Australia: Million Dollar Misdeed: Construction Company Receives Record NSW Fine For Electric Shock

In a milestone decision handed down on Friday 5 May 2017, construction company WGA Pty Ltd (WGA) has been convicted and fined AUD 1 million from a maximum of AUD 1.5 million after the NSW District Court found that its director deliberately let a subcontractor work near live high-voltage powerlines in order to avoid delaying a construction project1. The fine is the largest penalty imposed for an offence under the NSW Work Health and Safety Act 2011 (WHS Act) to date.

Incident

WGA was the principal contractor on a residential construction site in Sydney and engaged a subcontractor, Christopher Cullen, to install windows in a set of apartments.

The apartment building had been constructed in close proximity to powerlines that ran along King Georges Road, South Hurstville. The upper power lines were owned by Sydney Trains and conducted 33,000 volts.

On 19 June 2014, Mr Cullen was standing on a window ledge and installing aluminium angles to the outside of the windows. Mr Cullen suffered an electric shock when the 2.7m angle he was holding came in contact with (or in close proximity to) the high voltage upper powerlines. According to witnesses, he appeared to be on fire after being thrown backwards on the scaffolding.

Mr Cullen suffered burns to 30 percent of his body and required extensive medical treatment and rehabilitation. He has been unable to return to work.

Safety failures

WGA pleaded not guilty to the WHS Act charges but did not appear in court for any of the hearings.

A SafeWork NSW inspector had issued two improvement notices to WGA on 22 May 2014 (just 28 days prior to the incident), after the Inspector found that the scaffolding on the outside of the apartments could not be used without putting a person within three metres of the high-voltage upper powerlines. No exclusion zone had been established to prevent a person coming within that distance.2 

During the course of March 2014, WGA was issued with three prohibition notices in respect of similar contraventions. During conversations with the inspector about the issue prior to the first prohibition notice, Mr Hassan had replied with words to the effect of "I don't really see it as such a problem" and "why would someone reach out and touch it".3  The risk was then detailed to Mr Hassan by the inspector with words to the effect of:

"All it would take is for a worker to pick up materials, such as scaffolding or those lengths of steel, turn around and they could easily come into contact with the power lines. It is unrealistic to expect busy construction workers to simply remember the power lines and stay away from them. That's why you need to have physical and visual barriers, particularly if you are not always on site when work is taking place. Tiger tails are not a control measure and do not provide protection against electric shock or electrocution."4

Mr Cullen commenced work on the site in May 2014.  He did not receive an induction or attend any tool box talks during the course of his work at the site. Mr Cullen had not previously conducted high density residential work or worked in the vicinity of power lines, as he usually performed more straightforward residential and renovation work.

Judge Scotting heard that in June 2014, WGA sought, but failed to obtain, approval from Sydney Trains to isolate the powerlines so that work could be carried out because the building had been constructed too close to the upper power lines and the conditions for turning the power back on could not be met.  There was written evidence that in May 2014 Mr Hassan had acknowledged (to both the inspector and Sydney Trains) that the power needed to be isolated before undertaking the work that Mr Cullen was required to perform.5

WGA director, Mr Hassan, then "pleaded" with Mr Cullen to install the angles on the windows facing the powerlines because the work needed to be completed before the scaffolding was removed the following weekend.6

Mr Hassan did not tell Mr Cullen about the presence of live powerlines, that they were high voltage, nor did he receive instruction that he should not go onto the window ledge to install the angles unless power was isolated in those lines. There was no barrier tape or signage in place warning Mr Cullen of the risk posed by the high-voltage power lines.  Further, Mr Cullen was not made aware that an improvement notice had been issued in respect of the work.

Judge Scotting found that WGA had actual knowledge of the risk posed by the work and the control measures that were required to alleviate the risk. Mr Hassan had been provided with a copy of the Code of Practice Working Near Overhead Power Lines and the NSW Transport System Guide Working around Electrical Equipment, as well as clear and unequivocal instructions from the SafeWork NSW Inspector and Sydney Trains about the control measures that were required to avoid this very risk.  Judge Scotting stated that: "the likelihood of the pleaded risk occurring was high if the control measures were not adopted.  The potential consequences were catastrophic in that an electric shock was likely to cause death or serious injury because the upper power lines were carrying 33Kv."7

Judge Scotting took the view that the fact that the power could not be isolated did not affect the reasonable practicability of the necessary measure to stop work on the window ledge by either waiting until the power was isolated before allowing Mr Cullen to do the work or directing Mr Cullen not to work on the window ledge unless the power was isolated.  Sydney Trains was in the process of trying to find a solution to the problem (created by WGA in constructing the building too close to the power lines).8 Judge Scotting stated that "WGA should have delayed the work until a solution was found".9 

Judge Scotting concluded that WGA had a "non-existent" safety system for Mr Cullen's work10, had shown a "blatant disregard of its safety obligations"11 and that its "level of moral culpability for the offence was high".12 He found WGA guilty of breaching s 19(1) and 32 of the WHS Act, imposing a penalty of AUD 1 million and AUD 50,460 in prosecution costs.

Trend towards higher penalties

Previously, the largest fine for a breach of the WHS Act in NSW was AUD 500,000. The fine was issued to Ulta Group Pty Ltd in November 2014 for a similar incident in which a worker suffered an electric shock when he contacted power lines whilst placing reinforcing steel rods into a block wall at a construction site.

The WGA case highlights a trend towards higher penalties for workplace health and safety offences in many Australian jurisdictions.  Examples include:

  • Commonwealth:

In April 2017, waste management company Cleanaway Operations Pty Ltd (formerly Transpacific Industries) was fined a record AUD 650,000 for breach of the Commonwealth WHS Act after a worker was injured in a chemical fire during a production trial at the company's Wingfield chemical waste processing plant13. The fine is the highest penalty ever imposed in a Comcare-initiated proceeding. In sentencing, Judge Davison said that the company provided very limited information about the new chemical product to its workers and failed to provide all necessary technical information to the workers directly involved in the trial.

  • Queensland:

In March 2017, a sole trader operating an amusement ride business was fined AUD 80,000 after a worker was fatally crushed by an amusement ride at Collingwood State School's Christmas Carols in 201414. The fine was the largest penalty issued to an individual in Queensland under the state's work health and safety legislation. The Ipswich Magistrates Court heard that the worker was told to climb the chair-o-plane ride and remove bolts from the centre pole despite having no training on that ride. The court found that the defendant failed to identify hazards, put in controls for hydraulic failure during set-up and dismantling and provide adequate training and information.

  • Victoria:

In December 2016, logistics company Toll Transport Pty Ltd was fined a record AUD 1 million in relation to an incident in which a stevedore was fatally crushed by a trailer while helping to load cargo onto a ship15. The penalty is the largest ever handed down by a Victorian court for an offence under workplace health and safety laws. The Court found the company was aware of the serious risk to people working in the vicinity of mobile plant and did not have a clearly spelt-out and closely supervised system to alleviate this risk.

  • Australian Capital Territory:

In August 2015, Canberra construction company Kenoss Contractors was fined AUD 1.1 million over the death of a truck driver Michael Booth, who was electrocuted when his tip truck touched low hanging power lines on the company's work site16. The Industrial Magistrates Court found that Kenoss failed to implement simple safety measures such as limiting access to the site, posting signs warning of the live power lines or attaching flags to the lines to make them more visible. In circumstances similar to the WGA case, the company was aware of the risk and had previously been issued with a prohibition notice regarding working near live power lines.

This move towards higher penalties for companies and individuals is likely to reverberate across other harmonised WHS Act jurisdictions. In the recent landmark decision in Williamson v VH & MG Imports Pty Ltd [2017] QDC 56, the Queensland District Court found that a fine of AUD 90,000 imposed by the Queensland Magistrates Court at first instance was "manifestly inadequate" and substituted a fine of AUD 125,000. Significantly, the court held that the state's mirror WHS Act permitted sentencing courts to have regard to comparable decisions from other harmonised states and territories, given that the main object of the WHS Act is to provide for a "balanced and nationally consistent framework" for work health and safety.

Lessons for employers

If you see something, do something – In an early observation of principles in the original judgment on conviction, Judge Scotting reminds us that "an employer must have a proactive approach to safety issues"17.  One of the interesting aspects of this case if you focus on 'what went right' is the multiple occasions where organisations other than the defendant were proactive in their approach and systems.  The scaffolding company, Synergy Scaffolding had stopped performing work on the site because they were not prepared to install hoarding without the requisite approval of Sydney Trains. Indeed, each of the earlier interactions between WGA and the inspector had been triggered by other organisations (particularly Ausgrid and Sydney Trains) notifying SafeWork NSW that work was being performed in possible contravention of the requirements of the Code of Practice.

Proactive risk management is key – This case represents yet another example of the need to be proactive in risk management and effectively implement the control measures identified in relevant Codes of Practice.

We have entered a phase of higher penalties for known risks – Employers who neglect to take simple precautions to avoid a known risk may face significantly higher penalties than in the past, especially where the likelihood of the risk occurring is high and the potential consequences include serious injury or death.  Employers in states and territories which have historically imposed lower penalties under the model WHS legislation should be alert to the potential for higher penalties to be imposed, in accordance with those in other harmonised jurisdictions.

Million Dollar Misdeed: Construction Company Receives Record NSW Fine For Electric Shock

Footnotes

1 See Safe Work (NSW) v WGA Pty Ltd [2017] NSWDC 92 (5 May 2017) for the judgment on sentencing.  See Safe Work (NSW) v WGA Pty Ltd [2017] NSWDC 91 (10 April 2017) for the principal judgment.

2 It appears that improvement notices were issued rather than prohibition notices on this occasion because the Inspector did not have sufficient evidence to form the opinion that work had been or was about to occur on the scaffold and as such, there was not an immediate risk to health and safety.

3 See principal judgment, para 14.

4 See principal judgment, para 15.  See also sentencing judgment, para 8.

5 See principal judgment, para 40 and sentencing judgment, para 8.

6 This work had not been part of Mr Cullen's original quote.  See principal judgment, para 47. 

7 See principal judgment, para 101 and sentencing judgment, paras 9-10.

8 See sentencing judgment, para 11.

9 See principal judgment, paras 110-111.

10 See sentencing judgment, para 14.

11 See sentencing judgment, para 15.

12 See sentencing judgment, para 17.

13 Commonwealth Director of Public Prosecutions, Cleanaway cops $650k fine over Adelaide chemical fire (19 April 2017).  Comcare, Cleanaway fined over Adelaide chemical fire (20 April 2017).

14 Workplace Health and Safety Queensland, Ride operator receives record fine after death of worker at a school event (24 March 2017).

15 DPP v Toll Transport Pty Ltd [2016] VCC 1975 (14 December 2016).

16  Brett McKie v Munir Al-Hasani & Kenoss Contractors Pty Ltd (in liquidation) [2015] ACTIC 1; Michael Inman, Kenoss Contractors fined AUD 1.1 million for workplace death (19 August 2015), The Canberra Times.

17 See principal judgment, para 84.

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