Australia: Report On National Harmonisation Of OHS Laws Released

In our July issue we reported on the appointment by the Workplace Relations Ministers' Council of an advisory panel tasked with the job of preparing two reports on the optimal content of a model OHS Act for adoption throughout Australia. The panel's first report has now been released.

Overview

The report contains 75 recommendations relating to the following issues:

• the primary duty of care to be enshrined within the model OHS Act

• the standard of conduct required to comply with the duty and the standard of proof that applies to prosecutions for breach

• additional duties to be imposed on specific persons

• the obligations of company directors and officers

• the manner in which OHS offences should be prosecuted

• sentences for breach.

There are a range of important issues that will be dealt with in the second and final report of the panel, which is due on 30 January 2009. The issues to be dealt with in the final report include:

• consultation arrangements

• regulation making powers and administrative processes

• permits and licensing.

Primary Duty of Care

The review panel has recommended that a broad statutory duty of care be included in the model OHS Act. The duty should apply to persons who conduct a business or undertaking and should cover workers (broadly defined) and others who may be put at risk to their health and safety by the conduct of the business.

The proposed new duty of care is not limited to the existence of an employment relationship, nor is the proposed duty to have any geographical restrictions such that it only applies at a workplace. The panel has recommended that the primary duty of care should apply to any work activity, and to work consequences (wherever they may occur), which result from the conduct of the business. The report gives an example of a situation where goods may be inadequately restrained and may fall from a truck on an open highway. While the highway cannot be considered to be the workplace of the person responsible for restraining the load, under the proposed new duty of care the consequences which flow from the load falling onto the open highway could be considered in determining whether that person breached their obligations.

In making the recommendations, the panel was concerned to ensure that the model OHS legislation provides for:

• as broad a coverage as possible, to ensure that the duties of care deal with emerging and future hazards and risks, as well as changes to work and work arrangements

• clarity of expression, to ensure certainty in the identification of the duty holders and so that duty holders can understand the obligations placed upon them

• the interpretation and application of the duties of care consistent with the protection of health and safety.

These objectives are achieved in part by the recommendation of the panel to include a broad definition of the term "worker" as it applies for the purpose of the primary duty of care. The expanded definition extends the duty beyond the traditional employment relationship to include any person who works, in any capacity, in or as part of the business or undertaking. This expanded definition is likely to capture a wide category of persons including labour hire personnel, volunteers and contractors' employees.

Similarly, the panel has recommended that the duty apply to any person conducting a business or undertaking, whether as an employer, a self-employed person, the Crown in any capacity or a person in any other capacity and whether or not the business or undertaking is conducted for gain or reward.

Scope and Issues of Proof

The panel has recommended that the primary duty of care under the model OHS legislation should be subject to a qualifier of "reasonable practicability". This qualifier is to be placed within the duty (as is presently the case in Victoria, Western Australia, the Australian Capital Territory and the Northern Territory) rather than in a separate defence provision (New South Wales and Queensland).

The primary duty of care will, therefore, require the person conducting the business to ensure, to the degree reasonably practicable, the health and safety of workers and others who may be put at risk by the conduct of the business.

The panel has recommended that a definition of the expression "reasonably practicable" be included in the model legislation. The panel has proposed a definition which covers the following considerations:

• the likelihood of the hazard or risk eventuating

• the degree of harm that may result if the hazard or risk eventuated

• what the duty holder knows, or a person in their position ought reasonably to know, about:

• the availability and suitability of ways to eliminate or reduce the hazard, the harm or the risk, and

• the costs associated with the available ways of eliminating or reducing the hazard, the harm or the risk, including whether the cost is grossly disproportionate to the degree of harm and the risk.

The panel has also recommended that the concept of control should not play a part in determining the nature or extent of a party's exposure to the primary duty of care. The panel is of the opinion that the existence of the qualifier "reasonably practicable" will supply an appropriate filter enabling cases of no or minimal control to be appropriately dealt with. Under the present OHS laws certain obligations, most notably the obligation imposed on persons who control non-domestic premises used as a place of work, are regulated by notions of control. In New South Wales, at least, this has led to the development of a fairly involved jurisprudence.

Finally, the panel considers that in any action for breach of the duty of care, the prosecution must be required to prove all elements beyond reasonable doubt – including that the defendant had failed to take steps that were "reasonably practicable". There are to be no statutory defences to a prosecution for breach of the duty of care – principally because the concept of "reasonably practicable", which is the cornerstone of the current statutory defence in New South Wales, would now form part of the duty of care itself.

Other Duties

A number of important recommendations are made by the panel which will affect personal liability under the model Act. As outlined above, the primary duty of care will not be placed upon the 'employer' but on a 'person', which includes natural persons. It was acknowledged that this change potentially exposes individuals to the primary duty and the associated higher penalties stemming from a breach of that primary duty. However, the report clarifies that the primary duty is not intended to apply to "individual functionaries within an organisation" such as middle managers or supervisors with practical day-to-day control of the workplace, but to persons who are actually conducting or operating the business (such as the business owner). "Natural persons employed or engaged to undertake activities in the business or undertaking of another will be workers ... or officers and will owe duties of care as such".

In addition to the primary duty, the panel has recommended that certain specific duties should apply to particular classes of persons, including:

• persons with management or control of workplace areas

• manufacturers/designers/suppliers/importers of plant substances and structures

• workers

• other persons present at the workplace

• OHS service providers.

Duties of persons with management or control

Currently, there are material differences between the jurisdictions on this issue.

In Victoria, the obligation is placed on a person who has management or control of a workplace to any extent (including the owner of such workplace) to ensure that the workplace, and the means of entry and exit, are safe so far as is reasonably practicable. However, in Queensland the obligation extends to a person who has control of fittings, fixtures and plant in a workplace area.

The report recommends that the model Act include a "specific duty of care owed by a person with management or control of the workplace, fixtures, fittings or plant within it to ensure that the workplace, the means of entering and exiting the workplace, and any fixtures, fittings and plant within the workplace are safe without risks to health and safety".

The discussion in relation to this duty centred around the alleged inconsistent case law on the definition of 'control' which is due, in part, to the "many uses to which 'control' is put in current OHS legislation". Therefore, the report recommends that the term 'control' be defined (and the Queensland Act is referred to as an example) and used only in relation to this duty. The definition of 'management and control' will be discussed further in the second report due in January 2009.

Designers/Manufacturers/Importers/Suppliers of Plant Structures or Substances

The intention here is to establish a duty of care to ensure that the health and safety of those contributing to the use of, using, otherwise dealing with or affected by the use, of plant, structures or substances is not put at risk. The duties of care will apply in relation to any reasonably foreseeable activity undertaken for the purpose for which the plant structure or substance was intended to be used. The duties of care are owed to those persons using or otherwise dealing with or his health or safety may be affected by, the use of the plant substance or structure. The specific duties of care should incorporate broad requirements for:

• hazard identification, risk assessment and risk control

• appropriate testing and examination to identify any hazards or risks

• the provision of information to the person to whom the plant, structure or substance is provided about the hazards, risks and risk control measures

• the ongoing provision of any additional information as it becomes available.

Duty of employees

Most Australian OHS Acts impose a duty on employees or workers (as defined in each Act) to take care of their own safety and that of persons around them.

The panel has concluded that the model Act should include a duty to be imposed upon 'workers' to take reasonable care for their own health and safety, that their acts and omissions do not adversely affect the health or safety of others and to cooperate with any reasonable action taken by the person conducting the business or undertaking in complying with the model Act. The definition of worker is to be broad enough to cover any persons who carry out work activities as part of a business or undertaking.

Duty of 'other persons at the workplace'

Recommendations 48 and 49 provide that the model Act should include a limited duty of care placed upon 'other persons at the workplace' to take reasonable care for their own safety and that of others who may be affected by their conduct or omissions at the workplace. While this would impose duties on persons such as visitors and the public, the authors stated that the duty of care "would be proportionate to any control such a person is able to exercise, recognising that such duties are complementary to the overall duty of the person conducting the undertaking".

OHS Service Providers

The report recommends that any person providing OHS advice, services or products that are relied upon by other duty holders should also be under a duty to ensure that no person at work is exposed to a risk to their health or safety from the provision of the services.

Directors and Company Officers

Under other current OHS laws, directors and company officers may be found liable for a breach of duty.

Some jurisdictions, such as Victoria, incorporate the definition of 'officer' found in section 9 Corporations Act 2000 (Commonwealth) while others define the term so as to include executive officers, directors and "persons concerned in management of the corporation or making decisions that affect the whole or a substantial part of the corporation". The definition of 'officer' will be dealt with in the second report of the panel.

The form of the 'officer's' duty also differs between jurisdictions. Several OHS Acts provide that company officers are automatically liable for company breaches unless the officer proves a defence of due diligence or lack of influence. In New South Wales, for example, the director or officer or person involved in the management of a contravening corporation is deemed to be guilty of the same contravention. It is then for the director/officer to establish the statutory defence.

In Victoria, however, an officer is guilty of a breach of the Act if an offence committed by the corporation was attributable to the officer's failure to exercise reasonable care.

Of the three options proposed in relation to the form of the 'officer' liability provisions, the report recommends that it be a positive duty to ensure a corporation complies with its duties under the model Act. The duty is to be qualified by the requirement that an officer exercise due diligence in discharging his or her responsibilities within the organisation. The onus of proving the elements of the offence would rest on the prosecution.

The authors of the report believe that this creates a positive duty on an officer to ensure that the corporation complies with its duties rather than "accountability only applying after a contravention by the company". The concept of 'due diligence' was chosen because it is well understood by directors and officers and is of a "more stringent" standard than that applied to workers. The report notes that if its primary recommendation for a positive duty to be applied to officers is not accepted, then provisions based on sections 144 and 145 of the Victorian OHS Act 2004 should be adopted in the model Act.

Prosecutions

Prosecutions for breach of any of the duties in the model Act should be commenced within 2 years of the offence or within 1 year of a finding in a coronial or other official proceedings.

Rules against duplicity and double jeopardy are also to apply. This would mean an end to the current system in NSW where appeals from an acquittal are available.

Findings of guilt should be the subject of appeal to the Supreme Court of the relevant State and, ultimately, to the High Court.

Sentencing - Primary duty

The panel recognised that there currently exists a great deal of inconsistency between the penalties applicable in each State for a breach of the primary duties of care. The highest maximum penalty for a corporation for breach of a general duty of care is $1,020,780 in Victoria, whilst the lowest is $100,000 in the ACT.

There is even more variation when the breach involves an aggravating factor in which case NSW has the highest penalty for a corporation, $1,650,000, and Tasmania has the lowest, $150,000.

The panel believes that fines are a key part of achieving deterrence in the area of OHS law particularly because of the graduated enforcement approach that is used. Consequently the panel has recommended higher maximum fines as well as a wider range of sentencing options.

The panel determined that it was not preferable to simply take the highest maximum penalty for an offence in any one of the Australian jurisdictions and make that the maximum penalty across all jurisdictions. It was felt that this approach assumed that the existing maximum penalties were sufficient and that this would not complement the graduated system of sanctions that is being suggested under the model Act.

Consequently, the panel has recommended a new penalty regime that centres around whether an offence is a Category 1, Category 2 or Category 3 offence. For Category 1 offences, which the panel indicates are likely to be rare, the maximum penalty will be $3,000,000, which is almost double the current maximum in NSW for an aggravated breach of a primary duty. The table below sets out the maximum penalties proposed under the model act.

The panel stated that there needs to be a significant custodial sentence available for Category 1 offending by an individual. As such this sentence will only be available where there was a breach of duty of care involving serious harm or the risk of serious harm and where the offender was reckless or grossly negligent.

The panel did not consider it advisable to reserve the highest maximum penalties for repeat offenders as it felt that this would inappropriately restrict the court in the penalties that they must impose. On some occasions a first offence may be of such a nature that it warrants the maximum penalty range and similarly, a second offence may be such that it is unrelated to earlier offending and should not be subject to a higher penalty range.

Sentencing – other duties

The table below sets out the maximum penalties proposed under the model act for the other duties.

The panel also recommended that there be a range of other sentencing options for Courts to use in conjunction with their power to impose fines on offenders.

There is evidence that a range of sentencing measures used simultaneously can have the most effective deterrent affect.

In particular the panel recommended that the following sentencing options should be provided for in the model act in addition to fines and custodial sentences:

• Adverse publicity orders;

• Remedial orders;

• Corporate probation;

• Community service orders;

• Injunctions;

• Training orders;

• Compensation orders; and

• Enforceable undertakings (to be discussed in detail in Second Report in January 2009).

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.