29 Sep 2011

Changes in new harmonised OH&S laws by 1 January 2012

by Joe Catanzariti

The Occupational Health and Safety (OH&S) harmonisation laws are to be implemented by 1 January 2012, a mere three months away.

The concept of uniform OH&S laws across the country has gained support as it became evident that the lack of consistency has been problematic for both employers and employees. Some states initially expressed hesitation; however, once Queensland initiated acceptance of the new OH&S laws, other states, including NSW, moved to pass the set of laws as well.

On 5 May 2011, the recently elected NSW Liberal Government tabled two Bills which not only introduced the model Work Health and Safety Act ("WHS Act") but also expedited many of the changes by proposing amendments to the current Occupational Health and Safety Act (NSW) 2000 ("OHS Act").

The Occupational Health And Safety Amendment Act 2011 ("OHSA Act"), introduced to immediately amend the current NSW OHS Act:

  • removes the reverse onus of proof;
  • makes directors and officers no longer automatically liable for any breaches by the corporation; and
  • retains the unions’ power to prosecute. (A provision of the Bill which would have immediately removed unions’ right to prosecute was dropped under amendments proposed by the cross benchers on 27 May 2011.)

Below are a few of the changes the new laws bring in.

Change in onus of proof

Under the old OHS Act, employers had a duty to ensure health and safety in the workplace subject to a limited defence of reasonable practicability, a "reverse onus" duty. This reverse onus of proof has now been removed from the harmonised legislation which restores the presumption of innocence.

Under the new OHSA Act, the onus moves to the prosecution to establish the employer did not take all reasonably practicable measures to prevent the risk to health and safety occurring. [1] The prosecution will now be required to set out what the employer could “reasonably” have done to prevent the risk to health and safety.

This change has been made as a transitional amendment in preparation for the harmonised WHS Act where the prosecution must prove that an employer has not “so far as reasonably practicable” ensured the health and safety of its employees and that they are not put under any risk from work carried out.[2]

Directors and officers

Under the old OHS Act, a director or a person concerned in the management of the company is prima facie liable for any contravention of the Act unless due diligence was used to prevent the contravention.

Under the transitional OHSA Act, section 26 has been amended to impose a duty on “officers of a corporation” to exercise due diligence to ensure that the corporation complies with its occupational health and safety duties.[3] This creates a positive obligation on the part of the “officers of a corporation” to ensure due diligence has been conducted.

Officers of a corporation are those defined by section 9 of the Corporations Act, which include:

  • a director or secretary of a corporation;
  • administrators and liquidators of a corporation;
  • partners in a partnership; and
  • officeholders in a unincorporated association.

The transitional changes made under the OHSA Act mirror the changes that will be made on 1 January 2012 under the WHS Act.

The WHS Act also imposes a duty of care beyond the traditional employer-employee/ contractor relationship to capture a variety of working arrangements. Duties under the WHS Act are imposed on any “person conducting a business or undertaking”. The duty is broad and is owed not only to employees, but to contractors, labour hire workers, apprentices, trainees and work experience students.

Due diligence

Indications of the requirements of due diligence by officers are provided in a non-exhaustive list of steps under section 26(3). Due diligence requires an officer to take reasonable steps:

  • to acquire and keep up-to-date knowledge of OH&S matters;
  • to understand the nature and operations of the trade, business or other undertaking of the corporation and the associated risks;
  • to ensure that appropriate resources to eliminate or minimise hazards from such operations are available and utilised by the corporation;
  • to ensure the corporation has processes for receiving and considering information about incidents and hazards and responding in a timely manner; and
  • to ensure the corporation has, and implements, appropriate processes for complying with its relevant duties and obligations under the legislation, for example, reporting, consultations, training.

A consequence of this duty is that officers may be liable for failing to exercise the requisite due diligence despite the fact that the corporation itself is complying with its obligations, or without an incident or accident in the workplace even occurring. There is now a positive duty on company officers to enquire and monitor their company’s safety performance and assist company officers to better understand their safety obligations.

Under the new amendments, under either the OHSA Act or the WHS Act, an officer of the corporation may commit an offence by failing to exercise the required due diligence, despite the corporation itself complying with its requirements.

Changes in the offences

The WHS Act groups offences into three categories, with penalties scaled according to each category. Category 1 offences are the most serious breaches involving recklessness and exposing an individual (to whom a duty is owed) to the risk of death or serious illness or injury. Category 2 offences occur where a person is exposed to a high level of risk of death or serious illness or injury, but without recklessness. Category 3 offences are breaches without a high risk of serious harm and without recklessness.

The WHS Act significantly increases penalties for breaches, with maximum penalties scaled according to the offences. The maximum penalty for a body corporate ranges from $500,000 (category 3 offence) to $3,000,000 (category 1 offence). Under the old OHS Act, reckless conduct by corporations causing death attracted a penalty of $1,650,000, while breach of general duties attracted $550,000 for a first offence and $825,000 for second and subsequent offences.

The legislation also grants courts a wider variety of sentencing orders. Under the old OHS Act, orders could be imposed on defendants to take steps to remedy any matter the offence caused, pay WorkCover’s investigation costs, publicise the offence, or undertake projects for general improvement of OHS.

Where a court convicts a person or finds a person guilty of an offence against the WHS Act, sentencing options include enforceable undertakings, remedial orders, adverse publicity orders, training orders, injunctions, compensation orders and community service orders, in addition to any penalty.

Jurisdictional changes

The WHS Act takes the jurisdiction for OHS offences away from the NSW Industrial Relations Commission and prosecutions will now be instituted for summary offences in the Local Court (which will have the jurisdiction to order fines of up to $50,000) or the District Court.

Difference in consultation

The WHS Act imposes a broader obligation on the person conducting the business or undertaking regarding consultation. Persons conducting the business or undertaking must consult with “workers”, not just “employees”, as far as reasonably practicable, about OH&S matters.

In addition to this, for instances of specific circumstances, consultation is required when for example, identifying hazards and assessing risks.

There are no transitional arrangements from the old OHS to the new WHS Act as this area was not addressed in the OHSA Act. Every employer, or adviser to an employer, should acquaint themselves with these important new developments.

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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[1] Sch 1 of Occupational Health and Safety Amendment Act 2011, section 7A.

[2] Model Work Health Safety Bill 2011, section 19. See also sections 17-18.

[3] Sch 1 of Occupational Health and Safety Amendment Act 2011, section 9.

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