Labour hire firms were taught an important lesson when a South
Australian court imposed the State's highest ever penalty
against a single entity under the new laws for failing to ensure
the safety of one of its workers who suffered severe burns at a
host employer's premises.
As the shift away from traditional employer-employee
relationships in the workplace continues to gain momentum, more and
more businesses are introducing labour-hire engagement models as a
way of structuring their workforce. Such a shift highlights the
need for businesses to re-examine their approach to work health and
safety, including the division of responsibility between labour
hire employer and host employer for those businesses operating out
of jurisdictions within the harmonised Work Health and Safety Act
regimes (WHS Act).
Under the WHS Act, a 'person conducting a business or
undertaking' will owe a primary duty of care to ensure, so far
as is reasonably practicable, the health and safety of all workers.
This broad duty of care cannot be delegated, but it can be shared
and it will be enforced. For labour hire businesses this means that
the business itself, as well as the host employer to whom the
worker is supplied, will each retain responsibility for that
primary health and safety duty as well as a further duty to
consult, co-operate and co-ordinate activities with the host
employer in respect of that worker.
On 27 April 2016, a South Australian labour-hire company was
fined $240,000 for its breach of the State WHS Act, including in
respect of its attempts to delegate the businesses' safety
duties to the host employer. In the decision of Marie Boland v Big
Mars Pty Ltd, Industrial Magistrate Stephen Lieschke found that the
labour hire-company, Big Mars Pty Ltd, had 'failed
miserably to carry out any of its fundamental safety
responsibilities' after 21 year old migrant worker Mr
Hsiao suffered serious burns to the bottom half of his body when he
slipped into a bath of caustic soda while working at the host
employer's abattoir. Among other failings, Big Mars had failed
implement any adequate system of hazard identification or risk
assessment specific to the host employer's premise;
check or audit that the host employer provided and maintained
written safe operating procedures for the use of relevant
equipment, and that such procedures were provided to Mr Hsaio;
ensure that the work instructions provided to Ms Hsiao were
translated into a form he could understand (Ms Hsiao had difficulty
reading documents in English); and/or
assess the adequacy or otherwise of any training provided to
Hsaio by the host employer, nor provide any information,
instruction or training to Hsiao itself in respect of those tasks
he was being retained by the host employer to perform.
The Magistrate considered that all of these steps were simple
tasks for the labour hire business and ones that should have been
put into place, particularly given the fact that the business had
40 employees placed at that host. He was particularly critical of
the fact that despite Big Mars' early guilty plea, no statement
of contrition had been made in circumstances where the
business' breaches were so serious, and had caused such a
degree of loss and damage to Ms Hsiao.
In sentencing Big Mars, the Magistrate noted his doubts of
ongoing compliance by Big Mars in respect of its work health and
safety obligations and therefore considered individual deterrence
to be an important aspect of the sentencing process. He also
confirmed that general deterrence for labour hire businesses as a
sector was an important factor and one which had influenced his
decision to impose the significant penalty.
Lesson for labour hire companies and employers
In this case, the Magistrate stressed that labour-hire employers
cannot simply 'leave all safety considerations up
to' the host employer, but that instead a labour-hire
employer must be astutely proactive in all stages of the workers
assignment with the host employer including prior to the workers
commencement, and at all stages throughout the life of the
assignment. In particular, he stated that Big Mars had a
responsibility to obtain specific details of the tasks that its
worker would be required to carry out and attend the worksite to
identify any foreseeable hazards and resulting risks of injury
associated with those specific tasks.
The host employer, Thomas Foods International, will appear
before the court in June.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
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When employees engage in out-of-hours misconduct, it can negatively affect the reputation of the employer.
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