Further to our previous Federal Update on the Work Health and Safety laws in Australia, we continue to see a raft of Australian jurisdictions make changes to WHS laws in order to enhance the obligations of businesses, strengthen offences and prohibit insurance or indemnity for WHS penalties.
The model WHS laws have been implemented in all jurisdictions except VIC (very soon to take place in WA).
Despite reforms for harmonisation of WHS laws, there are slight differences, and this continues to be challenging for organisations and businesses operating across more than one state or territory.
In the next couple of years we will continue to see strengthening of laws and prohibition of insurance for WHS penalties across further states and territories consistent with the recommendations of the 2018 Boland Review into WHS model Legislation.
Below we review recent legislative changes in various states and territories including in relation to industrial manslaughter and insurance for WHS fines.
Insurance of WHS Penalties Wrap up
- Western Australia, New South Wales and Victoria prohibit insurance or indemnity against a WHS fine or penalty.
- The Australian Capital Territory, Queensland, Tasmania, Northern Territory and South Australia do not yet prohibit insurance for WHS penalties.
Western Australia’s Work Health and Safety Act 2020 (WA Act) was passed by Parliament on 3 November 2020 and assented to on 10 November 2020.
On 15 December 2021, Minister Stephen Dawson MLC announced that the WA Act will come into effect in March 2022.
The new laws are largely based on the national model WHS Act used in other jurisdictions (except Victoria) and encompass a range of measure including:
- a new duty of care is imposed on providers of WHS services to ensure that their services do not pose a health and safety risk;
- there is no limitation period for charges of industrial manslaughter;
- insurance of WHS penalties is unlawful with penalties imposed.
WHS Service Providers
WHS providers will need to more vigilant than ever as they will have responsibilities under the WA Act. Under s 26A, a new duty of care is imposed on providers of WHS services to ensure that their services do not pose a health and safety risk so far as is reasonably practicable.
Under the WA Act, there is no limitation period for bringing charges of industrial manslaughter against persons conducting a business or undertaking (PCBUs) or their officers. Penalties for gross negligence/industrial manslaughter has increased - the maximum penalty for corporations from $2.7 million to $10 million. For individuals it may be up to 20 years imprisonment and a fine of $5 million.
Insurers are on notice that the Australian jurisdictions in which they can offer insurance for WHS penalties will contract further.
Under section 272A of the WA Act, penalties apply to:
- those who insure or indemnify a person against a fine for an offence under the WA Act,
- those who are insured or indemnified against fines under the WA Act, and
- those who pay or accept an indemnity for a fine for an offence under the Act.
The maximum penalty is $51,000 for individuals and $255,000 for body corporates. This will affect insurers but also cut across the common indemnity arrangements between subcontractors and principal contractors in building projects.
On 21 September 2021 the Occupational Health and Safety and Other Legislation Amendment Act 2021 (VIC) (Vic Amendment Act) was assented to. It clarifies cover for labour hire workers and prohibits insurance or indemnity of WHS penalties in Victoria.
The Vic Amendment Act seeks to ensure labour hire workers have the same rights and safety protections as other workers.
It also requires labour-hire providers and host employers to consult and cooperate on their shared responsibility to ensure the safety of labour-hire workers. Any breach of this duty would be punishable by fines of up to $32,713 for individuals and $163,566 for businesses.
Prohibiting Insurance or Indemnity
The Vic Amendment Act expressly prohibits individuals and businesses from entering into a contract that insures or indemnifies it against paying monetary penalties under workplace safety laws. Under s 148A of the Vic Amendment Act, such insurance or indemnity arrangements are invalid.
Organisations and businesses may be fined up to $300,000 if entering into insurance contracts for workplace health and safety fines. Entering, offering to enter, or holding such a contract will attract penalties of up to $54,522 for individuals and $272,610 for body corporate (as of 1 July 2021).
This will deter organisations, businesses and individuals from mitigating financial liability for breaches of workplace safety laws and encourage organisations in taking proactive steps in protecting workers.
NEW SOUTH WALES
Currently, NSW WHS laws do not recognise industrial manslaughter as an offence. Instead, a person may be prosecuted for manslaughter for the death of a person at work under the Crimes Act 1900 (NSW), punishable by imprisonment for 25 years.
The Work Health and Safety Amendment (Industrial Manslaughter) Bill 2021 (NSW Bill) was introduced as a private members bill on 16 February 2021 and seeks to amend the Work Health and Safety Act 2011 (NSW).
The Bill has been passed by the Legislative Council and is being sent to the Legislative Assembly in 2022 for consideration.
Sections 34D and 34E introduce two new manslaughter related offences which affect PCBUs or senior officers of PCBUs.
A PCBU or senior officer would commit an offence if a worker or other person dies at a workplace, or is injured at a workplace and later dies, and the death is caused by the conduct of the person conducting the business or undertaking and that person is negligent or reckless about causing the death.
A PCBU or a senior officer could be liable for a maximum penalty of 25 years’ imprisonment for an individual, or over $10 million for a body corporate.
Since 2020, it has been an offence to enter into, provide or benefit from insurance or indemnity arrangements in relation to the payment of penalties under the NSW Act.
AUSTRALIAN CAPITAL TERRITORY
Previously industrial manslaughter was an offence under the Crimes Act 1900 (ACT) (Crimes Act). The Work Health and Safety Amendment Act 2021 No. 19 (ACT) (ACT WHS Act) received assent on 11 August 2021.
Now, Industrial manslaughter is established as an offence similar to that under the Crimes Act, aligning it with other work safety offences. It involves a person being reckless or negligent about causing the death of the work or other person.
The ACT WHS Act has established the highest financial deterrence for safety failings and unsafe practices. The increased the maximum penalty for body corporates is $16.5 million and period of imprisonment is a maximum of 20 years.
The ACT does not currently have legislation addressing insuring WHS penalties.
This article was co-authored by Amber Zhang.