Australia: NSW Secure Employment Test Case - Just More OHS Regulation?

Last Updated: 7 June 2006
Article by John Oakes

Key Point

  • The new award provisions have the potential to create uncertainty over OHS obligations for host employers and labour hire employers with an increase in the potential of prosecution for breaches of OHS legislation.

On 28 February 2006, a full bench of the Industrial Relations Commission of NSW handed down its judgement in the Secure Employment Test Case [2006] NSWIRComm 38.

The background to Unions NSW's claim

The applicant, Unions NSW, made an application for a State decision variation of exemplar awards regarding host employers' obligations for occupational health and safety of labour hire employees, as well as an obligation for host employers to provide labour hire employees with occupational rehabilitation in the event of a workplace injury.

Unions NSW based its claim upon the evidence of Professor Quinlan from the School of Industrial Relations at the University of NSW and submissions by WorkCover NSW to the NSW Government's Labour Hire Taskforce.

The evidence of Professor Quinlan and WorkCover highlighted the fact that labour hire employees are traditionally contracted to perform work as a result of increased workloads requiring short turnaround, which results in the inability of the organisation to meet specific deadlines. Labour hire employees are normally utilised to fill these short-term gaps and evidence suggests that, because of the environment under which they are employed, host employers are either unable or unwilling to provide appropriate induction training and supervision to labour hire employees.

WorkCover in its submission to the Taskforce indicated that generally host employers' management systems are often in disarray and labour hire workers step into environments of elevated OHS risk arising from adverse effects created by the process.

In support of its claim for award prescription in relation to rehabilitation, Unions NSW relied upon evidence from WorkCover NSW that it is often difficult for employees of labour hire and contract businesses to access suitable duties.

Unions NSW also said that further award prescription in this area is necessary because the NSW Government had to date not introduced further legislation to act on recommendations in the Labour Hire Taskforce report.

The full bench's decision

In its decision, the full bench of the Commission agreed with the evidence of Unions NSW that confusion existed between host and labour hire employers in relation to their respective OHS obligations. The Commission agreed with, and adopted, the format of the proposed award provision put forward by Unions NSW. The proposed changes included requiring employers engaging employees in a labour hire or contract business to:

  • consult with those employees about the workplace occupational health and safety consultative arrangements
  • provide appropriate occupational health and safety induction training and protective equipment to those employees;
  • ensure awareness of any risks in the workplace and any procedures to manage those risks; and
  • take all reasonable steps to provide those employees with suitable duties as part of any rehabilitation program for the employees.

With regard to rehabilitation, the Commission agreed with evidence of the NSW Minister for Industrial Relations. The Commission accepted that it was unreasonable for an award to contain a prescriptive provision in relation to the rehabilitation process given the legislative requirement for insurers to confer with employers and employees to develop rehabilitation and return to work plans.

Employer groups have expressed concern at the decision which in affect will result in a duplication of regulation of employers. Regulation will exist under the OHS legislation as well as the Industrial Relations Act 1996 ("IR Act"). An employer may face a criminal penalty under OHS legislation, civil penalty under the enforcement provisions of the IR Act as well as potential civil claims for personal injury.

It is debateable whether the inclusion of this provision in an award will result in a greater awareness of safety obligations in the workplace.

This raises the question regarding the extent to which the new award provisions will assist in ensuring compliance by a host employer in circumstances where the host employer is unable or unwilling to comply with current provisions under the Act.

The effect of the decision

The duplication of obligations and, in particular, the focus on the host employer may lead to confusion over the obligations of the labour hire employer. Some employers may consider that its obligations are reduced, thereby creating the potential for a workplace accident to occur and potential exposure to a prosecution.

A host employer will now not only need to ensure its OHS system satisfies the risk management requirements of the Act but that it also addresses those safety requirements prescribed in relevant awards.

A review of a host employer's management of OHS obligations as it applies to labour hire employees may be required to ensure clear procedures are in place. It is possible that OHS systems may need to be amended to include procedures that not only comply with the requirement of the Act but also address the new award provisions.

There is potential for conflict between the new award provisions and current obligations under the Act. Currently the requirement for the provision of personal protective equipment to the employee lies with the labour hire employer. The award provisions will now require the host employer to provide personal protective equipment to the labour hire employee, if the host employer fails to meet the obligation under the award, the labour hire employer will be in breach of its obligations under the Act.

Notwithstanding the potential for a duplication of controls, both host and labour hire employers must ensure they comply with obligations imposed under OHS legislation to avoid the risk of prosecution and the resultant criminal conviction.

Thanks to Michael Connolly for his help in writing this article.

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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