On 25 February 2019, the Report of the first national review of Australia’s model Work Health and Safety (WHS) laws was released. The Report which was prepared by former executive director of SafeWork South Australia, Marie Boland, notes that the regulatory scheme under the model laws is largely operating as intended. However, it identifies areas for improvement and makes 34 recommendations for reform. These include the introduction of an industrial manslaughter offence and some adaptation of the duty-holder principles under the model laws to various modern work arrangements.
Background
The model WHS laws aim to provide for a harmonised approach to WHS regulation across Australia. They were developed following the establishment of Safe Work Australia, the statutory body tasked with undertaking a National Review of WHS laws in 2008. The model WHS laws were implemented by all jurisdictions, except for Victoria and Western Australia, between 2012 and 2013.1 However, Victoria may soon be the only jurisdiction not to have adopted the model WHS laws, as the Western Australian government has recently engaged in consultation regarding new legislation to be based on the model WHS Act.2
In 2018, at the request of the federal and state Ministers responsible for WHS, Ms Boland reviewed the content and operation of the model WHS laws (including the model WHS Act, WHS Regulations and Codes of Practice). Ms Boland’s Report followed extensive consultation with stakeholders, and is the first comprehensive review of the model WHS laws since their implementation.3
Overall assessment of the model WHS laws
The Report notes that the objective of harmonising WHS laws across the country has largely been achieved and remains strongly supported by business groups. However, there are some concerns that uniformity is being eroded by variations in the implementation of the model laws in some jurisdictions.4 In addition, many of those consulted for the review want Victoria and Western Australia to implement the model laws.5
According to the Report, the three-tiered framework of regulation under the model laws (WHS Act, Regulations and Codes) was widely supported by stakeholders. However, small business representatives considered that the regulatory scheme is too complex and does not adequately address their particular circumstances.6
The Report found that businesses generally encounter difficulties with confusion and complexity in the model laws, especially the WHS Regulations and Codes.7 Ms Boland therefore recommended that the model WHS Regulations and Codes ‘be reviewed against clear criteria to determine what risks or activities should be prescribed in a regulation or supported by a model Code’.8
…the gig economy and various types of platform work present new challenges which may require some fine-tuning of the model laws.
A central concept introduced by the model WHS laws is that of imposing a primary duty of care and a range of other obligations upon a ‘person conducting a business or undertaking’ (PCBU). The Report concluded that the new duties framework under the model laws is operating well and that the PCBU concept, along with the related definitions of ‘worker’ and the ‘workplace’, were providing an adaptable scheme of regulation in relation to new forms of work and emerging business models.9 However, the gig economy and various types of platform work present new challenges which may require some fine-tuning of the model laws. For example, Ms Boland recommended that the WHS Act clarify that a contractor or subcontractor in a contractual chain can be both a worker (owed duties by a PCBU) and a PCBU (owing duties to others in that supply chain).10
Other key recommendations
Introduction of new offences of gross negligence and industrial manslaughter
Queensland and the ACT are presently the only jurisdictions with specific industrial manslaughter offences, in addition to the category 1 to 3 offences applicable to contraventions of the model WHS laws11 (see further discussion of the current penalty regime under the heading ‘Increases in penalties’ below).
Although category 1 to 3 offences are focused on the level of risk to which individuals are exposed, rather than the consequence of any breach of duty12, a common view amongst stakeholders was that there should be a specific offence relating to fatalities in the workplace as a result of the gross negligence of another.13
Ms Boland noted there have been few successful prosecutions for category 1 offences due to difficulties in proving ‘recklessness’, as it requires proof of a conscious choice to take an unjustified risk.14 She also identified further difficulties in securing an alternative conviction for criminal manslaughter as against a corporation, linked to having to identify the directing mind and will of the corporation.15
As a result, the Report recommended the inclusion of ‘gross negligence’ for category 1 offences to maintain a risk-focused approach where a duty holder has exposed an individual to a risk of serious harm or death.16 It is considered that this would add an extra deterrent to the model WHS laws and assist prosecutors to secure convictions without needing to prove an intentional failure on behalf of duty holders.17
Ms Boland also recommended the creation of the new consequence-focused offence of industrial manslaughter, where the outcome of gross negligence by duty holders is the death of a person covered by the model WHS laws.18 The Report recommended a more robust offence than that presently in place in Queensland, for example, by expanding the offence beyond the death of a ‘worker’, to include the death of third parties such as clients, customers, visitors or neighbours of the workplace.19
Officers
Under the model WHS Act, the term ‘officer’ is defined broadly to include not only directors, but those persons who make, or participate in making, decisions that affect the whole, or a substantial part of the business of the corporation.20 Officers are required to exercise due diligence to ensure that their PCBU complies with its duties or obligations imposed by the model WHS Act.21
Guidance is provided by the model WHS Act. It states that due diligence includes, for example, taking reasonable steps to acquire and keep up to date with knowledge of work health and safety matters, to gain an understanding of the nature of the PCBU’s operations and generally of the hazards and risks associated with those operations, and to ensure the PCBU has available for use and uses appropriate resources and processes to eliminate or minimise risks to health and safety from the work it carries out.22
…feedback received during the review noted that the inclusion of officers’ duties in the model WHS Act has encouraged discussion at an executive level regarding roles and responsibilities.
Although there is potential for the broad definition of officer to create uncertainty as to which members of a PCBU are captured, feedback received during the review noted that the inclusion of officers’ duties in the model WHS Act has encouraged discussion at an executive level regarding roles and responsibilities.23 In any event, as part of the review, Ms Boland recommended greater clarity from WHS regulators regarding enforcement of due diligence provisions, including how they identify and assess duty holders and their associated duties during an investigation.24
Concurrent duty holders
The model WHS Act explicitly provides that more than one person can concurrently have the same duty in relation to a matter, and that each must comply with that duty.25 Further, there is an obligation upon concurrent duty holders to consult, co-operate and co-ordinate activities with any other duty holders.26
The review revealed difficulties experienced by duty holders in determining the extent of responsibility regarding WHS matters when multiple duty holders were involved, and a common concern regarding a lack of guidance provided by the model WHS laws on consulting with concurrent duty holders.27 As a result, Ms Boland recommended, as a matter of priority, the development of a new model Code to provide practical guidance on the principles that apply to duties, including a focus on the operation of shared duties, with reference to a modern working arrangements.28
WHS regulation to provide greater guidance on psychological injury
A key concern repeated by those consulted during the review was the inadequacy of the current model WHS laws in addressing and managing risks associated with psychological health. Illustrative of the significance of psychological health is the fact that although workers’ compensation claims relating to mental health conditions currently represent a small proportion of all serious workers’ compensation claims, such claims lead to longer periods of absence from work and higher awards of compensation.29
The model WHS Act defines health to include psychological health. Accordingly, the primary duty of a PCBU in ensuring, so far as reasonably practicable, that workers and other persons are not exposed to risks to health and safety arising from the work carried out by the business or undertaking, extends to psychological health.30 However, psychological health and how to manage psychological risks or hazards remain unaddressed by the current model WHS Regulations or Codes.31 A number of psychological risks were identified in the submissions received from stakeholders during the review including those associated with geographically isolated workers, those required to work away from home for extended periods of time, migrant workers and women returning from maternity leave.32
Although Safe Work Australia has recently published guidance material on the topic,33 Ms Boland recommended the development of additional regulations to address how to identify psychological risks and the appropriate control measures to manage those risks, as a matter of priority.34
Easier worksite access for union officials assisting health and safety representatives
The model WHS Act provides for the election of health and safety representatives (HSRs) to represent workers who carry on work for the business or undertaking.35 The legislation also provides for the functions of HSRs, including to investigate complaints from members of the work group relating to work health and safety.36 In performing their functions, HSRs can request the assistance of any person, whenever necessary.37
The right of a HSR to request assistance is separate and distinct from the scheme for right of entry of union officials onto work sites governed by the Fair Work Act 2009 (FW Act). This distinction was highlighted in a 2017 decision of a Full Federal Court in Australian Building and Construction Commissioner v Powell.38 The Full Court unanimously held that a union official attending a construction site to assist a HSR was not entitled to enter solely under the Victorian OHS Act, but was also required to have a federal right of entry permit and meet all other entry requirements pursuant to the FW Act.
Returning to the model WHS Act, a key concern of employers articulated during the review was that it is often difficult to determine whether those entering the workplace are genuinely entering to assist a HSR.39 Others noted that these provisions can be used to circumvent the right of entry provisions and can lead to HSRs being pressured by union officials to arrange for their entry.40 On the other hand, union submissions to the review supported the right of a HSR to request assistance.41
In weighing the competing concerns, Ms Boland considered that the right of the HSR to request assistance should not be restricted if the person they are seeking assistance from is also a union official.42 The Report recommended that Safe Work Australia and other relevant agencies investigate how to provide a union official access to a workplace to assist a HSR, without the need to hold an entry permit pursuant to the FW Act.43
Increases in penalties
The model WHS Act establishes three categories of offences for failure to comply with a health and safety duty.
Category 1 is the most serious, for recklessness in exposing an individual to whom a duty of care is owed to the risk of death, serious illness or injury.44 A category 2 offence occurs when a person fails to comply with their health and safety duty, absent recklessness, and that failure exposes an individual to a risk of death or serious injury or illness.45 The least serious offence, a category 3 offence, occurs when a person has a health and safety duty and fails to comply with that duty.46
The penalties for offences under the model WHS Act are described in monetary amounts. For instance, the model Act states the commission of a category 1 offence by a body corporate can attract a maximum penalty of $3 million.47 Describing penalties in this way, rather than in penalty units, has had the effect that penalties have remained at the same level despite inflation and increases in the value of penalty units across participating jurisdictions.48 For example, a submission was received to the effect that had the maximum penalty for a category 1 offence increased with the value of a Commonwealth penalty unit, the maximum penalty would now be in excess of $5.5 million.49
Ms Boland recommended that penalties be increased to reflect increases in the Consumer Price Index and the value of penalty units in the participating jurisdictions, to ensure penalties continue to retain their value as a deterrent.50
Creation of an offence to insure against WHS penalties
Presently there is no impediment to a body corporate obtaining insurance to protect itself, its officers and employees against liability to pay penalties arising from breaches of the model WHS laws.51
Insurance for this purpose was largely unsupported by the stakeholders consulted during the review and submitted to be against public policy, given the key purpose of a penalty is to promote greater compliance with the model WHS laws.52 Others submitted that it was imperative to enable companies to insure for these risks and associated legal investigation costs including damages, as this is essential for attracting and retaining quality leadership and management, as well as managing the cost of doing business in Australia.53
Drawing upon the New Zealand position, Ms Boland recommended the addition of a statutory offence arising from entering into a contract of insurance which indemnifies against liability for a monetary penalty under the model WHS Act, to provide insurance for such a liability, and to take the benefit of such insurance or indemnity.54 Importantly, this amendment is not intended to preclude insurance coverage for legal costs incurred in defending a prosecution.55
Implications
The recommendations in the Report, if implemented, would result in a number of significant changes to WHS regulation in Australia. Businesses would have to manage these changes — particularly the extension of an industrial manslaughter offence to all Australian jurisdictions (if the Victorian proposal is also implemented), further adaptation of the regulatory scheme to new business models and various forms of psychological harm, and easier access of union officials onto work sites to assist HSRs.
Ms Boland’s Report is presently with the Ministers responsible for WHS for consideration. A regulation impact statement process will be undertaken by Safe Work Australia over coming months, with an opportunity for stakeholders to make further submissions, before the Ministers respond to the Report later this year.56