The National Transport Commission ("NTC") has issued an options paper as part of the ongoing review of the chain of responsibility ("CoR") provisions in the new Heavy Vehicle National Laws ("HVNL").
While it is not clear which options will be adopted, there may be good news and bad for those who are subject to the laws – from consignors through schedulers and loading managers to consignees of goods. These laws and proposed changes may affect your business and should be carefully considered.
The scope of the CoR laws – and how they may affect you
The HVNL came into operation on 10 February 2014 across Australia, other than in the ACT and the Northern Territory (who are expected to adopt the HVNL at a later date) and Western Australia (which will not be adopting the NHVL).
CoR provisions in the HVNL place obligations on each of the parties along the transport chain to take steps to ensure the carriage of goods by road is undertaken safely. This includes specific requirements and potential liabilities associated with fatigue management, speed, load restraint and mass weight limits.
CoR provisions apply requirements to hold accountable any 'party in the chain' - including schedulers, loading managers, consignors and consignees - in a position to exert 'influence' or 'control', or who may 'encourage' behaviour that may cause drivers to breach the legal requirements for safe driving. A consignor or consignee may contribute to a driver breach by the delivery times they require; a scheduler may affect rest breaks and other factors resulting in fatigue; and a loading manager may have control over weight and load restraint.
A party in the chain may avoid liability where they did not know and could not reasonably be expected to have known of the contravention; or they have taken all 'reasonable steps'; or there were no other steps the party could reasonably have taken in the circumstances.
When considering whether the duty has been discharged the HVNL sets out matters the court may have regard to when determining whether a 'party in the chain' has taken reasonable steps, such as:
- the nature of the activity that led the to breach;
- the risks to public safety associated with the activity;
- the likelihood of the risk;
- the degree of harm likely to result from the risk;
- measures available and measures taken;
- the costs of measures taken to provide information, training, instruction and supervision;1 and
- compliance with a relevant industry code of practice.2
These lists are not exhaustive and regard must be had to the relevant circumstances, including the nature and level of risks associated with the relevant work activities.
CoR laws apply not only to the business, but also to individuals, including officers. The current laws provide for an officer to be liable for a breach by a company unless the officer was not in a position to control or influence the outcome, or by exercising 'reasonable diligence' to prevent an offence.
Breaches carry heavy penalties and accused must prove a defence
Breaches of the HVNL are criminal offences and attract heavy penalties, that range from $3,000 to $10,000 per breach.
Deficiencies in processes and implementation may result in dozens, or even hundreds of breaches.
Once the facts have been proven (e.g. mass weight limits were exceeded), the burden is then on the accused to prove a reasonable steps or reasonable diligence defence. It is therefore critical that your business have and effectively implement policies and processes for compliance associated with the role of the business in the chain, including taking reasonable steps to identify how others along the chain (e.g. carriers) are providing for compliance.
The NTC options paper
The NTC options paper was developed by an industry and government taskforce.
The options paper sets out particular issues identified by stakeholders including relevant industry groups, an analysis of the benefits and risks associated with proposed options to address those issues. It invites public comments and submissions by 14 March 2014.
Concerns addressed in the options paper include inconsistency in the scope or breadth of duties, lack of certainty on critical provisions such as 'reasonable steps', and the reverse onus approach requiring an accused to prove their behaviour met a standard, rather than the prosecution being required to prove that it did not.
The options paper includes many options for the adoption of elements of the model Work Health and Safety Act ("WHS Act"), both to address concerns and align the HVNL with the WHS Act.
While the options paper should be read in full and all options considered, we note the following as demonstrating the significance of proposed changes:
- Adopting a defined standard of reasonably practicable: There has been considerable criticism of the current requirement for an accused to demonstrate they took reasonable steps, with that standard not being clear in the legislation. A proposed option is for the offences to occur where the duty holder has failed to meet the standard of what is 'reasonably practicable', as defined in the WHS Act. The prosecution would have the burden of proving that standard had not been reached, rather than the accused having to show that it had been breached.
If adopted, this change would align the HVNL with the WHS Act and provide for consistency with current generally accepted enforcement principles and practices.
- Executive officer liability: The options paper highlighted the concerns expressed by stakeholders that the current liability provisions of executive officers may not "sufficiently meet the requirements of the COAG Principles on Directors' Liability Provisions, and the appropriateness of a reversed onus of proof for extended liability".3
One of the options identified is to provide a positive duty for officers to ensure compliance by 'due diligence', defined similarly to the definition in section 27 of the WHS Act.
If this option is accepted this will make compliance obligations for executive officers a lot clearer and mean that compliance under the HVNL is aligned with compliance under the WHS Act. Further, adopting the due diligence definition will ensure that those who govern the organisation will be aware of the hazards and risks associated with the business and promote safe work practices, ongoing compliance and continuous improvement.
Conversely, adopting the definition of due diligence will make it easier for the prosecuting body to demonstrate a breach by an executive officer and not require the prosecutor to prove that breach by the executive officer has caused a breach by a driver.
- Expansion of parties in the chain: Stakeholders have raised concerns that current duties do not capture many individuals such as "inventory managers, time slotters, retail managers, load owners and freight customers" who may have or exert influence over driver behaviour or over others in the chain. An option proposes expansion of the duty holders to include these people.
Concerns have also been raised that the definition of 'responsible person' captures 'employees', but not a broader class of 'workers' which has the effect of "singling out drivers but not other workers".4 It is proposed that the broad definition of a 'worker' in the WHS Act be adopted, to achieve this expansion and provide further alignment with WHS duties.
- Enforcement measures: Options to improve enforcement by the transport regulators include the adoption in the HVNL of the WHS Act enforcement measures which are currently not available under the HVNL, such as the powers of authorised officers to:
- Issue a 'prohibition notice' (currently only the courts can issue prohibition notices under the HVNL);
- Issue non-disturbance notices; and
- Require persons to enter into enforceable undertakings.
- Penalties and offences: There is said to be unanimous agreement amongst the stakeholder groups that the current penalties imposed under the HVNL should be increased and be aligned with those that may be imposed under the WHS Act.
This would see a very significant increase in penalty levels under the HVNL, reflecting the seriousness of breaches, particularly those relating to systems failures that allow multiple or repeated breaches to occur. This increase in penalties may, in our view, require a change in approach by the regulators and the courts to take a holistic approach to breaches rather than adding up a number of relatively small penalties and often reaching the same or a higher total penalty. Changes to the penalty levels may accordingly produce a change in the nature or at least perception of these offences.
We will be happy to assist you in preparing submissions or providing comment
We are currently assisting clients in understanding their CoR obligations, measuring and improving their CoR compliance and defending prosecutions. With this experience, we are able to assist our clients in preparing submissions in response to the options paper and will happy to do so.
1Sections 620 to 623 of the HNVL
2Section 625(5) of the HVNL
3Chain of Responsibility Review Assessment of Options Paper, February 2014, at page 23
4Ibid 4, at 41
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.