In response to a guilty verdict of non-compliance to Occupational Health and Safety laws, judges usually apply financial penalties to companies and individuals. These penalties are intended to deter the offenders from re-offending and also to set an example to others.
The following Case Studies show however, that the court will consider proof that the guilty party has a valid Safety Management System, as mitigation towards the penalty which it decides on and hence a clean safety record can result in a reduced penalty.
JSN Hanna Pty Ltd – Penalty Reduction
In this case the principle contractor JSN Hanna Pty Limited (the offender), pleaded guilty to an offence, that as a person who had a health and safety duty under section 19(1) Work Health and Safety Act 2011 (the Act), it failed to comply with that duty and thereby exposed Taiene Silva to a risk of death or serious injury, contrary to section 32 of the Act. The maximum penalty for this offence is a fine of $1.5 million.
In Dec 2012, JSN Hanna was the principle contractor for the development of residential units. Mr Silva who was 17 years old at the time, was employed as a labourer by a sub-contractor Ultra Wall. He had only been working for 3 months, having just finished his Higher School Certificate
Mr Silva was installing a panel on the second floor and was standing on scaffolding in the lift shaft. In order to balance himself, he placed his foot on a piece of timber. The timber was there to align the wall and serve as form-work when concrete was poured – it was not meant to weight bearing. The timber gave way and Mr Silva fell down a height of 12m. He sustained a head wound requiring 12 stitches, swelling and lacerations to the face, neck pain and bruising. The gap through which he fell, was between a crane tower in the lift shaft and the scaffold. Hand rails had been erected around the lift shaft, but on the day of the accident the handrails had been removed on the one side, to allow access to the scaffolding.
There was a Safe Work Method Statement (SWMS) in place, which identified falling from height as a risk and listed the main control measure as the installation of handrails and physical guarding. Mr Silva had received induction training and attended tool box talks (although these were mostly not documented) and was placed with a more experienced worker to instruct him. JSN Hanna conducted daily safety walks at the site to ensure that it was safe for workers and weekly documented site inspections were also undertaken. At the date of the incident the offender had in place a WHS Project Safety Plan (PSP). The PSP included site safety rules, which provided that elevated works must be carried out in accordance with regulations, WorkCover directives, Codes of Practice and specific instructions. Copies of the site rules were displayed at the entrances to the site, lunch rooms and the site office.
Mr Hanna from JSN Hanna, pointed out that they are a small family business that only took on one project at a time. They have been in operation for 45 years and had never previously had a serious incident.
Following the incident the offender took a number of steps including:
• Dismissing the subcontractor involved
• Installing additional scaffolding in the lift shaft
• Commissioning a safety risk audit
• Arranging for officers to complete additional WHS training
• Conducting spot checks on workers to ensure compliance with safety requirements
• Tool box talks were documented and new workers were required to demonstrate their understanding of the topics covered
• Making WHS compliance a fundamental condition of the contract with sub-contractors
• Employing a full-time Site Safety Coordinator and Compliance Officer and
• Reviewing WHS systems and practices
The judge noted that the penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. However the need for specific deterrence is substantially reduced by reference to the extensive efforts of the offender to comply with the Act.
Mitigating factors taken into consideration:
• The offender did not have any prior convictions
• The offender was a person of good character. The offender is a good corporate citizen. It employs a number of people and has supported charitable causes and works
• JSN Hanna has a reputation as a safe and responsible entity
• The offender is unlikely to re-offend. The offender took immediate and comprehensive steps to improve its safety systems at the site, following the incident
• The offender expressed remorse for its failures and breach of the safety laws
• The offender entered a plea of guilty
• The offender co-operated with the investigation
In conclusion JSN Hanna was convicted and fined $87,500. They were also ordered to pay the prosecutor’s costs of $70,000.
Below are three additional Case Studies where the same conclusion was reached and penalties were reduced.
Trew Stone Building Contractors
In July 2009, the South Australian Industrial Relations Commission fined Trew Stone Building Contractors Ltd, a discounted penalty because the company took active steps to improve its OHS practices and policies, to the required standard, after a workplace accident.
Trew Stone was nearing the completion of renovations when one of its employees fell from scaffolding. A prosecution was brought and Trew Stone pleaded guilty.
In assessing the penalty in a plea mitigation, the Industrial Magistrate took into account:
• the risk of injury
• the regret showed by the offender and its guilty plea
• Trew Stone’s very good safety record
• Trew Stone’s full cooperation with investigations and
• improvements to its OHS standards
A penalty of $14,875, plus levy and costs, was imposed, including a 15 per cent discount for the guilty plea.
Premier Precast Pty Limited
At concrete product manufacturing company, Premier Precast Pty Limited (the employer), large concrete mixers were used as part of its day-to-day operation. Peter Barrett was on his third day of employment there, when he was asked to hose out a concrete mixer. He was unsupervised while performing the task, despite never having hosed out a mixer before. He slipped and fell into the mixer while it was in operation, causing horrific injuries that ultimately led to his death.
The employer pleaded guilty to a charge under section 8(1) of the Occupational Health and Safety Act 2000 (NSW) for failing to ensure the health and safety of an employee. The particulars of the charge included that there was a failure to:
• ensure the moving parts were adequately guarded
• ensure a safe system of work
• ensure adequate risk assessment and
• provide necessary instruction, training and supervision
The court found that the risk to Mr Barrett had been reasonably foreseeable as Mr Barrett:
• had only been working for the employer for three days
• had no experience in the work he was instructed to do
• was alone and unsupervised at the time of the accident and
• had not received adequate instructions
• the mesh guard of the mixer was not affixed and could be removed while the mixer was in operation.
The maximum penalty under the Act was $550,000. The judge assessed the value of an early guilty plea at 25 per cent of the maximum penalty. The absence of prior convictions, the fact that the employer cooperated with WorkCover during the investigation and prosecution and the employer’s clear remorse, were all considered bases for a further reduction in the penalty. The employer was fined $99,000.
Trading Metals Pty Ltd
A recent decision in the South Australian Industrial Relations Court has shown that an Occupational Safety and Health (OSH) management system can significantly reduce the penalty imposed following an OSH incident, by demonstrating a commitment to improve safety.
In Boland v Trading Metals Pty Ltd, the respondent was charged with breaching S32 of the Work Health and Safety Act 2012 (SA), after one of its employees lost the top of his right ring finger, when it became trapped by a pallet that was being loaded onto a truck by a forklift at his workplace.
Trading Metals entered an early plea of guilty and was found to be co-operative during the investigation and prosecution stage. Further, the court heard that:
• this was the first offence for Trading Metals
• following the incident, Trading Metals took positive steps to address the deficiencies at its work site and
• prior to the incident, Trading Metals had made attempts to address work health and safety issues commencing with a legislative compliance audit.
Taking into account all these matters, the Industrial Magistrate found that Trading Metals should be penalised ‘in the context of an organisation that had taken steps to work safely’ and imposed a fine of $65,000. This fine was then reduced by a further 40% for the early plea of guilty, resulting in an actual fine of $39,000 (amounting to less than 3% of the maximum penalty of $1.5million).
The above case studies indicate that:
• Employers should ensure that new staff are adequately trained and supervised.
• Employers should conduct regular risk assessments and provide workers with adequate training, instruction and supervision.
• Cooperation with workplace safety authorities, including an early plea, may reduce the penalty imposed.
• Positive steps taken by employers to improve existing OHS standards in the workplace may mitigate penalties for breaching OHS legislation.
• The importance of maintaining up-to-date OHS policies is highlighted.
Author: Janine Nicholson for myosh365