The Work Health and Safety Act 2011 (Qld) (the WHSA),
which commenced on 1 January 2012, and the recent Western Australia
Supreme Court decision in Keating v Fry  WASC 15,
are timely reminders that company directors are ultimately
responsible for occupational health and safety and maintaining a
safe system of work.
The WHSA now imposes an obligation on directors and officers to
act with due diligence regarding occupational health and safety
(OHS) matters. Under the WHSA, due diligence includes:
Acquiring and keeping up-to-date knowledge of work health and
Gaining an understanding of the nature of the operations of the
business and the hazards and risks associated with those
Ensuring there are appropriate resources and processes to
eliminate or minimise risks.
If faced with a charge under the WHSA, directors will not be
able to argue that they were not involved in the day-to-day running
of the business as they are the ones who will be found responsible
for their company's OHS requirements. This is what occurred in
In that case, two directors of a company specialising in the
hire and sale of hoists and cranes appealed the finding that they
failed to provide and maintain a safe working environment under the
Western Australian equivalent to the WHSA.
An employee was killed after an L68 pack of 16 crane components
slipped while being lifted. There were two known methods for
lifting the packs, the first was the safe method and the second was
the unsafe method. The second method was being used when the
employee was killed. The directors argued that if they saw method 2
being used, they would have stopped it and enforced method 1.
The court dismissed the appeals and said that the directors
assumed method 1 was in use but the company had no sufficient
procedures in place to ensure method 1 was always used. For
instance, the company did not have a system to enforce method 1 or
a proper induction procedure in place.
The directors were fined $10,000 each and the company was fined
$70,000. They were also ordered to pay costs.
Similarly, in the case of Inspector James v Paul (No 2)
 NSWIRComm 117, a director who was charged with breaching his
OHS obligations, was unable to avoid liability by arguing that he
was not involved in the day-to-day management of the business. That
case also involved an employee being killed after a machine he was
The cases and legislation not only reinforce that directors are
ultimately responsible for OHS but should also be a reminder that
if insureds do not maintain a safe system of work for their
employees, they may not only have to defend a common law claim, but
may also be charged with breaching the WHSA.
In extreme cases, breaches can result in imprisonment.
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.
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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.
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