When the Work Health and Safety (WHS Act) commenced at the start of 2012, lawyers began sounding the alarm over the more onerous personal liability provisions in the legislation and of the risk that in certain cases (of recklessness), directors and officers could face imprisonment.
At the time lawyers were accused of scaremongering or exaggerating the new risk for Corporation’s Officers (Directors and the Executive Management) presented by the personal obligation of due diligence in regard to health and safety obligations.
However, the past two years has seen a significant increase in the penalties being imposed on businesses and individuals who fail to comply with their WHS and electrical safety duties. We are also now witnessing the emergence of a pattern of individual directors being imprisoned for reckless breaches of their due diligence obligations.
Three recent examples are provided.
A director/ business owner was sentenced to 6 months’ imprisonment following a 2017 workplace fatality. The 72-year-old director of a scrap metal business was taken into custody after pleading guilty to:
- failing to comply with her duty not to expose other persons to risks arising from her undertaking; and
- recklessly engaging in conduct that placed or may have placed another person who is at a workplace in danger of serious injury.
In February 2017, a worker died after falling from forklift tines. The deceased worker was riding on the tines which also carried a metal bin. The tines were about 3 metres above the ground. The deceased and a metal bin fell from the tines with the bin striking the deceased.
The director/owner was operating the forklift. She was not licensed to operate the forklift. She also failed to ensure that the bin was secured on the tines.
The director was ordered to pay $10,000 for the first offence and sentenced to six months’ imprisonment for the second offence.
In early February 2019, a Queensland company director was convicted and sentenced to one year imprisonment (with only a portion suspended) after the 2014 death of a 62-year-old roofer. The director’s company, Multi-Run Roofing Pty Ltd (Multi-Run), was also convicted and fined $1 million.
The alleged offence was a category 1 offence – reckless conduct that exposed an individual to the risk of death or serious injury.
Multi-Run, was contracted to undertake roofing work at a factory at Cooroy in Queensland. During the roofing work, the deceased worker fell almost six metres from the factory roof. The business failed to install protection on or near the edge of the shed.
There was evidence that it was reasonably practicable to install safety rails around the roof’s edge. Further, the cost of installing safety rails (around $5,000) had specifically been included in the $300,000 contract price for the work. Rather than install safety rails Multi-Run and the director developed an alternative system of work. The workers were to use 2 scissor lifts and safety harnesses to access the roof. That system was not made available on the day the worker fell from the roof. Both the company and the director were found guilty of reckless conduct.
In another Queensland prosecution, a director was committed to stand trial in the District Court of Queensland (and now faces jail of up to 5 years). His company could be fined up to $3 million. The prosecution arises out of the death of a worker who was using a heat gun in an area in which fuel vapours were present. The worker was burnt to death when the fuel vapours ignited.
The prosecution claims that the director was indifferent towards the hazard and failed to ensure there was a safe system of work to prevent the ignition. That is, it’s not that there was any active direction to the worker to work in a dangerous way, Rather, the director and business ignore or was in different to ensuring safe systems of work.
In this case the recklessness is the indifference or the failure to actively manage safety.
What do these cases mean for you?
The decisions to impose custodial sentences is consistent with an increasing willingness by the Courts to wield the full penalty regime in the legislation and to recognise that compliance with the WHS and Electrical Safety obligations are paramount to the community.
These cases are a significant development. In the past, individuals in Queensland have received suspended custodial sentences for serious WHS breaches. The custodial sentences however add significant weight to the argument that individuals who recklessly fail to comply with their personal WHS duties are more and more likely to be handed a custodial sentence.
It is also clear that recklessness can be indifference or failing to be active in pursuing safety.
What must you do?
With the risk of custodial sentence more and more possible, businesses and in particular a business’ directors and officers must – at the very least:
- understand their personal liability obligations
- recognise practical steps to implement to ensure they meet their due diligence obligations and that their company complies with its WHS/Electrical Safety obligations
- ensure that they act in safety matters and not ignore or demonstrate indifference particularly in relation to very high-risk activities
- understand the scope of an inspectors’ powers when responding to WHS investigation; and
- be prepared to instruct their lawyers immediately in the event of a serious safety incident to ensure that any investigation is conducted according to law and that the directors’ and officers’ rights and entitlements are protected and met.
If you do not know the scope and extent of your personal liability obligations, please contact us if you have a serious safety incident, call us immediately.