Neil Foster is a senior lecturer at the University of Newcastle’s School of Law. He spoke to CCH about the new officers’ duty under the model Work Health and Safety Act (WHS Act).
The new officers’ duty contained in the WHS Act has attracted a significant amount of interest since the draft WHS Act (then called the Safe Work Act) was released in October 2009 (the latest draft was released in May 2010). In addition to the primary duty of care contained in section 19 of the WHS Act, section 27 requires that an officer of a person conducting a business or undertaking exercise due diligence to ensure that a duty holder complies with its obligations under the WHS Act.
This in effect imposes a positive duty upon an officer of a company to exercise due diligence. Making an officer personally liability under OHS legislation is not a new development and has been a feature of many of the state and territory OHS statutes for a long time. Foster argues that personal liability is a crucial part of OHS regulation because “a lot of research points to the fact that personal liability focuses the minds of senior management on health and safety issues.”
An important issue is how “officers” are defined under the WHS Act. The National Occupational Health and Safety Review Panel (Panel), charged with making recommendations regarding the content of the harmonised law, recommended that the WHS Act adopt the definition of “officers” contained in the Corporations Act 2001 (Cth) with a few minor amendments. This means that directors of a company and others who make or participate in making decisions about the company are covered. However, Foster sees the adoption of the Corporations Act definition as problematic because the definition picks up those who have authority to affect the financial standing of the organisation. According to Foster, “just because you can affect the financial standing of the corporation doesn’t mean that you have the capacity to affect the health and safety of those at work. It makes sense in the context of financial accountability but not necessarily in the context of OHS.”
Instead, Foster argues, the Panel would have been better off recommending the adoption of the definition contained in section 26 of the Occupational Health and Safety Act 2000 (NSW). Section 26 imposes a duty on those “concerned in the management of the company.” Although the definition adopted in the WHS Act was initially motivated by a desire to narrow the scope of the duty (by excluding “middle management”), Foster says that “ironically, it could have the opposite effect.”
The duty under the WHS Act only requires an officer to exercise due diligence. The WHS Act defines “due diligence” in section 27 to include matters such as ensuring that the person conducting the business or undertaking implement processes for complying with its duties under the WHS Act. Although the initial drafts of the WHS Act contained an exhaustive legislative definition, the most recent draft of the WHS Act states that the definition “includes” the listed factors. Foster points out that “this leaves room for courts interpreting the legislation to broaden the scope of the definition, by requiring for example, that an officer is required to provide adequate supervision to ensure that a health and safety system is carried out.”
The consequences for an officer found to be in breach of the WHS Act can be severe. The WHS Act provides for three categories of penalties, with the penalty increasing in severity depending on whether the breach resulted in a risk of a death or serious injury or illness. The highest penalty is reserved for those that demonstrate recklessness without reasonable excuse. Foster says that “the new penalties under the WHS Act are significantly higher than is now the case under state OHS legislation. For a NSW manager, who might face a $55,000 penalty at the moment, they will now face a potential $300,000 for a similar offence where there is a risk of serious harm. In addition, if they are reckless and if there was a risk of death or serious injury, the maximum financial penalty is increased from $165,000 under current section 32A in NSW, to $600,000 under s 31 [of the WHS Act].”
Some commentators have argued that “category three” offences- those where there has been a simple failure to comply with the WHS Act- should be a civil penalty provision rather than a criminal offence. However, Foster remains vehemently opposed to such a proposal arguing that “this would send the wrong message. We need to be saying that exposing someone to injury or illness as a result of work carried out is seriously unacceptable behaviour.”
One aspect of the new laws that Foster remains very critical about is the fact that the prosecution bears the onus of proof to show that an officer has not met the standard of due diligence. According to Foster, this will make prosecutions quite difficult to obtain because the prosecution needs to adduce evidence negating each of the limbs contained in the definition of due diligence.
“The logical way that the legislation ought to have been set up is that officers had to show that they had exercised due diligence. Officers are the ones likely to be in possession of the evidence showing that they had taken steps to comply with their statutory obligations. This is how OHS legislation has historically been set up, and in jurisdictions where the reverse onus of proof has existed, such as the UK, the legislation has operated without imposing undue detriment on officers,” says Foster.
Despite some of these shortcomings, Foster believes that casting the new officers’ duty as a positive duty to exercise due diligence is a step in the right direction because it sends a clear message about the importance of safety in the workplace.
Readers interested in reading some of Neil Foster’s academic writing on this issue can access his work at http://works.bepress.com/neil_foster/