Australia: A Uniform National OHS System?

Last Updated: 26 September 2008
Article by John Tuck

Harmonising Australia's occupational health and safety (OHS) laws has been firmly on the national agenda since October 2006. The lack of consistency between the safety laws in each state has led to significant compliance costs on employers who engage people in more than one jurisdiction. The arguments for harmonisation appear compelling to many, however, the path to a uniform set of laws is unlikely to be a simple one.

The Rudd government made it clear early in its first term that it intends to continue to push for the harmonisation of the OHS laws. At the Council of Australian Government (COAG) meeting held in March 2008 it was agreed that OHS harmonisation was a top priority. The State and territory heads of government endorsed a plan that included three important objectives. First, a review of Australia's OHS laws. Secondly, the development of an exposure draft for a model OHS Act by March 2009. And finally, the finalisation of the model Act and its submission to a Council of state and territory workplace relations ministers by September 2009.

At the second COAG meeting in July 2008 the governments formalised their commitment to harmonisation committing to have this done by no later than December 2011. It is proposed that in order to harmonise OHS laws, each state and territory will enact or give effect to their own laws to mirror the model OHS legislation and regulations.

In this article we consider what some of the key issues are for Australian employers.

Where we are today

Currently each state and territory in Australia has its own OHS legislation. The Commonwealth also has its own legislation, the Occupational Health and Safety Act 1991, which until recently only applied to Commonwealth employees. There are also multiple workers compensation schemes that operate in each jurisdiction.

The OHS laws in each state have a number of differences. Of critical importance is the differing standards. In New South Wales, employers are required to 'ensure' safety. In other jurisdictions that duty is to take 'all reasonably practicable steps to protect health and safety'. These standards are supported by various codes of compliance and regulations. There are also differing return to work rules and compensation processes. When you consider the pyramid of laws that underpin safety at work the complexity quickly becomes apparent. You can add to this the penalty range that differs markedly throughout Australia. For example, in Victoria there is a maximum penalty of $1,020,780 whereas in the Northern Territory the maximum penalty is $125,000. There are also differing prosecution regimes with the unions playing a particularly prominent role under the New South Wales laws. These differences make it onerous for many employers to comply. They also impose significant costs.

What is proposed?

On 4 April 2008, the Federal Minister for Employment, Education and Workplace Relations, Julia Gillard appointed a panel to conduct a review of Australia's OHS laws. The panel is undertaking a review of the OHS legislation in all jurisdictions and will make recommendations on the optimal structure and content of a model OHS Act. After calling for submissions the review panel received over 200 submissions on how to approach the development of model laws. These laws will be developed once the review panel has first reported on the duties of care, who holds a duty, and the scope and limits on any duty. In this first stage the review panel will also consider the nature and structure of offences and defences. This report is due on 31 October 2008.

It is anticipated that the second stage which commences in March next year will involve the preparation of model laws to be finalised by October 2009. The preparation of these laws will fall in part to the Workplace Relations Ministers' Council who will be responsible for making decisions about the model OHS laws, including regulations and codes of practice.

In addition there will be a new government agency that will have responsibility to:

  • Develop, monitor, maintain and provide advice on model OHS legislation consisting of a model principal Act, regulations and codes of practice.
  • Develop a compliance and enforcement policy to ensure nationally consistent regulatory approaches across all jurisdictions.
  • Research, develop and recommend national OHS standards as appropriate.

The OHS models currently operating that are most likely to be considered by the review panel are the Victorian model, the New South Wales model and the United Kingdom model. The New South Wales model is the most rigorous of those models. It also has the highest penalties, for example in the case of workplace death there can be a fine of up to $1.65 million and imprisonment for up to five years. Interestingly, the New South Wales government sponsored Stein Report into proposed recommendations to change the New South Wales laws, which was finally released in July 2008, supports the call to amend the standard to do what is 'reasonable and practicable'.

The road to harmonisation is unlikely to be smooth. Already differences of approach have been plainly articulated amongst the stakeholders. The ACTU has voiced its objection to a complete takeover of OHS laws. In particular the ACTU has suggested that in some industries, such as mining and maritime, the model OHS laws should not operate to override specific industry regulation.

The recent development of the ACT introducing its new OHS Bill that differs from other jurisdictions adds to the complexity of bringing OHS together under one system. For example, the ACT Bill allows an employee to refuse to work if they think there is a risk to their health. It also requires an employer to consult with workers on safety matters. The continued differences in approach arguably make the achievement of a uniform OHS system more difficult.

Issues for employers

Plainly the commitment to harmonisation is made with a view to reducing costs and administration, and generally making it easier for workers and employers who conduct business in more than one state. A number of Australian employers have already had the experience of operating under one system. These eligible companies took advantage, while they could, of the Howard government's changes to the Commonwealth OHS Act that allowed the Commonwealth OHS Act to apply to private companies who compete with Commonwealth Authorities or a corporation that was formerly an Authority. Although access to a Comcare licence is currently subject to a moratorium on the issuing of new licences while the Government assesses changes the OHS laws, it is likely that other employers will seek to change to the Commonwealth system if the opportunity presents itself again.

Employers who have moved to the Commonwealth system have reported that they have enjoyed the benefit of applying one set of laws to their whole business, and having to deal with only one regulator. The standard of care is consistent across their organisations, being the obligation to take 'all reasonably practicable steps to protect health and safety'.

In the submissions to the review panel there is considerable interest in what the new standards will be and what approach will be preferred from those currently applying in the states and territories. There is considerable support for the system that does not impose absolute duties, such as that which operates in both Victoria and Western Australia.

The review presents the opportunity to consider other issues. For example the issue of multiple employers on a site and whether this can be better managed to avoid the confusion that sometimes exists where there are overlapping responsibilities between employers. Further, the review and development of model laws and codes, also opens the door to considering whether a uniform approach can apply to fatigue management, and the issue of drug and alcohol management and testing.

Benefits

Challenges

Simplified systems for multi-jurisdiction employers

Uncertainty during review period

Administrative and compliance cost savings

Possible increase in penalties

One system for workplace management and safety

Potential for more onerous duties in some states

Conclusion

There is ample work to do before anyone could confidently predict how the model laws in OHS will operate throughout Australia in December 2011. There is a risk that the cooperative approach to harmonisation could lead to model legislation that never gets enacted at a state level or which allows significant local variation on key issues such as liability or penalties. This opt-in approach risks a situation for business that will not be much improved from the current position.

If the governments can agree on model OHS laws then there will be scope for considerable savings. The lack of uniformity imposes significant compliance costs on employers. The enthusiasm for Comcare licences suggests many Australian employers would welcome a national system. We await with eager anticipation the review panel's report due next month and will keep you posted.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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