A recent NSW Supreme Court decision has confirmed that an inspector’s power to obtain documents under the Work Health and Safety Act 2011 (NSW) extends to documents located outside the jurisdiction.
Perilya Broken Hill Limited (PBHL) operated a zinc, lead and silver mine in Broken Hill, NSW. PBHL’s parent company, Perilya Ltd, and board of directors (Board) were located in Perth, Western Australia. Perilya also operated mining operations in other Australian States and overseas.
In June 2012, a PBHL employee was seriously injured when he fell approximately 14 metres down a mine shaft at the Broken Hill operation (Incident). Perilya was investigated by the NSW State Department of Trade and Investigation (Regulator) in respect of the Incident. On behalf of the Regulator, an inspector issued two notices under section 155 of the Work Health and Safety Act 2011 (NSW) (WHS Act) which required Perilya to, among other things, produce documents relating to:
- minutes of Board meetings between 24 May 2008 and 30 December 2012; and
- any documents prepared during the above period at the direction of Perilya’s executives or managers to advise the Board of matters relating to safety performance at the mine.
The inspector was aware of an earlier incident at the mine in 2008 and hence the request covered this period.
Initially, Perilya provided the Regulator with certain documents that fell within these categories of requests, however the copies were heavily redacted due to an objection that some of the documents contained commercially sensitive information. Perilya did not provide other documents that were requested as it argued they were not relevant and legal professional privilege applied. It also argued that the fact that the documents were located outside the jurisdiction where the incident had occurred, and that the regulator had requested information under the auspices of both the old and new WHS Act, rendered the notice invalid.
Subsequently, the regulator requested unredacted copies of certain of the documents previously provided, however Perilya again refused to provide these on similar grounds.
Perilya was eventually charged with two offences for failing to comply with notices to produce documents under section 155 of the WHS Act, and was ultimately found guilty of the offences and ordered to pay a fine of $20,000 for each offence and costs of $74,281.
Perilya appealed this decision in the New South Wales Supreme Court on the principal ground that the notices issued by the regulator under the WHS Act were invalid.1
According to the Supreme Court, for a notice to be lawful and properly issued under section 155 of the WHS Act, an inspector must reasonably believe that the documents relate to a possible contravention of the Act, and that the documents are necessary to assist the Regulator to monitor or enforce compliance with the WHS Act.
To successfully resist this kind of notice, the duty holder would be required to demonstrate a “reasonable excuse” not to produce the disputed documents, such as a claim of legal professional privilege.
In rejecting Perilya’s appeal on this issue, the Supreme Court found that:
- jurisdiction was of no consequence as territorial limitations did not invalidate the relevant notices. Therefore, the fact that Perilya was registered in Western Australia and its office was located in Perth were not decisive in considering the validity of notices issued under the NSW WHS Act in respect of a NSW site.
- Perilya was directly involved in the NSW mine on a number of levels including, but not limited to, the fact that the company and its Board had ultimate control over the operations;
- a failure to provide health and safety information (ie Board minutes that refer to safety matters) can be indicative there has been a contravention of the WHS Act; and
- sensitive commercial information that is subject to a request under section 155 can be protected under the legal professional privilege and confidential information provisions of the WHS Act.
Bottom line for employers
The powers and functions of the Regulator under the WHS Act, and other equivalent Acts, are broad in scope. Although penalties apply for not complying with statutory notices (such as those issued under section 155), there may be reasonable grounds for objecting to them.
When assessing whether there are reasonable grounds to object, employers should consider whether:
- the notice was issued properly:
- the notice is valid;
- the correct entity has been served;
- the recipient is capable of complying with the notice; and
- whether or not legal professional privilege applies to the requested information.
Individual officers who are subject to proactive due diligence obligations under the WHS Act and who are served with a section 155 notice should seek legal advice immediately, particularly where there is an extra-territorial element.