March 2010 edition Cover Story

The issue of safety within the workplace is of central importance for employers in New South Wales. Most employers are committed to seeing their workers return home safely at the end of the working day. Further, injured workers cause a loss of productivity and, for many businesses, increased workers compensation premiums. Most significantly, NSW employers face the most vigorous safety standards in the world.

The Occupational Health and Safety Act 2000 imposes upon employers an absolute obligation to ensure the health, safety and welfare of their employees and sub-contractors. This obligation can also extend to non-employers. Illustrative of this extensive obligation is a shopping centre manager, who is not only responsible for the health, safety and welfare of its employees, but also the consumers that enter the shopping centre. Further, the liability extends past the company to the director, personally.

In most States where there is a qualification upon that duty of “reasonableness”. For example in Victoria, the obligation is qualified thus: “so far as is reasonably practicable”. The New South Wales legislation omits such a qualification.
Accordingly, in New South Wales, where an accident happens, an employer can be charged and found guilty on essentially every single occasion.

Investigations and prosecutions are managed by WorkCover. Once charged in New South Wales, there are extremely limited defences available to the employer. The culture which this has generated as a result of this Act has prompted the
Australian Federation of Employers and Industries chief executive Garry Brack to liken the situation to Soviet Russia where any allegation made by WorkCover results in a conviction on almost every single occasion. Importantly, in their
prosecutions, WorkCover did not have to identify what procedure could have been taken by the employer to avoid the workplace accident.

In fact, the Commission had stated that the employer’s duty went beyond avoiding risks that were reasonably foreseeable, to an absolute duty to avoid risks, even where the employee was found to have included: “inadvertence, inattention,
haste and even foolish disregard for personal safety”. Accordingly, it was and remains an impossible standard with which employers have to comply. The upshot is that every business in NSW is in breach of the Act every day of the year.

The situation for employers is further worsened by the fact that when employers are found guilty, there is, unlike almost any other area of criminal law, no right to appeal to the Supreme Court. Accordingly, once the matter was heard by the full bench of the Industrial Relations Commission (comprised largely of ex-trade unionists or employer association functionaries), the Act prevented employers (often facing fines in the sum of hundreds of thousands of dollars) from appealing to the Supreme Court where they found there was a miscarriage of justice.

A rare dose of common sense

Finally, this absurdity has been challenged as a result of the recent High Court judgment of Kirk v The Industrial Relations Commission (a case which has been trawling its way through the courts for approximately seven years).

In this decision, Mr Kirk owned a farm near Picton in New South Wales. He had worked elsewhere in industries for twenty years with a clean record. He had limited experience in farming and accordingly engaged a friend, Mr Palmer
to manage the property. Mr Palmer was highly experienced in farm management as he had previously managed a large property. Despite this experience, one day Mr Palmer for reasons unknown decided, when delivering materials, to drive down a steep hill, rather than take an established road. He later injured himself and Mr Kirk and his company were found guilty and fined $121,000.

The High Court delivered a stinging judgment against the Industrial Relations Commission in which it cleared Mr Kirk of any wrongdoing. In particular, the High Court emphasised that in its prosecution, WorkCover needed to identify
what Mr Kirk had done wrong and how he could have acted to prevent the accident from occurring.

The implications of this judgment may be significant as WorkCover are currently reviewing the manner in which they handle current prosecutions and employer groups are calling for a royal commission into the operation of the New South Wales legislation. Their Honours also decided that the NSW Government could not deprive an employer to the right to appeal an adverse decision of the Full Bench of Industrial Relations Commissions to the NSW Supreme Court.

The real irony in all this is that several years ago, the NSW Labor Government commissioned report on the OH&S Act from Retired Judge Paul Stein. That report recommended (amongst many amendments to restore some balance into the Act) that an avenue of appeal to the Supreme Court be included. The NSW Labor Government shelved that report.

Courtesy of the High Court, the door is ajar for employers in their quest for some balance and natural justice in the area of OH&S in this, otherwise, abjectly governed State. Keep an eye on this space.

To discuss the Kirk Case and NSW OHS further contact Warwick Ryan at Central Coast Business Lawyers on 4367 4366.

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