Key Points: Directors and officers have new positive obligations to
ensure businesses are complying with their
For the first time in some Australian jurisdiction, directors
and officers will soon have a positive duty to ensure their
businesses comply with their safety obligations under new
occupational, health and safety laws.
Under the new laws, officers could be personally liable for up
to $600,000 in fines and/or 5 years'
imprisonment if they recklessly breach their duty and it
results in, or exposes a person to, serious harm.
When do the changes come into effect?
The new obligations on officers will come into effect when the
new safety laws come into operation around the country on 1
Who is an "officer" under the new laws?
The definition of officer under the new laws will replicate the
definition in section 9 of the Corporations Act 2001 (Cth) which
a director or secretary of a corporation;
administrators and liquidators of a corporation;
partners in a partnership; and
officeholders in a unincorporated association.
It also includes a person:
who makes, or participates in making, decisions that affect the
whole, or a substantial part, of the corporation or business;
who has the capacity to affect significantly the corporation or
in accordance with whose instructions or wishes the directions
of the corporation or entity are accustomed to act (excluding
advice given by the person in the proper performance of functions
attaching to a person's professional capacity).
Officers must exercise due diligence
Company directors and officers will have to exercise "due
diligence" to ensure that their business complies with its
safety obligations. This means that officers could be liable for
breaches of safety without an incident or accident even occurring.
Under the new legislation , in exercising due diligence officers
must take reasonable steps to:
acquire and keep up-to-date knowledge of work
health and safety matters;
gain an understanding of the nature of the
operations of the business and the hazards and risks associated
with those operations;
ensure the business has available for use, and
uses, appropriate resources and processes to
eliminate or minimise risks to health and safety; and
ensure the business has appropriate processes for
receiving and considering information regarding safety
incidents, hazards and risks and responding in a timely way to that
ensure that the business has, and implements, processes
for complying with its obligations under the new laws
which may include:
reporting notifiable incidents;
consulting with workers;
ensuring compliance with notices issued by the safety
ensuring the provision of training and instruction to workers
about work, health and safety;
ensuring that health and safety representatives receive their
entitlements to training.
The obligations on officers are prescriptive and clearly require
them to be proactive in ensuring their business complies with its
What must officers do to ensure compliance with the new
To ensure officers are in compliance with their new duties from
the commencement of the new laws on 1 January 2012 they must
immediately consider whether they need to adapt their current
Any new policies or procedures should be tried and tested in the
lead-up to 1 January 2012 to ensure compliance from that time. Some
practical steps that officers might consider implementing
receiving and undertaking training in OH&S matters;
ensuring they receive minuted updates on safety matters at
annual board meetings;
ensuring that they are aware of the budgets that are allocated
to OH&S matters in their business;
ensure there are appropriate processes in place for reporting
and responding to health and safety issues – boards
should, at a minimum, consider reports from management that company
processes have been reviewed by a person with knowledge of OH&S
ensure that appropriate resources are allocated to OH&S
through a OH&S audit that is a regular item for any audit and
risk committee of a Board of Directors.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).