On 1 January 2012 a new Work Health and Safety Act (WHS Act) will take effect in most States and Territories as part of a national project to “harmonise” Occupational Health and Safety (OH&S) laws. At present it is unclear whether Western Australia will participate.

Company directors will be required to exercise ‘due diligence’ to ensure their organisations comply with health and safety obligations. The same due diligence obligations will be imposed on other members of an organisation’s senior management if they fall within the definition of “Officer” as defined in the Corporations Act 2001 (Cth). This shift to impose more onerous OH&S obligations on a larger group of managers and senior executives is significant. Organisations must review their current procedures now to determine what structures and processes need to be implemented in order to satisfy that the due diligence standard of care is being met by relevant personnel.

New penalties

Consequences for breach of these duties have significantly increased. Directors and officers who fail to comply with the new legislation may find themselves personally liable for sums up to a maximum of $600,000 and up to five years imprisonment. Organisations may be liable to separate, and larger, penalties up to a maximum of $3,000,000 for each offence.

It is now vital for all directors and officers to understand their obligations and ensure that their companies are compliant prior to the new Act coming into effect.