For many employers operating in professional services and non-industrial industries, the concept of work health and safety is, let’s face it, not thought of as a particularly significant workplace issue. Occupational awareness and the maintenance of safe work systems and practices is, however, not only applicable to heavy industries and those where workers are working with dangerous machinery and equipment. Unfortunately, some employers learn the hard way that the work health and safety laws in Australia are expansive and can be incredibly powerful in circumstances of noncompliance. As is often the case, a fairly minor safety breach or incident is enough to expose an unsafe workplace, and can result in the employer becoming the subject of a safety audit by the regulator, who under the Work Health and Safety legislation has a number of enforcement options available to it. This may include bringing criminal prosecutions against company directors and officers for failing to discharge their legal obligations and seeking Court orders for the imposition of significant financial penalties on the corporation and its directors.
As part of the national harmonisation of work health and safety legislation, the Commonwealth and each State and Territory of Australia (except for Western Australia and Victoria) agreed in 2008 to amend their legislation so that each jurisdiction was consistent (with minor variations) under a national model. On 1 January 2012, the model Work Health and Safety Act 2011 (Cth) (“WH&S Act”) was introduced. The WH&S Act imposes various duties on persons in the workplace, including any person conducting a business or undertaking (“PCBU”) as well as directors and officers, workers and other individuals who visit the workplace. It is important to note that a person, especially a duty-holder such as a person holding corporate office, may have more than one duty at any time, and more than one person can concurrently owe the same duty.
Under the WH&S Act, the primary duty of care is imposed on the PCBU regardless of the nature of the business or enterprise being carried on, and whether or not the business is conducted for profit (or not), and includes partnerships, unincorporated associations, companies and sole traders. The primary duty is owed to “workers” who for the purposes of the WH&S Act extends to a range of persons in addition to employees, such as contractors, employees of contractors, labour hire personnel, outworkers, apprentices and trainees, work experience students and volunteers. The primary duty is to take all steps, so far as is reasonably practicable, to ensure that the health and safety of workers:
a) who are engaged, or caused to be engaged by the PCBU; or
b) whose activities in carrying out work are influenced or directed by the PCBU,
is not put at risk.
There are number of key obligations imposed on the PCBU under the primary duty, including:
- the provision and maintenance of a work environment without risks to health and safety;
- the provision and maintenance of safe plant and structures;
- the provision and maintenance of safe systems of work;
- the safe use, handling, and storage of plant, structures and substances;
- the provision of adequate facilities for the welfare at work of workers in carrying out work for the business or undertaking, including ensuring access to those facilities;
- the provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the conduct of the business or undertaking; and
- that the health of workers and the conditions at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business or undertaking.
In order to satisfy these obligations and discharge the primary duty, the PCBU must take “reasonable steps”. What is reasonable will depend on the particular circumstances, including the role exercised by the duty-holder, the materiality of the risk to health and safety and the cost involved to eliminate or reduce the risk. If a duty-holder fails to take reasonable steps and exercise due diligence to ensure that the PCBU complies with the WH&S Act, they face significant penalties, either as an officer or as an individual. Depending on the duty that is breached, and any steps taken to mitigate the impact on affected workers, an officer can be subject to maximum penalties as high as $600,000 or 5 years’ imprisonment (or both).
In addition to the primary duty, the PCBU has a duty to consult workers in respect of matters relating to health and safety. Failure to do so may attract a penalty where workers are denied the ability to take part in consultation (and to be represented at work) in relation to work health and safety matters. While consultation is a legal requirement, other benefits include creating greater awareness and commitment to work health and safety through a collaborative approach, and fostering positive working relationships which can lead to greater cooperation and trust in the workplace.
The WH&S Act requires that consultation include the PCBU sharing information with workers, giving them a reasonable opportunity to express their views about work health and safety matters, involving workers in the decision-making process and taking their views into account, and advising workers of the outcome in a timely manner. Further to the duty to consult, the PCBU has a duty to establish a safety committee if requested to do so by 5 or more workers. Penalties may apply if a duty holder fails to observe these obligations, including up to $20,000 in the case of an individual and $100,000 in the case of a corporation.
In addition to the obligations imposed on a PCBU there are specific due diligence duties imposed on “officers” of a PCBU, to ensure the person conducting the business or undertaking complies with any duty or obligation it holds under the WH&S Act. An officer’s obligation is to take reasonable steps to ensure that the officer has the relevant knowledge and understanding, or that the relevant decision or action has been taken, regarding WH&S duties. What is reasonable will depend on the relevant circumstances. An officer includes directors and any person who makes or is involved in making decisions that affect the whole or a substantial part of the PCBU. The guidelines to the legislation set out what is meant by “due diligence”. Due Diligence includes taking reasonable steps to:
- acquire, and keep up to date knowledge of work health and safety matters;
- gain an understanding of the risks and hazards associated with the conduct of the business;
- ensure the business has, and utilises, appropriate resources and processes to eliminate or minimise risk to health and safety;
- ensure the business has appropriate resources and processes for receiving and responding to information regarding incidents, hazards and risks in a timely way;
- ensure that the business has, and implements, processes for complying with its duties under the WH&S Act; and
- verify provision and use of resources and processes referred to above.
As is clear from the obligations set out above as to the WH&S duties owed by officers, which encompasses the Board of Directors, they will be responsible for ensuring compliance and can be personally liable for failing to do so.
In some circumstances, where the PCBU has committed an offence against the WH&S Act, or a major workplace incident has occurred (such as a workplace fatality), the regulator or an inspector may issue improvement notices, require the PCBU to give enforceable undertakings or commence legal proceedings. For example, in 2015, Hume Doors & Timber (Aust) Pty Ltd entered into undertakings, in lieu of prosecution after a worker was injured, to improve literacy and numeracy of staff (at a cost of $385,000) to ensure workers who spoke English as a second language were able to report safety hazards and respond appropriately to emergencies.
As should be evident from this brief overview of the WH&S Act and the legal requirements under it, work health and safety is not a vacuous body of law, and employers will not be excused for failing to comply. Employers ought to consider their work health and safety obligations, and take active steps to ensure the workplace is safe and without risk for all who use it. We recommend, at a minimum, that employers:
- ensure the “officers” of the organisation know and understand their duties of due diligence;
- regularly engage a work health and safety expert to conduct a due diligence audit on the workplace;
- ensure appropriate consultation with the workforce regarding WH&S matters;
- ensure appropriately drafted work health and safety policies are in place and employees are familiar and have access to such policies;
- provide training and information to employees and officers on their work health and safety responsibilities; and
- apart from ensuring that correct response mechanisms are in place, employers should conduct emergency response drills at the workplace from time to time.
If you wish to further discuss the steps that can be taken to mitigate the legal risks in this area or have an employment matter for which you require assistance, please do not hesitate to contact us for specialist advice.
This alert is not intended to constitute, and should not be treated as, legal advice.