The much anticipated draft Model OHS laws are expected to be released for public comment next week reflecting the decision of the Workplace Relations Ministerial Council on the recommendations of the National OHS Review Panel.

The draft legislation will introduce model provisions which each of the states and territories have committed to adopting into law in each of their jurisdictions.

The draft legislation will recast the duty of care approach by introducing the concept of a person conducting a business or undertaking as being the central duty holder under the law. The laws will also include a new approach to personal liability and create new enforcement powers and higher penalties for OHS offences.

Duty of care

The legislation is expected to introduce a new duty holder to replace “employers” at the centre of the general duty provisions – a person conducting a business or undertaking.

It is expected that under the new laws a person conducting a business or undertaking will be required to ensure, so far as is reasonably practicable, the health and safety of workers engaged or caused to be engaged by the person and workers whose activities are influenced or directed by the person. In addition, the person will also have a duty to ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.

More than one person can be a person conducting a business or undertaking at any given workplace. Notwithstanding that, each person must discharge their duty to the extent of their capacity to influence or control and consult, cooperate and coordinate their activities with those other persons.

This expanded duty has the capacity to broaden the existing duties significantly, extending their reach to any activities that may impact health and safety.

At a typical construction site, the subcontractors will be conducting a business or undertaking in their respective trade and therefore will have a duty of care to other persons at the site. Principal contractors will also be conducting a business or undertaking of construction services. Superintendents and project managers will similarly be conducting a business or undertaking, as will consultants on the project. Indeed, even the principal or developer of the project will be conducting a business or undertaking, namely that of commercial development of the site. All these persons will be duty holders under the legislation as persons conducting a business or undertaking.

The new approach also has the potential to capture complex corporate structures since holding companies and management companies may still be performing a relevant business or undertaking for the purpose of the legislation. Even financial lenders on projects may be performing a business or undertaking and therefore may have relevant duties under the legislation.

It is expected that the person conducting a business or undertaking will also have obligations with respect to incident reporting and consultation, thus completely replacing the need for the concept of employer to be maintained as a duty holder in the legislation. This is intended to maintain the expansive approach created through the creation of the duty-holder category but in practice is likely to come with some complications. It will, for example, create significant duplication of functions with multiple persons being obliged to report the same incident.

Penalties

It is expected that the legislation will introduce three categories of offences with the highest category attracting a maximum penalty of $3 million.

To view table click here.

The maximum penalty for individuals will be $600,000 and/or up to 5 years’ imprisonment.

In addition, it is expected that courts will have the ability to make publicity orders, restoration orders, community service orders, enforceable undertakings, injunctions, training orders and compensation orders.

Publicity orders are now a feature of the OHS legislation in most jurisdictions but they are sparingly used. In NSW, where they have been available since 2001, they have been used against government departments and local councils only. If used more widely as they are in the environmental context, they have a very significant deterrence potential, especially given the financial markets’ increased awareness of the link between good OHS performance and good corporate governance more generally.

Training orders also have significant potential. It is expected that the court will on sentencing have the power to require the person convicted of an offence, and presumably officers of the person in the case of corporations, to undertake a specified course of training.

The power to order compensation for OHS offences, however, if introduced as expected, will introduce a new dynamic to OHS prosecution. Prosecutions will shift from an exercise solely aimed at punishing the offender to one, at least in part, concerned with compensating injured persons and families of deceased persons. This has the potential to give injured persons and families standing in prosecutions an interest in such proceedings which they presently do not have. It also blurs the line between workers compensation and OHS enforcement and is likely to make proceedings more adversarial where there are allegations of negligence on the part of the injured person.

Public comment

The draft legislation is expected to be released shortly. While the principles put forward in the reports into the Review of National OHS legislation were on the whole sound, the devil is always in the detail. It is important that all interested parties pay particular attention to the draft legislation when it is released and make appropriate submissions in the public comment period.