Australia: Enforceable Undertakings - An Alternative For WH&S Enforcement

On 1 June 2003, the Queensland Government introduced a new enforcement mechanism under the Workplace Health and Safety Act 1995 - the enforceable undertaking.

It is now three years on and this article will look at the operation and effect of enforceable undertakings in Queensland and how employers can use this mechanism to avoid prosecution for a breach of the Act.

An enforceable undertaking is a written undertaking given by a person who is alleged to be in breach of the Act which is approved by the Director-General of the Department of Industrial Relations.

One of the primary benefits of enforceable undertakings to persons who are facing prosecution for a breach of the Act is that, if approved, the Director-General must discontinue any proceeding that was commenced for the alleged breach and must not commence any proceeding for the alleged breach in the future.

Accordingly, enforceable undertakings are an alternative to facing prosecution which can deliver a number of benefits including time and cost savings of court proceedings, and avoiding adverse publicity which might result from those proceedings, payment of penalties and a blemished safety record, which is often an important motivator for organisations which rely on their safety record to secure work.

Approval of an undertaking lodged with the Department is at the discretion of the Director-General. The Director-General will only approve an enforceable undertaking when it:

• provides significant and real benefit to workers, industry and the community;
• acknowledges that the Department alleges a breach has occurred;
• identifies the facts and circumstances of the alleged breach;
• includes an assurance from the organisation about future behaviour;
• establishes or maintains an occupational health and safety management system at the workplace which is subject to third party auditors at regular intervals; and
• represents the most appropriate enforcement option in the circumstances of the case.

Because of the significant benefit requirements, an enforceable undertaking is seen as an incentive to improve health and safety standards, rather than punishment for failing to comply with the Act. However, not all undertakings lodged with the Department are approved, particularly if the terms of the undertaking do not deliver workplace health and safety benefits to industry or the broader community.

Enforceable undertakings are legally binding commitments and non-compliance could attract a penalty of up to $375,000.

Since their inception, the use of enforceable undertakings has been embraced by persons facing prosecution for breach of the Act, including undertakings from organisations such as Qantas Airways and Sea World.

In many cases, the cost of an enforceable undertaking is substantially greater than the fine that would have been ordered by the court. This is because enforceable undertakings usually involve substantial educational and safety promotion obligations and the carrying out of safety upgrades and training. For example, Sea World committed in its enforceable undertaking to spend an estimated $290,000 in research into ignition isolation devices for jet skis and related community safety activities, after the incident in September 2002 in which four people were injured.

Enforceable undertakings may offer a more beneficial outcome for non-compliance with the Act than prosecution. The main advantage is that the outcomes of enforceable undertakings can be practical, with the potential to create sustainable industry improvements in workplace health and safety as opposed to individual organisations merely correcting problems as they arise.

Further, enforceable undertakings can be a useful method of resolving workplace health and safety breaches before they get to the stage of prosecution. This alternative may cost an organisation more than the potential fines in the short-run, however, in the long run, it avoids the expense and time delays inherent in the prosecution process and saves them the public relations nightmare of being perceived as a law-breaker.

In New South Wales, the Occupational Health and Safety Amendment Bill 2006, which has been released for public comment, proposes to introduce into the Occupational Health and Safety Act 2000 a similar undertaking regime to that which is in place in Queensland.

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.