Highest fine ever in Victoria

An employer, Toll Transport Pty Ltd (Toll) has been fined $1,000,000 for contraventions of the Occupational Health and Safety Act 2004 (Vic) (Act). The fine is significant and reflects an increased preparedness by Courts to impose high fines on those who breach the Act, even when an early plea of guilty is entered. The decision can be found here.

Facts

Toll operates a commercial shipping service between Webb Dock in Port Melbourne and Burnie in Tasmania. On 20 May 2014, an employee performing stevedoring duties for Toll was killed while working at the Port Melbourne site. The incident occurred during the loading process on the deck of a ship. The deceased was crushed by a trailer carrying 20 foot shipping containers, weighing up to 90 tonnes, being pushed by a prime mover on the deck where he was working. The vision of the driver of the prime mover was restricted and he was unable to see the deceased working in front of him.

Toll pleaded guilty to one charge under section 21(1) and section 21(2)(a) of the Act, namely, that it failed to provide and maintain a safe system of work in relation to the loading of the deck.

Factors taken into account in passing sentence

In examining the level of fine to be imposed, Judge Cannon took into account Toll's early plea of guilty, evidence of remorse and significant community contributions. However, the Judge placed significant weight on specific deterrence in sentencing Toll. Two factors weighed heavily against Toll. Firstly, Toll had a significant history of prior contraventions of health and safety legislation Australia-wide. Secondly, the Judge found that having regard to that history and also its operations at other ports, Toll was on notice as to the risks involved in the work being performed.

In an attempt to limit the extent of any fine, Toll made submissions about the steps it had taken after the incident to ensure safety, and the costs of taking those steps. Among other things, Toll made improvements to its system of work for loading and unloading including:

  • installing video cameras monitored by deck officers, who are then in radio contact with prime mover drivers;
  • installing radar speed detectors to ensure that the prime movers travel at a prescribed speed limit; and
  • enhancements to its traffic management procedures to include explicit instructions regarding where stevedores are positioned, their roles and the circumstances in which vehicles do not proceed onto the deck. This was in contrast with a system permitting freer movement of personnel.

In relation to these matters, Judge Cannon said that the incident was reasonably foreseeable and the improvements should have been made earlier. The Judge also stated that it was 'somewhat unpalatable' that reference was made to the cost of the improvements, given that no monetary sum could ever restore loss of life.

Outcome

The maximum penalty for the offence at the relevant time was $1,299,240. Judge Cannon imposed a fine of $1,000,000, which was the largest fine ever imposed for a single contravention of the Victorian Act (the largest in Australia for a single contravention was $1.1 million in the Kenoss Contractors case in 2016 which related to the electrocution of a worker).

Lessons

Key lessons from this case:

  • Courts have in recent times shown a preparedness to increase the level of fines for breaches of safety legislation.
  • Employers need to consider whether the information they have at their disposal in connection with workplace risks places them on notice that a potential safety incident may occur. If an employer is found to be on notice, the level of fine is likely to be elevated.

WA Courts fine workers over deaths of their co-workers

Two recent cases contribute to the seemingly increasing trend of safety regulators prosecuting workers, and not employers, for breaches of safety legislation that cause the death of another person. The Perth and Fremantle Magistrates Courts have fined two employees $11,000 and $9,500 respectively for failing to take reasonable care for the safety of another person and causing their death.

In the first case, Mr Lewis was employed as a press operator/forklift operator in Narrogin. In 2013, while loading hay bales with another worker, Mr Lewis was driving a forklift with the forks raised and struck the other worker, piercing his abdomen. The worker later died from his injuries.

Mr Lewis pleaded guilty to not taking reasonable care for the safety of another person by operating the forklift with the forks raised above 30 centimetres. The Perth Magistrates Court heard that Mr Lewis had been warned by supervisors about operating the forklift with the forks raised and completed high risk work training that included an assessment on the operating height of the forks.

The Perth Magistrates Court fined Mr Lewis $11,000 and ordered him to pay $1,745 in costs.

The second case involved Mr Taylor, who was employed as a pre-delivery assistant at a car dealership in Attadale. Mr Taylor drove a new vehicle into a maintenance bay to check its rear lights. However, instead of checking the lights himself, he asked a nearby manager to assist him. While the manager was behind the car, Mr Taylor accidently pressed the accelerator instead of the brake and collided with the manager, dragging him several metres. The manager later died from his chest injuries. The Fremantle Magistrates Court found Mr Taylor guilty of not taking reasonable care for the safety of another person by failing to ensure the manager was not behind the vehicle while it was in reverse gear and the engine was running. Mr Taylor was fined $9,500 and ordered to pay $12,052.75 in costs.

In both these cases, there were readily available alternatives to how the work could be performed that would have avoided the incidents. The Courts found that the employees were aware of and had received training in these measures from their respective employers. That the employers were not prosecuted demonstrates the benefits of being able to clearly show that an appropriate system of work was in place and employees had been trained in these systems.

Update on Coal Workers' Pneumoconiosis Select Committee Interim Report

There have been a number of significant developments in the Inquiry being undertaken by the Coal Workers’ Pneumoconiosis (CWP) Select Committee. The key developments are:

  • On 22 March 2017 the Select Committee released its Interim Report, a copy of which is available here;
  • The Interim Report is critical of the management of CWP in Queensland to date;
  • The Select Committee's reporting date has been extended to 29 May 2017 on the basis that the 'issue of CWP was much larger and more complex than was understood when the Parliament established the committee’s Terms of Reference'; and
  • The Terms of Reference have been formally extended to include (among other things) respirable dust exposure to coal port workers, coal rail workers, coal-fired power station workers and others. The reporting date in relation to these additional terms is 29 September 2017.

The CWP Select Committee was established by parliament in September 2016 to inquire and report on the re-emergence of CWP (black lung disease) among Queensland coal workers. While the Committee's focus was originally on underground mines, late last year it expanded its investigation to include open cut operations and most recently, coal export terminals.

Interim Findings

The Interim Report finds that CWP did not 're-emerge' in 2015 but instead was re-identified after more than 30 years of Queensland's authorities failing to look for it or properly identify it. The Committee found that 19 Queensland workers have been confirmed as having CWP, with a 20th case likely.

The Committee makes a number of preliminary findings in the Interim Report, including that there has been a 'massive systemic failure across the entirety of the regulatory and health systems' to properly regulate air-borne dust and to identify CWP. Based on the Interim Report, it is likely that the Select Committee will recommend legislative changes to the regulation of respirable dust in its final report.

Specifically, changes recommended are likely to be in relation to:

  • the Occupational Exposure Limit for respirable coal mine dust;
  • the regulation of atmospheric dust monitoring;
  • the frequency and extent of atmospheric dust monitoring inspections;
  • the workplaces at which atmospheric dust monitoring must be undertaken;
  • the use of real time personal dust monitors;
  • the current Coal Mine Workers’ Health Scheme;
  • the providers of radiographic imaging and spirometry under the Health Scheme;
  • the arrangements for ensuring coal workers’ chest x-rays are properly read and classified according to the International Labour Organisation system for Classification of Radiographs by properly qualified and approved B-Readers;
  • the cost and scope of health assessments for retired or former coal workers;
  • the workers’ compensation scheme as it applies to long latency respiratory diseases;
  • the regulatory environment; and
  • the implementation of a new regulatory environment.

Industry will need to monitor this process closely and employers now covered by the expanded terms of reference (particularly coal ports and coal rail) should take the opportunity to review respirable dust systems now.

What the first new black lung diagnosis in NSW means for coal operators

Following almost 20 new cases of coal workers’ pneumoconiosis (CWP) (also known as 'black lung disease') in Queensland since May 2015, there has been a recent diagnosis of the disease in New South Wales, the first reported since the 1970s. The person affected worked in a number of open cut mines in New South Wales before leaving the industry in 2014.

The New South Wales Resources Regulator is investigating and has announced that it will take enforcement action if there has been any breach of health and safety laws. There have been calls from the CFMEU for New South Wales to follow Queensland’s lead and set up a parliamentary inquiry into the disease.

Coal operators in New South Wales can expect that black lung will now become a focus of the Resources Regulator, particularly in light of the approach taken in Queensland.

In this context, there are a number of steps we recommend coal operators in New South Wales (in particular, but also in other states) take to ensure they are best placed to both effectively manage the risk of CWP and to respond to any parliamentary inquiry or regulator audit action:

  • Continue to be vigilant in the management of dust at coal mines Coal mine operators should be vigilant in taking steps to prevent CWP. It is likely that the Resources Regulator will have a keen focus on this issue beyond its investigation of the first CWP diagnosis. Even if there is a parliamentary inquiry in New South Wales the Resources Regulator will continue to monitor dust management at coal mines and take enforcement action as it considers appropriate.
  • Review control measures for dust management Now is the time for coal mine operators to review the control mechanisms they have in place for dust management and ask whether they work effectively. It is also prudent to audit compliance with dust control measures, to test their effectiveness in practice. If the review or audit identifies deficiencies in control measures, corrective action should be taken immediately. For example, if personal protective equipment (PPE) is used as a control measure, are workers actually wearing the PPE? If the audit process reveals that workers are not wearing PPE, operators should take steps to ensure compliance including through training, toolbox talks and random site checks. Ensuring compliance will also go some way to demonstrating the effectiveness of PPE as a control measure. That said, we note that the regulator in Queensland has serious concerns about the use of PPE as a control measure for CWP. Other control measures may include ventilation systems, dust suppression, regular health check-ups for workers and education for workers.

Checklist for action

As a simple checklist, coal operators should:

  • recognise and assess the risk;
  • review what the mine does to manage the risk;
  • reflect on the effectiveness of the risk control measures and take any necessary corrective or preventative action to avoid or remove unacceptable risk;
  • conduct a compliance and effectiveness audit of control measures;
  • maintain an ongoing dialogue with workers about both hazards and risks and preventative measures; and
  • finally, watch this space - keep abreast of the inquiry in Queensland and keep on the lookout for proposed action by the New South Wales Government or any audit action by the Resources Regulator. Coal operators may need to be in a position to give evidence at an inquiry or respond to an audit. Start collecting data to demonstrate the effectiveness of your dust management systems and identify key personnel who can assist if necessary.

Managing mental health issues proving to be challenging

While the topic of mental health now appears to be at the forefront of the minds of HR and safety managers, the results of a number of surveys and research performed across various industries in Australia suggests that the wellbeing of workers is actually worsening. This is despite the fact that a number of organisations have been developing and implementing wellbeing programs designed to improve wellbeing in their workplaces.

The lack of motivation by organisations to implement wellness programs to tackle this issue does not appear to be the problem. The research points to a lack of consultation with workers about mental health and wellbeing strategies to be a significant contributing factor to the decline in workers' mental health and wellbeing. This is because the 'discussion' and focus on mental health seems to stop once strategies are implemented – there is no 'lifecycle' for gradually improving mental health.

While wellbeing programs can reap positive mental health rewards, the most successful results are often seen where an organisation has a mental health framework in place. A successful mental health framework adopts a WHS risk management approach to managing mental

  • health issues, and involves the following steps:
  • identifying sources or situations (ie, 'hazards') that are likely to cause mental health issues in the workplaces (eg, unreasonable performance management, bullying and workplace change);
  • identifying the risks that arise if the hazards identified are not controlled (ie, workers' suffering depression, long term absences and poor retention rates);
  • developing and implementing measures to control the identified risks (eg, wellbeing programs, policies and training for managers);
  • reviewing and auditing the effectiveness of those control measures at appropriate intervals.

Some of the matters identified above were expressly identified in our Managing Mental Health in the Workplace Report 2016.

We are offering a GuideME about managing mental health in the workplace in October 2017, to register your interest please email us at guideme@minterellison.com.

Summary of interesting WHS developments across Australia

Category 1 WHS prosecutions in Queensland

Work Health and Safety Queensland (WHSQ) announced in late February 2017 that two companies, Lavin Constructions Pty Ltd and Mutli-Run Roofing Pty Ltd, and their respective directors, will be prosecuted after a worker died after he fell six metres from the edge of a roof. WHSQ alleges the companies breached section 19(2) of the Work Health and Safety Act Qld (2011) (WHS Act) by failing to ensure the health and safety of 'other persons' was not put at risk from work carried out as part of its business and section 20 by failing to ensure the workplace was without risks to health and safety of any person.

Some of the failures referred to by WHSQ include that the worker was not wearing a personal fall-prevention harness despite safety equipment being available on the work site and that 'simple safety guidelines' were not followed.

As the first category 1 prosecution in Queensland, WHSQ will need to demonstrate the companies engaged in reckless conduct under section 31 of WHS Act.

The two companies face a potential fine of up to $3 million each, while the two directors face up to $600,000 and/or up to five years imprisonment if they are found to have failed to exercise 'due diligence' under section 27 of the WHS Act.

$220,000 penalty for inadequate SWMS

In our December 2016 update we informed you about a WHS prosecution against Tamex Transport Services (Tamex) for its breach of section 19(1) of the Work Health and Safety Act 2011 after a worker sustained injuries when the door of a freight cage on a forklift struck him in the head.

The District Court of New South Wales found the Safe Work Method Statement (SWMS) was inadequate because it was unclear about the exclusion zone distance which meant Tamex had not ensured the health and safety of workers so far as is reasonably practicable.

The Judge has now determined the penalty. The decision can be found here.

After considering a number of mitigating factors (including that Tamex had good prospects of rehabilitation, had demonstrated remorse and had swiftly responded to the failings that led to the incident), Judge AC Scotting imposed a fine of $220,000 and ordered Tamex to pay the prosecutor's costs in the amount of $82,000. The maximum penalty that Tamex could have been fined was $1.5 million.

In determining the appropriate penalty, Judge AC Scotting considered, among other things the following:

  • the risk of serious injury or death to a pedestrian being in close proximity to an operating forklift was 'obvious' and was actually foreseen by the offender prior to the incident occurring – this lead to Tamex including reference to an exclusion zone in the relevant SWMS;
  • the distance of the exclusion zone recorded in the SWMS was ambiguous and unclear – this was the case even though the risks associated with not having exclusion zones was well known within transport industry through the 'Loading, Unloading and Exclusion Zones Guidelines 2010';
  • Tamex had not implemented or enforced the exclusion zone and it had not provided workers with any training on it – this complacency allowed workers (including the injured worker) to develop a practice of unloading freight in close proximity to operating forklifts; and
  • the cost associated with implementing measures to eliminate or minimise the identified risks were 'relatively simple and not costly'.

Additional fatigue management obligations in respect of train drivers in QLD

New fatigue management provisions in the Transport (Rail Safety) Regulations 2010 (QLD) will take effect from 1 July 2017.

The new provisions prescribe standard work hours and rest periods for drivers of freight or passenger trains (including light rail vehicles) in Queensland. In summary, the standard hours requirements are as follows:

  • the maximum length of a shift to be 12 hours for a two driver train and nine hours for a single driver train;
  • train drivers must have a break of at least 8 – 12 continuous hours after the end of their shift depending on whether their shift ends at their home or away depot; and
  • in any 14 day period, a train driver must not work more than 12 shifts or perform 132 hours of work.

Rail transport operators can apply for alternative hours and rest breaks to the 'standard' provided they can demonstrate they have adequate fatigue management programs in place.