The new regime was to commence on 1 January 2012. For political and parochial reasons, that has not occurred.
The WHS Act and WHS Regs commenced in the Commonwealth, Queensland, New South Wales, Northern Territory and Australian Capital Territory jurisdictions on 1 January 2012. Debate on the Bill is ongoing in South Australia and Tasmania, while the Bill has not yet been introduced into the Victorian and Western Australian parliaments. Nevertheless, all Australian businesses should be aware of the impending impact of the legislation and be preparing for its operation.
Over the past four years, Safe Work Australia, working with state and territory governments, has prepared a model Work Health and Safety Act (WHS Act) and Regulations (WHS Regs). The purpose of the WHS Act and WHS Regs was to deliver an identical OHS regime throughout Australia for the benefit of business.
The new regime was to commence on 1 January 2012. For political and parochial reasons, that has not occurred.
The WHS Act and WHS Regs commenced in the Commonwealth, Queensland, New South Wales, Northern Territory and Australian Capital Territory jurisdictions on 1 January 2012. Debate on the Bill is ongoing in South Australia and Tasmania, while the Bill has not yet been introduced into the Victorian and Western Australian parliaments. Nevertheless, all Australian businesses should be aware of the impending impact of the legislation and be preparing for its operation.
What’s new with the Act?
The WHS Act bears some similarities to the Victorian OHS Act. It removes the perversities of NSW and Queensland legislation, where employers have a reverse onus of proof to show that they have taken every reasonable, practicable step to avoid injury. Properly, under the new legislation, that onus of proof stays with the Government Regulator.
The major changes for all Australian states and territories under the WHS Act are:
- a positive duty on officers to act with due diligence
- a massive increase in penalties
- broader primary duties to ensure all parts of the chain of production are captured for liability purposes.
Officers’ duty of due diligence
An officer, for the purpose of the WHS Act, is the same as for the Corporations Act. It includes directors, company secretaries, CEOs and CFOs. It also involves any other employees who have substantial control of the business.
The positive duty of due diligence means two things:
- Officers must exercise this duty at all times.
- The duty imposes several requirements on officers:
- to have a working knowledge of the WHS Act
- to understand their business as a whole (not just the siloed area of interest they work in, such as finance)
- to be aware of the major hazards, in all areas of the business, to workplace safety
- in respect of each hazard, to know what is the risk (not only how serious is the risk to workplace safety but what is the likelihood of occurrence)
- what controls the business should be utilising to prevent the risk from occurring
- what resources have been allocated towards instituting the control and are they reasonable in the circumstances.
What must be in place
As a result, the following infrastructure is critical for officers of an employer – under the WHS Act called a ‘person conducting a business or undertaking’ (PCBU):
- There must be a safety business plan that properly identifies hazards, risks, controls and the required resource allocation.
- There must be a reporting structure that accurately feeds up to the officers in the business of what has occurred in the past (lag indicators such as lost time injuries, medical treatment injuries and near misses). The report should also contain lead indicators, that is, work to be undertaken by the business to ensure safety, such as training for the specific risks within the business, internal or external audits with gap analysis, setting out deadlines and accountabilities for the completion of safety works and tool box meetings to increase safety knowledge within the workforce, etc. Finally, the reporting structure must identify what are the major risks within the business, the controls and whether the controls are being implemented.
Underlining these new infrastructures, it is critical that employers ensure they have a paperwork safety infrastructure which complies with the obligations under the WHS Act and WHS Regs.
What’s expected of workers
There are new duties that are imposed upon workers. These duties go past the traditional obligations of taking reasonable care to prevent injury to themselves or others and extend workers’ requirements to comply with lawful and reasonable directions and policies and procedures.
This is a significant lever for business and will ensure that where a business has the appropriate OHS infrastructure, both officers and businesses will not be liable in the event of an incident which is unforeseeable or as a result of the foolish behaviour of workers.
Penalties
The level of penalty has increased massively for all states as has potential terms of imprisonment for some states and territories.
Where an officer acts recklessly, they risk imprisonment of up to five years and fines of up to $600,000. Reckless conduct in such circumstances is being aware of a risk of serious injury or death, knowing that risk and failing to act upon it. Employers (PCBUs) will be liable for penalties of up to $3 million. Workers will risk imprisonment for up to five years and fines of up to $300,000 if they act recklessly.
A breach of a primary duty (to do everything reasonably practicable to avoid a workplace injury or illness) has a maximum fine of $1.5 million for the PCBU. The maximum potential fine for officers is $300,000 and for workers it is $150,000.
Extension of primary duties
All jurisdictions have a primary duty imposed upon employers (PCBUs) to do everything that is reasonably practicable to avoid injury or illness within the workplace. This primary duty inevitably includes having a safe system of work (an OHS infrastructure as described above), having appropriate training and supervision and monitoring the health of workers. Nearly all jurisdictions extend this primary duty to designers, manufacturers and constructors. The WHS Act extends this primary duty beyond designers to suppliers and importers.
These duties require each entity (designer, supplier, constructor and so on), at each stage of product or service development, to act safely. The liability is concurrent and the imposition of penalties by courts is not an overall penalty shared between a number of entities.
Each entity is liable to a maximum fine. The purpose of this change in the legislation is to ensure people like importers, suppliers and designers provided plant, equipment, structures and substances that are safe. If the Regulator becomes aware of an unsafe piece of equipment, they will track back and look for the root cause of that safety issue, tracking it back to the designer, potentially the importer or supplier.
As a result of the due diligence obligations of officers, importers, suppliers and designers need to introduce new safety knowledge into the business to ensure whatever they import, supply or design is safe for the circumstances in which that particular product will be utilised.
Key changes
There are numerous other changes around the requirement to consult, parallel rights of entry to union officials under the Fair Work Act and the WHS Act, anti-discrimination provisions with significant fines for employers (PCBUs) who treat someone adversely as a result of raising a safety issue (such as holding a safety office, or having held a safety office) and the loss of the right to silence (privileged against self-incrimination).
The changes described above empower the Regulator to intervene at the highest level in business, to require directors to answer questions, to chase the source of the safety error and to prosecute many entities and officers where there has been a safety breach leading to injury, illness or death.
The critical changes in the WHS Act are:
- The WHS Act is drafted on a risk management platform, not a compliance platform. All members of the chain of command in a business must utilise risk management techniques, not mere compliance and checklists.
- It is not enough to train. Employers (PCBUs) must be able to demonstrate that all workers are competent in safety in their relevant field and responsibilities. Without competence, officers cannot be confident that the reporting they receive is accurate, dependable and true. Without that competency, officers and employers (PCBUs) are exposed to prosecution.
- Although there will be variations between states – for instance, New South Wales will permit union prosecutions; Queensland imposed specific obligations in offshore tourist diving; Western Australia may reduce penalties, reduce health and safety representatives’ rights to stop work, etc.) – it is likely that Australia will enjoy significant similarity in its OHS legislation by 1 January 2013. This will provide businesses who work across state lines with a significant reduction in cost. However, for middle-sized and small businesses, it will involve a massive increase in the bureaucratisation of their documentation and introducing safety competence at every level within the business.
- The role of OHS managers will – and must – change under the WHS Act and WHS Regs. The role will change from being a policeman to a librarian/teacher who transfers safety knowledge to the chain of command rather than being the sole resource that the business looks towards in solving safety issues.
This change flows from the need for competence in the workforce and the risk management theme that underpins the WHS Act and WHS Regs. The OHS manager’s role must move towards ensuring that every person in the chain of command has the safety knowledge (relevant to their area), can do appropriate risk assessments and is authorised and empowered to act to avoid a safety risk.
For many states, there will be 12 months to prepare. There is significant work to be done. The WHS Act imposes obligations that are significantly higher than the other state or territory legislation. The positive duties on officers of an employer (PCBU) are so significant that the development of competency, reporting and risk assessment skills in the business, must be rolled out as a matter of urgency.
