A new offence and serious penalties are now in action across NSW for PCBUs (employers, businesses and the like) and officers (including directors and some senior executives) whose actions or inactions lead to the death of a worker. Although there are no specific new WHS
obligations to be aware of, there are new
consequences. It is now more important than ever for organisations and senior executives to educate themselves on their obligations under WHS legislation.
Workplace safety is a critical issue for Australian workers and the organisations which employ or engage them. According to
Safe Work Australia (Key Work Health and Safety Statistics Australia, 2023 | dataswa (safeworkaustralia.gov.au)) there are an average of 180 worker fatalities every year – that is, over two workers die at work from preventable causes each week.
In response, NSW has introduced the offence of Industrial Manslaughter from 16 September 2024. Industrial manslaughter can be simply defined as an offence which occurs when the death of a worker in the workplace is caused by the actions or inaction of an a PCBU or officer. In NSW, the Work Health and Safety Amendment (Industrial Manslaughter) Act 2024 (Amendment Act) establishes the offence of industrial manslaughter and the significant penalties which now apply.
Significant Penalties for Businesses and Individuals
The penalties in NSW include the largest fines in the country for a body corporates (up to
$20 million) and potential
life imprisonment for an officer where there is a death on the worksite caused by a serious failure of a person(s) to meet the relevant WHS laws.
All other states in the country now have a similar offence as part of their WHS legislation. The ‘failure’ of an officer in NSW must amount to ‘gross negligence’ but the standard changes slightly between other states. Furthermore, in most states WHS fines are not insurable – so if an officer gets fined, they may not be able to turn to their organisation or insurance policies for coverage. That is, they are
personally liable.
WHS: Best Practice Approaches for NSW Businesses
There have been two cases this year where officers of medium sized enterprises in NSW and Queensland have successfully defended prosecutions for breaches of their ‘due diligence’ obligations under the relevant WHS laws. The defences were successful for a few key reasons.
Firstly, the officers took an
active interest in the WHS compliance of their organisation. This was reflected in the organisation’s
paper trail, where board and management meeting minutes showed that the officers were discussing the organisations’ WHS compliance, identifying key WHS hazards and risks in the organisation, giving the
right authority and direction to key personnel to address those issues and then
following up at the next meeting(s) to ensure the right action was taken.
The above steps were possible because the officers had
competent managers with the
right qualifications and experience to manage the organisation’s WHS compliance. The regulators in the cases did not (or could not) produce any evidence to suggest otherwise. That competent manager was considered the
primary process or resource the organisation used to ensure its compliance with the WHS legislation.
Secondly, the officers were able to produce evidence that the managers were
equipped with the right resources to meet the WHS obligations. Essentially, there was no
budgetary constraint for the managers when the organisation needed to incur costs to eliminate or minimise risk to WHS (including accessing external advisors, consultants and the like).
What Do Business Officers Need to do Next: Practical Advice?
The courts in NSW and Queensland have recognised that an officer of a medium sized enterprise is
entitled to delegate matters of WHS to an appropriate manager as the officer could not be across every aspect of the organisations’ operations at all times.
As a starting point, we recommend that officers
audit their organisation for the following:
- The resources officers make available to the organisation/ managers and the like to meet the organisation’s obligations under the WHS legislation – are there any budgetary constraints? Has your organisation grown to a point where you need to bring in more personnel to manage your WHS compliance?
- The relevant manager’s performance – have you got the right people in the right roles? how rigorous are your recruitment processes? have you got any reason to question your manager’s performance as it relates to matters of WHS?
- Key delegations for managers under their contracts and policies as it relates to WHS – are your managers clear on what they are/ are not responsible for? Are they trying to do too much and do you need to start delegating more?
- The level of reporting between managers and officers about WHS matters – remember, if it’s not written down it’s hard to prove it ever happened. Think about how your conversations are translated into management meeting minutes and board meeting minutes.
- How officers keep themselves appraised of WHS matters (including WHS legislation and the specific WHS hazards and risks to their organisation).
The Hicksons Workplace Relations Team has extensive experience in navigating legislative changes such as these for NSW businesses. We provide practical advice and guidance, which protects you from risk.
Article written by Hicksons' Partner, Warwick Ryan and Associate, Alexandra Beal.