A project manager, who conceded that he was involved in the decision-making within an organisation has been found not to be an "officer" within the meaning of the Work Health And Safety Act 2011 (Act)(Brett McKie V Munir Al-Hasani & Kenoss Contractors Pty Ltd (In Liq)  ACTIC 1).
Kenoss contracted with the ACT Government for road resurfacing works. At the relevant time Kenoss had only one director, Mrs Beverly Brendas. Her husband, Mr Spiros Brendas, was employed as the General Manager. Their son, Mr Dimitri Brendas, was employed as the safety officer. He had no experience or qualification in safety systems.
Mr Al-Hasani, a well qualified engineer, was employed by Kenoss as Project Manager. At the time, he was managing a number of projects for the company.
A contractor, engaged to deliver materials for the resurfacing works, was electrocuted when the bucket of the truck either came very close to, or contacted with, low hanging power lines forming an electrical arc. The materials were being delivered to a site compound, which was fenced off and no control measures were in place with respect to the low hanging power lines.
Decision and Issues
Industrial Magistrate Walker found that:
- There was a clear breach of the duty owed by Kenoss, contrary to section 32 of the Act. Therefore it was guilty of a category 2 offence.
- Mr Al-Hasani did not exercise due diligence in respect to safety compliance.
- The requirement to exercise "due diligence" pursuant to section 27 only arises if Mr Al-Hasani was an "officer" of Kenoss.
It follows that the issue for Industrial Magistrate Walker to resolve was to ascertain whether Mr Al-Hasani was an "officer".
Magistrate Walker noted that position of "officer" was defined in the Act by reference to section 9 of the Corporations Act 2001 (C'th), in particular by sub-section 9(b) as a person:
- " who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or
- who has the capacity to affect significantly the corporation's financial standing; or
- in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the directors or the corporation)..."
Mr Al-Hasani's participation in the business process was described as "operational". His evidence at trial was that:
- he prepared tenders for work, though management had to agree with the prices he worked out for the job. If management was not happy, then they would refuse to tender for the project or require that he increase the price quoted;
- he could not hire or fire employees;
- he had no financial budget to engage suppliers, purchase materials etc. for the completion of works; and
- he participated in management meetings, monitored projects progress and keep the general manager advised of it.
In short, Mr Al-Hasani agreed that he undertook all of the work one would expect of a project manager.
Mr Al-Hasani conceded when it was put to him that he was participating in the decision-making within the organisation.
Magistrate Walker did not consider that concession was conclusive on the matter and there were clear limits on his participation delineated by his role as project manager. Magistrate Walker found that Mr Al-Hasani had operational responsibility for delivery of specific contracts which had been entered into and his role was to implement these projects. Any suggestion that Mr Al-Hasani's participation went beyond operational to organisational participation was speculative.
In the circumstances, Magistrate Walker found that the Prosecution had not proven, beyond reasonable doubt, that Mr Al-Hasani was an "officer", and as such, he did not owe a specific duty to exercise due diligence. Accordingly the charge against Mr Al-Hasani was dismissed.
What this means
Although this was a matter decided in the ACT under its Work Health and Safety Act, the duty imposed on "officers" is consistent across the states and territories which have adopted the harmonised legislation. This decision provides the first insight as to the matters the Court will take into account when considering who has due diligence obligations as an "officer" under the harmonised work health and safety laws.
It is evident that each individual case will turn on its facts and particularly in the context of the specific business or undertaking, which may be quite fluid.
If you are wondering whether you will be considered an "officer" within the meaning of the Act think about:
- whether you participate in or make decisions with respect to the strategic direction of the company; or
- do you have approval for expenditure, whether it be capital or otherwise (e.g. hiring or firing of staff in some instances), which could significantly affect the profit/loss the company makes.
An organisational chart, specifying who the officers of the company are will not be conclusive on the issue.
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.