health and safety as a priority in the workplace. One particular, method of controlling exposure to risk has met with the ire of the court. That control method is the administrative control. ADMINISTRATIVE CONTROLS Administrative controls are those which, are verbal or pictured instructions provided to workers telling them to do or not to so something in the face of a risky activity. It is important to realise that there is a hierarchy of control methods which the occupational health and safety legislation in Queensland has regard to. Administrative controls are regarded as a control measure of last resort. The hierarchy is as follows: 1. Elimination. This means trying to eliminate the hazard all together from the system of work or the piece of machinery upon which the work activity is being performed. 2. If elimination is not possible then determine whether substitution could be an effective control measure. Substitution may involve, substituting a less 7

8 hazardous material, process or equipment, redesigning equipment or work processes or even isolating the hazard. 3. Only as a last resort, when exposure to the risk is not (or can not be) minimised by other means, should administrative controls or personal protective equipment be considered. The process of choosing control measures and the process of using and implementing control measures is important for the management of workplace health and safety as evidenced by the judgement of President Hall in the case of Finn v Devan Management Pty Ltd [2005] QIC 1 (17 December 2004); 178 QGIG 23. In that case Mr Cockburn an employee of Devan Management Pty Ltd was using an implement on the tractor known on the farm as the plastic picker upper to roll up plastic that had been laid in the rows of the paddock. At the time he was operating the plastic picker upper without assistance. When the plastic was being picked up it was not uncommon for the plastic to break. In the event of the plastic breaking, the operators had been told to stop the tractor, turn the motor of, leave the tractor, retie the plastic to picker upper, get back on the tractor, restart the tractor and then continue on. Unfortunately, on the day which Mr Cockburn was operating the pickerupper he became entrapped in the implement and passed away at the scene before help arrived. The Court, in considering the effectiveness of the administrative i.e. the verbal instruction, considered that Devan Management should have turned its corporate mind to the question of whether there were any physical devices were available to protect the driver from the risk of being dragged into the picker upper by the plastic. President Hall noted in his judgment that: There is no reason to doubt that if Mr Price, the director who gave evidence, had turned his mind to that question prior to the incident rather than after the incident, he would have made the same discovery which he made all too late... An employer who has not turned his mind to the question of whether other controls are available before adopting administrative controls has neither exercised proper diligence to 8

9 prevent the contravention nor taken reasonable precautions to prevent the contravention. President Hall repeated these sentiments in the case of Verrall v Goodwyn Investments Pty Ltd [2005] 180 QGIG 729 where a 19 year old man sustained injury to his fingers in a folding machine. President Hall noted of the system of work involved for the folding machine that it involved the worker: Placing his fingers within moving parts of a machine. The only safety precaution taken was the development of instructions designed to ensure that the machine was not set in motion before the Mr Lord s fingers had been removed. It has long been accepted that such administrative controls are an inadequate method of ensuring the safety of workers. It is the circumstance of aggravation that the machine was designed so that it might have been used without exposing workers such as Mr Lord to the hazard just described. The safety mechanisms were not being utilised. Further, even observance of the administrative controls exposed Mr Lord to the peril of error. It cannot be more strongly suggested that in the management of occupational health and safety that consideration be given by management as to the control measures. Suffice to say that a cursory examination of plant and equipment in operation at a workplace will be insufficient to mount a defence as against the basically strict liability offence. A coherent and systematic approach by management must be taken to ensure that the hierarchy of controls is at least visited by management. The way by which management does this, in terms of management behaviour is little described or understood and is open to further research. There is a necessary link to be made between the regulations that are imposed upon business and the practical implementation of those regulations in business given that the Workplace Health and Safety Act 1995 contains within it a provision which not only attaches liability to the corporation for a contravention of the Act but to impose liability upon those in management positions through the representative contravention provision. REPRESENTATIVE CONTRAVENTIONS 9

10 For example, section 167 of the Act requires that: (1) The executive officers of a corporation must ensure that the corporation complies with this Act. (2) If a corporation commits an offence against a provision of this Act, each of the corporation's executive officers also commits an offence, namely, the offence of failing to ensure that the corporation complies with the provision. (3) Evidence that the corporation has been convicted of an offence against a provision of this Act is evidence that each of the executive officers committed the offence of failing to ensure that the corporation complies with the provision. (4) However, it is a defence for an executive officer to prove: (a) if the officer was in a position to influence the conduct of the corporation in relation to the offence - the officer exercised reasonable diligence to ensure the corporation complied with the provision; or (b) the officer was not in a position to influence the conduct of the corporation in relation to the offence. The Act defines executive officer as meaning a person of the corporation who is concerned with, or takes part in, the corporation's management, whether or not the person is a director or the person's position is given the name of executive officer. This is a wide definition and can potentially capture a number of people in management roles particularly those who set work schedules, purchase plant, set and develop policies and procedures and supervisors of workers. It is important to emphasise that the definition is not restricted to the director of an employing corporation. Whilst the Department of Industrial Relations Annual Report did not indicate that an executive officer prosecution had been mounted by the Department the wording of section 167 makes it clear that an offence of the corporation is also an offence of the individual executive officer unless the executive officer can establish one of the two defences which are available in subsection (4). 10

11 Such a provision highlights the need for management to ensure that occupational health and safety is of priority as part of the business and undertaking in which they are involved. As the final topic for this paper the comments of the Court regarding sentencing and the levels of fine will be covered. This final topic aims to support the introductory comments of this paper that occupational health and safety should be approached pragmatically by management and further that occupational health and safety should be a management priority. FINES In terms of the level of fines for prosecutions under the Act, I stated in the introduction that the average fine for a prosecution is $21, The obvious caution is that this figure is only an average so that there are fines award which are greater than this amount and fines which are less. The other caution is that this average fails to take into account the different aggravating circumstances which are a part of all prosecutions. The aggravating circumstances are detailed in section 24 of the Act. That section provides that if: (a) the breach causes multiple deaths the maximum fine is 2000 penalty units or 3 years imprisonment for an individual; or (b) the breach causes death or grievous bodily harm (which is defined by the Act) the maximum penalty is 1000 penalty units or 2 years imprisonment for an individual; or (c) the breach causes bodily harm (which is defined by the Act) the maximum penalty is 750 penalty units or 1 year's imprisonment for an individual; or (d) if the breach involves exposure to a substance likely to cause death or grievous bodily harm the maximum penalty is 750 penalty units or 1 year's imprisonment for an individual; or (e) otherwise the maximum penalty is 500 penalty units or 6 months imprisonment. 11

12 It is important to note that the Penalties and Sentences Act 1992 (Qld) will apply if the obligation holder is a corporation with the court having the ability to impose upon the corporation a maximum fine of an amount equal to 5 times the maximum fine for an individual. In terms of sentencing offenders and the appropriate fine levels under the Workplace Health and Safety Act, President Hall of the Queensland Industrial Court has indicated that mitigating circumstances, that is issues that may justify a reduction in the penalty given the circumstances of the corporate defendant can be taken into account in the setting of the penalty. The caution to this statement is that too much cannot be made of the mitigating circumstances so as to detract from the intention of the legislature and the recognition that occupational health and safety should be a priority for all business. President Hall confirmed this view in the decision of Twigg v Hughes and Hessey Pty Ltd [2005] 180 QGIG 924 where he stated: Whilst any work related injury is one work related injury too many, there are (thankfully) not many of them. A consequence is that it is rarely possible to identify a tariff sentence or a range within which any fine should fall. Whilst there are exceptions in the case of minor bodily harm injuries and burning injuries, in ordinary circumstances guidance will be sought in fines imposed in cases in which the facts were quite discrete. There is also the problem that because one is dealing with money penalties one will not have, e.g.. a head sentence from which an actual sentence has been derived, and the additional problem that one will be dealing with a global sum set after allowance has been made for mitigating factors. There are the further problems that the maximum penalty has steadily increased and, in the case of decisions of this court, a decision is often no more than a decision that a fine fixed at first instance is not so erroneous that it should be interfered with. Very often, the previous decisions will be little more than signposts along the way. The obligations imposed by the Act verge on absolute. Observance of statutory obligations may require the doing of more than is reasonable and the expenditure of 12

13 more than is reasonable. The Act does not create an exception for small business and does not provide a defence of impecuniousity. Rather, the approach of the Act, understandably in light of its objects, appears to be that those who cannot afford to ensure safety in embarking upon the undertaking and activities at all. Whilst it is appropriate to examine the financial circumstances of a Respondent with a view to avoiding oppression in sentencing, there is no justification for the granting of such indulgence to small and struggling businesses as to undermine the incentive to comply with the obligations imposed by the Act. CONCLUSION From this analysis of some select aspects of the Queensland Workplace Health and Safety Act 1995 it is hoped that an awareness of the occupational health and safety legislation has been generated. It is conceded that this paper is, in a sense, a bad news type of paper which merely states the consequences but provides no assistance to managers or management to manage and identify the occupational health and safety risks associated with a particular business or industry. There is a vast amount of information, standards and regulations that exist on how to manage occupational health and safety risks and the types of occupational health and safety systems that may be suitable to a particular business or industry. What is missing is the understanding of management behaviours and attitudes towards the relevant statutory obligations and how compliance with the obligations are implemented in business. One suspects that the expectations of the courts, as evidenced by the cases, may not match with the attitudes and behaviours of management. That is an avenue for further research. As a first step, and really this paper s only purpose, as stated in the introduction, is to highlight the need for managers and management to consider occupational health and safety as a priority along with the other important and vital aspects of running and managing a business. 13