States contemplate framework for national OHS scheme

In April 2008, the Federal Minister for Employment and Workplace Relations Julia Gillard announced the commencement of a National Review into Model Occupational Health and Safety (OHS) Laws.

Each State and Territory has traditionally operated its own OHS regime. The harmonisation of OHS laws aims to reduce bureaucracy, boost business efficiency and provide greater certainty and protection for all workplace parties.

Ms Gillard appointed a three-member panel to conduct the national OHS review. The former CEO of the National Occupational Health and Safety Commission Robin Stewart-Crompton was chairman of the panel. The other two members of the panel were Stephanie Mayman, a commissioner of the Western Australian Safety and Health Tribunal, and Barry Sherriff, the lead partner of the national OHS practice of respected Australian-based international law firm Freehills.

As part of its terms of reference, the panel reviewed OHS legislation in each jurisdiction for the purpose of making recommendations on the optimal structure and content of a national model OHS Act. Between April 2008 and January 2009, the panel consulted privately with numerous organisations in each jurisdiction. The panel also received 243 written submissions from all levels of government, regulators, unions, employer groups, industry representatives, legal professionals, academics and OHS professionals.

The panel issued its preliminary report to the Workplace Relations Ministers? Council (WMRC) on 31 October, 2008. The first report made recommendations on the priority areas identified in the panel?s terms of reference relating to duties of care (including the identification of duty holders and the scope and limit of duties) and the nature and structure of offences.

The second report was submitted to the WMRC on 30 January, 2009 and focused on a variety of other matters relevant to a model OHS act, including scope and coverage, workplace-based consultation, participation and representation provisions, enforcement and compliance, regulation-making powers and administrative processes, permits and licensing arrangements for employees engaged in high risk work and the role of OHS regulatory agencies in providing education and assistance to duty holders.

The WMRC announced on 18 May, 2009 that it had agreed to implement a framework for uniform OHS laws for adoption by the jurisdictions. It considered each of the Review?s 232 recommendations, carrying 133 recommendations and agreeing in principle to 69 other recommendations, subject to qualifications.

Panel member Barry Sherriff spoke at the Safety Institute of Australia?s Safety in Action conference in Melbourne in March about the panel?s recommendations for the proposed model act. He explained that a number of factors motivated the National Review. ?From the business perspective, the Productivity Commission identified safety as a key area where differences in not only the law, but the way it was administered and regulated around Australia caused a lot of inefficiency,? he said. ?From a more practical level, harmonising the law would allow the same processes, policies, procedures and approaches to be adopted.?

He added that the equity of a national OHS model was also important. ?Why should a worker in one jurisdiction be protected less or quite differently than a worker in another jurisdiction? Why should various stakeholders have particular rights or obligations in one jurisdiction and they not be applied or seen as appropriate in another??

Barry Sherriff emphasised that the introduction of a national OHS model is not a ?federal takeover?, as it is up to all the States and Territories to apply a universally agreed set of regulations and to implement the model in their jurisdictions. He also stated that the model would not promote a reduction in safety standards. ?In fact, the aim,? he said, ?was to improve safety standards, wherever possible. We also had to take into account the views of stakeholders so we ensured that all of the available information was obtained and understood to achieve the best outcomes. Laws cannot be considered to be optimal unless they are seen as credible and realistic by all involved in their implementation and enforcement. There is no point in coming up with utopia if it isn?t acceptable and won?t be adopted or is resisted. Understanding current trends locally and internationally was important, and accommodating the change in the nature of work and work arrangements was critical.?

The panel?s first report in October 2008 identified and advocated who should be responsible for duty of care under a model OHS act. This included:
? All who are conducting a business or undertaking (the primary duty of care).
? Individuals with management or control of workplace areas.
? Designers of plant, substances and structures.
? Builders, erectors and installers of structures.
? Suppliers and importers of plant, substances and structures.
? OHS service providers.
? Officers, workers, and other persons at the workplace.

The WRMC did not accept the recommendation for a specific duty of care for OHS service providers. It noted, however, that OHS service providers would be subject to the primary duty of care.

The duty of care would be qualified under the model OHS act by what is ?reasonably practicable?, which would enable the duty holder to understand what he/she must do to meet the standard.

The panel also recommended that the nature of OHS offences could be potentially treated as indictable offences. In all jurisdictions, except Victoria, OHS offences are regarded as summary offences, with the culpable parties brought before a judge or magistrate only. In Victoria, such offences can be both summary and indictable, meaning that an offending party if indicted could face both a judge and jury. The panel?s recommendation was that a Category 1 OHS offence would be indictable, but that Category 2 or Category 3 offences would be treated as summary offences. The WRMC did not agree with the detail of this recommendation, citing it would cause unwarranted and irreconcilable conflicts with existing criminal and procedural laws in the jurisdictions. It agreed in principle, however, to the notion of

Category 1, 2 and 3 offences.
A Category 1 offence was agreed for the most serious breaches, for an offence of recklessly endangering a person to risk of death or serious injury at a workplace. A Category 2 offence was agreed for circumstances where there is a high level of risk of serious harm but without recklessness. A Category 3 offence would apply for a breach of the duty without recklessness or high risk of serious harm.
The panel advocated that under the model act, there would be fines for individuals and corporations, with corporate fines to be set at five times that of the individual. The maximum individual fine for a Capital 1 offence would be $600,000, the corporate fine $3 million. This was also agreed to in principle by the WMRC.

?It is now proposed that the fines be substantially increased,? Barry Sherriff explained. ?The unions in their submissions proposed a minimum $6 million maximum fine or a percentage of turnover for corporate fines. They have stated publicly that the levels of penalty are not high enough. There have been public statements from within industry that the levels of penalty are too high.

The highest of the penalties recommended under a model Act (also agreed to in principle by the WMRC) would apply in a case of very high culpability (involving recklessness) in relation to non-compliance with a duty of care where there is serious harm (fatality or serious injury) to any person or a high risk of such harm – in effect, a Capital 1 offence. This can include imprisonment for up to five years for individuals.

Barry Sherriff did not, however, believe that the penalties advocated for OHS breaches under a model Act were too punitive.  ?Indeed not,? he reasoned, ?because the panel?s reports make it clear that the principle of graduated enforcement is critical and should be adopted. Penalties should be reserved for cases which are the most serious and where punishment is merited, and the alternative of dealing with the breach that improves safety should be adopted – so requiring people to undertake safety projects and to agree to enforceable  undertakings that actually produce safety outcomes. So there?s more of a focus, in fact, away from the punitive, but if the crime is serious and the culpability is high, then people must be punished.?

Despite the recommendations for penalties, Barry Sherriff emphasised that he did not expect OHS roles or corporate governance in Australia to change dramatically. ?Those who are currently involved in running the business, to put it that broadly, are likely to be found to be an officer.  In every State, however it is worded, an officer can be liable for breaches by a company where those breaches have resulted from or are attributable to the officer not exercising reasonable care in their role in governing and running the organisation properly as it is relevant to safety. That?s the law that already applies; it?s just worded differently in different States and applied differently.  The recommendations for a positive duty of care make it clear that in fact an officer must do something, can be guilty even if the company is not and make it clear what the officer is required to do.  So it?s purely a case of clarifying a current legal position and making it clear, so that officers know their roles and obligations.?

While he acknowledged the severity of the penalty will depend on the degree of the culpability of the officer, Barry Sherriff said it was unlikely the officer would be solely responsible. ?If it?s a case that the officer was aware of very significant hazards, very serious risks, and did nothing about it, then that would be a high level of culpability and an appropriately high penalty might be applied.  But in that situation it is likely that the company more broadly would have been aware and been guilty.  The circumstances where an officer might be guilty and the company is not is where the company has procedures in place but the officer has not observed those procedures. Ultimately if people are put at risk because the company has done the wrong thing, then it?s ordinarily a lower level of offence for the individual.?

As part of identifying and advocating which specific classes of people have a duty of care, the panel also recommended that the model act should define the ?management or control? of the workplace, fixtures, fittings and plant to make it clear who owes the duty of care. Barry Sherriff gave his interpretation of liability if, under the model act, a quarry hires equipment from a contractor that is operated by that quarry?s employees and an accident occurs to a worker on that piece of equipment.

?I suppose there are a number of layers there,? Barry Sherriff considered. ?Firstly, there is the primary duty of care. Any person conducting a business or undertaking has to look after workers, whether employees or contractors. What that means is that each of the businesses involved in a work activity will, to the extent that they are involved in that activity, have that duty. It overrides everything else.

?Particular people have contributions to the work being done. Those who supply the plant and equipment, by supplying it, are providing something that may give rise to risk. They have to ensure that it is safe and that information is provided with it to enable it to be operated safely. So there is a duty in that aspect.  

?Where there is someone in management and control of the workplace itself and plant and fixtures within it, then that organisation has to make sure that the workplace and that plant and equipment and fixtures is safe.

?What the panel recommended there – so there is no argument about who is responsible – was  to adopt the Queensland position that it is
the owner of the workplace who is liable, unless the owner, by a contract or a lease, gives effective and sustained control to somebody else. Therefore, without something clearly in writing through that personage, the owner has that obligation and knows they have that obligation. If, on the other hand, a contract clearly provides for that control to pass to somebody else, effectively and in a sustained way, then that other party is clearly identified and has the duty. So if, for example, you have a greenfields or even a brownfields site, where the contract provides for the passing of site control to the contractor, the contractor will have that duty of care, not the owner.?

The WRMC did not accept the proposed definition of a person with management or control of a workplace, so that will continue to be determined on the facts.

The primary duty of care on a person conducting a business or undertaking and the further duties on those specifically noted above should, theoretically, prevent a situation arising where the quarry owner, if he/she is in charge of the worksite, could simply blame the contractor for failing to service its equipment effectively. ?One of the underlying objectives of the structuring of the duties of care is to make sure that everybody understands that people who can influence safety have a duty of care,? explained Barry Sherriff. ?If you are involved in work, you have a duty of care. So it turns the focus onto ?What do I have to do?? rather than ?Can I get out of it?? And ultimately the compliance with the duty is the same. For all these duties of care, what can reasonably be expected of you??

It is anticipated that the quarrying and the mining industries will seek separate regulation of OHS in their industries or at least separate regulation in relation to specific hazards from the model Act. This would be in accordance with the panel?s recommendation that separate regulation in specific industries or in relation to specific hazards should only apply where ?periodically and objectively justified?.

Barry Sherriff advised that the decision to separately regulate quarrying or mining will belong to each State and Territory, which in turn will have to demonstrate to the Commonwealth their justification for separate legislation.

?The drafting of separate legislation will require justification. What is it about some industries that makes them so different that the model Act, which is broad-based and principle-based, isn?t enough?? Barry Sherriff conjectured. ?If it?s a case of needing more detail in specific areas, can that be done under the same act, but within specific regulations, which it is now in a number of areas? If it?s a case of needing a specialist regulator, a specialist inspectorate, then that?s an administrative measure, not a legal measure. That can still be done under the same legislation.

The development of a national OHS harmonisation model has occurred separately of a federal inquiry into a workable National Mine Safety Framework. In 2005, the National Mine Safety Framework Steering Group was convened by the Ministerial Council on Mineral and Petroleum Resources to consider a national consistency legislation framework. The steering group has developed four of seven strategies focused on areas where consistency across jurisdictions could be beneficial, including:
1. Competency support.
2. Compliance support.
3. A consistently applied enforcement protocol.
4. Effective data collection, management and analysis.
5. Consistent approaches to consultation.
6. A strategic approach to mine safety and health research and development.
7. Nationally consistent legislation.

Since the commencement of the National Review into Model OHS Laws, some quarters of the mining industry (including the Construction Forestry Mining and Energy Union) have expressed concern that national model legislation will not adequately cover specific industry hazards that are presently co-ordinated and covered in other State and Territory legislation for mining and quarrying and which are being developed within the National Mine Safety Framework. Barry Sherriff did not believe that the work done on the National Mine Safety

Framework would be lost because of the development of a national OHS harmonisation law.

?The National Mine Safety Framework has been going for many years and the steering group has done a lot of good work,? he said. ?They have developed principles in the legislative area.  The Framework is not necessarily inconsistent with the recommendations of the model laws. It may be that the mining area in a particular State comes under the OHS model laws reflecting that consistency and the National Mine Safety Framework may help populate that technical detail.  Or it may be that the mining area remains separate but that the National Mine Safety Framework process is informed by the model OHS Act approach and helps to modify what the Framework does in mining so that consistency is provided.?

Now that the States and Territories have approved the development of a model Act in principle, it is the responsibility of the jurisdictions to assist the development of the model Act and implement the model OHS legislation into law by December 2011. He cautioned against unnecessary delay.

?The intention is that the model Act be developed collectively by Safe Work Australia with the involvement of all of the jurisdictions, and that they all adopt it at the same time. The most significant potential downside of delay is a reluctance to adopt what is being put forward.  Delays may reflect a lack of agreement as to detail, which may make it less likely to work, or to be implemented. The intention of the recommended model has been to improve safety, therefore any delay could potentially produce a very intangible, ongoing risk to safety that need not be there.?

Further information about the National Review into Model Occupational OHS Laws can be found at

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