The Safety Show. The New Work Health and Safety Laws. Corporate Liability and Personal Liability for Directors & Senior Managers

Transcription

1 The Safety Show FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES The New Work Health and Safety Laws Corporate Liability and Personal Liability for Directors & Senior Managers Siobhan Flores- Walsh, Partner Occupational Health and Safety 25 October 2012

2 Key Issues Today FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES Legal Obligations: Corporate & Individual Consequences of breach:penalities & insurance Practical Guidance: Legal and Management Strategies Special Note About Horizontal Consultation

3 Jurisdiction Current status Status of Model Law Adoption Australian Capital Territory Introduced 1 January 2012 Commonwealth Introduced 1 January 2012 New South Wales Introduced 1 January 2012 Northern Territory Introduced 1 January 2012 Queensland Introduced 1 January 2012 South Australia FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES WHS Bill currently before parliament. Bill was introduced and then withdrawn on the first occasion. Commencing 1 January 2013 Tasmania WHS Bill first reading in Legislative Assembly on 18 October Commencing 1 January 2013 Victoria Western Australia WHS Bill has not yet been introduced into parliament. Will probably adopt the WHS laws in their current form later WHS Bill has not yet been introduced into parliament. Will probably adopt the WHS laws in their current form but timing is not clear

4 Changes in snapshot Old regime Employer Primary duty holder New regime PCBU Deemed liability Directors & managers Positive, personal & criminal liability Quasi-criminal Jurisdiction Criminal Max $550K Penalties Max: $3m and gaol, Implied Concurrent Duty Holders Express

5 The New Primary Duties of Care The Duty Your personal liability arises here The governed activity Who has the duty? Relevant Standard Operation of the business or undertaking Person conducting the business or undertaking (PCBU) Reasonably practicable Organisational decision making and governance Officers Duty of Care Due diligence Work activities (including supervision) Workers Duty of Care Reasonable care Circumstantial attendance at the workplace (i.e. visitors) Others Duty of Care (i.e. at a workplace) Reasonable care

6 This is a criminal regime (for primary duties) Category Description Maximum penalty Category 1 Most serious cases Breach of the primary duty involving recklessness and serious harm to a person or risk of such harm. Corporation: $3 M Officers: $600,000 Gaol up to 5 yrs Workers & other persons: $300,000 Gaol up to 5yrs Category 2 Breach of the primary duty where serious harm or the risk of it without the element of recklessness. Corporation: $1.5 M Officers: $300,000 Workers & other persons: $150,000 Category 3 Breach of the duty that does not involve high risk of serious harm. Corporation: $500,000 Officers: $100,000 Workers & other persons: $50,000

7 Who and what is a PCBU? Who? A person (corporate, individual or public authority) who conducts a business or undertaking. Duty? The PCBU must take all steps reasonable practicable to ensure the health and safety of workers and others affected by the business. Scope Workers include volunteers, contractors, students on placement Others include the public NOT limited to the workplace 7

8 Reasonable practicability Control is relevant to what can be done & if it is reasonable to do it

9 What is the officer s duty of care? PCBU Duty or obligation Officer must exercise Due Diligence to ensure that the PCBU complies with that duty or obligation 9

10 Who is an officer? Director Trustee of a compromise or other arrangement Company Secretary Administrator, Liquidator, received or receiver manager Shadow directors - instructions or wishes accustomed to act Officer Affects financial standing Makes, or participates in, decisions affecting the whole or a substantial part of business

11 Identifying the officers Consider Directors Company Secretaries Certain members of Senior Management Shadow Directors (individuals & corporations)

12 Due diligence includes taking reasonable steps to Provide and use appropriate resources & processes to minimise WHS risks Monitor information on incidents, hazards and risks and respond in a timely way to that information Gain an understanding of the nature, hazards & risks associated with the operations of the PCBU. Ensure work health and safety & legal compliance Acquire and keep up-to-date knowledge of WHS matters Due Diligence Verify the use of these resources and processes These six elements fall into two categories: 1. Knowledge and understanding and 2. Management action

13 First Element - To Know Resources and Processes Monitor OHS Activity Understand Business & Hazards Legal compliance Taking reasonable steps to acquire and keep up-to-date knowledge of work health and safety matters. Knowledge OHS Due Diligence Verification Requires a knowledge management system Need a baseline, up-skill as required & maintain Knowledge includes, safety leadership, officers & organisational legal obligations, risk management, incident investigation and auditing.

14 Second Element To Understand Resources and Processes Monitor OHS Activity Taking reasonable steps to gain an understanding of the nature of the operations of the PCBU and generally of the hazards and risks associated with those operations. Understand Business & Hazards Knowledge OHS Due Diligence Legal compliance Verification 1. An officer must be able to accurately list the critical risks in their business and have insights into how they arise and how they are managed. 2. Safety observations give first hand understanding.

15 Third Element Ensure Resources and Processes Resources and Processes Monitor OHS Activity Understand Business & Hazards Legal compliance Taking reasonable steps to ensure that the PCBU has available for use, and actually uses, appropriate processes and resources to eliminate or minimise risks to health and safety from work carried out by the PCBU. Knowledge OHS Due Diligence 1. Reasonable steps to ensure that adequate processes are in place (e.g. accreditation to AS/NZS 4801) 2. Assess the safety impact of every resource decision. Verification

16 Fourth Element To Monitor Resources and Processes Monitor OHS Activity Understand Business & Hazards Legal compliance Knowledge OHS Due Diligence Verification 1. Requires appropriate processes for: - Receiving; - Considering; and - Responding in a timely way to information about incidents, hazards and risks. Taking reasonable steps to ensure that the PCBU has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information. 2. Requires the balanced use of lead and lag indicators.

17 Fifth Element - To Comply Resources and Processes Monitor OHS Activity Understand Business & Hazards Legal compliance Knowledge OHS Due Diligence Verification 1. Cost/benefit analysis about whether to comply = breach. 2. Requires a culture of legal compliance. 3. Requires a process for legal compliance audits. 4. Reviews must be conducted by competent persons. 5. Reviews are required at reasonable intervals. Taking reasonable steps to ensure that the PCBU has, and implements, processes for complying with the PCBU s duty under the WHS Act.

18 Sixth Element To Verify Resources and Processes Monitor OHS Activity Understand Business & Hazards Knowledge OHS Due Diligence Legal compliance Verification 1. Verify that there are reasonable steps in place, and being used, to ensure: 1. Adequate processes 2. Adequate resources 2. Verify (typically) through: 1. Accreditation against a credible standard 2. Monitoring lead and lag indicators 3. Reviewing the expertise and numbers of relevant personnel. 4. (and sometimes) safety observations Taking reasonable steps to verify that there are reasonable steps are in in place and being used to ensure : Adequate Processes Adequate Resources

19 Practical Compliance In essence The officer s duty requires the officers of a corporation to put in place a WHS Governance Programme that is designed to ensure that officers interrogate their company s work health and safety management system (WHSMS) This means - An officer can breach the duty merely by failing to implement an effective WHS Governance Programme, even though there may not have been a work health and safety incident at the officer s company.

20 Relationship between a WHS Governance Programme & Work Health and Safety System 1. The Due Diligence System facilitates compliance with the Officer s Duty 2. The Work Health and Safety System facilitates compliance with the PCBU s duty. WHS Governance System Work Health and Safety System The Due Diligence System Interrogates the WHSS to Ensure PCBU compliance

21 The Two Components of a WHS Governance Programme A programme of action for officers that, if undertaken, will demonstrate compliance with the officer s duty A mechanism to record the actions undertaken, to create evidence of officers compliance with the officer s duty.

22 The Workers duty Take reasonable care for own health and safety Take reasonable care that his or her acts or omissions do not adversely affect health and safety of others Worker Duty Comply, so far as worker is reasonably able, with any reasonable instruction that is given by PCBU to allow the PCBU to comply with the WHS Act Co-operate with any reasonable policy or procedure of the PCBU relating to health and safety at the workplace that has been notified to workers 22

23 Don t forget the Senior Worker - Reasonable Care is on a continuum Low control & autonomy High control & autonomy What would the reasonable person in their position do in the circumstances. A court looks all the relevant circumstances, including the worker's experience, position and training. Managers they will be judged by the level of control over a particular person/project/site/activity, including their level of autonomy or whether they act under the instructions of and report directly to a more senior manager.

24 Concurrent Duty-holder Consultation Duty-holder Duty-holder Duty-holder Examples of Concurrent Duty-holders include: Consultants Contractors Third Party Logistics Landlords

25 Three key issues What are concurrent duty holders (and how do you identify them)? How do you discharge the duty? Helping other concurrent duty holders play their part (and protecting your organisation)

26 Who are the concurrent duty holders? First step is to identify your duties you can t co-ordinate with others until you know what your duties are as a Person Conducting a Business or Undertaking and the upstream duties that are sub-sets of that duty: Person in management or control of a workplace (includes landlords, licensees and property managers) Person in management or control of fixtures, fittings or plant at a workplace Designers of plant, substances or structures, which are to be used, or could reasonably be expected to be used, at a workplace Manufacturers of plant, substances or structures, which are to be used, or could reasonably be expected to be used, at a workplace Importers of plant, substances or structures, which are to be used, or could reasonably be expected to be used, at a workplace Suppliers of plant, substances or structures, which are to be used, or could reasonably be expected to be used, at a workplace

27 Consult, co-operate and co-ordinate Consultation involves: Providing information Receiving a response to the information Considering the response An exchange of information designed to produce a shared understanding (per the Code of Practice)

28 Consult, co-operate and co-ordinate #2 Co-operation involves working together Ensure free flow of information Timely responses to requests from other duty holders Co-ordination involves arranging work so that there are no gaps in compliance Degree of overlap between the three Cs but you need all three

29 How does this work in practice? Likely to work across a number of sites so may not have understanding of specifics of your site Issues with contractors Have specialist skills you don t have so how do you supervise? Engaged for their skills (or on price) rather than because of known safety compliance Not part of your safety culture (and likely to have a lower commitment to your business)

30 Contractor management consult, co-operate & co-ordinate How safety aware are they? If possible, find this out before you engage them (questionnaire as part of tender process) If not possible, find out before they start work Establish their commitment to your work and site Site-specific inductions Make their systems work with your systems Communications and co-ordination Who are the points of contact and what are the methods of communication? How do you ensures that information flows from point of contact to all relevant workers? When your information changes, that change needs to be communicated how? Who is auditing compliance?

31 Lease of premises as workplace Concurrent duty holders other than contractors? Does the landlord understand their obligations? Does the lease deal with safety issues? Acquisition of workplace plant (machinery, equipment, appliances, containers, implements and tools) Does the supplier understand their obligations? Do you have the right warranties/indemnities?

32 Helping your concurrent duty holder play (and comply) Contracts are useful in two ways: To ensure that the safety obligations of the parties are considered and understood from the start of the relationship To record agreement as a source of rights during the relationship If your contracts with other duty holders don t deal with safety issues, why not?

33 Five Key Changes/Take Outs about the New WHS Laws Primary Duty Holder Scope of Liability Officer Duty Nature of Liability Concurrent Duty Holder Consultation PCBU Criminal Increased & Broad Express Onerous & Personal

34 About the Presenter Siobhan Flores-Walsh is a Partner in the Sydney office of Norton Rose Australia. She has worked in Occupational Health Safety and Security/ Employment/Industrial Relations for 20 years and is listed as a leading Australian OHS/Employment lawyer in Chambers Global 2011 and Siobhan regularly conducts client training in OHS; discrimination, bullying and harassment; complaints handling, workplace surveillance and flexible work practices. She is sought after in the speaking circuit, presenting regularly at commercial conferences. Siobhan is the co-author of the two editions of the CCH publication Australian Master Human Resources Guide. Siobhan is published and speaks regularly in relation to WHS and related areas

35 Disclaimer The purpose of this presentation is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Norton Rose Australia on the points of law discussed. No individual who is a member, partner, shareholder, director, employee or consultant of, in or to any constituent part of Norton Rose Group (whether or not such individual is described as a partner ) accepts or assumes responsibility, or has any liability, to any person in respect of this presentation. Any reference to a partner or director is to a member, employee or consultant with equivalent standing and qualifications of, as the case may be, Norton Rose LLP or Norton Rose Australia or Norton Rose OR LLP or Norton Rose South Africa (incorporated as Deneys Reitz Inc) or of one of their respective affiliates. 35