Earlier this year, the Western Australian Court of Appeal confirmed the critical importance of effective monitoring, review and enforcement of safe work procedures for the directors, managers and officers of corporations in its decision in Fry v Keating [2013] WASC 109.

The proceedings involved an appeal following the prosecution of D&G Hoists and Cranes Pty Ltd (Company) and its directors for contraventions of the Occupational Safety and Health Act 1984 (WA) (OS&H Act) after the fatal injury of an employee that occurred when a pack of crane components slipped in the course of being lifted and moved at the Company’s premises in October 2007.

Following a trial, the Magistrate found that the Company had breached Section 19 of the OS&H Act by failing, so far as practicable, to provide and maintain a working environment in which its employees were not exposed to the risks of being injured or killed, and that this failure caused the death of the employee. The Magistrate also found that the offence was attributable to neglect on the part of the directors, in contravention of Section 55 of the OS&H Act.

The Company was fined $90,000 and each of the directors was fined $45,000.

The Company and the directors appealed the decision to the Supreme Court. The Company appealed on the basis that the sentence imposed against it was “manifestly excessive”, but did not appeal its conviction. Each of the directors appealed their convictions and also the sentences imposed against them.

The Supreme Court dismissed the Company’s appeal (although it reduced the fine by apportionment (an issue in the appeal to the Court of Appeal)). The Supreme Court also dismissed the directors’ appeals against their convictions, but allowed the directors’ appeals against the sentences imposed against them and apportioned the Company’s original fine of $90,000 between the Company ($70,000) and each of the directors ($10,000 each) on the basis that they were “joint offenders” within the meaning of Section 55 of the Sentencing Act 1995 (WA) (Sentencing Act).

The Company did not participate in the further appeal to the Court of Appeal and had, by the time of the hearing before the Court of Appeal, gone into liquidation. Therefore, the appeal before the Court of Appeal related, primarily, to the directors and the apportionment of the penalty between them and the Company.

Each of the directors contended that:

  1. the Court erred in law in finding the directors guilty of neglect attributable to the Company’s commission of the offence when there were no facts or evidence capable of supporting a finding or an inference that they knew or ought to have known of unsafe methods being used on the day of the incident;
  2. the Court erred in failing to require the prosecution to particularise the specific act of neglect of the directors, which was said to have attributed to the commission of the offence by the company; and 
  3. in the absence of the proper application of Section 55 of the Sentencing Act, the Court should have found that the sentences imposed on the directors by the Magistrate were excessive, having regard to the current sentencing practices and level of culpability attributable to the commission of the offence by the Company.

The prosecution appealed the apportionment findings of the Supreme Court and contended that the Court erred in law in holding that the directors were “joint offenders” within the meaning of Section 55 of the Sentencing Act and as such, the ability for the Court to impose one fine and to apportion that fine between the Company and each of the directors.

The issue relating to the apportionment of the penalty turned on the proper construction of Section 55 of the Sentencing Act and, in particular, whether the Company and the directors were properly “joint offenders” within the meaning of Section 55 of the Sentencing Act.

The term “joint offenders” is defined in the Section 55 of the Sentencing Act as:

“Persons who are each convicted of an offence because a legal relationship between them (such as co-owners of property) results in each of them being criminally responsible for the act or omission constituting the offence.”

Section 55 of the OS&H Act states:

“Where a body corporate is guilty of an offence under this Act and is proved that the offence occurred with the consent or connivance of, or was attributable to any neglect on the part of, any director, manager, secretary or other officer of the body, or any person who was purporting to act in any such capacity he or she, as well as the body corporate, is guilty of that offence”.

The Court of Appeal found that the directors were not guilty of an offence because of their legal relationship with the Company. This is because Section 55 of the OS&H Act requires there to be “consent, connivance, or neglect” on the part of the director, manager, secretary or other officer (or person purporting to act as the same) and that this was an additional element to the offence. The Court of Appeal therefore found that it was not the directors’ legal relationship with the Company that resulted in them being criminally responsible, but this additional element, namely their “consent, connivance, or neglect” which gave rise to the offence.

Consequently, the Court of Appeal has confirmed that directors, managers, secretaries or other officers (or person purporting to act as the same) stand alone and not jointly with their corporations when charged. It is therefore imperative for them to be able to demonstrate an absence of “consent, connivance, or neglect” on their part.

What are also striking about the decision are the (unfortunately all too common) circumstances which founded the charges against the directors and which ultimately disposed of their appeals against their convictions.

Shortly stated, the facts which were established at the trial (and which were not in dispute on the appeal) were:

  1. The Company operated a workplace including a hoist, crane and storage yards.
  2. The Company’s operations included the movement of crane parts (referred to as L68 Packs).
  3. An L68 Pack comprised 16 components which each weighed 375kg, stacked into interwoven rows of eight.
  4. The directors of the Company were experienced in an industry involving the slinging of loads, and both were qualified dogmen and riggers.
  5. Each of the directors were “hands on” in terms of being based at the workplace and frequently in the yard.
  6. At the time of the incident, the hierarchy within the workplace (from top to bottom) was: 
  1. the directors;
  2. an operations manager;
  3. a yard supervisor; and
  4. a leading hand, who allocated jobs to workers in accordance with instructions from the yard supervisor.
  1. Most of the workers were qualified dogmen and/or riggers.
  2. There was a hazard in the workplace in regard to the lifting of L68 Packs.
  3. Any movement of L68 Packs by a method which involved securing only the bottom two of the 16 components of the pack (referred to as Method 2) was incorrect and dangerous and created the risk of injury or death.
  4. A method of lifting which properly encapsulated all components (referred to as Method 1) was the appropriate method to lift L68 Packs.
  5. In 2004, the directors had discussed with the yard supervisor the appropriate method for slinging L68 Packs and had decided to use Method 1.
  6. The yard supervisor’s administrative duties did not permit him to give full attention to the yard.
  7. Method 2 had been in use at the workplace on a regular basis for some time prior to the incident.
  8. The directors did not know that Method 2 was in use.
  9. Five workers, who were recently engaged prior to the incident, believed, based in part on the instructions from more senior dogmen/riggers, that Method 2 was the method to be used in moving L68 Packs at the workplace.
  10. The directors believed or thought that the yard supervisor was enforcing the use of Method 1.
  11. One of the directors accepted that: 
  1. it was one of his responsibilities to oversee the work of workers and to see that it was done safely; and 
  2. workers sometimes “do things in a way that they shouldn’t”;
  1. It was foreseeable that a worker might use a method other than Method 1 in slinging L68 Packs.
  2. The provision and maintenance, so far as practicable, of a working environment in which workers were not exposed to hazards required there to be supervision of dogmen/riggers (despite their qualifications) to ensure that the correct method of moving L68 Packs was in use.
  3. There was no a consistent induction process in place and the deceased worker had not been the subject of an induction.
  4. At the time of the incident, a written safety procedure was being formulated, but had not been put in place.
  5. There was no consistent system in place whereby dogmen/riggers who were new to the business were shown how to correctly sling an L68 Pack.
  6. There was a breakdown of the supervision system in the workplace in that:
  1. some time prior to the incident, the yard supervisor reported to his supervisor that Method 2 was being used, but nothing was done about it;
  2. the operations manager had no training in occupational health and safety, and had no experience in dogging or rigging and would not have known whether slinging was being done properly or not;
  3. the yard supervisor considered the leading hand to be his “eyes in the yard”, but the leading hand had only ever seen Method 2 in used; and
  4. there was no formal safety officer engaged by the Company.

The above circumstances, or permutations of the above circumstances, are by no means atypical in contraventions of occupational safety laws. 

The decision therefore affirms that it is not sufficient for directors, managers, secretaries or other officers (or person purporting to act as the same) to engage in a “set and forget” approach to safe work procedures, or to assume that safe work procedures that are established are in fact being used by workers, or that a worker’s experience or prior training is sufficient to ensure safety. 

It is, unfortunately, often the case that workers take shortcuts and/or circumvent procedures that are intended to achieve safe outcomes through inadvertence, error or a desire to perform work in an “efficient” or “time effective” manner. Indeed, it is often the case that (very) experienced workers act in this way, due to a familiarisation with the risks associated with the tasks regularly performed by them.

Effective risk management requires:

  1. the identification of hazards;
  2. the assessment of risks associated with those hazards;
  3. the adoption of adequate control measures; and
  4. importantly, effective monitoring, reviewing and enforcement of the control measures that are adopted.

In circumstances where the control measures that are adopted rely on “administrative controls”, such as safe work procedures, the need for proper documented training, monitoring and enforcement is critical.

The decision also confirms, to the extent that there was any ambiguity, that directors, managers, secretaries or other officers (or person purporting to act as the same) need to be “proactive” and “audit” the safety systems and actual performance of work. Prudence would dictate that this auditing not occur in an ad hoc fashion, but be systematic and documented to evidence the discharge of the duty imposed.