Smoke and mirrors with latest

OHS Amendments

The NSW Government has announced it will amend the Occupational Health and Safety Act 2000 (OHS Act), following the release of its report on the OHS Act’s review. The report claims to ‘clarify’ and ‘improve’ certain areas, while paying lip service to some of the key changes called for by Employers First™. But the amendments in fact promise no relief at all for employers and do a ‘smoke and mirrors’ job on the role of WorkCover. 

The amendments have already been drafted into an amending Bill, which it is planned to push through the NSW Parliament at various stages before and on 1 October this year. WorkCover has already published a series of fact sheets to inform the public of what has been decided. The entire package resembles a well scripted performance, designed to cement the absolute employer duty of care and further entrench a privileged and protected WorkCover bureaucracy. Employer arguments have been either downplayed or ignored. Revealingly, the summary of the Report describes the review process as comprising six steps, none of which involve taking public, business and employer submissions into account.

What are the main ‘changes’ planned for the OHS Act, and how will they affect employers?

General duties

The government claims that it has made a major concession to employer concerns by introducing the ‘reasonably practicable’ concept into the general duty provisions. It has simply moved this idea from the defences and brought it into the main duty – which will now ‘clarify’ that employers (as well as manufacturers, suppliers, employees etc) must do what is reasonably practicable to fulfill their duties and obligations.

But there is no indication that anything will be done to relieve employers of the virtually absolute duty to ensure safety – because it is still certain that injuries, incidents and fatalities will be interpreted as meaning employers failed to do what was ‘reasonably practicable’ in the circumstances.

This is clear when one looks at the introduction of the so-called Victorian provision into the obligation to ‘ensure’ health and safety. This supposed advance amounts to nothing more than an ‘explanation’ in the amendments – one that will make clear to judges that employers will still bear the burden of eliminating all risks, or at least reducing them to the lowest level that is ‘reasonably practicable’. WorkCover, and ultimately the Industrial Relations Commission (IRC), will still be able to rule that whatever the employer did was not enough.

When one looks at the factors to be considered in determining whether the employer’s actions were ‘reasonably practicable’, it is clear that the amendments leave many means by which employers may be hanged  – especially those small businesses and organisations without the resources to engage OHS specialists to spot every conceivable risk in a workplace. Those factors include:

• what the employer ought reasonably to have known about the hazards giving rise to the particular risks
• the likelihood of the risk eventuating
• the likely degree of harm
• what the employer ought reasonably to have known about ways of eliminating or reducing the risk
• the available means for eliminating the risk
• the cost of eliminating the risk.

Nowhere does it say that one should look at the cost of eliminating the risk in terms of what is ‘reasonably practicable’ for the business in question. When you take into account that the IRC has invariably held that the occurrence of an injury means an employer has failed to do something – and then identified what they ‘ought reasonably to have known’ with the benefit of hindsight – it is clear that the amendments in fact fail to amend anything. All of this is dressed up as a new and enlightened ‘common sense’ approach.

Directors and managers

The report acknowledges that there has been much criticism (from Employers First™ and others) of the current provision where ‘a person concerned in the management of a corporation’ can be deemed liable for breaches of the OHS Act by the corporation that employs them – unless they can use one of the virtually useless defences. Because this has exposed a huge number of persons to prosecution, there has been a justified call (apart from getting rid of this unfair deeming law altogether) to define exactly who is covered by the provision.

The amendments make it clear. As of 1 October, the law will specify that all ‘officers’ of a corporation will be held liable for OHS matters under their control. The definition is borrowed from the Corporations Act, which specifies the following:

• directors and secretaries of a corporation
• persons who make, or participate in the making of, decisions that affect the whole, or a substantial part, of the    business of the corporation
• persons who have the capacity to affect significantly the corporation’s financial standing
• persons in accordance with whose instructions or wishes the directors of a corporation are accustomed to act.

We can see that the effect of this change is to widen the net of those people who could end up paying big fines – the payment of which directly benefits WorkCover in most cases. Clearly, persons who participate in the making of decisions that affect a business are many indeed – and prosecutions under the corporations laws reveal that this may include other companies that have an interest in the business, not to mention spouses of small business owners who are directors or secretaries but have no real involvement in the day to day running of the workplace, let alone the spotting of hazards and risks.

Although the new ‘officer’ provisions will contain the caveat that they will apply only where their failure to take ‘reasonable care’ has led to the breach, this may well provide an invitation to the IRC to hold that all non-participating officers must take reasonable care and actively involve themselves in health and safety. This would be consistent with the view of the Australian Securities and Investments Commission (ASIC) (and that of the state and federal courts) that there really is no such thing as a ‘silent’ director and that all officers have duties and are responsible for breaches of the law.

So by ‘clarifying’ who the OHS laws apply to, the NSW Government and WorkCover have made it clear they now will apply to a much wider body of potential fine payers than before.

The role of WorkCover

One of the main criticisms levelled at the OHS Act by Employers First™ (see our Submission to the Review of the OHS Act) was the abrogation of responsibility by WorkCover ever since the new OHS Act was introduced in 2001. Gone are the days when a business could contact WorkCover and seek advice from its inspectors on the best ways to minimise risks and protect the health of employees. With the absolute duties imposed by the OHS Act, WorkCover knew it would be pointless – and even contrary to its interests – to give any advice at all. So it has been reduced to a prosecuting and revenue collecting agency.

With the new amendments, the government claims to have answered the critics. WorkCover will now have:

• an ‘advisory role’ to employers and others on ‘particular workplace health and safety issues’
• the ability to issue occasional Guidelines. This will give it greater ‘flexibility’ (normally a word to be condemned) while    still ‘rigorously enforcing’ the regulations.

It is generally understood that ‘guidelines’ are broad statements of principle by an organisation, rather than points of advice. Also, note that:

• the guideline process will include a period of public comment, thereby further diluting WorkCover’s responsibility for    the advice it gives
• the particular ‘issues’ on which it can give advice have not been specified, nor is there any duty on its inspectors to    do so
• WorkCover inspectors will be given the task of giving advice on ‘how to remedy the breach’. This means it need not    advise on how to minimise or eliminate risk, but simply to tell employers after a breach has occurred what they have    done wrong. Again, it has reserved for itself the benefit of hindsight.

But most importantly, any ‘advice’ given by WorkCover to employers will not be able to be used in their defence. Businesses will not be able to argue that they are not guilty or that their fines (or terms of imprisonment) should be reduced on the grounds that they followed guidelines set out by WorkCover.

The Chief Executive of Employers First™ Garry Brack pointed out to the media: “What’s the point of advice if you can’t rely on it? It’s smoke and mirrors.”

So what has changed? Very little, because WorkCover inspectors are still protected from giving specific advice that will expose their organisation to any risk, and because employers know their advice can’t ultimately be relied on. This will reinforce WorkCover’s disinterested attitude to workplace health and safety. Also, it will continue to retain for itself the prosecutorial luxury of looking for all possible ways that an accident could have been avoided after the event. So much for its expanded advisory role.

Employee duties

The amendments will pay lip service to employer arguments that there is no duty imposed on employees – and that workplace health and safety must be a cooperative effort between all stakeholders.

In a backhanded acknowledgement, WorkCover’s fact sheet admits only that employees already have a duty to take reasonable care for the safety of all people at their place of work – and that this already implies they are to take care of themselves.

But importantly, the amendments will ‘provide new protections’ for employees by making it clear they:

• must take ‘reasonable’ care for the safety of themselves and others at work
• will be able to seek reinstatement if they have been unlawfully dismissed for being involved in an ‘OHS issue’.

Apart from the lack of any real evidence that the dismissal of employees for involvement in OHS issues has ever really been a problem in NSW, it is clear that the call to extend the duty to employees has been met with a determined effort to shield them from responsibility. This is because:

• the actions of employees need only be ‘reasonable’, meaning they will be able to rely on the kind of common law    (and widely international) criteria that employers have been claiming make sense for themselves and everyone else
• it is not intended to give employers the defence that an employee contravened instructions or training, or that they    did something that no reasonable person could have foreseen (as in all the cases where an employee does    something stupid or unpredictable)
• employers will still be open to prosecution for failing to stop employees from harming themselves and others.

So the government has responded to those who are calling for clearer responsibilities for employees by saying that an implied duty already exists, and by giving them greater protection – without in any way allowing employers to point to an employee’s failure as a defence. This protection will only serve to further absolve employees of responsibility – and encourage the view that health and safety at work has nothing to do with them.

Appeal rights

Employers First™ has long argued that the OHS Act denies employers fundamental rights of appeal that are available to even the most serious criminal offenders. To compound the injustice, the NSW Industrial Relations Act at the same time gives WorkCover a right of appeal where an employer is acquitted of a charge of breaching the Act.

The WorkCover fact sheet about the new amendments considers this not to be a problem at all, downplaying its significance because it is ‘rarely used’. This is probably because employers are rarely acquitted. But it also admits there is a ‘perception’ (not the reality) of a ‘double jeopardy’ situation in the minds of ‘some employers’. Fortunately, this imbalance will be partly corrected by taking away WorkCover’s right of appeal against an acquittal of an offence under the OHS Act.

But, again downplaying the huge grass roots reaction of employers against injustices in the OHS Act, WorkCover acknowledges only that ‘concerns’ about the stripping of employer rights of appeal in OHS matters has been expressed by the Full Bench of the Industrial Court. This legal outrage will now be corrected, and appeal rights have been restored – but only with leave of the Full Bench or certification from a judicial member.

Enforceable undertakings

It is proposed that WorkCover will be able to enter into enforceable undertakings with an employer who is facing prosecution for a breach of the OHS Act. Again, this is with the intention of allowing flexibility and minimising the costs, efforts and delays associated with OHS prosecutions. The undertakings would serve as a compliance tool in lieu of prosecution.

A voluntary undertaking would be filed with the Industrial Court and would:

•   act as a binding commitment between WorkCover and the employer
• commit the employer to taking preventative action to correct or prevent a breach of the OHS Act
•   act as a stay of prosecution on the alleged breach.

At first glance, this may seem like an opportunity for employers to fix a hazard or risk without having to be prosecuted and fined. But there are hidden risks, namely:

• there is no intention that WorkCover will spell out what the employer needs to do, simply that the employer must    correct or prevent a breach (which is what they must do now anyway)
• a breach of an undertaking will inevitably lead to a new charge
• a new breach of the OHS Act during the term of the undertaking will mean that an employer will face two charges –    the substantive breach and the breach of undertaking
• the wording of undertakings is not clear, but it is likely that they will be worded generally so that any further OHS    breaches will involve breaches of undertaking as well
• there will be more room for disputation with WorkCover about whether the undertakings have been complied with –    giving WorkCover greater ability to leverage results from employers under the threat of further prosecution.

Right of entry

One of the problematical aspects of the OHS Act has been the right given to employee representatives to enter workplaces without notice whenever they consider that an OHS breach has or may have been committed. This power has again been declared free of any controversy and retained, despite the clear submissions from employer groups, and has now in fact been extended.

As of 1 October there will no longer be any need to point to a suspected breach of the OHS Act. Simply by giving 24 hours’ notice, unions will be able to send someone from head office to discuss matters related to workplace health and safety with workers. This will need to take place during work breaks or meal breaks. In other words, unions will be able to enter a workplace to discuss issues generally with workers – as long as they can show that OHS matters were on the agenda. These opportunities will simply be used by organised unions to monitor developments at the individual enterprise level, enlist recruits and market their services. The latest OHS amendments can be seen as a step in the union campaign to boost membership from an historic low.

To make matters worse for employers, the IRC has been given a new and enhanced role in the right of entry area. Although WorkCover inspectors have been made available to date to ‘assist’ an authorised representative where they feel the employer may wish to obstruct or hinder their entry or the exercise of their functions, now the matter may be referred to the IRC in the form of a dispute. The IRC has been empowered to make orders as it sees fit – and it will follow like night follows day that it will seek to expand this new facet of its jurisdiction. Generally, the creation of any new right, jurisdiction or industry is a self-fulfilling prophecy.

Safety recommendation notices

The new amendments have adopted another recommendation strongly endorsed by the union movement. As of 1 October, the chairperson of an OHS committee or an OHS representative will be empowered to issue a ‘safety recommendation notice’ (SRN) where they believe on reasonable grounds that an employer is breaching, repeating or continuing a breach of the OHS Act. Training on how and when to do this will be provided by WorkCover.

What is noteworthy is that:

• a reasonable belief will be sufficient for the issue of an SRN (presumably reasonable to WorkCover and ultimately an    industrial magistrate)
• the SRN must be referred to the employer, who will be required to remedy the alleged breach
• there will be no requirement that a solution to the problem must be provided or recommended
• the employer may only refer an unreasonable request to a WorkCover inspector within seven days
• the inspector must within 14 days confirm the SRN by issuing an improvement or prohibition notice – or cancel the    SRN
• appeals against the inspector’s decision are to be directed to WorkCover and then to an industrial magistrate.

In other words, employers will be ordered to fix an alleged breach based on the belief of an employee representative – and will then need to jump three expensive and time-consuming hurdles (two of which are administered by WorkCover) before the belief can at all be declared unreasonable.

Information sharing

Another aspect of the expansion of WorkCover’s powers in the new amendments is the mandate it has been given to disclose information about OHS breaches and employers’ OHS records to other regulators outside NSW. It will be able to forward information, without the consent of any material party affected by the disclosure, to ‘an officer or authority engaged in administering or executing Commonwealth, State or Territory law’ relating to workplace health and safety. WorkCover will be able to call on inspectors from other jurisdictions to assist in its policing of OHS, and to disclose information to them and other NSW government agencies.

The effect of this is unclear at this stage, but it points to the possibility of businesses that operate across state borders being faced with sentencing possibilities that take interstate OHS breaches into account. It also indicates that WorkCover’s enforcement and watchdog role may be taking on a potentially national significance.

OHS enforcement

The new laws will do nothing to restore the primacy of WorkCover’s advisory role, despite its added ‘flexibility’ in issuing guidelines and accepting employers’ enforceable undertakings. But they do emphasise that it will ‘rigorously enforce the legislation’ where it considers it necessary in pursuit of its compliance function.

There will be a continuing reliance on, and presumably expansion of, WorkCover’s compliance and prosecution mechanisms – and the new amendments will set the legislative framework for this to be made possible. These mechanisms include:

• investigations and audits
• workplace inspections
• criminal and civil prosecutions
• enforceable undertakings
• safety recommendation notices
• the recording of oral evidence by inspectors
• the filing of ‘victim impact statements’ on sentencing in fatality cases
• other compliance verification strategies (to be announced by bureaucratic edict as the need arises).

Conclusion

The new amendments to the OHS Act have been awaited with a high degree of anticipation by employers following the mandatory legislative review process. It should have been clear (with the passage of the industrial death laws last year) that the NSW Government was proceeding with its agenda of further empowering WorkCover regardless of the public and business response to the review. It is therefore not surprising that the proposed amendments, when they become operational, will do little to relieve employers from the burden of the OHS juggernaut.

But what is perhaps most surprising is the alacrity with which the draft Bill has been announced, and the ease with which some employers have been dazzled by the smoke and mirrors. The amendments have been presented as a concession to employers with their talk of WorkCover ‘advice’ and ‘reasonably practicable’ duties but – like a magician’s trick hat – they actually mask an expanded OHS bureaucracy and increased OHS risks for employers in general.