Mckie v Al-Hasani and Kenoss Contractors Pty Ltd (in liq) [2015] ACTIC 1

A recent decision by the ACT Industrial Court in Mckie v Al-Hasani and Kenoss Contractors Pty Ltd [2015] has clarified the definition of an "officer" under the new work health and safety (WHS) laws, determining that a project manager's role does not fall under the definition because the role's responsibilities are primarily operational, rather than organisational. In doing so, the Magistrate has increased certainty surrounding who owes a duty of care within workplaces and has reaffirmed existing concepts of due diligence under the laws.

Background

As reported in our previous article "First Officer charged under Work Health & Safety Act", the case involved the death of a truck driver, Mr Booth, who was electrocuted after his truck came in contact with live power lines while tipping his load.

Mr Booth was an employee of David O'Meley Truck Hire, a company subcontracted by Kenoss Contractors, which had been contracted by the ACT Government to resurface roads in Turner. On the day of the incident, Mr Booth was directed to take the truck's load to the main compound; however, he was not given any direction and instead ended up at the small compound. Kenoss's workers had been previously told not to use the small compound due to its dangerous, low-hanging wires, yet the site was left unlocked with no visible warning signs regarding the presence of live power lines. The power lines were also obscured by foliage. As a result, Mr Booth had little to no knowledge of the surrounding dangers when he drove his truck into the small compound, where the incident occurred. 

Both Kenoss and its project manager, Mr Al-Hasani, were charged with committing a category 2 offence, which is contrary to s 32 of the Work Health and Safety Act 2011 (ACT) (the Act), and Mr Al-Hasani was charged as an officer of the corporation, under to s 27 of the Act. The maximum penalty for a category 2 offence under the legislation is $1,500,000 for a body corporate and $300,000 for an officer. 

Industrial Magistrate Walker found that the risk of electrocution was obvious and could have been eliminated or mitigated through the introduction of simple safety measures. Some examples of these possible measures included not using the small compound site at all, having power turned off when a delivery was required, or by providing appropriate signage to warn of the risk of the power lines. Consequently, it was found that Kenoss had clearly breached their duty of care to subcontractors and their employees.

A project manager is not an officer

In determining whether there was a breach of duty, the Magistrate first considered whether Mr Al-Hasani was an officer under the Act and, if so, whether he had exercised due diligence as required by the Act.

By examining the tasks performed by Mr Al-Hasani, the Court held that he did not meet the definition of an officer. In coming to this decision, the Magistrate looked at Section 9(b) of the Corporations Act 2001 (Cth), which defines an officer as a person:

  • who makes, or participates in making, decisions that affect the whole, or a substantial part, of the corporation's business, or
  • who has the capacity to significantly affect the corporation's financial standing, or
  • in accordance with whose instructions or wishes the directors of the corporation are accustomed to act (excluding advice given by the person in the proper performance of functions attaching to the person's professional capacity or their business relationship with the corporation's directors).

The Court examined Mr Al-Hasani's role in detail and took a broader approach than the definition of officer under the Corporations Act. The Court referred to the decision in Shafron v Australian Securities and Investment Commission[2012] where the High Court stated that in determining whether a person is an officer, the enquiry should not be confined to just the "role that person played in relation to the particular issue in respect of which it is alleged that there was a breach of duty".

Mr Al-Hasani gave evidence that he had no authority to hire or pay any workers and further that he had to submit all prices to management and get their approval before he could go ahead with work. However, he did agree that he undertook "all of the work one would expect of a project manager". There was no evidence that he had control over the business or undertakings of Kenoss, he could not give direction over which contracts should be pursued and he was not responsible for hiring or firing employees or spending funds. Magistrate Walker concluded that she was not satisfied that Mr Al-Hasani's role amounted to the level of an officer because the role was purely operational. She did however indicate that he breached his obligations as a worker, but that a charge under this provision had not been presented.

The charge against him was dismissed.

It is also worth noting that the Court heard that Mr Al-Hasani did not exercise due diligence because he was aware of the risks associated with the small compound but failed to take reasonable steps, as specified under s 27(5) of the Act, to address these risks. His failures included using an inadequate Safe Work Method Statement, not ensuring all subcontractors were aware of the risk and the lack of a process to ensure safety compliance.

Where to from here

If the reasoning of this case is to be followed in the harmonised states, it appears that an individual's role must be organisational in order to meet the definition of officer under the WHS Act. It was held to be significant that Mr Al-Hasani was not in charge of the hiring and firing of employees, tendering for projects or managing funds, which led to his role being interpreted as operational rather than organisational. This is despite Mr Al-Hasani performing the other duties common to that of a project manager. These considerations may be determinative in future decisions where state regulators are looking to prosecute officers.

We would like to acknowledge the contribution of Georgia Wells and Josh Stewart to this article.