Penalties imposed under Western Australia's Occupational Safety and Health Act 1984 (Act) have been kicked up a notch with the Perth Magistrates Court recently fining a company and its director more than double the previous record. In setting this new high water mark, the Court has sent a clear message that failing to ensure a safe workplace will likely result in substantial penalties for both companies and individuals.
In 2016, a 17 year old Esperance man working for FGS Contracting Pty Ltd (FGS) was rushed to hospital following a workplace accident. The employee and FGS director, Ryan Franceschi, had been installing a large steel shed. Mr Franceschi was driving a telehandler but left it while it was still running. The telehandler then moved and struck a ladder that the employee was on, causing him to fall. He had not been provided with a helmet and suffered severe, and permanent, skull, jaw, shoulder and chest injuries. The employee had also not been given the required construction and safety training.
Both FGS and Mr Franceshi were charged with breaching the Act.
In May 2018, the Perth Magistrates Court found that Mr Franceschi and, by extension, FGS had breached s 19(1) of the Act by failing to provide the employee with a helmet or the necessary construction and safety training. FGS was fined $225,000.
Mr Franceschi was also found liable as an individual under s 55 of the Act. Section 55 provides that a director may be liable where a breach of the Act occurs with the consent or connivance of the director, or where a breach is attributable to any neglect on the part of the director. The Court found Mr Franceschi had neglected to ensure the employee had the required training and protective gear and was also negligent in his use of the telehandler. He was fined $102,500, which is a record for an individual, being more than double the previous record penalty of $45,000 imposed in 2011.
The combined penalty of $327,500 is also a record for breaches of the Act arising from non-fatal injuries, and demonstrates the Court's move towards a tougher workplace health and safety regime.
In Western Australia it has historically been difficult for the regulator to secure convictions against individuals under health and safety laws because first, the company or business must have breached its duty of care and second, the individual must have been negligent or consented to, or connived in, the breach. This is a high burden to prove beyond reasonable doubt.
However, the Occupational Safety and Health Amendment Bill 2017 is currently on the floor of WA's Legislative Council and is expected to become law in 2018. It will bring WA's workplace health and safety laws into line with the rest of Australia. Importantly, 'officers' of a company, such as Mr Franceschi, will have a proactive duty to exercise due diligence to ensure that their business complies with its WHS obligations. This will make it less onerous for the regulator to establish an individual has breached his or her own obligations. Further, under the new laws:
- an officer may be convicted and found guilty of a breach whether or not the business has been convicted or found guilty of a breach;
- 'officer' is broadly defined and extends beyond company directors to include persons who make, or participate in making, decisions that affect the whole or a substantial part of the business; and
- penalties will substantially increase, reaching as high as $680,000 and 5 years' imprisonment for an individual and $3,500,000 for a body corporate.
This means, aside from ensuring your business is ready for the incoming health and safety laws, it is imperative that persons who may be considered 'officers' of a business understand their duty of due diligence and what this will require of them in practical terms. A failure to do so, where this leads to a workplace fatality or serious injury, will lead to prosecution and could lead to the imposition of a very heavy penalty (or worse).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.