In another first for South Australia, an employer has negotiated an enforceable undertaking in lieu of a prosecution under the Work Health and Safety Act 2012 (SA) (the WHS Act). Heralded by SafeWork SA in the lead up to the introduction of the WHS Model Legislation, the safety regulator has been true to its word in offering an alternative to the court room, witnesses and hefty fines.
Of note for other harmonised states, is the lower level of investment accepted by SafeWork SA in enforceable undertakings, which is perhaps reflective of the smaller South Australian economy. When there is an alleged contravention of the Act, SafeWork SA has two choices:
- it can prosecute the alleged offender and seek a penalty, or
- if requested by the alleged offender, it can accept an enforceable undertaking in lieu of a prosecution.
What is an enforceable undertaking?
An enforceable undertaking is a legally binding agreement given by the alleged offender to commit to achieving specific WHS outcomes under s 216 of the Act. Any legal proceedings in connection with the alleged offence are dismissed once the undertaking is accepted by SafeWork SA.
The purpose of an enforceable undertaking is to improve health and safety standards at the workplace, as well as for the wider community and industry. While a prosecution may fail to significantly change the behaviour of a workplace, an undertaking ensures that substantial improvements are made.
Although there are benefits to avoiding a prosecution (and the potentially significant penalty), enforceable undertakings can involve immense costs that could potentially be greater that the penalty's value. Nevertheless, undertakings are desirable because all costs determined go straight back into the workplace and community, ensuring future compliance and avoiding further contraventions of the Act.
Possible strategies that may be proposed in an enforceable undertaking include:
- implementation of special training programs to address the needs of workers, supervisors and management
- publicity regarding the alleged breach
- industry-wide awareness programs
- donations to not-for-profit organisations that focus on WHS, and
- any other strategies that extend beyond compliance with the Act and provide a benefit to workers, the community and/or the industry.
The first enforceable undertaking
On 11 May 2015, Adelaide Resource Recovery Pty Ltd (ARR), a recycling company, agreed to spend approximately $241,900 on safety initiatives set out in an enforceable undertaking. It was alleged that ARR had committed a category 2 offence in exposing an individual to a risk of death, or serious injury or illness, by failing to ensure the health and safety of its workers. As a body corporate, ARR faced a maximum penalty of $1,500,000.
On 24 May 2013, an employee of ARR was inspecting the mechanisms of a conveyer machine. The employee was observing the mechanisms driving the rotating shafts within the machine from a maintenance platform. The safety procedure required the mechanism to be isolated before inspection, but the employee did not do this. During his observations, the employee dropped a torch he was holding. When he reached out to grab the falling torch, his glove caught in the mechanism and his thumb was pinched. As a result the employee's thumb was severed approximately 1 cm from the tip.
Before the incident, ARR had safety protocols, procedures, training systems, induction systems and safe work method statements in place. However, the machine involved in the incident was inadequately guarded, as it had been removed to allow for frequent maintenance.
It was noted in the enforceable undertaking that ARR had no previous convictions and that its services and products played an important role in South Australia's recycling industry. ARR ensured the injured worker received immediate medical treatment and promptly complied with all notices issued by SafeWork SA.
As a result of the contravention, ARR spent approximately $215,050 on rectifying any deficiencies in health and safety at its workplace, including installing appropriate guarding to the machine, upgrading lighting in the area, hiring an additional construction and demolition shed supervisor, and employing a site safety supervisor. ARR also made several mandatory commitments including:
- committing that the behaviour leading to the alleged contravention had ceased and would not reoccur
- committing to ongoing effective management of WHS risks
- committing to disseminate information about the undertaking to relevant parties
- committing to participating constructively in all compliance monitoring activities of the undertaking
- retaining the additional construction and demolition shed supervisor, and ensuring they conduct spot audits, site safety walks and revising the Safe Work Method Statements in consultation with workers
- retaining the site safety supervisor
- publishing a safety hazard alert for its industry on the importance of adequate guarding
- having a representative speak at a forum conducted by SafeWork SA
- assisting in running a training program conducted by Mission Australia, and
- paying SafeWork SA's costs associated with the undertaking.
What does this mean for employers?
This shows that SafeWork SA will accept an enforceable undertaking in lieu of a prosecution in South Australia and that it need not be at the financial level seen interstate. It also demonstrates that the costs associated with hiring new employees can be included in the undertaking.
However, it is important to note that SafeWork SA will only consider an undertaking proposed by the alleged offender and will not propose it themselves. Undertakings will not be accepted for a Category 1 offence or where the alleged contravention has resulted in a fatality or serious injury and there is a suggestion that the offender has been reckless under the Act.
Can you force the regulator to accept an enforceable undertaking?
Unfortunately there is no power to compel SafeWork SA to accept a proposed undertaking, it is at their discretion whether or not they will proceed with prosecution.
What factors will the regulator consider in making an assessment?
SafeWork SA will require the undertaking to benefit individuals at the worksite, the sector in which the incident took place and the community at large. It is only where an undertaking meets these three objectives that it will be considered.
For practical purposes, the undertaking's action items must be tangible strategies with defined time frames and costs. The undertaking must also demonstrate an overall commitment to effective risk management, compliance monitoring and preventing a reoccurrence of the alleged contravention.
An undertaking is an acknowledgment by the offender that changes need to be made in their workplace to address and safeguard against further incidents, consequently it must not contain or imply any denial of liability. In addition, an undertaking cannot set up defences for non-compliance or for contraventions through its terminology.
In assessing whether to enter into an undertaking, SafeWork SA will also consider:
- the proposed undertaking's merits and benefits
- the person's financial ability to meet the terms of the undertaking
- the significance of the commitment compared to the capability of the person
- the person's compliance history
- the support the person has provided to the injured person
- input from the injured person, and
- the likely outcome should the matter be dealt with through legal proceedings.
An undertaking becomes enforceable once it is accepted by SafeWork SA.
What happens if there is non-compliance with an enforceable undertaking?
There are penalties for not complying with an enforceable undertaking. SafeWork SA can apply to the court for an order to enforce compliance, with the maximum penalty for a body corporate being $250,000 and $50,000 for an individual.
In the event of an incident, employers should seek advice as to whether an enforceable undertaking suits your needs.
We would like to acknowledge the contribution of Georgia Wells to this article.