Australia: Executive duties

Last Updated: 11 October 2018
Article by Rebecca Niumeitolu

Most Read Contributor in Australia, September 2018

Executives now have a positive duty to exercise due diligence to ensure that their businesses comply with their safety duties. Safety duties include Chain of Responsibility (CoR) parties' primary duty under section 26C as well as a list of additional duties, such as the obligation not to permit unsafe vehicles to be used and the obligation to comply with heavy vehicle authorisations.

This article provides you with an overview of the recently changed executive responsibilities.

Who is an executive?

An executive under the Heavy Vehicle National Law (HVNL) includes directors as well as individuals in management positions who are responsible for controlling or directing the use of heavy vehicles.

What is 'due diligence'?

It can be helpful to think of due diligence is a minimum standard of behaviour that the HVNL imposes on executives in relation to supervising and implementing systems to support their businesses' transport activities.

To discharge these obligations, executives are expected to have an ongoing understanding of their businesses' transport activities, legal obligations and risks associated with their business' transport activities. They are also expected to ensure that their businesses are equipped with appropriate resources to eliminate or minimise those risks and to implement processes to deal with safety hazards, to comply with business' primary duty and to report incidents.

How is the obligation to exercise due diligence different from executives' current exposure to prosecution under extended liability provisions?

CoR parties will be familiar with extended liability provisions under the HVNL. For example, section 183 of the HVNL provides that if a mass, dimension or loading requirement is breached, other parties in the Chain, such as the driver's employer, are also taken to have committed a mass, dimension or loading offence (as applicable).

The executive duty obligation under section 26D is different for two main reasons:

  • there does not need to be any prior breach by another CoR party for an executive to be prosecuted. The executive duty is independent. Therefore if an executive fails to act proactively to perform the executive's duties, then the executive can be prosecuted
  • the very purpose of section 26D is to make executives, even directors who are not usually involved in the day-to-day running of their businesses' transport activities, responsible for ensuring their businesses comply with the HVNL. Rather than focusing on the liability of business as a whole, which tends to be the result of prosecutions of employers under extended liability provisions, section 26D allows for each executive to be held independently liable where they fail to discharge their obligations with due diligence. The result is that all levels of a business are attentive to and cooperating to meet requirements of the HVNL.

What types of actions can executives take to comply with their duties under section 26D?

  • learn about their business' obligations under the HVNL and understand what they mean for their business
  • ensure their business has a system that identifies, assesses and manages risks in respect of safety duties and transport activities
  • ensure their business implements a reporting system for employees and other CoR parties to notify it of HVNL breaches
  • keep informed about HVNL breaches and remedial actions if they arise
  • ensure their business has appropriate equipment and procedures to comply with its HVNL requirements, this includes loading restraint procedures and measures to accurately weigh loads
  • ensure their business provides training and instruction to employees and contractors on their HVNL obligations and steps they can take to comply with these obligations. This should include role specific training. For example, role specific training could include providing schedulers and managers with additional training about avoiding asking or directing drivers to breach fatigue requirements, providing training on work and rest time requirements and providing information on detecting signs of fatigue
  • executives should ensure their businesses reviews of their risk assessment, training and reporting systems to ensure that they are working effectively.

What are tell-tale signs that executives are not complying with their duty?

  • delegating their duties to others in such a way that they have no knowledge of systems implemented by their business to comply with HVNL obligations
  • repeat offences by the company and its employees tends to indicate there is a systemic failure starting from the executive level of the business down to the operational levels of the business
  • limited or no training to employees on their obligations under the HVNL. Training employees can be a costly process which often requires approval from the executive and managerial levels of businesses. The absence of it suggests that executives are not discharging their obligations properly.

What if executives breach their duty?

The maximum penalty for a contravention of section 26D turns on which safety duty the executive is has failed to ensure the business is complying with. For example:

  • if the failure relates to a breach of the business' primary duty under section 26C, then the relevant maximum penalty would be $300,000 or five years imprisonment or both
  • if the executive failed to cause its business to comply with the general safety requirement not to use an unsafe heavy vehicle, then the maximum penalty would be $6,000
  • if the executive failed to ensure that its business had a system for training or checking that speed limiters are not tampered with, then the maximum penalty would be $10,000.

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 relevant to your circumstances please contact one of the named individuals listed.

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