Headline goes here. The rise of a solution not fit for purpose. Industrial manslaughter reform. Discussion Paper

Headline goes here Industrial manslaughter reform The rise of a solution not fit for purpose Discussion Paper Current as at 30 August 2018

Contents Introduction 1 Industrial Manslaughter: State of the Nation 3 What should organisations be doing to respond to the industrial manslaughter developments? 9 Problems with industrial manslaughter provisions 10 Interfering with the risk based framework of the legislation 11 Confusion between negligence and recklessness? 12 Significant jurisdictional differences 14 Will industrial manslaughter provisions actually result in higher penalties and strengthen deterrence? 15 Just because an offence is on the books, does not mean it will be used 17 What is the problem industrial manslaughter reform is trying to solve? 18 The real problem: Issues in enforcement, penalties and sentencing 19 Recommendations for enforcement and sentencing 23 UK sentencing guidelines in focus: An alternative for more consistency in sentencing 25 Annexure A 28 Annexure B 50

1 Introduction For many years, the appetite for industrial manslaughter offences on the statute books has waxed and waned. But the events in Queensland with multiple fatalities at Eagle Farm and Dreamworld in 2016 gave the push additional impetus, with the Queensland Government announcing a Best Practice Review of Workplace Health and Safety Queensland that would include recommendations for industrial manslaughter provisions. Those provisions commenced in Queensland as of October. Up until that point, only ACT had such a provision on the books. Now it seems other jurisdictions are looking to follow suit. Unions have taken advantage of this particular moment in history. The ACTU Congress met in Brisbane in mid-july 2018, where the Congress endorsed a proposal titled Kill a worker, Go to Jail Industrial Manslaughter further calling on state and federal governments to amend WHS laws to include specific provisions relating to gross negligence causing death (industrial manslaughter) after hearing from CFMEU WA maritime division leader Chris Cain who told delegates that fines in this context ought to be $20 million and 20 years imprisonment. 1 At the Federal level, there is also renewed interest in the matter. In March 2018, the Senate referred an inquiry to the Education and Employment Reference Committee into the framework surrounding the prevention, investigation and prosecution of industrial deaths in Australia. That inquiry is currently in its public hearing phase and was originally due to report back by 20 September 2018. On 16 August 2018, the Senate agreed to an extension of time for reporting until 4 October 2018. But is legislative reform that takes the form of industrial manslaughter offences the answer to the problem we are trying to solve? If the point is that the community wishes to see more serious ramifications for the most egregious types of conduct in failing to look after the health and safety during the performance of work, simply introducing industrial manslaughter provisions will not have that result. Indeed, this renewed push for industrial manslaughter offences may represent a step backwards for health and safety outcomes. It may be that these developments cause us to avoid shining a light on areas where real law reform is required if we are to align how the health and safety legal framework practically operates with community expectations. 1 Workplace Express, Unions back 20 years jail for industrial deaths, July 19 2018 cited at https://www.workplaceexpress.com.au/nl06_news_ selected.php?act=2&nav=11&selkey=56974&utm_source=daily+email&utm_medium=email&utm_campaign=subscriber+email&utm_ content=read+more&utm_term=unions%20back%2020%20years%27%20jail%20for%20industrial%20deaths

In this discussion paper, we explore: the state of play around the country in terms of the current status of the laws on industrial manslaughter, planned reform efforts and issues arising in specific jurisdictions and recommendations for companies in light of these reforms the background to the call for industrial manslaughter reform for health and safety laws why we say that industrial manslaughter provisions may not be the answer, and future directions for a more productive way ahead to solving the true issues at the heart of this particular call for law reform.

3 Industrial Manslaughter State of the Nation As it stands, the ACT and Queensland have current provisions for industrial manslaughter with Victorian and Western Australian Governments in recent months also announcing commitments to the implementation of such provisions. The review of WorkSafe NT being conducted by Tim Lyons which is due to report back by the end of the year has also been asked to explore this issue. We set out in the diagram at a glance, and in more detail in the table below, the state of play of industrial manslaughter provisions around the country. At a glance: Current status of industrial manslaughter laws around the country WA Current Status: No Govt. has announced it intends to create a criminal IM offence, with 20 years imprisonment for individuals found guilty of acting recklessly NT Current Status: No Lyons Review will address effectiveness of current offences and penalties under WHS legislation and whether IM offences should be introduced QLD Current Status: Yes Where: See s34c and 34D of the Work Health and Safety Act 2011 (Qld) When: Since 23 October Who: PCBUs and senior officers negligently causing death Penalties: $10 million fine for corporations and 20 years imprisonment for individuals NSW Current Status: No Labor opposition committed to creating IM criminal offence if elected in March 2019 state election ACT Current Status: Yes Where: See s49c, 49D and 49E of the Crimes Act 1900 (ACT) When: Since 1 March 2004 Who: Employers and officers for recklessly or negligently causing the death of a worker by their conduct Penalties: $1.5 million fine for corporations (and up to $5 million with court ordered publicity and projects) and $300,000 for individuals and 20 years imprisonment or both SA Current Status: No Labor lost the SA March 2018 election. IM following Qld's lead promised by Labor SA not likely to occur under this Govt TAS Current Status: No Labor opposition intends to consult with unions and other stakeholders on IM provisions, next State election not due until 2022 VIC Current Status: No Govt. committed to creating criminal IM offence if re-elected in the November 2018 state election

In depth: Current status of industrial manslaughter laws around the country State/ Territory Australian Capital Territory Status of industrial manslaughter laws The first industrial manslaughter legislation was passed in the ACT Legislative Assembly on 27 November 2003, with the Crimes (Industrial Manslaughter) Amendment Act 2002 (ACT) taking effect as of 1 March 2004. Industrial manslaughter provisions are set out in the Crimes Act 1990 (ACT) in Part 2A. Under s49c, an employer commits an offence if a worker dies in the course of employment by, or providing services to, or in relation to, the employer, or is injured in the course of employment by, or providing services to, or in relation to, the employer and later dies, and the employer s conduct causes the death of the worker. An employer can only be prosecuted under this provision if the employer has: been reckless about causing serious harm to the worker (or any other worker) by the conduct; or been negligent about causing the death of the worker (or any other worker) by the conduct. There is also a provision dealing with industrial manslaughter committed by a senior officer (section 49D). Senior officer of an employer is defined as, in relation to an employer that is a Government entity, a Minister, a person occupying a chief executive officer position in relation to the Government or Government entity, a person occupying an executive position in relation to the Government or Government entity who makes, or takes part in making, decisions affecting all, or a substantial part, of the functions of the Government or Government entity. In relation to an employer that is another corporation, a senior officer is an officer of the corporation as under section 9 of the Corporations Act. Finally, in relation to an employer that is another entity, a senior officer is any of the following: i) a person occupying an executive position in relation to an entity who makes, or takes part in making, decisions affecting all, or a substantial part of the functions of the entity; and/or ii) a person who would be an officer of the entity if the entity were a corporation. The current penalties for s49c and s49d offences are up to 2,000 penalty units (currently $300,000 for individuals and $1.5 million for corporations), 20 years imprisonment, or both. In addition to the monetary penalties available under s49c, the Court may order a corporation to take certain actions under section 49E(2) of the Crimes Act 1900 (ACT). Those court directed actions can include any action to publicise details regarding the offence, the incident and any penalties imposed as well as orders to do stated things or establish or carry out a stated project for the public benefit even if the project is unrelated to the offence. Under section 49E(4), the total cost to the corporation of compliance with an order or orders under section 49E(2) in relation to a single offence must not be more than $5,000,000 (including any fine imposed for the offence under s49c).

5 In depth: Current status of industrial manslaughter laws around the country State/ Territory Status of industrial manslaughter laws Queensland The Work Health and Safety and Other Legislation Amendment Act (WHS Amendment Act) introduced industrial manslaughter provisions into Part 2A of the 2011 (Qld) for both senior officers and PCBUs. The WHS Amendment Act creates two criminal offences of industrial manslaughter under sections 34C and 34D. An employer and a senior officer commit an offence where: a worker dies in the course of carrying out work (or is injured and later dies); the PCBU or senior officer s conduct causes the death of the worker; the PCBU or senior officer was negligent about causing the death of the worker by the conduct. A senior officer is defined as an executive officer of the corporation (if the person is a corporation) or, otherwise, the holder of an executive position in relation to the person who makes, or takes part in making, decisions affecting all, or a substantial part, of the person s functions. This is different from the section 9 Corporations Act 2001 (Cth) definition of an officer for the purposes of officer due diligence obligations in section 27 of the WHS Act and may capture a broader group of individuals than those captured by the due diligence obligation. An offence is considered a crime and the time limitation periods associated with other offences under the WHS Act do not apply to the industrial manslaughter offence. While a WHS Prosecutor was also established by the WHS Amendment Act, transfer of the prosecutorial role to the WHS Prosecutor will not affect the requirement for indictable offences (which includes both Category 1 and industrial manslaughter offences) to be referred to the DPP for decision and action. A PCBU found guilty may be liable for a fine of up to $10 million and a senior officer may be liable to a term of up to 20 years imprisonment. These offences commenced on 23 October. Those provisions have also been incorporated within Part 2B of the Electrical Safety Act 2002 (Qld) and Part 2A of the Safety in Recreational Water Activities Act 2011 (Qld).

In depth: Current status of industrial manslaughter laws around the country State/ Territory Status of industrial manslaughter laws Victoria The Victorian Government announced on 28 May 2018 a commitment to creating a new criminal offence of industrial manslaughter if re-elected in the November 2018 state election, with 20-years imprisonment for individuals or a fine of up to approximately $16 million for corporations. This would represent a significant increase in maximum penalties under the Occupational Health and Safety Act 2004 (Vic) (OHS Act) that are currently set for the reckless endangerment offence under section 32 of the OHS Act (five years imprisonment or a fine of $3,171,400 million for corporations and $285,426 for individuals). The announcement indicated the intent for the provision to involve a negligence test rather than recklessness, seemingly taking a lead from the Queensland approach. 2 The new offence is also to apply to an employer s negligent conduct that causes the death of a non-working member of the public. That is, there is clear intent from the public announcements for the provisions to capture public safety contexts. WorkSafe Victoria will be responsible for prosecuting employers for workplace manslaughter. This is a fresh attempt to introduce such provisions, following the previous Crimes (Workplace Deaths and Serious Injuries) Bill 2001 (Vic) which was ultimately defeated in the Legislative Council in June 2002. Victoria s 2004 Maxwell Review 3 had earlier rejected the introduction of a separate offence, stating that manslaughter prosecutions should remain within the ambit of general criminal laws. Instead, section 32 of the OHS Act (reckless endangerment) was introduced to implement Mr Maxwell QC s recommendation for a potential custodial offence in the context of high culpability. The introduction of industrial manslaughter provisions are said to be a response to the increasing annual fatalities in Victoria. Upon announcement, Victoria s Premier Daniel Andrews stated that Up to 30 people are killed at work in Victoria every year this is 30 deaths too many. 4 Victoria s Premier Daniel Andrews said: The penalty must be a strong enough deterrent to make employers take workplace safety seriously, and not rely on deep pockets to avoid accountability while cutting corners on safety. 5 2 See Premier s announcement which states: Employers whose negligence leads to the death of an employee will face up to 20 years in jail under tough new laws to be introduced by a re-elected Andrews Labor Government. Cited here: https://www.premier.vic.gov.au/workplace-manslaughter-laws-toprotect-victorians/. 3 C Maxwell, Occupational Health and Safety Act Review, March 2004, Government of Victoria. 4 See Premier s Statement, Workplace Manslaughter Laws to Protect Victorians, 26 May 2018 cited at https://www.premier.vic.gov.au/workplacemanslaughter-laws-to-protect-victorians/. 5 Ibid.

7 In depth: Current status of industrial manslaughter laws around the country State/ Territory Status of industrial manslaughter laws Western Australia The Western Australian Government has also announced that it intends to follow Queensland s lead on industrial manslaughter offences and amend its draft WHS laws to include union-led prosecutions and 20-year gaol terms for recklessness. New South Wales Presently, there is no industrial manslaughter offence in NSW. In July 2018, the NSW Labor opposition indicated that it intends to introduce a new law to properly address the issue of workplace death where it occurs as a result of breaches of work safety obligations if it wins the next state election in March 2019. NSW Shadow Industrial Relations Minister Adam Searle indicated that NSW Labor would will consult with unions, employers and the community about the best model and the level of penalties, including length of jail terms, bearing in mind that manslaughter [in the Crimes Act] has a maximum penalty of 25 years jail. Mr Searle seemed to prefer consistency with general manslaughter provisions on gaol time rather than proposals such as Victoria s 20 years imprisonment. In making that announcement, Mr Searle said that NSW Labor would carefully draft the laws to ensure individual workers were not made scapegoats for corporate failures. 6 It remains to be seen if NSW Labor is swayed by the ACTU Congress proposal of $20 million fines and 20 years imprisonment for such offences. South Australia Presently, there is no industrial manslaughter offence in South Australia. As at February 2018 the Labor party promised to follow Queensland s lead on industrial manslaughter but subsequently lost the March 2018 state election. 6 See Anna Patty, Labor vows to jail bosses over workplace deaths in NSW, Sydney Morning Herald, 2 July 2018 cited at: https://www.smh.com.au/ business/workplace/labor-vows-to-jail-bosses-over-workplace-deaths-in-nsw-20180702-p4zoyr.html.

In depth: Current status of industrial manslaughter laws around the country State/ Territory Status of industrial manslaughter laws Northern Territory Presently, there is no industrial manslaughter offence in the Northern Territory. However, former ACTU assistant secretary Tim Lyons has been tasked with determining whether the NT WHS Act should be amended to include an offence of gross negligence causing death as part of the Best Practice Review of Workplace Health and Safety in the Northern Territory. 7 The Review is being conducted by Tim Lyons, who conducted review into the Queensland WHS Act 8 which informed the most recent legislative amendments to the WHS Act (QLD). Among the Terms of Reference is to: consider specific issues such as whether an offence of gross negligence causing death should be introduced and whether current penalty levels under the current work health and safety laws act as a sufficient deterrent to non-compliance. 9 Submissions for the WorkSafe NT review close on 31 August 2018 and the Review is due to report back to the Attorney-General and Minister for Justice by December 2018. Tasmania Presently, there is no industrial manslaughter offence in Tasmania. However, earlier this year the Labor party announced it was committed to pursuing the introduction of industrial manslaughter laws. Despite subsequently losing the election, in April 2018, Shadow Minister for Workplace Relations Sarah Lovell announced that Labor will undertake a detailed consultation with industry and unions looking toward the introduction of industrial manslaughter laws. It seems that Tasmania is likely not to see the introduction of industrial manslaughter laws in the next few years but this may be back on the agenda if there is a change of government in that jurisdiction. 7 See Best Practice Review of Workplace Health and Safety in the Northern Territory, Discussion Paper, July 2018 cited at https://justice.nt.gov.au/ data/assets/pdf_file/0005/541814/best-practise-review-of-workplace-health-and-safety-in-the-northern-terr...pdf. 8 the Best Practice Review of Work Health and Safety in Queensland Final Report, 3 July. 9 See consultation page of Attorney-General and Justice for the Best practice review of workplace health and safety in the NT cited at https://justice. nt.gov.au/attorney-general-and-justice/law/open-law-reform-consultation.

9 What should organisations be doing to respond to the industrial manslaughter developments? The maximum penalty exposure for companies in the context of a fatality will significantly increase from $3 million to upwards of $10 million in jurisdictions with industrial manslaughter offences. The ramifications for individuals in the context of workplace fatalities involve potential imprisonment increases from five years imprisonment to 20 years. And these imprisonment terms will apply in the context of offences that are potentially easier for prosecutors to make out (see discussion on negligence vs recklessness below). 10 A trend we reported in our WHS Year in Review publication. Training To date the organisational responses to personal liability under health and safety laws has been primarily to provide training for officers at the Board and senior leadership level in relation to officer due diligence. Any training to senior leaders needs to provide updates to leaders on these developments. As the dual trends of increasing worker prosecutions 10 and the introduction of industrial manslaughter offences gather apace around the country, organisations should revisit whether they are providing sufficient leadership training particularly for middle managers and site managers who may find themselves caught by these new industrial manslaughter provisions in the context of a workplace fatality. Fatal incident response protocols Given the significant legal ramifications in the context of workplace fatalities, we take the view that organisations need to proactively review their incident response and investigation policies and protocols to determine whether they are sufficient for fatal incident response. It may be that a more sophisticated incident response is required with separate legal representation for the corporate entities and individuals involved at multiple levels as there may be a conflict between the various interests of individuals and organisations given the microscope is now on both the conduct of individuals and organisations. It may be worthwhile proactively considering establishing a panel of different law firms to be immediately available to represent different interests in the event of a fatal incident. Organisations should also review the extent of coverage in their insurance policy arrangements to ensure that lower level workers legal representation costs would be covered in the context of fatal incidents. Industrial manslaughter provisions may not be good for health and safety at all as the natural consequence of these reforms will be for everyone to lawyer up in the context of fatal incidents and not share information with other parties, limiting the potential for lessons to be shared and learnt from those unfortunate events.

Problems with industrial manslaughter provisions There are a number of reasons why simply introducing industrial manslaughter provisions are an ineffective solution for the problem it is trying to resolve. These include: 1. They interfere with the objectives of, and risk-based preventative framework established by, health and safety laws. 2. They further entrench the myth that health and safety laws are somehow quasi criminal in nature and not real crime which further undermines the objectives of the health and safety laws. 11 3. Introduced on a jurisdiction by jurisdiction basis with different tests, defences and penalties they pose a threat to the general proposition at law that the law should apply to all people equally. 4. The potential for less consistent outcomes because there will be multiple potential offences at play in the context of fatal incidents that occur during the course of work. 5. Just because an offence is on the statute books, does not mean that it will be used for enforcement action or that penalties imposed by Courts will be consistent with community 11 For discussions surrounding the various characterisations of WHS offences see Neil Gunningham and Richard Johnstone, Regulating Workplace Safety: Systems and Sanctions (Oxford University Press 1999), chapter 1, 6 11, chapters 6 & 7 and chapter 8, 323 329, Richard Johnstone, Work health and safety and the criminal law in Australia Policy and Practice in Health and Safety (2013) 11.2, 25 44.

11 Interfering with the risk based framework of the legislation Australia s health and safety laws adopt a risk-based principles approach to statutory obligations for the health and safety of workers and others. The approach can be seen in the risk management principles that inform the duties 12 as well as in the test for reasonable practicability. That proactive risk based approach flows through to the design of the offences. This means that organisations and their leaders can easily understand what is required: they must ensure that they proactively and effectively identify and manage the risks in the work they conduct. By way of example, the three categories of offence under the model WHS Laws jurisdictions are as follows: Category Breach Corporation Officer Worker Category 1 Offence Engaging in conduct, without reasonable excuse, that exposes an individual to whom a duty is owed, to a risk of death or serious injury or illness and the duty holder was reckless as to that risk. $3,000,000 $600,000 and/ or 5 years imprisonment $300,000 and/ or 5 years imprisonment Category 2 Offence Engaging in conduct, without reasonable excuse, that exposes an individual to whom a duty is owed, to a risk of death or serious injury or illness $1,500,000 $300,000 $150,000 Category 3 Offence Fails to comply with the duty $500,000 $100,000 $50,000 The tiered offences regime increases maximum financial penalties where there is evidence that a contravention is committed in the context of a person being exposed to the risk of death or serious injury or illness where there is also an element of recklessness (category one offences). This approach matches the preventative legislative framework established by the WHS Laws. That risk based approach is also reflected in the most serious type of offence under the Victorian OHS Act (section 32 duty not to recklessly endanger persons at workplaces). That risk based approach is undermined by the introduction of industrial manslaughter provisions that are based purely on consequences (that is, because a fatality occurs). 12 See for example section 4 of the OHS Act in Victoria and section 17 in model WHS Laws jurisdictions.

Confusion between negligence and recklessness? In the case of both Queensland and potentially Victoria, we have a potentially perverse position where there are higher penalties for lower standards of proof. In Queensland to prove industrial manslaughter, a prosecutor needs to establish that: i) a worker died in the course of carrying out work for the accused (or later died from injuries suffered in the course of carrying out work for the accused); ii) the accused s conduct caused the death; and iii) the accused was negligent about causing the death of the worker (emphasis added). In Queensland, the intent for the industrial manslaughter amendments is that: the existing standard of proof in Queensland for criminal negligence will be applied to both offences. 13 In other jurisdictions, it is not entirely clear whether the relevant standard of negligence that will apply to the proposed industrial manslaughter offences is civil negligence or criminal negligence. To establish civil negligence, a duty holder must fall short of the standard of care that a reasonable person would be expected to exercise in the circumstances. Criminal negligence is a higher standard that requires proof of conduct which falls so far short of the relevant standard that it merits criminal punishment. Irrespective of whether the standard is civil or criminal negligence, both types of negligence represent a lower standard than that required to establish a defendant s recklessness. The concept of recklessness requires actual foresight of the probability or likelihood of the consequences of the contemplated act or omission and willingness to run the risk of the consequences becoming reality. 14 That is, for recklessness, the prosecutor must be able to establish that the defendant had knowledge that their act or omission would have or could have placed a person at risk of serious 13 See Work Health and Safety and Other Legislation Amendment Bill, Explanatory Notes. 14 See Penble v The Queen (1971) 124 CLR 107 per McTiernan and Menzies JJ; La Fontaine v The Queen (1976) 136 CLR 62; R v Crabbe (1985) 156 CLR 464; R v Sergi [1974] VR 1; Nydam v The Queen [1977] VR 430; R v Windsor [1982] VR 89. 15 See Orbit Drilling Pty Ltd v R [2012] VSCA 82, [24]. 16 R v Nuri [1990] RV 641, 643.

13 injury and continued on with that conduct regardless of that risk. Recklessness requires a prosecutor to prove foresight on the part of the offender that the conduct engaged in would probably have the consequence that another person at the workplace was placed, or could be placed, in danger of serious injury 15 and that the offender displayed indifference as to whether or not those consequences occur. 16 The industrial manslaughter provisions based on a negligence test with their higher penalties, will, perversely, be easier to prove than category one offences with their recklessness test and lower penalties. Further, the offences in Queensland, do not account for circumstances of accident, involuntariness, reasonable excuse or acts independent of the will of a defendant, and do not afford other defences which would otherwise be available under the Criminal Code Act 1899 (Qld) for other criminal offences involving homicide. 17 The absence of such defences, combined with the low standard of proof of negligence and the high maximum penalties (20 years imprisonment for an individual or $10 million for a corporation) has the potential to result in unjust unintended consequences. In the case of Victoria, if it follows Queensland s lead and utilises negligence in its proposed industrial manslaughter offences, it risks repeating the perverse position of having higher penalties for a lower standard of offence within its laws. Under section 32 of the OHS Act, a person commits an offence if they recklessly engage in conduct that places or may place another person who is at a workplace in danger of serious injury. That offence comes with potential penalties of a fine of up to $3,171,400 million for corporations and $285,426 and/or five years imprisonment for individuals. The Review in the Northern Territory appears to be asking Tim Lyons to explore a gross negligence test, whereas Western Australia s announcements on industrial manslaughter have used the term recklessness. 17 As outlined by the Queensland Law Society s Submission re the Work Health and Safety and Other Legislation Amendment Bill 21 September, 2.

Significant jurisdictional differences As can be seen by the above discussion, we are now seeing different tests (recklessness vs negligence), different levels of officer (senior officer with a lower bar vs officer under Corporations Law) and different penalties ($1.5 million, $10 million, $16 million) creeping in on a jurisdiction by jurisdiction basis which is problematic for consistency of laws and the general rule that the law should apply to all people equally. Irrespective of jurisdiction and whether these requirements live within the general criminal laws or health and safety laws, consistent standards are required. There are also inconsistencies created within individual jurisdictions in the case of the ACT. The maximum penalty in terms of a fine for a corporation s breach of the industrial manslaughter offence under the ACT Crimes Act by a corporation ($1.5 million 18 ), is half the maximum penalty for a corporation s breach of a category 1 offence of the 2011 (ACT) ($3 million), the latter reflecting the Model WHS Laws. In most circumstances either offence would be available to a prosecutor where an employer s conduct caused the death of a work and the employer had been reckless as to the harm that would be caused to an employee.

15 Will industrial manslaughter provisions actually result in higher penalties and strengthen deterrence? What we have learnt from the first six or so years of the model WHS Laws is that just because there are categories of offences with higher penalties attached, does not mean that higher penalties will be imposed. In model WHS Laws jurisdictions where maximum penalties are based on three tiers of offences, the majority of prosecutions have involved category two prosecutions. To date, across the country there has only been one successful category one prosecution with judgment handed down on 26 February 2018 in the case of Stephen James Orr v Cudal Lime Products Pty Ltd [2018] NSWDC 52. The penalty handed down to the organisation charged in that first completed category one prosecution was $900,000 from a maximum of $3 million. While it is too early to establish a trend, we are seeing higher penalties imposed in serious category two offences than in category one offences. The high water marks for category two prosecutions (where the maximum penalty for a corporation is $1.5 million) have included $1 million and $1.1 million penalties. See for example, the $1 million penalty imposed in Safe Work (NSW) v WGA Pty Ltd [] NSWDC 92 (5 May ) and the $1.1 million penalty handed down against Kenoss Contractors in relation to Brett McKie v Munir Al-Hasani & Kenoss Contractors Pty Ltd (In Liq) [2015] ACTIC 1. 19 In many ways, we have not seen the full extent of enforcement under the current available offences within the WHS Laws given that we only have one successful completed case of a category one offence since the introduction of the model WHS Laws. 18 That $1.5m maximum penalty figure in terms of the fine, can however be supplemented with publicity orders or project orders so that the total sum of money to be paid by an employer (including a fine) can be anything up to $5 million. See section 49E(4) of the Crimes Act 1900 (ACT) in that regard.

New South Wales: only successful category one prosecution to date Orr v Cudal Lime Products Pty Ltd [2018] NSWDC 52 26 February 2018 KEY LESSON: Ensure that i) personnel are qualified for the work they provide; and ii) notices issued by regulators are taken seriously and effectively close out issues raised. Failing to have systems and processes in place for these matters may be considered reckless. Cudal Lime Products Pty Ltd (Cudal) operated an opencut limestone mine in NSW. The incident followed several electrical faults at the mine which occurred between 2007 and 2013. It was held that electrical work had been conducted by an unqualified Cudal employee on the site. Mr Perceval, a worker, resided 200 metres from the mine with his de facto partner. On 27 August 2014, Mr Perceval left the cottage to commence work at the mine. He had turned on an electric motor which powered a crusher to pulverise rock. On his return, Mr Perceval found his partner deceased in the shower. She had suffered electrocution. The court heard that Cudal was issued notices by the regulator in 2007, 2009 and 2013 with respect to maintenance issues involving electricity. Furthermore, in an attempt to save costs, Cudal instructed Mr Shannon (an employee) to complete electrical work on the switchboard which he was not qualified to do. The court held that the risks were foreseeable and deficiencies in the maintenance of cabling were obvious. The instruction to Mr Shannon was found to be reckless and it was reasonably practicable for Cudal to implement steps to eliminate or minimise the risks to workers, which they failed to do. Cudal pleaded guilty to the Category 1 offence in respect of breaching section 19(2) (the primary duty of care to other persons) of the 2011 (NSW) (WHS Act (NSW)). Cudal was fined $900,000 from a maximum of $3 million. This is the first successful Category 1 prosecution under the WHS Act. Mr Shannon also pleaded guilty and was convicted of a Category 2 offence in respect of breaching sections 28 (the worker duty) of the WHS Act, and was fined $48,000 from a maximum of $150,000. Stephen James Orr v Cudal Lime Products Pty Ltd; Stephen James Orr v Simon Shannon [2018] NSWDC 27 19 See Michael Inman, Kenoss Contractors fined AUD 1.1 million for workplace death (19 August 2015), The Canberra Times.

17 Just because an offence is on the books, does not mean it will be used As outlined above, the ACT has had industrial manslaughter provisions on its statute books since 2004 and yet there have been no prosecutions under those provisions. That is a particularly interesting point to note given that earlier this year, 9 defendants (both a mix of corporations and individuals) were charged under the ACT s WHS Laws and general criminal laws for conduct arising in the context of a workplace fatality involving a crane during the construction of the University of Canberra hospital. None of those 9 prosecutions instituted by the prosecutor have included an election by the prosecutor to charge under the ACT s industrial manslaughter provisions. They have however, included one offence of general manslaughter under section 15 of the Crimes Act 1900. Australian Capital Territory case update Multiple parties charged in relation to fatality at a construction site Proceedings commenced 18 April 2018 On 4 August 2016 at the University of Canberra Hospital construction site, a crane which was being used to move an 11-tonne generator overturned and killed a worker at the site. Proceedings were commenced on 18 April 2018. Multiplex Constructions Pty Ltd (Multiplex), the principal contractor at the site, has been charged with Category 1 and Category 2 offences under the Work Health and Safety Act 2011 (ACT) (the WHS Act (ACT)). A separate subcontractor, RAR Cranes Pty Ltd (RAR Cranes), has also been charged with Category 1 and Category 2 offences. Additionally, proceedings have been brought against the following individuals: the CEO of Multiplex (for a Category 2 offence), 3 of its employees (the site manager for a Category 2 offence, the senior site supervisor for Category 1 and Category 2 offences and the site safety officer for Category 1 and Category 2 offences). In respect of RAR Cranes, the Managing Director (for a Category 2 offence) and a crane dogman (for a Category 1 offence) have also been charged. The crane driver operating the crane at the time of the incident has been charged with general manslaughter under the Crimes Act 1900 (ACT). Multiplex s CEO and RAR Cranes Managing Director both face Category 2 prosecutions for breaching the officers duty with fines of up to $300,000 under the WHS Act (ACT). WorkSafe ACT is alleging significant and systemic failures in relation to safety following the WorkSafe ACT and police investigations into the incident.

What is the problem industrial manslaughter reform is trying to solve? When one analyses the calls for industrial manslaughter provisions, the arguments presented in favour of such offences are largely related to the idea that penalties are not significant enough in the context of workplace fatalities. That argument can be seen in the motion introduced (and agreed) at the ACTU s Congress 2018 just last week. The motion was written in the following terms: Title: Kill a worker, Go to Jail Industrial Manslaughter Text: Too many workers are killed at work. No industry is exempt. For too long big business has escaped responsibility for deaths that occur at work. To simply fine employers where workers have lost their lives is totally unacceptable. Congress calls on state and federal governments to amend Workplace Health and Safety laws to include specific provisions relating to gross negligence causing death (industrial manslaughter) to ensure that an unscrupulous employer or entity found to have been negligent or otherwise culpable for causing serious injury or death are prosecuted to the full extent of the law. This amendment is the criminal deterrent needed to save more workers lives and protect the public. Kill a worker: go to jail. 20 20 See the ACT Congress Motion here: https://cdn.workplaceexpress.com.au/files/2018/18manslaughter.pdf.

19 The real problem: Issues in enforcement, penalties and sentencing If the problem is that the community wants to see tougher penalties in the context of serious fatal incidents, then perhaps what is required is to further explore the way the current provisions are enforced, and the potential available and actual penalties imposed under current health and safety offences. We are only just beginning to see $1 million plus penalties being imposed around the country. The highest penalty, $1,300,000, was handed down in Victoria in December against Downer EDI Works Pty Ltd, a $1,137,525 penalty was imposed against CK Crouch Pty Ltd (in liquidation) in Victoria, a $1 million penalty imposed in Safe Work (NSW) v WGA Pty Ltd [] NSWDC 92 (5 May ) and a $1 million penalty imposed in DPP v Toll Transport Pty Ltd [2016] VCC 1975 (14 December 2016). The early days of prosecutions arising in the model WHS Laws jurisdictions have not seen consistency in sentences imposed. To illustrate the lack of consistency in sentencing, we undertook a review of a sample of cases in New South Wales, Queensland and South Australia for section 32 (category two offences) involving a breach of section 19(1) of the WHS Laws (the primary duty to workers) in those jurisdictions, breaking down the penalties handed down between January and July 2018 for those offences. The complete table is at Annexure A to this discussion paper. When you review the financial penalties in terms of lowest penalties, median and highest penalties across those three jurisdictions, there are significant disparities as can be seen in Graph 1 below. The Y axis represents the penalty imposed by the court, ranging $0 to $1,000,000 (the highest penalty imposed being $1,000,000 in NSW). The X axis shows the outcomes for these three metrics according to state.

Graph 1 Total financial penalties for breach of primary duty to workers *Breach of s19(1) in contravention of s32 of Work Health & Safety Act Category 2 Offense $1,000,000 $900,000 $800,000 $700,000 $600,000 $1,000,000 $90,000 $12,500 Highest Average $500,000 $400,000 $300,000 $200,000 $100,000 $200,000 $60,000 $20,000 $390,000 $97,500 $39,000 Lowest $0 NSW QLD SA Deeper analysis based on the NSW cases highlights that there are also discrepancies in terms of penalties imposed when analysed against the key sentencing criteria of seriousness of harm as indicated within each of the judgments in the sample cases. Graph 2 below shows penalties imposed in NSW focussing on seriousness of harm in relation to breaches of section 19(1) in contravention of section 32 of the. In Graph 2 the Y axis represents the penalty imposed by the court, ranging $0 to $1,000,000 (the highest penalty imposed being $1,000,000). The X axis represents the individual cases. 21 21 It should be noted that between Jan July 2018 there were 8 cases which the judge deemed to be of low seriousness, 8 cases which the judge deemed to be of high seriousness and 14 cases which the judge deemed to be of medium seriousness. We have selected a sample size of 8 for the medium seriousness cases in order to match the low and high seriousness case numbers and allow us to present the data graphically. See Annexure B to this discussion paper for individual trend lines in each of high, medium and low seriousness of harm of the sample cases used in Graph 2 according to severity of incident.

21 Graph 2 Financial penalty imposed according to seriousness of harm (NSW) *Breach of s19(1) in contravention of s32 of Work Health & Safety Act Category 2 Offense $1,000,000 $900,000 High $800,000 $700,000 $600,000 $500,000 $400,000 Med Low $300,000 $200,000 $100,000 $0 Sample Case As can be seen in Graph 2, there are a number of instances where penalties imposed in cases where the seriousness of the harm was assessed as medium by the court have outstripped penalties imposed in cases where the seriousness of harm was assessed as high. There have also been cases where penalties imposed for low seriousness of harm have been greater than the lower end of penalties imposed for medium and high seriousness of harm offences. In addition to issues in sentencing once brought before the courts, a number of high profile prosecutions arising from fatalities have not resulted in the types of outcomes expected by the community with examples including significant back-downs in enforcement action requiring withdrawal of charges initially laid by prosecutors in fatalities. We have also seen a number of cases where the sentences imposed by the courts at first instance appealed by prosecutors as being manifestly inadequate. 22 22 See for example the tripling of the penalty from $50,000 to $150,000 on appeal imposed on Kalafatis Packing Pty Ltd in DPP v Kalafatis Packing Pty Ltd [2018] VCC 638 (3 May 2018) or the Queensland decision where District Court Judge Tracy Fantin increased Mac Farms Pty Ltd s fine from $1,000 to $10,000 (from a maximum of $30,000), and Mac Pty Ltd s fine from $2,000 to $35,000 (from a maximum of $500,000), after finding their initial penalties were manifestly inadequate in relation to an incident where a seasonal worker on the farm suffered minor injuries when the tractor he was driving left a road and ran into a drain and he was thrown from the operators seat as there was no seatbelt (see Steward v Mac Pty Ltd and Mac Farms Pty Ltd [2018] QDC 20 (2 March 2018)).

Case examples include: 1. WorkSafe ACT s withdrawal of category one offence charges against Schwing Australia Pty Ltd and the NSW engineer Phillip James O Rourke in relation to the concrete pump collapse on July 21 2012 that resulted in the death of Ben Catanzariti on a construction site at Kingston Foreshore, and 2. the public scrutiny that arose in the context of the plea deal prosectuors accepted with Grocon in the context of three members of the public (two teenagers and a 33 year old woman) being killed at a Swanston Street building site in Melbourne s CBD on 20 March 2013 as a result of being crushed by part of a collapsed hoarding wall. 23 The plea deal involved a Grocon subsidiary, Grocon Victoria Street Pty Ltd pleading guilty to the charges, and receiving a $250,000 penalty in relation to that incident. The maximum penalty available was $305,000 rather than $1.1 million as the Victorian WorkCover Authority applied for the matter to be heard in the Magistrate s Court summary jurisdiction rather than proceeding to the County Court. As the Law Council of Australia indicated in its submission to the current Senate Inquiry into the framework surrounding the prevention, investigation and prosecution of industrial deaths in Australia: Inadequacies in the implementation of current criminal offences or WHS laws can be remedied by clear guidelines and adequate training and resources for effective prosecution and enforcement. If there is evidence to suggest that those who are culpable within a business are unable to be prosecuted, then a review of duty holders and duties should be undertaken with a view to the potential for amendment that would not be limited to situations involving fatalities. 24 23 See for example, the media coverage in WorkCover drops claim Grocon caused deadly wall collapse, The Australia, November 12, 2014 cited here: https://www.theaustralian.com.au/news/nation/workcover-drops-claim-grocon-caused-deadly-wall-collapse/news-story/ cfdadb81cdd7fc27cb3cebb1ed3f1e38 and subsequent coverage in Grocon subsidiary fined $250,000 for fatal wall collapse in Melbourne, The Guardian, 21 November 2014, cited here: https://www.theguardian.com/australia-news/2014/nov/21/grocon-subsidiary-fined-250000-for-fatal-wall-collapse-inmelbourne. 24 See Law Council of Australia, Submission to Senate Inquiry on Industrial Manslaughter, paragraph 11.

23 Recommendations for enforcement and sentencing There are a number of potentially more effective alternatives to introducing industrial manslaughter provisions to solve the chasm between community expectations and current trends in enforcement and sentencing. These are recommendations that ought to be considered as part of the National Review of the Model WHS Laws currently being undertaken by Marie Boland, due to report back to Ministers in early 2019. Some potential solutions in that regard include: 1. Review effectiveness of investigation training and procedures for inspectors It may be that more detailed guidance is required for inspectorates in relation to the evidence that must be gathered to meet the standard of proof in the most serious types of offences. 2. Revisit the maximum penalties for existing categories of offences under health and safety laws If the problem is one of the community not seeing a significant enough deterrent factor in the penalties available under the offences that currently exist, it would be simple enough to increase the available maximum penalties in the higher categories of offences in the model WHS Laws regimes and maximum penalties for reckless endangerment under section 32 of the OHS Act in Victoria (or indeed in relation to penalties available for the other duties). There would still be the capacity for general manslaughter provisions to be used in the context of the most egregious conduct that resulted in workplace fatalities which has always existed. 25 3. Increasing consistency in sentencing through the introduction of sentencing guidelines for the courts It may be worthwhile considering the approach adopted by the UK in introducing sentencing guidelines for Courts, tying penalties to both the seriousness of the offence and revenue of the corporation. From 1 February 2016, under the UK s Coroners and Justice Act 2009, courts are required to follow the Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline (UK Sentencing Guidelines). 25 Consider cases such as the 2015 sentence handed down to a managing director of a trucking company, Peter Colbert, who initially received a 13 and a half year gaol term (and then after appeal and retrial, a ten and a half year gaol sentence) after being sentenced for manslaughter associated with the death of a driver operating in a vehicle with faulty brakes. 26 See the Clyde & Co Report, Sentencing in Health & Safety: Headlines and High Fines, July, cited here: https://www.clydeco.com/uploads/blogs/ brexit/clyde Co_Health Safety_Enforcement_report_.pdf

The UK Sentencing Guidelines link financial penalties to the turnover of the defendant s business so that penalties have a real impact on the companies concerned and have had an immediate effect on the business community. In the 12 months following the introduction of the UK Sentencing Guidelines, the UK saw more 1 million penalties and above than in the previous twenty years combined (there were 19 such cases of fines exceeding that figure in 2016 in the UK). 26 In September 2016, a 4 million penalty was imposed against rail operator Network Rail in the context of a fatal incident involving the death of an 82 year old member of the public when she was hit by a train at a level crossing in Suffolk while walking to feed her chickens at a nearby farm. The prosecution occurred in circumstances where Network Rail had received recommendations to implement warning signs at the crossing on two previous occasions. The rail operator subsequently looked at a footbridge redesign for the crossing. Construction company, Manovon Construction was fined GBP 550,000 for two offences of corporate manslaughter and one health and safety breach arising from an incident during the renovation of a London basement flat where two men fell through plyboard hoardings around the site in the early hours of 19 October 2013. This figure represented 27.5% of the company s annual turnover. Clyde & Co s exclusive survey of clients in the 12 months following the introduction of the UK Sentencing Guidelines found that there had been a positive impact on health and safety at their organisation arising from the introduction of the UK Sentencing Guidelines for 46.6% of respondents. 28 Interestingly, the UK Sentencing Guidelines also saw a September 2016 5 million penalty imposed against Merlin Attractions Operations Limited in the Stafford Crown Court in the context of a non-fatal incident involving a rollercoaster crash at the popular Staffordshire Alton Towers amusement park on June 2 2015 when a loaded train collided with an empty test train, causing serious injuries to a number of riders 27 (which has become known as the Smiler Incident). 27 11 riders required medical treatment, five were seriously injured with two of the riders requiring partial leg amputations in the weeks following the Smiler Incident. 28 See footnote 23, page 4.