Court finds extensive safety procedures not enough to escape conviction

In October 2016, in SafeWork NSW v Newcastle Stevedores Pty Ltd [2016] NSWDC 294, a stevedoring company, was convicted and fined $150,000 by the District Court of NSW in relation to an incident in September 2012 when a team leader was fatally injured after 20-tonne stacks of aluminium ingot fell and crushed him while in the process of being loaded onto a ship.

Newcastle Stevedores pleaded guilty for failing to comply with its primary duty of care to ensure, so far as is reasonably practicable, the health and safety of its workers under the Work Health and Safety Act 2011 (NSW) (WHS Act) – in particular, sections 19 and 32.

The incident

The deceased worker led a team of five other stevedores in loading aluminium ingot stacks into the cargo holds of a tanker in port. Midway through the loading process, some timber planks which the team had laid to prevent cargo from shifting during sea passage moved out of position. The deceased directed his crane operator to move the suspended load to allow him to readjust the timber planks. To do so, the deceased climbed down the open face of previously loaded aluminium ingot stacks in the cargo hold, rather than using the portable ladders provided by Newcastle Stevedores. While climbing down, some ingot stacks started toppling causing some adjacent ingot stacks to fall directly onto him, crushing his legs, torso, chest and head.

The company's safety systems

Newcastle Stevedores operated in a high risk work environment, providing stevedoring services for the loading and unloading of bulk cargo onto ships and had extensive safety systems in place developed by persons experienced in safety matters. Among other things, Newcastle Stevedores: 

  • regularly reviewed the written safety procedures it had developed for six different vessel types and 16 different cargo types
  • provided ongoing training for workers in these procedures as well as additional specialised training in relation to specific work tasks
  • had a process for identifying and addressing risks and hazards in place, relevantly identified the risk of a crushing injury while loading aluminium ingot stacks and implemented controls
  • monitored and updated its safety systems on an ongoing basis
  • had a work health and safety committee (which met approximately every two months) and a consultative committee.

The Court's findings

The Court acknowledged Newcastle Stevedores' extensive safety systems, noting that its approach to safety both before and after the incident was 'conscientious and diligent'. There was evidence before the Court that this was the first incident involving an injury in approximately 50,000 loads.

However, the Court was critical of two deficiencies in respect of Newcastle Stevedoves' system for loading aluminium ingots. In particular:

  • the safety system did not require the use of the portable ladders Newcastle Stevedores made available for climbing down aluminium ingot stacks, it was not mandatory to use the ladders 
  • exclusion zones were not implemented or enforced with a prerequisite for zone entry being to secure ingot lifts with sling straps and ratchets to prevent ingots toppling over (despite the company's argument that this did not reflect industry practice).

The Court held that measures were readily available to eliminate or minimise risk of injury caused by aluminium ingot stacks falling. In fact, Newcastle Stevedores acknowledged these deficiencies by rectifying them through updated safety procedures following the incident.

In all of the circumstances, Justice Kearns assessed Newcastle Stevedores' breach as being towards the upper end of the low range (without giving any guidance about what low range means). In making this finding, Justice Kearns considered the fact that Newcastle Stevedores:

  • had no prior convictions 
  • had shown contrition and remorse
  • was a good corporate citizen
  • was unlikely to reoffend
  • cooperated with authorities.

What does this mean for your organisation?

Even if your organisation takes safety seriously, has extensive safety systems in place and continually monitors and updates those systems, and has had no major incidents, there is still a risk that deficiencies exist which could lead to non-compliance with work health and safety law. The Court's decision highlights the importance of focusing on continuous WHS improvement, including:

  • not only taking steps to identify and address a risk, but to ensure that the measures implemented effectively eliminate or minimise the risk, even if they are not industry practice. Newcastle Stevedores had measures in place but they were not effective enough
  • enforcing the controls and safety systems in place. Newcastle Stevedores implemented the ladder control but did not mandate its use. In this regard, the Court stated: 'There is little point putting in place safety systems unless there is a process to ensure that the systems are enforced' (see para 38).

Trends in enforceable undertakings

There is a clear trend in the States and Territories with harmonised WHS laws toward agreeing enforceable undertakings (EU) with the relevant regulator as an alternative to prosecution.

As part of this, we have seen regulators willing to accept EUs on terms that depart from what traditionally may be considered as 'standard' terms. It is our observation that the regulators are expecting to see more innovative proposals and a focus on safety leadership, in particular at the Board and executive level. It has also become more important for an organisation to be able to show the EU proposal has been the subject of consultation with workers.

The benefit of an EU is significant, in that it offers an opportunity to an organisation to significantly improve health and safety culture, while also contributing to improved safety outcomes within its industry and community.

It is important an organisation considers its options in relation to applying for an EU from the early stages of a regulatory incident investigation and certainly before any complaint and summons or equivalent in your State or Territory is issued. Even if a complaint and summons does not result, planning ahead can mean the EU proposal is targeted to the safety issues facing the business.

Some recent examples of the terms of EU proposals have included:

  • development of an all industry mobile phone application for managing and monitoring industry contractor issues
  • introducing initiatives to improve the literacy and numeracy of non-English speaking staff
  • providing work experience to local high school students and job seekers in the logistics and manufacturing industry
  • holding a community day in partnership with the Cronulla Sharks NRL team to promote workplace health and safety
  • producing training videos based on the safety incident
  • delivering presentations at industry forums
  • funding first aid courses
  • developing a farm safety video for children.

Having a SWMS doesn't mean your organisation is complying with WHS laws

Unfortunately no, it does not, just as an employer recently learned the hard way in SafeWork (NSW) v Tamex Transport Services P/L t/as Tamex [2016] NSWDC 295.

In November 2016, the District Court of New South Wales found Tamex had breached its primary duty of care under section 19(1) of the WHS Act after a worker suffered serious head injuries when the door of a freight cage on a forklift struck him in the head.  The worker was standing two metres away from a forklift that was being used to unload a truck he had driven to the depot when he was struck.

The safe work method statement (SWMS) Tamex adopted in 2010 for the loading and unloading of vehicles identified the risk of a 'fatality or serious personal injury from unsecured freight falling from forklifts of vehicles'. To minimise that risk, the SWMS provided for a pedestrian exclusion zone of 'up to five metres (sic) clear'.

While the SWMS was kept in the lunch room at the depot and available for workers to read, neither of the workers involved were aware of the existence of the pedestrian exclusion zone, nor were they given any training about it. As such, over the years they had developed unsafe working practices as they would be well within five metres of the forklift when unloading the freight.

In determining whether Tamex ensured the health and safety of the workers so far as was reasonably practicable, Judge Scotting found the wording of the SWMS was 'apt to mislead the ordinary worker' because the natural and ordinary meaning of 'up to five' metres clear could be construed as permitting pedestrians to be within five metres of the forklift (and not outside five metres of the forklift).

Judge Scotting was 'satisfied beyond reasonable doubt that the pedestrian zone provided for in the 2010 SWMS was not reasonably practicable because on its natural and ordinary meaning it did not create an exclusion zone that was capable of eliminating or minimising' the risk.

The matter has been listed for sentencing. Tamex could face a penalty of up to $1.5 million for this category 2 offence.

What does this mean for your organisation?

While the implementation of a SWMS, safe operating procedure (SOP), job safety analysis (JSA) and policies are some practical ways to demonstrate your organisation is discharging its obligations under WHS laws, their existence will offer almost no protection if they have not been drafted carefully, clearly and by someone who is qualified to assess the risks and suitable control measures.

Of course, it is also necessary to ensure your workers are aware of the SWMS, SOPs, JSAs and WHS related policies you have in place.

This case is a timely reminder of the importance of regularly auditing the currency and effectiveness of your organisation's SWMS, SOPs, JSAs and WHS related policies to ensure they remain compliant with WHS laws, codes of practice and any Australian standards. Where amendments to these documents are made, training should also be delivered to your workforce to ensure they are aware of any changes.

Guidance on the interaction between WHS laws and Australian Standards

Safe Work Australia recently released an information sheet about the interaction between WHS laws and Australian and other international standards.

The information sheet offers guidance to PCBUs about whether compliance with Australian and other standards is legally required in order to comply with WHS duties under WHS laws.

In summary, if an Australian or other standard is referred to in WHS laws then compliance with that standard is legally required. There are only a few standards referred to in the harmonised Work Health and Safety Regulations 2011.

While the remaining standards are not expressly referred to in WHS laws, compliance with them will be taken into account by a Court when determining whether a PCBU complied with a WHS duty 'so far as is reasonably practicable'. This is because knowledge of the existence of a risk and ways of eliminating or minimising that risk are often referred to in Australian and other standards and codes of practice.

Discrimination claim for refusal to employ person with mental health issue

In late November, the NSW Civil and Administrative Tribunal, in Chalker v Murrays Australia Pty Ltd [2016] NSWCATAD 282, rejected an application by an employer to strike out a job applicant's claim that they were subject to direct discrimination because the employer refused to employ them because of their mental health issue.

Murrays Australia sought to have the aspiring bus driver's discrimination claim dismissed for want of prosecution and for lack of substance.

While the decision is short on detail about why Murrays refused the job application, Deputy President Hennessy found that the 'inherent requirements’ exception in anti-discrimination law is 'not so obviously applicable that it justifies summarily dismissing Mr Chalker’s complaint'.

While the merits of the claim have not yet been dealt with, this decision is illustrative of the trend for job applicants and employees to allege discrimination on the basis of mental health (ie, a disability).

What does this mean for your organisation?

It highlights the need for employers to take real care in decision-making where a job applicant or employee has a mental health issue. Remember an employee needs to be able to perform the inherent requirements of the role – although this will need to be carefully considered in each circumstance.

Amusement devices at community events

Following the incident at Dreamworld in October 2016, Australian regulators have been conducting audits of amusement devices at theme parks and, of course, amusement ride safety is at the forefront of each regulators' agenda.

All organisations which come into contact with amusement rides (including outside the theme park industry) must have a broad understanding of the regulatory regime in relation to amusement devices. For example, this is an issue that may impact church or school organisations that hold fetes or other organisations who run community events and engage amusement ride contractors.

Running a community event presents a range of particular WHS challenges, including contractor management and managing the presence of children and the elderly. Although organisations engaging amusement ride contractors are not experts in relation to those devices, they continue to have an obligation to ensure health and safety, so far as reasonably practicable, for matters within their control. As we've seen, it's not enough for a PCBU to engage a contractor with expertise in an area and for the PCBU to rely on that expertise - the courts have found the PCBU still has WHS obligations under the legislation.

In addition to the usual steps required as part of contractor management, organisations engaging amusement ride operators should: 

  • request specific amusement device information including the:
    • amusement device registration with the relevant regulator
    • log book for inspection and maintenance of the ride
    • emergency plan for the ride
  • conduct its own due diligence including by independently confirming the registration with the relevant regulator and using ride operators who have been used by other organisations previously
  • ensure the contractor has public liability insurance
  • before allowing a ride to operate:
    • conduct a high level risk assessment
    • consider appropriate fencing/security/locks for rides
    • consider suitability of the ride for your event
    • ensure appropriate signage on rides (eg, you must be this tall to ride etc)
    • organise safe access points (eg, assist safe and orderly queuing)
  • during ride operation, monitor and supervise the activity (not just ride operators but also guests) and direct any unsafe activity to case.

Please let us know if you require more specific advice on contractor management or discharging your safety obligations in relation to amusement devices.

Legislative changes (in coal mining, rail and chain of responsibility)

Coal Workers Pneumoconiosis – Amended Regulations

Parliament has introduced the Mining Safety and Health Legislation (Coal Workers’ Pneumoconiosis and Other Matters) Amendment Regulation 2016 (Qld).

The amended regulations take effect from 1 January 2017. They primarily affect dust management obligations and medical assessments for Queensland coal operators, requiring: 

  • for development or longwall operations – reporting dust monitoring results at a minimum of once every three months
  • advising inspectors whenever dust concentrations exceed prescribed limits
  • reporting all identified cases of coal workers' pneumoconiosis (CWP), along with some other occupational lung diseases, to the Department of Natural Resources and Mines
  • providing respiratory function/x-ray examinations for retiring mine workers on request.

Under the amended regulations, new coal mine workers must undertake a chest x-ray when they start work in the industry, and must undertake further respiratory function and chest x-ray examinations at least as often as prescribed (five years for underground workers; ten years for open-cut). The results of these examinations must then be assessed against previous results (where available).

Further changes may be on the horizon with the CWP Select Committee due to report to the Queensland Parliament by 12 April 2017. This is likely to result in corresponding changes in other mining jurisdictions, particularly New South Wales and Western Australia.

Rail safety laws

On 8 July 2016, Queensland introduced new fatigue management provisions into the Transport (Rail Safety) Regulation 2010 (Qld). The new rules commence operation on 1 July 2017 and apply to both freight and passenger trains. These fatigue rules are largely the same as those in NSW under its Rail Safety National Law. Other jurisdictions subject to the Rail Safety National Law are considering similar changes.

The rules introduce limits around the rosters which may be set by rolling stock operators, by prescribing maximum shift lengths and allocations, and minimum rest break lengths. They also expand the content requirements for an Operator's 'Fatigue Management Program'. The new prescribed hours consist of:

  • what can be described as the 'standard' configuration of hours; or
  • an 'alternative work and rest hours approval' for alternative hours to that prescribed standard, granted on application to the Chief Executive (via the Rail Safety Regulator).

The Queensland Transportation and Utilities Committee has also recommended Parliament pass the Rail Safety National Law (Queensland) Bill 2016 (Qld) to adopt the Rail Safety National Law. If Parliament passes the Bill, it will take effect on 30 June 2017. This will bring the Queensland rail safety laws in line with the harmonised Rail Safety National Law in other Australian jurisdictions.

Queensland passes WHS-style Chain of Responsibility (CoR) laws for heavy vehicles

Queensland is the host jurisdiction for the Heavy Vehicle National Law (HVNL). On 1 December 2016, the Queensland parliament passed the Heavy Vehicle National Law and Other Legislation Amendment Bill 2016 (Qld) to update the HVNL's CoR and executive officer liability provisions.

The changes will be mirrored and take effect in each of the harmonised jurisdictions (except the Northern Territory) in mid-2018. Of the non harmonised jurisdictions (WA and Victoria), WA passed similar CoR legislation in early 2015.

The changes operate by requiring all parties in a position to control or influence on-road behaviour for heavy vehicles (drivers, prime contractors, operators, schedulers, consignors, consignees, packers, loading managers, loaders, unloaders) to ensure – so far as is reasonably practicable – the safety of their transport activities. They also require officers to exercise 'due diligence' to ensure their organisations comply with this primary duty of care.

The Bill effectively switches the burden of proof for alleged CoR breaches from defendants to prosecutors.

Further changes to the CoR are expected. The Transport Minister's statement describes the CoR changes as 'represent[ing] the first of three phases of legislative review for this national reform project.'

Western Australia's move towards model WHS Act further delayed

WA is currently looking to modernise its workplace health and safety legislation framework. The Government has indicated that while some of the core principles will be consistent with the harmonised WHS laws, there will be significant departures from the model laws in some areas.

A 'green' bill for the modernisation process was released for consultation in late 2014. However, in June 2016, WorkSafe WA recommended 132 changes to the model WHS Regulations. The Minister of Commerce is currently still considering changes to the general WHS Bill on 4 October 2016, the WA Department of Mines and Petroleum confirmed the WHS Bill for the resources sector will not be read in the Parliament before the next State election in March 2017.