In this In Brief, we examine a prosecution that WorkSafe WA Commissioner Lex McCulloch described as one that “illustrates that directors have an obligation to directly intervene if necessary in situations where unsafe work practices are taking place”.

In Fry v Keating [2013] WASCA 109 (23 April 2013), the Western Australian Supreme Court, Court of Appeal served a timely reminder that ignorance of occupational health and safety matters is no excuse for company officers.

The relevant legislation

Section 19 of the Occupational Safety and Health Act 1984 (WA) (OSH Act) requires an employer, so far as is practicable, to provide and maintain a working environment in which its employees are not exposed to hazards.

Section 55 of the OSH Act provides that where a body corporate is guilty of an offence under the OSH Act, and it is proved that the offence occurred with the consent, connivance of, or was attributable to any neglect on the part of any director, manager, secretary, other officer of the body (or any person purporting to act in the capacity of an officer/ manager), that person is also guilty of that offence. 

The policy underlying section 55 is that a company operates at the direction of its controllers.  Directors and other officers determine a company’s approach to occupational health and safety.  Section 55 of the OSH Act holds those persons accountable if the company breaches its obligations because of their consent, connivance or neglect.

What happened?

A rigger (Mr Murrie) employed by D&G Hoists and Cranes Pty Ltd (D&G Cranes), a crane and hoist hire company, was killed when a pack of 16 crane components – stacked interwoven and weighing over 375 kilograms each (known as a L68 pack) – fell from a crane and struck him.

D&G Cranes was prosecuted by WorkSafe WA for breaching section 19 of the OSH Act.  Two directors of the company were also prosecuted on the basis that the company’s breach was attributable to their neglect, as a result of the operation of section 55.

The evidence

The evidence revealed that there were two methods of lifting the L68 packs:

  • Method 1: which was a safe and appropriate method where all parts were encapsulated; and
  • Method 2: which was an unsafe method where all parts were not secure and some parts were at risk of falling; some riggers had been known to use Method 2 in the past.

In 2004, the risks associated with the appropriate methods of slinging a L68 pack had been identified and the directors of D&G Cranes had resolved with the Yard Supervisor that Method 1 should be the only method adopted.

The Yard Supervisor had a number of administrative duties as part of his role which prevented him from providing his full attention to the work carried out in the yard. 

In this instance, the L68 pack had slipped when it was being lifted using Method 2, which had previously been banned. 

The core evidence focussed on the fact that the directors were aware that:

  • there was a risk/hazard in the yard in relation to lifting the L68 packs;
  • moving the L68 packs using Method 2 was highly dangerous and created a risk of serious injury and/or death; and
  • Method 1 was the appropriate lifting method, which should have been used.

Magistrates Court decision

At first instance, it was held that:

  • D&G Cranes had failed to ensure that Method 1 was in place and enforced at the time of the incident;
  • this omission resulted in Method 2 being adopted;
  • Method 2 was extremely dangerous and its use in the yard demonstrated a failure by D&G Cranes, so far as was reasonably practicable, to provide and maintain a working environment where its employees were not exposed to the risk of being injured or killed as a result of being crushed or hit by a falling L68 pack; and
  • D&G Cranes’ failure caused the death of Mr Murrie.

D&G Cranes was convicted of failing to ensure a safe working environment and fined $90,000.  The two directors were also convicted on the basis that the offence by D&G Cranes was attributable to their neglect.  They were each fined $45,000.  They appealed to the Supreme Court of Western Australia.

Supreme Court decision

In the Supreme Court, McKechnie J held that the directors were not remote from the business of D&G Cranes.  Instead, the directors were active, hands-on and (in the circumstances) were neglectful in being unaware that the supervision system had broken down and by failing to enforce the use of Method 1.

His Honour stated that:

Their eyes might have been shut to the possibility that Method 2 might, on occasion, be used, but in the absence of a system to enforce the use of Method 1 at all times, or to have a proper induction procedure in place, the directors should have recognised the possibility that an employee might not always use Method 1”.

McKechnie J dismissed the directors’ appeals against their convictions.

Decision of the Court of Appeal

The directors then appealed to the Court of Appeal on the grounds that the prosecution had failed to provide evidence that they ought to have known that Method 2 was being used.

The directors relied on evidence that:

  • there was a system in place to report unsafe work practices which involved supervision by a Yard Supervisor and the hiring of qualified riggers and dogmen;
  • when the directors visited the yard they would correct the employees if they witnessed any unsafe work practices;
  • neither of the directors saw Method 2 being used in the yard; and
  • one director was overseas at the time that the incident occurred.

The Court of Appeal rejected the directors’ arguments and held that the findings at first instance, which were not contested on appeal, were sufficient to support their convictions.  It held that the directors had an obligation to ensure that Method 1 was in use and that they had failed to do so because the directors knew:

  • of the hazards and risks associated with moving L68 packs;
  • that Method 1 was the safe method which ought to have been used at all times;
  • that Method 2 was used in the workplace in the past;
  • that none of the employees had a consistent, documented induction process;
  • there was no written, safe working procedure documenting Method 1;
  • their employees were not formally trained in Method 1;
  • they did not have a dedicated occupational health and safety officer; and
  • the Yard Supervisor had administrative duties which required his attention away from the yard.

The Court of Appeal considered that, having this knowledge, the directors were not entitled to assume that Method 1 was being used at all times.  The directors needed to take reasonable steps to verify and ensure that Method 1 was, in fact, being used. 

Accordingly, the Court of Appeal held that D&G Cranes’ failure to ensure the health and safety of the employee who was killed was attributable to the neglect of each of the directors.  It considered that both directors had failed to ensure that the company had in place a safe system of work for the slinging of L68 packs, and failed to enforce Method 1 (which they knew to be safe).

Lessons from Fry v Keating

Fry v Keating confirms that in Western Australia, for the purposes of section 55 of the OSH Act, ‘neglect’ concerns not only what the officer or manager knows at the time of the breach but also what they ‘ought to have known’ in the circumstances.