Focus: Work Health and Safety
Services: Commercial, Employee & Industrial Relations
Industry Focus: Energy, Resources & Infrastructure, Financial Services, Medical & Pharmaceutical, Property
So much for safety harmonisation. A process which was trumpeted as part of an agreement to deliver a "seamless national economy" to reduce costs "incurred by business in complying with unnecessary and inconsistent regulation across jurisdictions" is, from that perspective, looking increasingly threadbare.
Indeed, we don't even have national agreement on which acronym to use – it's Work Health and Safety (WH&S) for those in the harmonised jurisdictions (the Commonwealth, the Territories, New South Wales and Queensland) and OH&S for everyone else (except, perhaps, the Tasmanians, who have had a Workplace Health and Safety Act since 1995, and the West Australians, where the Act puts "safety" first, so that the acronym is OSH).
The result of all of this is that if you do business in a harmonised jurisdiction, there are new laws to which you have to adapt, and, in particular, new obligations for the officers of the corporations which have to adapt to those laws. The fact that the "harmonisation process" is yet to produce a result worthy of that name doesn't mean that the new obligations are any less important for you, your board, and your company as a whole.
The harmonisation you have when you don't have harmonisation
So, how did we get here? In 2002, the National Occupational Health and Safety Commission (now Safe Work Australia) published a ten year plan which included, amongst its objectives, a nationally consistent regulatory framework for work safety. This was followed by a Productivity Commission report in July 2004 which described uniform national legislation and regulations as being "essential". This also quoted the conclusion of the Cole Royal Commission into the Building and Construction Industry that "there would be no more salutary reform to occupational health and safety law and regulation than a single national scheme comprehensively regulating occupational health and safety in Australia".
The present attempt to achieve that salutary reform was enshrined in the "National Partnership Agreement to Deliver a Seamless National Economy" in February 2009. All went well until the release of the draft laws in September 2009, at which point things started to go awry.
Of the non-harmonised jurisdictions, the South Australian and Tasmanian parliaments are still considering their positions, after having earlier looked likely to adopt harmonised legislation. Victoria now looks likely to make changes, and Western Australia now looks very unlikely to adopt any legislation which looks like the harmonised model. If that wasn't bad enough, Queensland now looks likely to "de-harmonise" its legislation if, as the polls predict, there is a change of government in March 2012.
In considering whether the harmonised laws are likely to affect your business, it is important to bear in mind their potential extraterritorial reach, especially in relation to the design, manufacture and supply of "plant, substances and structures". In 2006, a Victorian company was held be subject to the former Occupational Health and Safety Act 2000 (NSW) (the Old OH&S Act) when it sold a post-driving machine for use in New South Wales. There is nothing in the harmonised legislation to suggest that a different result would occur if that same transaction took place today.
The duties of PCBUs (and the due diligence of their officers)
Primary duties which previously fell principally upon employers now fall upon "persons conducting a business or undertaking", or PCBUs. In most cases, this won't make a lot of difference to the content of the duties – if you previously owed duties to employees as an employer, you will be in much the same position in relation to those employees, now that you are a PCBU.
The harmonised legislation designates a "primary duty of care", which in turn has several facets. The first facet is a duty to ensure, as far as reasonably practicable, the health and safety of both workers engaged by the PCBU, and workers whose work is influenced or directed by the PCBU. The second facet is a duty to ensure, as far as reasonably practicable, that the health and safety of other people is not put at risk by the performance of work. Without limiting either of those facets, the "primary duty of care" also picks up matters such as the provision of safe plant, safe systems of work, the provision of adequate facilities and the provision of adequate training.
The question of what is "reasonably practicable" will depend, of course, on all of the circumstances in which the work is being performed. It directs attention to what steps the PCBU can take, even if someone other than the PCBU has primary control of the work. The question also requires consideration of the magnitude of the risk and the resources available to the PCBU to eliminate or manage that risk.
Where a PCBU has a duty, "officers" of PCBUs also have a duty to exercise due diligence to ensure that the PCBU complies with that duty. Officers include both directors, and people who make or participate in decisions which affect a substantial part of the company (for example, senior executives). Exercising due diligence includes a number of elements which are listed in the legislation, as follows:
- to acquire and keep up-to-date knowledge of work health and safety matters
- to gain an understanding of the nature of the operations of the business or undertaking of the person conducting the business or undertaking and generally of the hazards and risks associated with those operations
- to ensure that the person conducting the business or undertaking has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking
- to ensure that the person conducting the business or undertaking has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information
- to ensure that the person conducting the business or undertaking has, and implements, processes for complying with any duty or obligation of the person conducting the business or undertaking under this Act
- to verify the provision and use of the resources and processes referred to in paragraphs (c)–(e).
Of course, the concept of the "due diligence" of officers in relation to safety matters is not new – the old OH&S Act provided that when a corporation contravened that Act, each of the directors was taken to have contravened the Act unless the director could show that the director was "not in a position to influence the conduct of the corporation in relation to the contravention" or "had exercised all due diligence to prevent the contravention by the corporation".
The key change is that the duty of due diligence is a now a positive duty, rather than an issue which only assumes importance if a director is prosecuted. The fact that the duty has now been given some content by the elements listed above (albeit that the list is inclusive, rather than exhaustive) gives directors a good starting point to determine what questions they should be asking to inform themselves about what the PCBUs on whose boards they sit are doing to manage safety obligations.
What about the workers (and workplaces)?
Identifying that a duty is owed is only the first part of the question; the second part of the question is to whom duties are owed. In broad terms, they are "workers", and people (other than workers) at "workplaces".
"Workers" is not limited to employees; it includes contractors, sub-contractors, labour hire employees, work experience students, and volunteers. The inclusion of volunteers in the harmonised legislation is not as big a change as some media coverage would suggest.
"Workplace" is any place where work is carried out, and can include vehicles. The fact that a worker reads some work papers on the train on the way home probably doesn't make the train a workplace, but if a worker is required (or permitted) to work from home, then the home is a workplace. Again, this is not a new concept, but it does draw attention, in an era in which work is increasingly mobile, to the need for the PCBU to pay attention to all of the places where work is occurring. This is as opposed to simply assuming that the PCBUs duties are at an end once the worker has left the office or factory.
That safety harmonisation has not occurred is greatly to be regretted. There is also considerable force in the submission that the introduction of new legislation in the harmonised jurisdictions has increased, rather than decreased, the regulatory load. However, with the new laws now in force, directors need to ensure that they know what the changes are and what their companies are doing to comply.
Compliance questions which should be asked include:
- who in your organisation has ultimate responsibility for work safety? Do they know what the effect of harmonisation is? What have they done to meet any changes which have occurred?
- what has been done to ensure that your workers are informed of any changes to their safety obligations? Have each of those steps been documented? What follow-up work is being done?
- does your organisation have a plan in place ready for a reportable safety incident, or a visit from an inspector or a union official who is a WHS entry permit holder?
- do you have governance structures in place so that the board can maintain sufficient oversight over safety to discharge the obligation of due diligence?
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.