13 Apr 2010

Update on proposed Federal occupational health and safety legislation

by Dr Graham Smith, Joe Catanzariti

National occupational health and safety legislation is due for enactment in early 2012. The national laws will simplify compliance for employers, though stringent standards will continue to be applied.

Soon after coming to power, the Federal Labor Government announced it would conduct a review into a proposed harmonisation of the nations various occupational health and safety (OH&S) laws. The Federal Government had in mind a uniform federal system whereby employers would no longer need to comply with different OH&S laws for each State they conducted business in. It was also hoped that consistency would reduce risks to health and safety of all concerned employees.

To this end, the States entered into an agreement with the Commonwealth to work towards a national model OH&S law. Safe Work Australia subsequently came into being in mid-2009, and a review of the nation's OH&S laws was underway.

Opposition to the scheme

Upon learning of the proposed national OH&S system, the NSW union movement initially provided opposition, as it was feared the new laws would remove some of the features of the NSW regime which, before a recent High Court decision, made it the most stringent in the country. The High Court's decision in Kirk v Industrial Relations Commission [2010] HCA 1 however has arguably negated much of the unions' position, as NSW OH&S laws will now be interpreted more in alignment with OH&S laws in the other States. The model laws will, however, alter the NSW emphasis on the employer owing the primary duty of care.

What does the model legislation look like?

Although not yet enacted, on 11 December 2009 the model legislation received tentative approval from the Workplace Relations Ministerial Council. The legislation is to be known as the Work Health and Safety Act.

The model laws bear close resemblance to legislation currently in place in Victoria and Queensland, and covers the usual areas of OH&S concern, including:

  • general safety duties;
  • notification of incidents;
  • workplace consultation, participation and representation;
  • provisions dealing with discrimination and victimisation of workers who raise OH&S issues;
  • OH&S rights of entry for unions;
  • the powers of inspectors and enforcement of the Act; and
  • prosecutions and sentencing for breaches.

The changes to be introduced by the model laws will have greatest impact in NSW and to a lesser extent, in Tasmania. Whereas the Occupational Health and Safety Act 2000 (NSW) imposes strict duties on employees, employers, self-employed persons and "controllers" of workplaces to ensure the health and safety of all persons at the work place, the model laws limit the duty only to what is "reasonably practicable". Thus, unlike the current NSW regime, it will generally be upon the shoulders of the prosecuting authority to show why it was reasonably practicable for an employer to adopt such measures, rather than the employer having to prove, by way of a defence, that it was not reasonably practicable.

In addition, unlike the personal liability automatically imposed on directors and managers of workplaces in NSW, the model laws only impose a duty on "officers" of a corporation to exercise "due diligence" in ensuring the corporation complies with its OH&S obligations. Accordingly, directors and senior managers of large enterprises will have greater certainty about the scope and nature of their obligations. In the event of an OH&S incident however, they will still need to demonstrate that they had exercised "due diligence," a term that is defined by the model laws in some detail and should be carefully studied by all directors and senior managers.

The model laws should not be taken to be encouraging a less rigorous approach to OH&S (particularly in NSW). This is emphasised by the significantly increased maximum penalties for breaches of OH&S obligations, where three categories of offences are provided:

  • for a category one offence, where a duty-holder recklessly exposes a person to whom they owe a duty to a risk of death or serious injury or illness, the maximum fine is $3 million for a corporation and $600,000 for officers or up to five years' imprisonment. Workers will also be liable to a $300,000 fine or up to five years' imprisonment;
  • for a category two offence, where a duty-holder breaches an OH&S obligation and thereby exposes a person to serious harm, a corporation is liable to be a $1.5 million fine, while officers and workers will be liable to $300,000 and $150,000 fines respectively; and
  • for a category three offence, where a duty-holder fails to comply with a duty, a corporation will be liable to a $500,000 fine, while officers and workers will be liable to $100,000 and $50,000 fines respectively.

Timeline for enactment

While the model laws have been substantially drafted, there is still the matter of the finer details to be embodied in regulations. It is anticipated this process will be completed before 2011. Once the model laws and applicable regulations are finalised, the Workplace Relations Ministers' Council will conduct a review with the aim of having the laws enacted by 1 January 2012.

What can employers do to prepare?

While the model laws will simplify the OH&S regimes across the nation, this does not mean employers can be less vigilant. The same or similar duties will remain, though they may be applied to a different standard depending on which State the employer currently conducts business.

Clayton Utz will provide further information once the model laws and regulations are in their final form.

This article was written when Joe was a partner at Clayton Utz and does not necessarily reflect his views as Vice-President of the Fair Work Commission.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.