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Focus: Occupational Health & Safety – July 2009

In this issue: We look at the process of harmonising OH&S law; the restrictive nature of NSW's OH&S legislation; drug testing in the workplace; the consequences of an employer failing to seriously consider an employee's safety concerns; where does a worker's journey end for the purposes of workers' compensation claims in NSW; appropriate sentencing of a defendant's failure to enforce safe work practices; and the importance of identifying the real causes of workplace injuries.

• Update on harmonisation of OHS law
• High Court to consider OHS regime
• Drug testing in the workplace – saliva better than urine
• Employer fined for failing to take OH&S concerns seriously
• Where does a worker's journey end?
• Failure to rigorously enforce safe work practices and sentencing offenders
• Identifying the real causes of workplace injuries

Update on harmonisation of OHS law

In brief: The recommendations in the reports on harmonisation of occupational health and safety laws in Australia¹ as approved or modified by the Workplace Relations Ministers' Council² will form the basis of the new national OHS law which is expected to be available for comment in late 2009. Senior Associate Ric Morgan reports.

Background

The Federal Parliament commissioned a panel to report to the Workplace Relations Ministers' Council (the WRMC) on the harmonisation of Australia's multi-jurisdictional OHS law. The WRMC considered the reports at its 18 May 2009 meeting and the recommendations were largely accepted. However, the WRMC rejected some key recommendations and qualified a number of others.

Differentiating between workplace and public safety

While accepting the general focus of broadening the application of OHS law from an employer focus to those conducting a business or undertaking, the WRMC made it clear that the drafting of new laws needs to ensure that OHS law does not overreach and become the basis for regulating public safety. This caution was also directed to the way in which a 'worker' will be defined.

Directors' and officers' duties

While the WRMC has accepted the broad focus of the recommendations in relation the requirement for directors and officers to exercise due diligence to ensure health and safety, important changes to the recommendations are required:

• The proposal for OHS law to adopt the Corporations Act definitions of 'directors and officers' has been rejected. Instead, the national OHS laws will impose duties on all persons who influence or make decisions that affect the whole or substantial part of an entity. This has the potential to capture a broader class of individuals and may result in the laws being closer to those in place in NSW, where those with management and control of particular workplaces have been successfully prosecuted.
• In a disappointing intervention, the WRMC has rejected the proposal to include a definition of what is required for the exercise of due diligence by directors and officers. The WRMC has decided that case law will define the due diligence obligation.
• Volunteer directors and officers, while owing a positive duty will not be liable for prosecution even for the most serious offences.

Consultation

In changes that are likely to be welcomed by industry, the requirement that every workplace must appoint a workplace health and safety officer (as is the case under current Queensland law) has been rejected. 

The WRMC has also rejected the recommendation that every workplace with 20 or more employees be required to have a formal OHS committee. This too will be welcomed by industry and will allow businesses and their workers to develop systems for consultation that are effective for their particular workplaces.

In a subtle change that may undermine the intent of the panel's recommendations, consultation between duty holders who share responsibility for the health and safety at a workplace will only be required where it is reasonably practicable. The panel recommended that the requirement for consultation should be based on the extent reasonably necessary to ensure health and safety.

Finally, the details of the requirements for consultation will be removed from the model OHS Act and included in regulations. This means that the actual requirements for consultation including the election of OHS representatives, the powers granted to them and the processes for forming OHS committees will be a matter for the individual states and territories. This may undermine some of the objectives of a harmonised OHS system.

Unions and OHS

The recommendation not to provide unions with a right to bring prosecutions has been accepted.

However, the right of entry for union representatives has been broadened by the WRMC. In addition to the purposes recommended by the reports, the WRMC changes mean that union representatives will also be able to access any part of a workplace that may directly affect the health and safety of those who are eligible to become members of the union even when no members or employees, who are eligible to become members, work in those areas.

Where to from here?

The original expectation was that an exposure draft of the model OHS laws would be available in July 2009. However, following the inaugural Safe Work Australia Council held on 10 June 2009 this timeframe has been pushed out. We can now expect the exposure draft to go to the WRMC in September 2009 with the model OHS legislation and a Regulatory Impact Statement issued for public comment over a six week period following WRMC's consideration of the exposure draft.

High Court to consider OHS regime

In brief: Following a recent grant of special leave to appeal, the High Court of Australia is to consider a claim that the occupational health and safety legislation in New South Wales is being interpreted in such a restrictive way as to mean that the defences available under the legislation provide no real protection to defendants. Graduate Jonathan Adamopoulos reports. 

 Facts and background

Graham Palmer was employed as the manager of a farm near Picton owned by Kirk Group Holdings Pty Ltd. An all-terrain vehicle (ATV) owned by the company overturned while Mr Palmer was navigating a steep slope on the farm which resulted in his death. The company was charged with offences under sections 15 and 16 of the Occupational Health and Safety Act 1983 (NSW) (the OHS Act)³ for a failure by the company to ensure the safety of Mr Palmer. Graeme Kirk, a director of the company, was also charged under s50 of the OHS Act which deems that a director is regarded as having contravened the Act where the company is in contravention.

Both Mr Kirk and the company pleaded not guilty, relying on the statutory defence under s53 of OHS Act that it was not 'reasonably practicable' for the defendants to comply with their duties under the OHS Act. In support of that defence, it was argued that it was unforeseeable that Mr Palmer would ride the ATV down a steep hill instead of using a purpose-built road. Since Mr Kirk was of ill-health and was not experienced in running a farm, he had delegated responsibility for safety procedures to Mr Palmer who had control of the farm on a day-to-day basis.

Justice Walton of the Industrial Relations Commission (the IRC) in finding both defendants guilty held that the responsibilities for workplace safety under the OHS Act were the company's and that it had neglected those duties by not ensuring that Mr Palmer had the necessary skills to manage the safe use of the ATV or to conduct risk assessments.⁴ The company was fined $110,000 and Mr Kirk, $11,000.

Appeals against the convictions

On appeal, the defendants argued that while Mr Kirk was the 'controlling mind', Mr Palmer was responsible for safety procedures. The Full Bench of the Industrial Court dismissed the appeal, finding:⁵

• the liability under ss 15 and 16 is absolute;
• the employer's duty to ensure safety is not delegable;
• the employer may be entitled, in certain cases, to rely on another person who has expertise in health and safety although criminal liability can only be avoided if the defence under s53 is proven; and
• the employer cannot delegate their duty under ss 15 and 16.

The defendants appealed to the New South Wales Court of Appeal seeking an inquiry into the convictions.⁶  They argued that the interpretation given to the OHS Act by the IRC made it impossible to comply with the OHS Act and that it failed to consider whether Mr Palmer had in fact discharged the duty of the company. The court dismissed the appeal.

The High Court appeal and its possible implications

The defendants were granted special leave on 1 May 2009 to appeal against the decision of the Court of Appeal. The matter will present an opportunity for the court to determine whether the interpretation of the duties under the OHS Act is so restrictive that it makes it impossible for an employer to comply with them and practically removes the benefit of the statutory defences. The issue of the difficulty of complying with the legislation is something that the defendants have submitted runs counter to the rule of law and the Constitution.

Given that the current New South Wales legislation imposes equivalent duties, this decision will have relevance to the operation and interpretation of the current law.

The court will also consider the provisions of the Industrial Relations Act 1996 (NSW) which limit the right of appeal of parties from the Industrial Court of New South Wales. 

Drug testing in the workplace – saliva better than urine

In brief: A decision handed down by the full bench of the Australian Industrial Relations Commission could end of urine testing of employees at work.⁷ Graduate Suzie Fraser reports.

Background

Shell Refining (Australia) Pty Ltd (Shell) applied to the Full Bench of the Australian Industrial Relations Commission seeking the review of a ruling by Senior Deputy President Hamberger that Shell's urine testing regime of employees was unjust and unreasonable. As reported in our September 2008 Focus, a dispute had arisen between the Construction, Forestry, Mining and Energy Union (the CFMEU) and Shell out of the CFMEU's concerns about Shell's drug and alcohol policy for the Clyde Refinery and Gore Bay Terminal.

Decision

The Full Bench upheld the ruling that saliva based methods of drug testing employees at work were preferable to urine testing. The evidence was that a urine test can detect drugs ingested within recent days and thus has a wide 'window of detection' whereas an oral fluid test can only detect drugs ingested in the few hours before the test. Based on this, an oral fluid test should be preferred because:

• it is less likely to detect drug use in an employee's own time and intrude into an employee's private life; and
• while neither test aptly measures impairment, a positive saliva test is more likely to indicate recent drug use and therefore actual impairment at the time of the test.

The Full Bench found that Senior Deputy President Hamberger correctly balanced the need for Shell to ensure the health and safety of an employee at work against the need to protect their privacy.

The Full Bench also found his Honour correctly made his decision conditional on two matters being resolved, namely that:

• laboratories be accredited to carry out oral fluid testing; and
• arrangements be made that identify the drugs to be tested for and the target concentration levels.

Until such time as these developments occur, urine testing regimes can continue.

Employer fined for failing to take OH&S concerns seriously

In brief: A recent decision of the New South Wales Industrial Court⁸ highlights the importance of employers treating employee safety concerns seriously. Overseas practitioner Fiona Robertson reports.

Background

Mr Calford, a roofer, was employed by a roofing subcontractor when he injured himself after falling from scaffolding. A few days prior to the incident, Mr Calford had alerted the principal contractor and his employer to the fact that the scaffolding needed to be fixed after he tripped and nearly fell.

Mr Calford was unable to work for six weeks as a result of his injuries.

Prosecutions under section 8, 9 and 10 of the Occupational Health and Safety Act 2000 (NSW) were brought against the principal contractor, its director and the subcontractor.

The decision

All of the defendants pleaded guilty to the charges. The court was critical of a number of aspects of the defendants' conduct including:

• the injured worker was not provided with a safe work method statement prior to commencing work at the site;
• neither the principal contractor nor the subcontractor documented a risk assessment in relation to the task;
• there was no documented induction process for workers at the site;
• there were no OH&S management plans; and
• the site foreman did not supervise the worker or carry out an inspection of the scaffolding.

Following the incident, the principal contractor carried out a comprehensive review of its OHS procedures. Although the court was persuaded that the company was unlikely to re-offend, given the serious nature of the offence the principal contractor was fined $80,000, its director $20,000, and the subcontractor $10,000.

Where does a worker's journey end?

In brief: For the purposes of the Workers Compensation Act 1987 (NSW), a worker's journey ends once the boundary of land upon which the workplace is situated is crossed. Lawyer Claire Palmer reports on a recent decision of the NSW Workers Compensation Commission.⁹

Background

On 22 May 2006, Mr Hogno arrived at work and parked in the work car park. He injured his right knee when it twisted as he was alighting from his car. Mr Hogno's initial claim for compensation failed when the arbitrator found that:

• his journey had ceased when he had crossed the boundary of the employer's property (under section 10 of the Workers Compensation Act 1987 (the Act)); and
• his employment was not a substantial contributing factor to the injury (under s9A of the Act).

Mr Hogno appealed the arbitrator's decision on the basis of these two findings.

The decision

Had Mr Hogno reached the end of his journey at the time of the injury?

In the initial decision, the arbitrator found that authorities on the issue¹⁰ indicated that a worker's journey ends at the boundary of the land on which the workplace is situated. Mr Hogno appealed this finding, arguing that his case was factually distinct because he had been in the process of alighting from his vehicle when he sustained the injury. His journey had not been completed at the time of the injury. President Keating found that nothing turned on this distinction, and that the case law was consistent with the arbitrator's finding that the place of employment is reached or left upon crossing the boundary of land upon which the workplace is situated.

Was Mr Hogno's employment a substantial contributing factor?

President Keating stressed that an arbitrator should consider the examples set out in s9A(2) when determining whether a worker's employment is a substantial contributing factor to an injury. These examples include:

• the time and place of injury;
• the nature of the employee's work;
• the duration of employment;
• the probability that the injury would have happened anyway at about the same stage of the worker's life if they had not been at work or worked in that particular job;
• the worker's state of health and any hereditary risks; and
• the worker's lifestyle and their activities outside the workplace.

In considering each of these examples, President Keating overturned the arbitrator's decision that there was no 'sufficient nexus' between Mr Hogno's presence in the car park and his work. At the time of the injury there was no reason for Mr Hogno to be in the car park for any purpose other than to commence his work duties. On that basis the arbitrator's decision was revoked and the employer was ordered to pay Mr Hogno's medical expenses.

Failure to rigorously enforce safe work practices and sentencing offenders

In brief: The Industrial Court of New South Wales¹¹examined the factors that should taken into account when determining the appropriate penalty for a defendant company and its manager that contravened section 8(1) of the Occupational Health and Safety Act 2000 (NSW). Law Graduate Stuart Packham reports.

Background

Mr McGuire had been employed by Mellor Enterprises for three months as a module builder operator. A module builder compacts harvested cotton into 'modules', which can then be covered by a tarpaulin. The module builder includes a large hydraulic press powered by the truck on which it is mounted.

The usual procedure Mellor Enterprises had adopted for covering the cotton was to place a tarpaulin over the cotton module and unravel it by hand. However, Mr McGuire and other module builder operators had adopted an alternate method. When Mr McGuire was using this method the tarpaulin tripped the control lever of the press, crushing Mr McGuire who died from his injuries.

Mellor Enterprises Pty Ltd and its manager, Jon Mellor were prosecuted under s8(1) of the Occupational Health and Safety Act 2000 (NSW). Both defendants pleaded guilty to the charges.

Decision

In determining the appropriate sentence, the court referred to Mr McGuire's youth and inexperience. Mr McGuire was performing a task using dangerous equipment in an unsafe manner while unsupervised. Further, Mr McGuire had not been taken through relevant safety procedure manuals at the commencement of his employment.

The court also noted that it was foreseeable that an injury would occur if the truck was left with its engine running. The truck was left on while the tarpaulin was being spread. The supplier's manual for the module builder specifically warned against this. While, the manual was not provided with the module builder when it was delivered to Mellor Enterprises; they knew of its existence and never asked for it.

The defendants pleaded guilty at an early stage which led to a 25 per cent reduction in sentence. The defendants also cooperated with the WorkCover Authority and immediately redesigned its work methods after a risk assessment. Justice Kavanagh was satisfied that the defendants were contrite and concerned. The corporate defendant was fined $120,000 (the maximum penalty was $550,000) and the individual defendant was fined $20,000 (the maximum penalty was $55,000). 

Identifying the real causes of workplace injuries

In brief: Considering whether an employee has an entitlement to workers' compensation under Queensland law requires the real causes of the workplace injury to be identified with precision. Senior Associate John Naughton reports.¹²

Background

Mr Rowe was employed by a car dealership in Townsville, Queensland. He resigned after 22 years' service following a management meeting which was ultimately determined by the Queensland Industrial Relations Commission (the QIRC) to have been conducted unreasonably. He subsequently applied for workers' compensation, attributing a psychological/psychiatric injury to the management meeting on his final day at work, but also to stressors encountered earlier in the course of his employment.

Legislation

Under the Workers' Compensation and Rehabilitation Act 2003 (Qld), a compensable injury is one which arises out of, or in the course of, employment, where the employment is a significant contributing factor to the injury. However, a compensable injury does not include a psychiatric or psychological disorder where it results from reasonable management action, (or from a worker's perception about reasonable management action).

Proceedings

When Mr Rowe's initial application for workers' compensation was rejected, he appealed the decision to the QIRC.

At first instance, the QIRC accepted Mr Rowe's application on the grounds that, while the stressors encountered earlier in his employment were not the result of unreasonable management action, the management meeting was of such an unreasonable nature that the employer could not rely on the 'reasonable management action' exclusion.

On appeal, the QIRC's decision was overturned by the Queensland Industrial Court which determined that the proper approach to determining eligibility for workers' compensation was to:

• embark on an enquiry to determine the specific action or actions which caused the onset of the injury in question; and
• consider whether or not these actions constituted reasonable management action taken in a reasonable way.

The Industrial Court held in this case that Mr Rowe's injury:

• was pre-existing, with the management meeting aggravating a major depressive disorder diagnosed years before; and
• occurred only because the earlier stressors during his employment had so undermined his psychological condition that he could not cope with the management meeting, and these earlier stressors did not arise from any unreasonable management action. 

Footnotes

1. National Review into Model Occupational Health and Safety Laws, First Report to the Workplace Relations Minister's Council, 31 October 2008 and Second Report to Workplace Relations Minister's Council, 30 January 2009.
2. WRMC Response to Recommendations of the National Review into Model Occupational Health and Safety Laws.
3. The predecessor to the Occupational Health and Safety Act 2000 (NSW).
4. WorkCover Authority of New South Wales (Inspector Childs) v Kirk Group Holdings Pty Ltd & Anor [2004] NSWIRComm 207.
5. Kirk Group Holdings Pty Ltd v WorkCover Authority (NSW) (2007) 164 IR 146.
6. Kirk Group Holdings Pty Ltd & Anor v Industrial Relations Commission of New South Wales [2008] NSWCA 156.
7. Shell Refining (Australia) Pty Ltd v Construction Forestry, Minding and Energy Union [2009] AIRCFB 428.
8. Inspector Yeung v Christopher Ogden and Ors [2009] NSWIRComm 47.
9. Hogno v Fairfax Regional Printers [2009] NSWWCCPD 33.
10. Chawla v Transgrid (11 June 2002) (3810/01) and Musumeci v Gem Engines Pty Ltd (2002) 23 NSWCCR 128.
11. Inspector John Forster v Mellor Enterprises Pty Ltd and Anor [2009] NSWIRComm 38.
12. Q-COMP v Glen Rowe [2009] 191 QGIG 67 (12 May 2009).

Published 31 July 2009

For further information, please contact:

• Peter ArthurPartner, Sydney
  Ph: +61 2 9230 4728
  Peter.Arthur@aar.com.au
• Maryjane CrabtreeExecutive Partner - Litigation & Intellectual Property, Melbourne
  Ph: +61 3 9613 8706
  Maryjane.Crabtree@aar.com.au
• Stephen McComishPartner, Perth
  Ph: +61 8 9488 3767
  Stephen.McComish@aar.com.au
• Rowan KellySpecial Counsel, Perth
  Ph: +61 8 9488 3804
  Rowan.Kelly@aar.com.au
• Jamie WellsPartner, Brisbane
  Ph: +61 7 3334 3268
  Jamie.Wells@aar.com.au
• Ric MorganSenior Associate, Melbourne
  Ph: +61 3 9613 8031
  Ric.Morgan@aar.com.au

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