The Safety Show The New Work Health and Safety Laws Corporate - - PowerPoint PPT Presentation

FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES

The Safety Show

The New Work Health and Safety Laws Corporate Liability and Personal Liability for Directors & Senior Managers Siobhan Flores- Walsh, Partner Occupational Health and Safety 25 October 2012

FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES

Key Issues Today

Legal Obligations: Corporate & Individual Consequences of breach:Penalities & insurance Practical Guidance: Legal and Management Strategies Special Note About “Horizontal Consultation”

FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES

Current status of Model Law Adoption

Jurisdiction Status Australian Capital Territory Introduced 1 January 2012 Commonwealth Introduced 1 January 2012

New South Wales

Introduced 1 January 2012

Northern Territory

Introduced 1 January 2012 Queensland Introduced 1 January 2012 South Australia WHS Bill currently before parliament. Bill was introduced and then withdrawn on the first occasion. Commencing 1 January 2013 Tasmania WHS Bill first reading in Legislative Assembly on 18 October 2011. Commencing 1 January 2013 Victoria WHS Bill has not yet been introduced into parliament. Will probably adopt the WHS laws in their current form later

Western Australia

WHS Bill has not yet been introduced into parliament. Will probably adopt the WHS laws in their current form but timing is not clear

Changes in snapshot

Old regime New regime

Employer Deemed liability Quasi-criminal Max $550K , Implied PCBU Positive, personal & criminal liability Criminal Max: $3m and gaol Express Primary duty holder Directors & managers Jurisdiction Penalties

Concurrent Duty Holders

The New Primary Duties of Care

Person conducting the business or undertaking (PCBU)

Relevant Standard Who has the duty? The governed activity

Operation of the business or undertaking Organisational decision making and governance Work activities (including

supervision)

Circumstantial attendance at the workplace (i.e. visitors)

Officers’ Duty of Care Workers’ Duty of Care Others’ Duty of Care (i.e. at a workplace) Reasonably practicable Due diligence Reasonable care Reasonable care

The Duty

Your personal liability arises here

This is a criminal regime (for primary duties)

Category Description Maximum penalty Category 1

Most serious cases Breach of the primary duty involving recklessness and serious harm to a person or risk of such harm.

Corporation: $3 M Officers: $600,000 Gaol up to 5 yrs Workers &

• ther persons: $300,000

Gaol up to 5yrs

Category 2

Breach of the primary duty where serious harm or the risk of it without the element of recklessness.

Corporation: $1.5 M Officers: $300,000 Workers &

• ther persons: $150,000

Category 3

Breach of the duty that does not involve high risk

• f serious harm.

Corporation: $500,000 Officers: $100,000 Workers &

• ther persons: $50,000

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Who?

• A person (corporate, individual or

public authority) who conducts a business or undertaking.

Duty?

• The PCBU must take all steps

reasonable practicable to ensure the health and safety of workers and

• thers affected by the business.

Scope

• ‘Workers’ include volunteers,

contractors, students on placement

• ‘Others’ include the public – NOT

limited to the workplace

Who and what is a PCBU?

Reasonable practicability

Control is relevant to what can be done & if it is reasonable to do it

What is the officer’s duty of care?

PCBU Duty or

• bligation

Officer must exercise Due Diligence to ensure that the PCBU complies with that duty or

• bligation

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Who is an officer?

Officer

Company Secretary Director Trustee of a compromise

• r other

arrangement

Administrator, Liquidator, received or receiver manager

Affects financial standing

Shadow directors - instructions or wishes accustomed to act

Makes, or participates in, decisions affecting the whole or a substantial part of business

Identifying the officers

Consider

Certain members of Senior Management Company Secretaries Directors Shadow Directors (individuals & corporations)

Due Diligence

Due diligence includes taking reasonable steps to…

These six elements fall into two categories: 1. Knowledge and understanding and 2. Management action Verify the use of these resources and processes Ensure work health and safety & legal compliance Monitor information

• n incidents,

hazards and risks and respond in a timely way to that information Provide and use appropriate resources & processes to minimise WHS risks Gain an understanding of the nature, hazards & risks associated with the operations of the PCBU. Acquire and keep up-to-date knowledge of WHS matters

First Element - To Know

Due Diligence

Knowledge OHS Understand Business & Hazards Resources and Processes Monitor OHS Activity Legal compliance Verification

• Requires a knowledge management

system

• Need a baseline, up-skill as required & maintain
• Knowledge includes, safety leadership, officers’

& organisational legal obligations, risk management, incident investigation and auditing.

Taking reasonable steps to acquire and keep up-to-date knowledge of work health and safety matters.

Second Element – To Understand

Due Diligence

Knowledge OHS Understand Business & Hazards Resources and Processes Monitor OHS Activity Legal compliance Verification

Taking reasonable steps to gain an understanding of

• the nature of the
• perations of the PCBU

and

• generally of the

hazards and risks associated with those

• perations.
• 1. An officer must be able to accurately list the

critical risks in their business and have insights into how they arise and how they are managed.

• 2. Safety observations give first hand

understanding.

Third Element – Ensure Resources and Processes

Due Diligence

Knowledge OHS Understand Business & Hazards Resources and Processes Monitor OHS Activity Legal compliance Verification

Taking reasonable steps to ensure that the PCBU has available for use, and actually uses, appropriate processes and resources to eliminate or minimise risks to health and safety from work carried out by the PCBU.

• 1. Reasonable steps to ensure that

adequate processes are in place (e.g. accreditation to AS/NZS 4801)

• 2. Assess the safety impact of every

resource decision.

Fourth Element – To Monitor

Due Diligence

Knowledge OHS Understand Business & Hazards Resources and Processes Monitor OHS Activity Legal compliance Verification

Taking reasonable steps to ensure that the PCBU has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information.

• 1. Requires appropriate processes for:
• Receiving;
• Considering; and
• Responding in a timely way to information

about incidents, hazards and risks.

• 2. Requires the balanced use of lead and lag

indicators.

Fifth Element - To Comply

Due Diligence

Knowledge OHS Understand Business & Hazards Resources and Processes Monitor OHS Activity Legal compliance Verification

Taking reasonable steps to ensure that the PCBU has, and implements, processes for complying with the PCBU’s duty under the WHS Act.

1. Cost/benefit analysis about whether to comply = breach. 2. Requires a culture of legal compliance. 3. Requires a process for legal compliance audits. 4. Reviews must be conducted by competent persons. 5. Reviews are required at reasonable intervals.

Sixth Element – To Verify

Due Diligence

Knowledge OHS Understand Business & Hazards Resources and Processes Monitor OHS Activity Legal compliance Verification

Taking reasonable steps to verify that there are reasonable steps are in in place and being used to ensure :

• Adequate Processes
• Adequate Resources

1. Verify that there are reasonable steps in place, and being used, to ensure: 1. Adequate processes 2. Adequate resources 2. Verify (typically) through: 1. Accreditation against a credible standard 2. Monitoring lead and lag indicators 3. Reviewing the expertise and numbers of relevant personnel. 4. (and sometimes) safety observations

Practical Compliance

In essence – The officer’s duty requires the officers of a corporation to put in place a WHS Governance Programme that is designed to ensure that officers interrogate their company’s work health and safety management system (WHSMS) This means - An officer can breach the duty merely by failing to implement an effective WHS Governance Programme, even though there may not have been a work health and safety incident at the officer’s company.

Relationship between a WHS Governance Programme & Work Health and Safety System

1. The Due Diligence System facilitates compliance with the Officer’s Duty 2. The Work Health and Safety System facilitates compliance with the PCBU’s duty. ______________________________________________________

WHS Governance System Work Health and Safety System

The Due Diligence System Interrogates the WHSS to Ensure PCBU compliance

The Two Components of a WHS Governance Programme

A programme of action for

• fficers that, if undertaken,

will demonstrate compliance with the officer’s duty A mechanism to record the actions undertaken, to create evidence of officers compliance with the officer’s duty.

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The Workers’ duty

Take reasonable care for own health and safety Take reasonable care that his or her acts or omissions do not adversely affect health and safety of others Comply, so far as worker is reasonably able, with any reasonable instruction that is given by PCBU to allow the PCBU to comply with the WHS Act Co-operate with any reasonable policy or procedure of the PCBU relating to health and safety at the workplace that has been notified to workers

Worker Duty

Don’t forget the Senior Worker - Reasonable Care is on a continuum

What would the reasonable person in their position do in the circumstances. A court looks all the relevant circumstances, including the worker's experience, position and training. Managers they will be judged by the level of control over a particular person/project/site/activity, including their level of autonomy or whether they act under the instructions of and report directly to a more senior manager.

Low control & autonomy High control & autonomy

Concurrent Duty-holder Consultation

Duty-holder Duty-holder Duty-holder

Examples of Concurrent Duty-holders include:

• Consultants
• Contractors
• Third Party Logistics
• Landlords

Three key issues

What are concurrent duty holders (and how do you identify them)? How do you discharge the duty? Helping other concurrent duty holders play their part (and protecting your organisation)

Who are the concurrent duty holders?

First step is to identify your duties – you can’t co-ordinate with others until you know what your duties are as a Person Conducting a Business or Undertaking and the upstream duties that are sub-sets of that duty:

Person in management or control of a workplace (includes landlords, licensees and property managers) Person in management or control of fixtures, fittings

• r plant at a

workplace Designers of plant, substances or structures, which are to be used,

• r could

reasonably be expected to be used, at a workplace Manufacturers

• f plant,

substances or structures, which are to be used,

• r could

reasonably be expected to be used, at a workplace Importers of plant, substances or structures, which are to be used,

• r could

reasonably be expected to be used, at a workplace Suppliers of plant, substances or structures, which are to be used,

• r could

reasonably be expected to be used, at a workplace

“Consult, co-operate and co-ordinate”

• Providing information
• Receiving a response to

the information

• Considering the response
• An exchange of

information designed to produce a shared understanding (per the Code of Practice)

Consultation involves:

“Consult, co-operate and co-ordinate” #2

Co-operation involves working together

• Ensure free flow of information
• Timely responses to requests from other duty

holders

Co-ordination involves arranging work so that there are no gaps in compliance Degree of overlap between “the three Cs” – but you need all three

How does this work in practice?

Issues with contractors

Likely to work across a number of sites so may not have understanding of specifics of your site Have specialist skills you don’t have – so how do you supervise? Engaged for their skills (or

• n price) rather than

because of known safety compliance Not part of your safety culture (and likely to have a lower commitment to your business)

Contractor management – consult, co-operate & co-ordinate

How safety aware are they?

• If possible, find this out before you engage them (questionnaire as part of tender

process)

• If not possible, find out before they start work

Establish their commitment to your work and site

• Site-specific inductions
• Make their systems work with your systems

Communications and co-ordination

• Who are the points of contact and what are the methods of communication?
• How do you ensures that information flows from point of contact to all relevant

workers?

• When your information changes, that change needs to be communicated – how?
• Who is auditing compliance?

Concurrent duty holders other than contractors?

Lease of premises as workplace

• Does the landlord understand their
• bligations?
• Does the lease deal with safety

issues?

Acquisition of workplace plant (machinery, equipment, appliances, containers, implements and tools)

• Does the supplier understand their
• bligations?
• Do you have the right

warranties/indemnities?

Helping your concurrent duty holder play (and comply)

Contracts are useful in two ways:

• To ensure that the safety obligations of

the parties are considered and understood from the start of the relationship

• To record agreement as a source of

rights during the relationship

If your contracts with other duty holders don’t deal with safety issues, why not?

Five Key Changes/Take Outs about the New WHS Laws

Primary Duty Holder

Scope of Liability

Nature of Liability

Officer Duty

Concurrent Duty Holder Consultation

PCBU Criminal Increased & Broad Express Onerous & Personal

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About the Presenter

Siobhan Flores-Walsh is a Partner in the Sydney office of Norton Rose Australia. She has worked in Occupational Health Safety and Security/ Employment/Industrial Relations for 20 years and is listed as a leading Australian OHS/Employment lawyer in Chambers Global 2011 and 2012.

Siobhan regularly conducts client training in OHS; discrimination, bullying and harassment; complaints handling, workplace surveillance and flexible work practices. She is sought after in the speaking circuit, presenting regularly at commercial conferences. Siobhan is the co-author of the two editions of the CCH publication “Australian Master Human Resources Guide”.

Siobhan is published and speaks regularly in relation to WHS and related areas.

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Disclaimer The purpose of this presentation is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Norton Rose Australia on the points

• f law discussed.

No individual who is a member, partner, shareholder, director, employee or consultant of, in or to any constituent part of Norton Rose Group (whether or not such individual is described as a “partner”) accepts or assumes responsibility, or has any liability, to any person in respect of this presentation. Any reference to a partner or director is to a member, employee or consultant with equivalent standing and qualifications of, as the case may be, Norton Rose LLP or Norton Rose Australia or Norton Rose OR LLP or Norton Rose South Africa (incorporated as Deneys Reitz Inc) or of one of their respective affiliates.