People Risk - WA's WHS Act

People Risk - WA's WHS Act

17 March 2022

Barry Nilsson Lawyers have prepared the following information on the Work Health & Safety Act in Western Australia for Austral Risk Services and our wholly owned subsidiary, WHS Total SolutionsWe asked them to provide information around industrial manslaughter, penalties and insurance with Western Australia's new WHS Act.

Work Health & Safety in Western Australia.

On 10 November 2020, the Work Health and Safety Bill 2019 was passed and assented to by the Governor and now awaits proclamation and finalisation of accompanying regulations to be brought into force. It brings with its significant implications for Employers and Insurers.

About the WHS Act

The new Work Health and Safety Act 2019 (WHS Act) will condense the current occupational health and safety landscape by:

  • Replacing the current Occupational Safety and Health Act 1984 (WA) (OSH Act) and its accompanying regulations;
  • Replacing elements of the Mines Safety and Inspection Act 1994 (WA) (MSI Act);
  • Replacing elements of the Workers’ Compensation and Injury Management Act 1981; and
  • Replacing elements of the Petroleum and Geothermal Energy Safety Levies Act 2011 ( WA) that relate to work health and safety.

The new laws will offer greater protection to WA workers, capturing modern employment relationships not just the classic employer/employee relationship. Importantly, they introduce the term ‘person conducting a business or undertaking’ (PCBU).

Meaning of 'worker'

The WHS Act adopts a broad definition of ‘worker’ to recognise the changing nature of employment relationships and to ensure that the protections in the legislation extend to all types of workers. It sets out a non-exhaustive list of persons who would meet the definition of ‘worker’, including employees, contractors/sub-contractors, labour hire company employees, apprentices, work experience students and volunteers.

A 'person conducting a business or undertaking' (PCBU)

The term ‘employer’ in existing WA safety laws will be replaced with the broader PCBU concept encompassing all types of organisations including those without employees. A PCBU can be an individual including a member of a partnership and a sole trader but will typically apply to companies and other entities. PCBU’s will owe a new ‘primary duty of care’ to ensure the health and safety of ‘workers’ (defined broadly) and others affected by the work. The duties imposed by the WHS Act mirror the duties imposed by the current law, such as ensuring that the health and safety of other persons is not put at risk from work carried out; the provision and maintenance of a work environment without health and safety risks; and the provision and maintenance of safe structures and plant etc.

Officer's liability and due diligence

The WHS Act provides that an officer of a PCBU must ensure that the PCBU complies with its duties and obligations under the WHS Act. An officer’s duty is a personal duty; therefore, officers must exercise due diligence in ensuring compliance. Officers may receive assistance from others, but the duty cannot be transferred or delegated.

The duty of due diligence placed on officers is a ’positive and continuous’ one that operates separately to the duties imposed on PCBUs. This is different to the position under current OHS legislation where an officer may be deemed to have contravened safety legislation but only if there has been a contravention by the employer. The duty will require officers to eliminate the risk insofar as is reasonably practicable and otherwise to minimise those risks insofar as is reasonably practicable. This means that officers have a duty to ensure health and safety and must consider factors such as the likelihood of the hazard or risk occurring, the degree of harm that might result from the risk as well as the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk.

Officers will have an additional duty to inform the regulator of any notifiable incidents including the death of a person, a serious injury or illness of a person or a dangerous incident. The definition of ‘dangerous incident’ is extensive and increases the need for officers to be constantly aware of possible dangers on their site/premises.

Industrial Manslaughter

The WHS Act provides new industrial manslaughter offences for breaches of a duty involving a death. Industrial Manslaughter is a serious criminal offence which arises when a PCBU has a health and safety duty and engages in conduct that causes the death of an individual (therefore failing to comply with the duty) and the conduct is engaged in knowing that the conduct is likely to cause the death of an individual, or with disregard of that likelihood. Proceedings in respect of this offence may only be commenced by the Director of Public Prosecutions (DPP).

The criminal offence attracts a penalty of 20 years imprisonment and a $5,000,000 fine for an individual or a fine of $10,000,000 for a body corporate.

An officer of a PCBU may also be charged with industrial manslaughter offences but additional elements of the offence must be proven. This includes establishing that the PCBU’s conduct was attributable to any neglect on the part of the officer, or if the conduct was engaged in with the officer’s consent or involvement. The implication of this is that a company and an individual officer could be charged with industrial manslaughter.

WHS Act and Insurance

The WHS Act expressly prohibits insurance and indemnity against monetary penalties imposed under WHS law and goes further to say that a person must not enter into or be indemnified by an insurance policy that protects against liability to pay a fine for an offence against the WHS Act. Penalties imposed by the WHS Act for this provision are fines of $51,000 for individuals and $255,000 for body corporates. Most importantly, the WHS Act will create a requirement to review nationwide insurance policies that include clauses indemnifying offences under the WHS Act. The WHS Act does not (on its terms) prohibit insurance for legal defence costs or for adverse costs orders.

 

Jurisdiction Prohibition to Insure Offence to Insure
NSW Yes Yes
Vic Yes Yes (from 22 September 2022)
WA Yes (From March 31 22) Yes (From March 31 22)
QLD No No
NT No No
TAS No No
SA No No

 

Penalties

Following significant increases to penalties in 2018, the WHS Act has increased penalties further:

 

Penalty Description Individual Corporation
Category 1 Person is a PCBU and has a WHS duty but fails to comply with that duty and causes the death of an individual PCBU: 5 years imprisonment + $680,000
Not PCBU: 5 years imprisonment + fine of $340,000
$3,500,000
Category 2 Failure to comply with WHS duty & exposes individual to risk of death / serious injury PCBU: $350,000
Not PCBU: $170,000
$1,800,000
Category 3 Failure to comply with duty PCBU: $120,000
Not PCBU: $55,000
$570,000

 

Potential Impacts

Commencement of the WHS Act will prompt extensive change across a range of industries, and so whilst commencement of the WHS Act is expected around early-2022, it is prudent to begin changing attitudes and policies regarding WHS that are currently in place to ensure that you are not caught off guard.

Executives and Leadership

Executives including directors and senior management may be classed as ‘officers’ under the new WHS Act; meaning that these individuals will have increased work, health and safety obligations and should aim to show documented evidence of actively discharging their ‘positive due diligence.’

Workforce

Some workers can potentially be classed as officers if they participate in decision making that affects a substantial part of the business or have the capacity to significantly affect the business’ financial standing. As outlined above, these individuals should aim to show documented evidence of actively discharging their duties under the new WHS Act.

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