The Queensland Parliament has introduced the most significant safety law reform that the mining and resources industry has seen in years by passing the Mineral and Energy Resources and Other Legislation Amendment Bill 2020.
Although the Bill affects a wide range of issues, in this article we have focused on the safety law reforms, particularly those aimed at the changes in engagement of statutory office holders and the introduction of an industrial manslaughter offence and what you can do to prepare for these changes.
The Bill introduces an offence of industrial manslaughter into a number of pieces of legislation including the Coal Mining Safety and Health Act 1999 (Qld) (CMSH Act), the Mining and Quarrying Safety and Health Act 1999 (Qld) (MQSH Act), the Explosives Act 1999 (Qld) (Explosives Act) and the Petroleum and Gas (Production and Safety) Act 2004 (Qld) (P&G Act).
Secondly, the Bill requires all persons appointed to critical safety statutory roles under the CMSH Act to be employees of the coal mine operator and not contractors.
Establishing an industrial manslaughter offence
The industrial manslaughter provisions will commence on a day to be fixed by proclamation. While a proclamation date has not yet been set, we suspect this will be relatively soon, given the Government’s concerns with respect to the number of safety incidents in this sector over the last 18 months which prompted calls for the legislative reforms.
The industrial manslaughter offence that has been introduced is in almost identical terms to that contained in the Work Health and Safety Act 2011 (Qld) (WHS Act) and is intended to ensure that there is consistency in how deaths of workers on Queensland worksites are treated. According to Queensland Natural Resources, Mines and Energy Minister Dr Anthony Lynham said "Creating the offence of industrial manslaughter is to ensure senior company officers do all they can to create a safe mine site"
An employer or senior officer will be criminally liable when:
- A worker dies in the course of carrying out work at the mine, or is injured in the course of carrying out work at the mine and later dies; and
- the employer/senior officer's conduct causes the death of the worker; and
- the employer/senior officer's conduct is negligent about causing the death of the worker by the conduct.
A person's conduct causes death if it substantially contributes to the death.
Who is liable and what is the applicable penalty?
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Definition of position: A person who employs or otherwise engages a
worker in relation to operations at the mine.
Maximum penalty: 20 years' imprisonment or 100,000 penalty units (approx. $13 million) if it is a body corporate
Definition of position: An executive officer of the corporation.
Maximum penalty: 20 years' imprisonment
Definition of position: The holder of an executive position (however
described) who makes, or takes part in making, decisions affecting all, or a substantial part, of the employer's functions
Maximum penalty: 20 years' imprisonment
An executive officer is further defined as being "a person who is concerned with, or takes part in, the corporation’s management, whether or not the person is a director or the person’s position is given the name of executive officer." This definition appears to be broader for corporations than the definition of an 'officer' under the Corporations Act 2001 (Cth) which includes a director or secretary of a company, as well as a person who:
- makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation;
- who has the capacity to affect significantly the corporation’s financial standing; or
- in accordance with whose instructions or wishes the directors of the corporation are accustomed to act.
A senior officer for a corporation, on the other hand, merely needs to be concerned with or takes part in the management of the corporation and does not need to be a director or named as an executive officer. In other words, a person may not be an officer under the Corporations Act, but they may still be a senior officer capable of being charged with the industrial manslaughter offence.
Organisations should carefully review their organisational structure and consider who will potentially fall within these definitions, regardless of their position title, and advise officers and senior officers on the potential exposure that exists under the Bill.
Procedural aspects of the offence
Industrial manslaughter is an indictable offence and the Bill specifically precludes the defence of accident from being relied upon. The explanatory memorandum clarifies that the onus of proof in criminal proceedings will apply. This means that the prosecution will be required to prove each element of the offence beyond a reasonable doubt. Criminal negligence also requires recklessness or gross negligence.
This is important because the CMSH Act and MQSH Act require the site senior executive (SSE) to manage an ‘acceptable level of risk' on their worksites. Where a fatal incident occurs, there could be an implied assumption that an acceptable level of risk was not achieved, thus effectively placing a reverse onus of proof on the SSE. This was an area of particular concern for industry and the clarification is welcomed as it means the intention of the provision is for the prosecution to prove each element and that the onus is not on the SSE to prove that an acceptable level of risk was achieved.
Similar to other manslaughter offences, there will be no time limitation period for prosecution.
Statutory office holders
The new laws also require workers in statutory office positions under the CMSH Act to be employed by the Operator. This includes:
- Persons appointed to be a SSE during the absence of a SSE;
- Persons appointed to perform duties prescribed by the regulation for surface mines;
- Underground mine managers;
- Ventilation officers; and
- Persons appointed to be a ventilation officer during the absence of a ventilation officer.
The explanatory memorandum states that these changes will allow employees to feel more comfortable raising and reporting safety issues without the concern that this will impact their employment.
There is an 18 month transitional period for these changes which is intended to provide coal mine operators with time to meet the new requirements. This period commenced on the 25 May 2020.
Mine operators should start reviewing who holds the roles outlined above and how they are engaged. If these statutory officer holders are not current employees, mine operators should consider how they will employ these workers directly. Historically a large number of these statutory roles are filled by contractors who may well be used to the benefits of being engaged as an independent contractor which could make negotiations more protracted.
Practical measures to assist in preparing for industrial manslaughter laws
- Identify who in your business may potentially be caught by the new provisions and provide training on how to meet your due diligence obligations not just to officers, and senior leadership roles, but to middle managers and site managers who may be caught by the provisions;
- Review all the potentially fatal hazards and risks in the workplace and ensure your controls are effective to manage these risks;
- Consider whether appropriate resources have been allocated to safety matters;
- Review your work, health and safety governance including the role of the Board, Senior Leadership and any safety committees and ensure it is clear and able to be demonstrated if required by a Regulator;
- Review incident action plans and responses; and
6. Consider insurance arrangements for the business and officers (as noted below).
Organisations should carefully review their insurance arrangements to check whether there is cover:
- for the organisation as employer (under a statutory liability or other liability insurance policy) for:
- monetary penalties – it will be essential to check limits/sub-limits in light of the maximum penalty under the new provisions; and
- costs of responding to a relevant investigation and defence costs of any prosecution; and
- for senior officers (under a directors' and officers' liability or other liability insurance policy) for costs of responding to a relevant investigation and defence costs of any prosecution.
Marie Boland's national review of the model WHS Laws in December 2018 recommended amendments to make it an offence to insure or indemnify a person against liability for a monetary penalty under the legislation, or enter into or benefit from such arrangements. This recommendation has not been taken up in Queensland to date, but the scope of policy cover and effect of policy exclusions still need to be carefully considered (noting this recommendation has recently been taken up in New South Wales with the passing of the Work Health and Safety Amendment (Review) Bill 2020).
Generally, policies should at least cover defence costs up to the time that any criminal liability is established by way of judgment. However, it is important to carefully check the terms of relevant exclusions and advancement of defence costs/repayment provisions and ensure these are drafted as broadly as possible in favour of the insureds. Further, the insured should check whether they have the right to appoint their preferred solicitors, and, ideally, pre-agree rates for those solicitors as a way to avoid later disputes with insurers regarding representation and rates.